As filed with the Securities and Exchange
Commission on May 6, 2019
Registration No. 333-230684
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
Form S-11
REGISTRATION
STATEMENT
FOR REGISTRATION UNDER THE SECURITIES ACT OF
1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES
Postal Realty
Trust, Inc.
(Exact name of registrant as specified in
its governing instruments)
75 Columbia Avenue
Cedarhurst, NY 11516
(516) 295-7820
(Address, including zip code and telephone
number, including area code,
of registrant’s principal executive
offices)
Andrew Spodek
Chief Executive Officer
75 Columbia Avenue
Cedarhurst, NY 11516
(Name, address, including zip code and telephone
number,
including area code, of agent for service)
Copies to:
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David
C. Wright
James V. Davidson
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, VA 23219
Telephone: (804) 788-8200
Facsimile: (804) 788-8218
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Christina
T. Roupas
Courtney M.W. Tygesson
Winston & Strawn LLP
35 W. Wacker Drive
Chicago, IL 60601
Telephone: (312) 558-5600
Facsimile: (312) 558-5700
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Approximate date of commencement of proposed
sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the Securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following
box:
¨
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement of the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
¨
If delivery of the prospectus is expected
to be made pursuant to Rule 434, please check the following box.
¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large
accelerated filer
¨
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Accelerated
filer
¨
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Non-accelerated
filer
¨
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Smaller
reporting company
x
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Emerging growth
company
x
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If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act.
¨
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
EXPLANATORY
NOTE
Postal
Realty Trust, Inc. is filing this Amendment No. 2 (the “Amendment”) to its Registration Statement on Form S-11
(Registration No. 333-230684) (the “Registration Statement”) as an exhibit-only filing. Accordingly, this Amendment
consists only of the facing page, this explanatory note, Part II of the Registration Statement, the signature page to the
Registration Statement and the filed exhibits. The preliminary prospectus is unchanged and has therefore been omitted.
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 31. Other Expenses of Issuance and
Distribution.
The following table itemizes the expenses
incurred by us in connection with the issuance and registration of the securities being registered hereunder. All amounts shown
are estimates except for the Securities and Exchange Commission, or SEC, registration fee and the Financial Industry Regulatory
Authority, Inc., or FINRA, filing fee.
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SEC Registration Fee
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$
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13,938
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NYSE Listing Fee
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25,000
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FINRA Filing Fee
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17,750
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Printing and Engraving Expenses
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25,000
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Legal Fees and Expenses (other than Blue Sky)*
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3,220,000
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Accounting Fees and Expenses
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1,785,000
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Transfer Agent and Registrar Fees
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43,000
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Other Expenses**
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1,635,000
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Total
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$
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6,764,688
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* Includes reimbursement of underwriters’
counsel fees
** Includes travel, organizational
expenses, consulting fees
Item 32. Sales to Special Parties.
See Response to Item 33 below.
Item 33. Recent Sales of Unregistered
Securities.
In connection with the initial capitalization
of our company, we issued 1,000 shares of our common stock for $1,000 to Andrew Spodek, our chief executive officer. The issuance
of such shares was effected in reliance upon an exemption from registration provided by Section 4(a)(2) under the Securities Act
of 1933, as amended, as transactions by the issuer not involving a public offering. No general solicitation or underwriters were
involved in this issuance.
In connection with the formation
transactions, our operating partnership will issue an aggregate of 1,333,112 OP units with an aggregate value of
approximately $26.7 million and we will issue 637,058 shares of Class A common stock and 27,206 shares of Class B common
stock with an aggregate value of approximately $13.3 million, in each case based on the midpoint of the price range set
forth on the front cover of the prospectus that forms a part of this registration statement, to Mr. Spodek, our chief
executive officer and certain of his affiliates as consideration in the formation transactions. All of such persons are
“accredited investors” as defined under Regulation D of the Securities Act. The issuance of such units will be
effected in reliance upon exemptions from registration provided by Section 4(a)(2) of the Securities Act and Regulation D of
the Securities Act.
Item 34. Indemnification of Directors
and Officers.
Maryland law permits a Maryland corporation
to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders
for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or
services or (b) active and deliberate dishonesty that is established by a final judgment and is material to the cause of action.
Our charter contains a provision which eliminates our directors’ and officers’ liability to the maximum extent permitted
by Maryland law.
Maryland law requires a Maryland corporation
(unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful
in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in
that capacity. Maryland law permits a Maryland corporation to indemnify its present and former directors and officers, among others,
against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made or threatened to be made a party by reason of their service in those or other capacities unless it is
established that: (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding
and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty; (b) the director or officer actually
received an improper personal benefit in money, property or services; or (c) in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was unlawful. However, under Maryland law, a Maryland corporation
may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the
basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses.
In addition, Maryland law permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation’s
receipt of (a) a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard
of conduct necessary for indemnification by the corporation and (b) a written undertaking by him or her or on his or her behalf
to repay the amount paid or reimbursed by the corporation if it is ultimately determined that the standard of conduct was not
met.
Our charter obligates us, to indemnify any
present or former director or officer or any individual who, while a director or officer of our company and at our request, serves
or has served as a director, officer, partner, trustee, member or manager of another corporation, real estate investment trust,
limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened
to be made a party to the proceeding by reason of his or her service in that capacity from and against any claim or liability
to which that individual may become subject or which that individual may incur by reason of his or her service in any of the foregoing
capacities and to pay or reimburse his or her reasonable expenses in advance of final disposition of a proceeding. Our charter
and bylaws also permit us to indemnify and advance expenses to any individual who served a predecessor of our company in any of
the capacities described above and any employees or agents of our company or a predecessor of our company.
We intend to enter into indemnification agreements
with each of our executive officers and directors whereby we indemnify such executive officers and directors to the fullest extent
permitted by Maryland law against all expenses and liabilities, subject to limited exceptions. These indemnification agreements
also provide that upon an application for indemnity by an executive officer or director to a court of appropriate jurisdiction,
such court may order us to indemnify such executive officer or director.
Furthermore, our officers and directors are
indemnified against specified liabilities by the underwriters, and the underwriters are indemnified against certain liabilities
by us, under the underwriting agreement relating to this offering. See “Underwriting.” In addition, our directors
and officers are indemnified for specified liabilities and expenses pursuant to the partnership agreement of Postal Realty LP,
the partnership of which we serve as sole general partner.
Insofar as the foregoing provisions permit
indemnification of directors, officer or persons controlling us for liability arising under the Securities Act, we have been informed
that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is therefore
unenforceable.
Item 35. Treatment of Proceeds from Stock
Being Registered.
Not applicable
Item 36. Financial Statements and Exhibits.
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(A)
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Financial Statements
.
See page F-1 for an Index to Financial Statements and the related notes thereto included
in this registration statement.
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(B)
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Exhibits
. The attached
Exhibit Index is incorporated herein by reference.
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Item 37. Undertakings.
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(a)
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The undersigned registrant
hereby further undertakes to provide to the underwriters at the closing specified in
the underwriting agreement, certificates in such denominations and registered in such
names as required by the underwriters to permit prompt delivery to each purchaser.
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(b)
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Insofar as indemnification
for liabilities arising under the Securities Act of 1933, as amended, may be permitted
to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed
in the Securities Act of 1933, as amended, and will be governed by the final adjudication
of such issue.
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(c)
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The undersigned registrant
hereby further undertakes that:
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(1)
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For purposes of determining
any liability under the Securities Act of 1933, as amended, the information omitted from
the form of prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or Rule 497(h) under the Securities Act of 1933, as amended, shall
be deemed to be part of this registration statement as of the time it was declared effective.
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(2)
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For the purpose of determining
any liability under the Securities Act of 1933, as amended, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that the registrant meets all of the
requirements for filing on Form S-11 and has duly caused this amendment to the registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Cedarhurst, State of New York, on this 6
th
day of May,
2019.
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Postal Realty Trust, Inc.
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/s/ Andrew Spodek
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Andrew Spodek
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Chief Executive Officer
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(Principal Executive Officer)
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Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates
indicated.
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Signature
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Title
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Date
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/s/ Andrew Spodek
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Chief Executive Officer and Director
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May 6, 2019
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Andrew Spodek
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(Principal Executive Officer)
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/s/ Jeremy Garber
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President, Treasurer and Secretary
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May 6, 2019
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Jeremy Garber
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(Principal Financial Officer)
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/s/ Matt Brandwein
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Chief Accounting Officer
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May 6, 2019
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Matt Brandwein
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(Principal Accounting Officer)
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EXHIBIT INDEX
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Exhibit
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Exhibit
Description
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1.1
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Form of Underwriting Agreement
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3.1**
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Form
of Articles of Amendment and Restatement of Postal Realty Trust, Inc.
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3.2**
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Form
of Amended and Restated Bylaws of Postal Realty Trust, Inc.
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4.1
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Form
of Certificate of Class A Common Stock of Postal Realty Trust, Inc.
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5.1
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Opinion
of Venable LLP regarding the validity of the securities being registered
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8.1
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Opinion
of Hunton Andrews Kurth LLP with respect to tax matters
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10.1**
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Form
of First Amended and Restated Agreement of Limited Partnership of Postal Realty LP
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10.2†
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Postal
Realty Trust, Inc. 2019 Equity Incentive Plan
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10.3†
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Form
of Postal Realty Trust, Inc. Alignment of Interest Program
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10.4†
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Form
of Postal Realty Trust, Inc. 2019 Employee Stock Purchase Plan
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10.5†
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Form
of 2019 Equity Incentive Plan Stock Award Agreement and Notice.
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10.6†
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Form
of LTIP Unit Vesting Agreement
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10.7
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Form
of Indemnification Agreement between Postal Realty Trust, Inc. and its directors and officers
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10.8†
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Form of Employment Agreement between Postal Realty Trust, Inc.
and Andrew Spodek
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10.9†
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Form of Employment Agreement between Postal Realty Trust, Inc.
and Jeremy Garber
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10.10
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Form
of Tax Protection Agreement between Postal Realty LP, Postal Realty Trust and Andrew Spodek
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10.11
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Form
of Third Party Management Agreement
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10.12
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Form
of Contribution Agreement between Unlimited Postal Holdings, LP and Postal Realty LP.
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10.13
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Form
of Contribution Agreement between Postal Realty Trust, Inc. and Postal Realty LP.
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10.14
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Form
of Contribution Agreement by and among Andrew Spodek, IDJ Holdings, LLC, Tayaka Holdings, LLC and Postal Realty LP.
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10.15
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Form
of Contribution Agreement between NPM Holdings, Inc. and Postal Realty LP.
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10.16
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Form
of Contribution Agreement between Postal Realty LP and Postal Realty Management TRS, LLC.
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10.17
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Form
of Agreement and Plan of Merger by and among Postal Realty Trust, Inc., UPH Merger Sub, LLC, United Postal Holding, Inc.
and Andrew Spodek
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10.18
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Form
of Right of First Offer Agreement
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10.19
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Form
of Agreement of Purchase and Sale between Postal Realty Trust, Inc. and Rosalind Spodek.
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10.20
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Form
of Agreement of Purchase and Sale between Postal Realty Trust, Inc. and Sara Nathanson.
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10.21
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Form
of Agreement of Purchase and Sale between Postal Realty Trust, Inc. and Joseph Nathanson.
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10.22
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Form
of Agreement of Purchase and Sale between Postal Realty Trust, Inc. and Bessi Marmer.
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10.23
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Form
of Agreement of Purchase and Sale between Postal Realty Trust, Inc. and IDJ Holdings, LLC.
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10.24
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Form
of Agreement of Purchase and Sale between Postal Realty Trust, Inc. and Asset 90047, LLC
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10.25
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Form
of Representation, Warranty and Indemnity Agreement
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10.26
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Form
of Tax Indemnification Agreement
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21.1
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List
of Subsidiaries of the Registrant
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23.1**
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Consent
of BDO USA, LLP
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23.2**
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Consent
of Real Estate Counseling, Inc.
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23.3
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Consent
of Venable LLP (included in Exhibit 5.1)
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23.4
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Consent
of Hunton Andrews Kurth LLP (included in Exhibit 8.1)
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24.1**
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Power
of Attorney
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99.1**
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Consent
of Patrick Donahoe to be named as a director nominee
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99.2**
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Consent
of Anton Feingold to be named as a director nominee
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99.3**
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Consent
of Jane Gural-Senders to be named as a director nominee
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99.4**
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Consent
of Barry Lefkowitz to be named as a director nominee
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* To be filed by amendment.
** Previously filed.
† Compensatory plan or arrangement.
Exhibit 1.1
[______] Shares
POSTAL REALTY TRUST, INC.
Class A Common Stock
UNDERWRITING AGREEMENT
May [___], 2019
Stifel, Nicolaus & Company, Incorporated
501 North Broadway
10
th
Floor
St. Louis, MO 63102
Janney Montgomery Scott LLC
1717 Arch Street
Philadelphia, PA 19103
BMO Capital Markets Corp.
3 Times Square
25
th
Floor
New York, NY 10036
As Representatives of the Several Underwriters
named in Schedule A hereto
Dear Ladies and Gentlemen:
Postal Realty Trust,
Inc., a Maryland corporation (the “
Company
”), and Postal Realty LP, a Delaware limited partnership (the “
Operating
Partnership
” and, together with the Company, the “
Transaction Entities
”), agree with Stifel, Nicolaus
& Company, Incorporated (“
Stifel
”), Janney Montgomery Scott LLC (“
Janney
”) and BMO Capital
Markets Corp. (“
BMO
”), as representatives (the “
Representatives
”) of the several Underwriters
named in
Schedule A
hereto (collectively, the “
Underwriters
”) to issue and sell to the several Underwriters
[_____] shares (the “
Firm Securities
”) of its Class A common stock, par value $0.01 per share (the “
Common
Stock
” or “
Securities
”), and also proposes to issue and sell to the Underwriters, at the option of
the Underwriters, an aggregate of not more than [_______] additional Securities (the “
Optional Securities
”)
as set forth below. The Firm Securities and the Optional Securities are herein collectively called the “
Offered Securities
.”
Simultaneous with the
First Closing Date, the Transaction Entities and certain of their affiliates and subsidiaries will complete a series of transactions
described more fully in the Registration Statement, the General Disclosure Package and the Prospectus under the caption “Structure
and Formation of our Company—Formation Transactions” (collectively, the “
Formation Transactions
”).
As part of the Formation Transactions, the Company will, among other things, (1) consolidate the ownership of the real properties
(the “
Properties
”) and other assets described in the Registration Statement, the General Disclosure Package
and the Prospectus under the Company and the Operating Partnership and (2) contribute the net proceeds from the offering of the
Offered Securities to the Operating Partnership in exchange for common units of limited partnership interest in the Operating Partnership
(“
OP Units
”). A list of material agreements pursuant to which the Formation Transactions will be completed is
set forth on
Schedule B
hereto (collectively, the “
Operative Documents
”).
The Transaction Entities
hereby confirm their agreement with the Underwriters as follows:
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1.
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Representations and Warranties of the Transaction Entities.
Each of the Transaction Entities,
jointly and severally, represents and warrants to, and agrees with, the several Underwriters that:
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(a)
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Filing and Effectiveness of Registration Statement; Certain Defined Terms
. The Company has
filed with the Commission a registration statement on Form S-11 (No. 333-230684) covering the registration of the Offered Securities
under the Securities Act of 1933, as amended (the “
Act
”), including a related preliminary prospectus or prospectuses.
At any particular time, this initial registration statement, in the form then on file with the Commission, including all information
contained in the registration statement pursuant to Rule 462(b), if any, and then deemed to be a part of the initial registration
statement, and all 430A Information (as defined below) and all 430C Information (as defined below), that in any case has not then
been superseded or modified, shall be referred to as the “
Initial Registration Statement
.” The Company may also
file with the Commission a Rule 462(b) registration statement covering the registration of Offered Securities. At any particular
time, this Rule 462(b) registration statement, in the form then on file with the Commission, including the contents of the Initial
Registration Statement incorporated by reference therein and including all 430A Information and all 430C Information, that in any
case has not then been superseded or modified, shall be referred to as the “
Additional Registration Statement
.”
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As of the time of execution and
delivery of this Agreement, the Initial Registration Statement has been declared effective under the Act and is not proposed to
be amended. Any Additional Registration Statement has or will become effective upon filing with the Commission pursuant to Rule
462(b) and is not proposed to be amended. The Offered Securities all have been or will be duly registered under the Act pursuant
to the Initial Registration Statement and, if applicable, the Additional Registration Statement. No stop order suspending the effectiveness
of or use of the Initial Registration Statement and any Additional Registration Statement has been issued under the Act and no
proceedings for that purpose have been instituted and are pending or, to the knowledge of the Transaction Entities, are contemplated
by the Securities and Exchange Commission (the “
Commission
”), and any request on the part of the Commission
for additional information from the Transaction Entities in connection with the Initial Registration Statement and any Additional
Registration Statement has been complied with.
For purposes of this Agreement:
“
430A Information
,”
with respect to any registration statement, means information included in a prospectus and retroactively deemed to be a part of
such registration statement pursuant to Rule 430A(b).
“
430C Information
,”
with respect to any registration statement, means information included in a prospectus then deemed to be a part of such registration
statement pursuant to Rule 430C.
“
Applicable Time
”
means [___] [a./p.]m (Eastern time) on the date of this Agreement.
“
Closing Date
”
has the meaning defined in
Section 2
of this Agreement.
“
Effective Time
”
with respect to the Initial Registration Statement or, if filed prior to the execution and delivery of this Agreement, the Additional
Registration Statement means the date and time as of which such Registration Statement was declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c). If an Additional Registration Statement has not been filed prior to
the execution and delivery of this Agreement but the Company has advised the Representatives that it proposes to file one, “Effective
Time” with respect to such Additional Registration Statement means the date and time as of which such Registration Statement
is filed and becomes effective pursuant to Rule 462(b).
“
Exchange Act
”
means the Securities Exchange Act of 1934, as amended.
“
General Disclosure Package
”
means the Preliminary Prospectus, as amended or supplemented immediately prior to the Applicable Time, together with the information
and free writing prospectuses, if any, identified in
Schedule C
hereto.
“
General Use Issuer Free
Writing Prospectus
” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective
investors, as evidenced by its being so specified in
Schedule C
to this Agreement.
“
Issuer Free Writing Prospectus
”
means any “issuer free writing prospectus,” as defined in Rule 433, including a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i), relating to the Offered Securities in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to
Rule 433(g).
“
Limited Use Issuer Free
Writing Prospectus
” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.
The Initial Registration Statement
and the Additional Registration Statement are referred to collectively as the “
Registration Statements
” and
individually as a “
Registration Statement
.” A “Registration Statement” with reference to a particular
time means the Initial Registration Statement and any Additional Registration Statement as of such time. A “Registration
Statement” without reference to a time means such Registration Statement as of its Effective Time. For purposes of the foregoing
definitions, 430A Information with respect to a Registration Statement shall be considered to be included in such Registration
Statement as of the time specified in Rule 430A.
“
Material Adverse Effect
”
means any material adverse change or effect, or any development involving a prospective material adverse change or effect, in or
affecting (i) the business, properties, general affairs, management, financial position, prospects, stockholders’ equity
or results of operations of the Transaction Entities or their respective subsidiaries or any predecessor entity of the Company,
the Operating Partnership or their respective subsidiaries (the “
Predecessor Entities
”), taken as a whole, whether
or not arising in the ordinary course of business, or (ii) the ability of the Transaction Entities to perform their respective
obligations under this Agreement, including the issuance and sale of the Offered Securities, or to consummate the transactions
contemplated in the General Disclosure Package and the Prospectus.
“
Prospectus
”
means the Statutory Prospectus that discloses the public offering price, other 430A Information and other final terms of the Offered
Securities and otherwise satisfies Section 10(a) of the Act.
“
Rules and Regulations
”
means the rules and regulations of the Commission.
“
Securities
Laws
” means, collectively, the Sarbanes-Oxley Act of 2002 (“
Sarbanes-Oxley
”), the Act, the Exchange
Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers”
(as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the
rules (“
Exchange Rules
”) of the New York Stock Exchange (the “
NYSE
”).
“
Statutory
Prospectus
” with reference to a particular time means the prospectus included in a Registration Statement immediately
prior to that time, including any 430A Information or 430C Information with respect to such Registration Statement. For purposes
of the foregoing definition, 430A Information shall be considered to be included in the Statutory Prospectus as of the actual time
that form of prospectus is filed with the Commission pursuant to Rule 424(b) or Rule 462(c) and not retroactively.
Unless otherwise specified,
a reference to a “
rule
” or “
Rule
” is to the indicated rule under the Act or the Exchange
Act as applicable.
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(b)
|
Compliance with Securities Act Requirements
. (i) (A) At their respective Effective Times,
(B) on the date of this Agreement and (C) on each Closing Date, each of the Initial Registration Statement or any post-effective
amendment thereto and the Additional Registration Statement (if any) complied and will comply in all material respects to the requirements
of the Act and the Rules and Regulations thereunder, and did not, does not and will not include any untrue statement of a material
fact or omitted, omits or will omit to state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; (ii) the preliminary prospectus included
in the General Disclosure Package and furnished to the Underwriters for delivery to prospective investors (the “
Preliminary
Prospectus
”) complied in all material respects with the Act (including without limitation Section 10 of the Act) and
did not, as of its date and does not, on the date of this Agreement, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading; and (iii) the Prospectus and each amendment or supplement thereto, as of their respective issue dates, complied
and will comply in all material respects with the Act and the Rules and Regulations thereunder, and neither the Prospectus nor
any amendment or supplement thereto, as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b)
and at each Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit
to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. The representation and warranties contained herein do not apply to statements in or omissions from any document
discussed herein based upon written information furnished to the Transaction Entities by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that such information is only that described as such in Section 7(c)
hereof (collectively, the “
Underwriter Information
”). Each preliminary prospectus and the Prospectus delivered
to the Underwriters for use in connection with the offering of the Offered Securities were or will be substantially identical to
the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
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|
(c)
|
Ineligible Issuer Status
. At the time of filing the Initial Registration Statement and any
post-effective amendment thereto, at the earliest time thereafter that the Company or any offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the Act) of the Offered Securities, and at the date hereof, the Company was not
and is not an “ineligible issuer,” as defined under Rule 405 under the Act.
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(d)
|
Emerging Growth Company
. From the time of initial confidential submission of a registration
statement relating to the Offered Securities with the Commission (or, if earlier, the first date on which a Section 5(d) Communication
(as defined below) was made) through the date hereof, the Company has been and is an “emerging growth company” as defined
in Section 2(a)(19) of the Act (an “
Emerging Growth Company
”).
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(e)
|
General Disclosure Package
. As of the Applicable Time and on each Closing Date, none of
(i) the General Disclosure Package, (ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with
the General Disclosure Package, (iii) each road show, if any, when considered together with the General Disclosure Package, and
(iv) any individual Section 5(d) Writing (as defined below), if any, listed on
Schedule C
hereto, when considered together
with the General Disclosure Package, included, includes or will include any untrue statement of a material fact or omitted, omits
or will omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus,
Issuer Free Writing Prospectus, road show or Section 5(d) Writing, if any, made in reliance upon and in conformity with the Underwriter
Information. For purposes of this Agreement, any oral or written communication with potential investors undertaken in reliance
on Section 5(d) of the Act is herein called a “
Section 5(d) Communication
,” and any Section 5(d) Communication
that is a written communication within the meaning of Rule 405 under the Act is herein called a “
Section 5(d) Writing
.”
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(f)
|
Preliminary Prospectus
. No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and each preliminary prospectus included in the General Disclosure Package, at the time of filing
thereof with the Commission, complied in all material respects with the Act and the Rules and Regulations.
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(g)
|
Issuer Free Writing Prospectuses
. Each Issuer Free Writing Prospectus, as of its issue date
and at all subsequent times through the completion of the public offer and sale of the Offered Securities did not, does not and
will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration
Statement. Each Issuer Free Writing Prospectus conformed, conforms or will conform in all respects to the requirements of the Act
and the Rules and Regulations thereunder. The Company has not made any offer relating to the Offered Securities that would constitute
an Issuer Free Writing Prospectus without the prior written consent of the Representatives; provided that such consent is deemed
to have been given with respect to each Issuer Free Writing Prospectus identified on
Schedule C
to this Agreement. The Company
(i) has filed or will file each Issuer Free Writing Prospectus required to be filed with the Commission pursuant to the Act and
the Rules and Regulations thereunder in accordance therewith and/or (ii) has retained or will retain in accordance with the Act
and the Rules and Regulations thereunder all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the
Act and the Rules and Regulations thereunder. The Company has made a bona fide electronic road show in compliance with Rule 433(d)(8)(i)
such that no filing of any road show (as defined in Rule 433(h)) is required in connection with the offering of the Offered Securities.
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(h)
|
Section 5(d) Communications
. The Company (i) has not engaged in, or authorized any other
person to engage in, any Section 5(d) Communications, other than Section 5(d) Communications with the prior consent of the Representatives
with entities that are qualified institutional buyers as defined in Rule 144A under the Act or institutions that are accredited
investors as defined in Rule 501(a) under the Act; and (ii) it has not distributed, or authorized any other person to distribute,
any Section 5(d) Writings, other than those distributed with the prior consent of the Representatives that are listed on
Schedule
C
hereto; and the Company reconfirms that the Underwriters have been authorized to act on its behalf in engaging in Section
5(d) Communications.
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(i)
|
Good Standing of the Company
. The Company has been duly formed and is validly existing as
a corporation in good standing under the laws of the State of Maryland, is duly qualified as a foreign corporation for the transaction
of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification in such jurisdiction, except where the failure to so qualify or to be in good
standing would not have a Material Adverse Effect, and has the power and authority necessary to own its properties and conduct
its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and to enter into and
perform its obligations (i) under this Agreement and the Operative Documents, to the extent it is a party to such agreements, and
(ii) in connection with the Formation Transactions.
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(j)
|
Good Standing of the Operating Partnership
. The Operating Partnership has been duly formed
and is validly existing as a limited partnership in good standing under the laws of the State of Delaware, is duly qualified as
a foreign limited partnership for the transaction of business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to require such qualification in such jurisdiction, except
where the failure to so qualify or to be in good standing would not have a Material Adverse Effect, and has the power and authority
necessary to own its properties and conduct its business as described in the Registration Statement, the General Disclosure Package
and the Prospectus and to enter into and perform its obligations (i) under this Agreement and the Operative Documents, to the extent
it is a party to such agreements, and (ii) in connection with the Formation Transactions. The Company, immediately following the
Formation Transactions, will be the sole general partner of the Operating Partnership and at the Closing Date, the Agreement of
Limited Partnership of the Operating Partnership, in the form filed as an exhibit to the Registration Statement, will be in full
force and effect, and the aggregate percentage interests of the Company and the limited partners in the Operating Partnership will
be as set forth in the General Disclosure Package and the Prospectus, provided that to the extent any portion of the Underwriters’
option to purchase Optional Securities is exercised as of the Closing Date, the percentage interest of such partners in the Operating
Partnership will be adjusted accordingly and, additionally, to the extent any portion of such option is exercised subsequent to
the Closing Date, the Company will contribute the proceeds from the sale of the Optional Securities to the Operating Partnership
in exchange for a number of OP Units equal to the number of Optional Securities issued.
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(k)
|
Subsidiaries
. Each subsidiary of the Company (after giving effect to the Formation Transactions)
has been duly organized and is existing and in good standing under the laws of the jurisdiction of its organization, with power
and authority to own its properties and conduct its business as described in the Registration Statement, the General Disclosure
Package and the Prospectus except where the failure to be so qualified would not, individually or in the aggregate, result in a
Material Adverse Effect; and each subsidiary is duly qualified to do business as a foreign organization in good standing in all
other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the aggregate, result in a Material Adverse Effect; all of the
issued and outstanding equity interests of each subsidiary of the Company have been duly authorized and validly issued and, in
the case of subsidiaries that are corporations, is fully paid and nonassessable; and the equity interests of each subsidiary is
owned by the Company, directly or through subsidiaries, free from liens, encumbrances and defects, except as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus. Except for the equity interests of each of the subsidiaries owned
by the Company, the Company does not own any shares of stock or any other equity securities of any corporation or has any equity
interest in any firm, partnership, association or other entity, except as described in the Registration Statement, the General
Disclosure Package and the Prospectus.
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(l)
|
Offered Securities
. The Offered Securities and all outstanding shares of capital stock of
the Company have been duly authorized; the authorized equity capitalization of the Company is as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus (except for subsequent issuances, if any, pursuant to this Agreement,
pursuant to reservations, agreements or employee benefit or equity incentive plans described in the Registration Statement, the
General Disclosure Package and the Prospectus); all outstanding shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with this Agreement on each Closing Date, such Offered Securities will
have been, validly issued, fully paid and nonassessable, will conform to the information in the Registration Statement, the General
Disclosure Package and the Prospectus and to the description of such Offered Securities contained therein; the shareholders of
the Company have no preemptive rights with respect to the Offered Securities; none of the outstanding shares of common stock of
the Company have been issued in violation of any preemptive or similar rights of any securityholder; the forms of certificates
used to represent the Offered Securities, if any, comply in all material respects with all applicable statutory requirements and
with any applicable requirements of the Organizational Documents of the Company, and, in the case of the Offered Securities, with
any requirements of the NYSE; the Securities have been registered pursuant to Section 12(b) of the Exchange Act and the Company
has not received any notification that the Commission is contemplating terminating such registration; and the Company has not received
any notification that the NYSE is contemplating terminating the listing of the Securities. Except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, there are no outstanding (i) securities or obligations of the Company
convertible into or exchangeable for any Common Stock of the Company, (ii) warrants, rights or options to subscribe for or purchase
from the Company any such Common Stock or any such convertible or exchangeable securities or obligations or (iii) obligations of
the Company to issue or sell any shares of Common Stock, any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
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(m)
|
OP Units
. The OP Units to be issued in the Formation Transactions have been duly and validly
authorized for issuance by the Operating Partnership and, at the Closing Date, will be validly issued; the issuance and sale
by the Operating Partnership of the OP Units in connection with the Formation Transactions are exempt from the registration requirements
of the Act and applicable state securities, real estate syndication and blue sky laws; the terms of the OP Units conform in
all material respects to the description related thereto contained in the General Disclosure Package and the Prospectus; and
except as disclosed in the General Disclosure Package and the Prospectus, (i) no OP Units are reserved for any purpose, (ii) there
are no outstanding securities convertible into or exchangeable for any OP Units, and (iii) there are no outstanding options, rights
(preemptive or otherwise) or warrants to purchase or subscribe for OP Units or any other securities of the Operating Partnership.
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|
(n)
|
Formation Shares
. The Common Stock (other than the Offered Securities) to be issued in connection
with the Formation Transactions (the “
Formation Shares
”) have been duly and validly authorized for issuance
and sale to the applicable persons or their nominees pursuant to the applicable Operative Documents and, when the Formation Shares
have been issued and delivered by the Company pursuant to the applicable Operative Document against payment of the consideration
set forth therein, the Formation Shares will be duly and validly issued and fully paid and non-assessable; the issuance of
the Formation Shares is not subject to any preemptive or other similar rights of any securityholder of the Company; and the
issuance and sale by the Company of the Formation Shares are exempt from the registration requirements of the Act and applicable
state securities, real estate syndication and blue sky laws.
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(o)
|
No Finder’s Fee
. Except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, there are no contracts, agreements or understandings between the Transaction Entities or any of their
respective affiliates, and any of their respective direct or indirect subsidiaries, and any person that would give rise to a valid
claim against the Transaction Entities or any Underwriter for a brokerage commission, finder’s fee or other like payment
in connection with this offering.
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(p)
|
Registration Rights
. Except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, there are no contracts, agreements or arrangements between either of the Transaction Entities or any
of their respective subsidiaries, on the one hand, and any person, on the other hand, granting such person the right to require
either of the Transaction Entities or any of their respective subsidiaries to file a registration statement under the Act with
respect to any securities of the Company, the Operating Partnership or any of their respective subsidiaries; except as described
in the Registration Statement, the General Disclosure Package and the Prospectus, no person has the right, pursuant to any contract,
agreement or arrangement, to have the offer and sale of any such securities to be registered under the Act pursuant to the Registration
Statement.
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(q)
|
Listing
. The Offered Securities have been approved for listing on the NYSE, subject to notice
of issuance.
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(r)
|
Absence of Further Requirements
. No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body is required for the performance by each Transaction Entity
of its obligations hereunder, in connection with the offering, issuance or sale of the Offered Securities hereunder or the consummation
of the transactions contemplated by this Agreement, or under the Operative Documents, or in connection with the consummation of
the Formation Transactions, except (i) such as have already been obtained or as may be required for the registration under the
Act of the Offered Securities, or (ii) such consents, approvals, authorizations, registrations or qualifications as may be required
under state securities or blue sky laws in connection with the purchase and distribution of the Offered Securities by the Underwriters,
by the rules of the NYSE or by the rules of the Financial Industry Regulatory Authority, Inc. (“
FINRA
”);
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(s)
|
Title to Property
. (i) Upon consummation of the Formation Transactions, the Transaction
Entities and their respective subsidiaries will have good and marketable title in fee simple to all of the Properties owned by
them, in each case free and clear of all mortgages, liens, deeds of trust, pledges, claims, restrictions, encumbrances and defects
except such mortgages, liens, deeds of trust, pledges, claims, restrictions, encumbrances and defects as do not, individually or
in the aggregate, materially affect the value of the Properties taken as a whole and do not materially interfere with the use made
and proposed to be made of such Property by the Transaction Entities and their respective subsidiaries; (ii) no third party,
including any tenant at any of the Properties, has any option or right of first refusal to purchase any Property or any portion
thereof or interest therein; (iii) all liens, charges, encumbrances, claims or restrictions on any of the Properties and the
assets of either of the Transaction Entities or any of their respective subsidiaries that are required to be disclosed in the General
Disclosure Package are disclosed therein; and (iv) neither of the Transaction Entities nor any of their respective subsidiaries
owns any real property material to the business of the Transaction Entities and their respective subsidiaries other than the Properties.
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(t)
|
Casualty
. None of the Properties has sustained any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by insurance, except for such loss as would not have a Material
Adverse Effect.
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(u)
|
Leases
. The Transaction Entities or one of their respective subsidiaries holds the lessor’s
interest under the leases with any tenants occupying each Property (collectively, the “
Leases
”). Other than
the Leases or as described in the General Disclosure Package, none of the Transaction Entities nor any of their respective subsidiaries
has entered into any agreements that would materially affect the value of any Property or would materially interfere with the use
made and proposed to be made of such Property by the Transaction Entities. Neither the Transaction Entities, nor, to the Transaction
Entities’ knowledge, any other party to any Lease, is in breach or default of any such Lease; to the Transaction Entities’
knowledge, no event has occurred or been threatened in writing, which with or without the passage of time or the giving of notice,
or both, would, individually or together with all such other events, constitute a default under any Lease, or would permit termination,
modification or acceleration under such Lease; and each of the Leases is valid and binding and in full force and effect, subject
to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles
of equity.
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(v)
|
Compliance with Laws Concerning Properties
. Except as would not, individually or in the
aggregate, have a Material Adverse Effect, neither of the Transaction Entities nor any of their respective subsidiaries is in violation
of any municipal, state or federal law, rule or regulation concerning any Property; except as disclosed in the General Disclosure
Package and the Prospectus, each of the Properties complies with all applicable codes, laws, ordinances, regulations and deed restrictions
or other covenants (including, without limitation, building and zoning laws and laws and regulations relating to access), except
where the failure to comply would not, individually or in the aggregate, have a Material Adverse Effect; except as disclosed
in the Registration Statement, the General Disclosure Package and the Prospectus, neither of the Transaction Entities nor any of
their respective subsidiaries has any knowledge of any pending or threatened condemnation proceedings, zoning change or other proceeding
or action that would affect the use or value of any of the Properties, except for such proceedings or other instances that would
not, individually or in the aggregate, have a Material Adverse Effect.
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(w)
|
Due Authorization; Absence of Defaults and Conflicts Resulting from Transaction
. The execution,
delivery and performance of this Agreement by the Transaction Entities and their respective subsidiaries (to the extent such entity
is a party thereto) and their consummation, as applicable, of the transactions contemplated herein and therein, the Formation Transactions,
the issuance and sale of the Offered Securities and the use of proceeds from the sale of the Offered Securities as described therein
under the caption “Use of Proceeds,” and compliance by the Transaction Entities with their obligations hereunder and
pursuant to the Operative Documents have been duly authorized by all necessary trust, corporate, limited liability company or limited
partnership action, as applicable, and do not and will not, whether with or without the giving of notice or the passage of time
or both, conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default or Repayment
Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties
or assets of either of the Transaction Entities or any of their respective subsidiaries or any Predecessor Entity (or a subsidiary
thereof) pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which either of
the Transaction Entities or any of their respective subsidiaries is a party or by which either of the Transaction Entities or any
of their respective subsidiaries may be bound, or to which any of the Properties or any other properties or assets of either of
the Transaction Entities or any of their respective subsidiaries is subject, except for such conflicts, breaches, violations, defaults,
Repayment Events, liens, charges or encumbrances that would not, individually or in the aggregate, have a Material Adverse Effect,
and would not materially adversely affect consummation of the transactions contemplated by this Agreement, nor will such action
result in any violation of (i) the provisions of the Organizational Documents (as defined below) of the Transaction Entities or
any of their respective subsidiaries or any Predecessor Entity (or any subsidiary thereof) or (ii) any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction over either of the Transaction Entities or any of
their respective subsidiaries or any of their Properties, except, in the case of clause (ii), for such violations that would not,
individually or in the aggregate, have a Material Adverse Effect, and would not materially adversely affect consummation of the
transactions contemplated by this Agreement. As used herein, “
Organizational Documents
” means the following,
each as amended from time to time: (i) in the case of a corporation, its charter and bylaws; (ii) in the case of a limited
or general partnership, its partnership certificate, certificate of formation or similar organizational document and its partnership
agreement; (iii) in the case of a limited liability company, its articles of organization, certificate of formation or similar
organizational document and its operating agreement, limited liability company agreement, membership agreement or other similar
agreement; (iv) in the case of a Maryland real estate investment trust, its declaration of trust and its bylaws; (v)
in the case of a trust, its certificate or declaration of trust, certificate of formation or similar organizational document and
its trust agreement or other similar agreement; and (vi) in the case of any other entity, the organization and governing documents
of such entity, and “
Repayment Event
” means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by either of the Transaction Entities or any of their respective subsidiaries
or any Predecessor Entity (or subsidiary thereof).
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(x)
|
Operative Documents
. The Transaction Entities and their respective subsidiaries, in each
case, to the extent that each such entity is a party thereto, have the legal right and power to enter into each of the Operative
Documents; the Transaction Entities and their respective subsidiaries, in each case, to the extent that each such entity is
a party thereto, have duly authorized, executed and delivered, or will execute and deliver prior to or concurrent with the Closing
Date, each of the Operative Documents; and each Operative Document constitutes a legally valid and binding obligation of the
Transaction Entities and their respective subsidiaries, in each case, to the extent that it is a party thereto, enforceable against
each of them that is a party thereto in accordance with its terms, except to the extent that such enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights and remedies generally.
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(y)
|
Absence of Existing Defaults and Conflicts
. Neither of the Transaction Entities nor any
of their respective subsidiaries is (i) in violation of its Organizational Documents, (ii) in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which either of the Transaction Entities or any of their respective subsidiaries is a party
or by which it may be bound, or to which any of the Properties or any other properties or assets of the Transaction Entities or
any of their respective subsidiaries is subject, except for such defaults that would not, individually or in the aggregate, have
a Material Adverse Effect, or (iii) in violation of any law, statute, rule, regulation, judgment, order, writ or decree of any
arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency having jurisdiction
over either of the Transaction Entities or any of their respective subsidiaries or any of their respective properties, assets or
operations, except for such violations that would not, individually or in the aggregate, have a Material Adverse Effect.
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(z)
|
Possession of Permits
. Each of the Transaction Entities and their respective subsidiaries
possess such licenses, permits, approvals, consents, certificates and other authorizations from, and have made all declarations
and filings with, all governmental authorities required or necessary to own or lease, as the case may be, and to operate their
respective Properties and to carry on their respective businesses as now or proposed to be conducted as described in the Registration
Statement, the General Disclosure Package and the Prospectus (collectively, “
Permits
”), except where the failure
to possess such Permits or make such declarations or filings would not, individually or in the aggregate, have a Material Adverse
Effect. Each of the Transaction Entities and their respective subsidiaries have fulfilled and performed all of their respective
obligations with respect to such Permits and all of the Permits are valid and in full effect, and no event has occurred which allows,
or after notice or lapse of time would allow, and neither of the Transaction Entities nor any of their respective subsidiaries
nor any Predecessor Entity (or a subsidiary thereof) has received any notice of proceedings relating to, revocation, modification,
or termination thereof or results in any other impairment of the rights of the holder of any such Permit, except, in each case,
as would not, individually or in the aggregate, have a Material Adverse Effect.
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(aa)
|
Absence of Labor Dispute
. None of the Transaction Entities nor any of their respective subsidiaries
is engaged in any unfair labor practice; and (i) there is (A) no unfair labor practice complaint pending or, to the knowledge of
the Transaction Entities, threatened against the Transaction Entities or any of their respective subsidiaries before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements is pending
or, to the knowledge of the Transaction Entities, threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to
the knowledge of the Transaction Entities, threatened against any of the Transaction Entities or any of their respective subsidiaries
and (C) no union representation dispute currently existing concerning the employees of any of the Transaction Entities or any of
their respective subsidiaries, (ii) to the knowledge of the Transaction Entities, no union organizing activities are currently
taking place concerning the employees of the Transaction Entities or any of their respective subsidiaries and (iii) there has been
no violation of any federal, state or local law relating to discrimination in the hiring, promotion or pay of employees, any applicable
wage or hour laws or any provision of the Employee Retirement Income Security Act of 1974, as amended (“
ERISA
”),
concerning the employees of the Transaction Entities or any of their respective subsidiaries except for such violations as would
not have a Material Adverse Effect.
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(bb)
|
Possession of Intellectual Property
. The Transaction Entities and their respective subsidiaries
have access to adequate patents, patent rights, licenses, inventions, copyrights, know how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or
other intellectual property necessary to conduct the business now operated by them, and none of the Transaction Entities nor any
of their respective subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect
to any of the foregoing which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
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(cc)
|
Environmental Laws
. Except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, and, except in each case as would not, individually or in the aggregate, have a Material Adverse Effect,
(i) neither of the Transaction Entities nor any of their respective subsidiaries nor any Predecessor Entity (or subsidiary thereof)
is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products, asbestos-containing materials or mold (collectively, “
Hazardous Materials
”) or to the
manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively,
“
Environmental Laws
”), (ii) each of the Transaction Entities and their respective subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements,
(iii) there are no pending or, to the knowledge of the Transaction Entities, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating
to any Environmental Law against either of the Transaction Entities or any of their respective subsidiaries or any Predecessor
Entity (or subsidiary thereof) and (iv) to the knowledge of the Transaction Entities, there are no events or circumstances that
would reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting either of the Transaction Entities or their respective subsidiaries
relating to Hazardous Materials or any Environmental Laws.
|
|
|
(dd)
|
Employment; Noncompetition; Nondisclosure
. None of the Transaction Entities has been notified
that any director, officer or other key person of the Transaction Entities or any of their respective subsidiaries plans to terminate
his or her employment with any Transaction Entity or any of their respective subsidiaries, as applicable. None of the Transaction
Entities or any of their respective subsidiaries is subject to any noncompete, nondisclosure, confidentiality, employment, consulting
or similar agreement that would be violated by the business activities of the Transaction Entities as described in the Registration
Statement, the General Disclosure Package and the Prospectus.
|
|
|
(ee)
|
Accurate Disclosure
. The statements in the Registration Statement, the General Disclosure
Package and the Prospectus under the captions “Prospectus Summary—Structure and Formation of Our Company,” “Prospectus
Summary—Restrictions on Transfer,” “Prospectus Summary—Restrictions on Ownership of our Capital Stock,”
“Prospectus Summary—Our Tax Status,” “Management,” “Executive Compensation,” “Certain
Relationships and Related Transactions,” “Policies With Respect to Certain Activities,” “Structure and
Formation of our Company,” “Description of the Partnership Agreement of Postal Realty LP,” “Description
of Capital Stock,” “Certain Provisions of Maryland Law and of Our Charter and Bylaws,” “Material Federal
Income Tax Considerations,” and “Underwriting,” insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings
in all material respects and present the information required to be shown.
|
|
|
(ff)
|
Absence of Manipulation
. None of the Transaction Entities nor or any of their respective
subsidiaries nor, to the Transaction Entities’ knowledge, any affiliates of the Transaction Entities, has taken, directly
or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.
|
|
|
(gg)
|
Statistical and Market-Related Data
. Any third-party statistical and market-related data
included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources
that the Transaction Entities believe to be reliable and accurate.
|
|
|
(hh)
|
Internal Controls and Compliance with the Sarbanes-Oxley Act
. The Company, its subsidiaries
and the Company’s Board of Directors are in compliance with all applicable provisions of Sarbanes-Oxley and the Exchange
Rules. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Company maintains
a system of internal controls, including, but not limited to, disclosure controls and procedures, internal controls over accounting
matters and financial reporting, an internal audit function and legal and regulatory compliance controls (collectively, “
Internal
Controls
”) that complies with the applicable Securities Laws are sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“
U.S.
GAAP
”) and to maintain accountability for assets; (C) receipts and expenditures are being made only in accordance with
management’s general or specific authorization; (D) access to assets is permitted only in accordance with management’s
general or specific authorization; and (E) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Internal Controls will be overseen by the Audit
Committee of the Board (the “
Audit Committee
”) in accordance with the Exchange Rules. Except as described in
the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not publicly disclosed or reported
to the Audit Committee or the Board, and as of the date hereof is not aware of any facts or circumstances that would require the
Company to publicly disclose or report to the Audit Committee or the Board, a significant deficiency, material weakness, change
in Internal Controls or fraud involving management or other employees who have a significant role in Internal Controls, any violation
of, or failure to comply with, the applicable Securities Laws, or any matter which, if determined adversely, would have a Material
Adverse Effect. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since the
date of the latest audited financial statements included in the General Disclosure Package, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
|
|
|
(ii)
|
Disclosure Controls
. Except as described in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company maintains an effective system of “disclosure controls and procedures” (as defined
in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to provide
reasonable assurances that information required to be disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms,
including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required disclosure, and such disclosure controls and procedures
are effective in all material respects to perform the functions for which they were established.
|
|
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(jj)
|
Litigation
. There are no pending actions, suits or proceedings (including any inquiries
or investigations by any court or governmental agency or body, domestic or foreign) against or affecting the Transaction Entities
or any of their respective subsidiaries or Properties that, if determined adversely to any of the Transaction Entities or any of
their respective subsidiaries or Properties, would materially and adversely affect the ability of the Transaction Entities to perform
its obligations under this Agreement or the Operative Documents, or which are otherwise material in the context of the sale of
the Offered Securities; and none of the Transaction Entities nor any of their respective subsidiaries has received any written
notice or communication threatening such actions, suits or proceedings (including any inquiries or investigations by any court
or governmental agency or body, domestic or foreign) and, to the Transaction Entities’ knowledge, none are contemplated.
|
|
|
(kk)
|
Financial Statements; Non-GAAP Financial Measures
. The financial statements included in
the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present
fairly in all material respects the financial position of the Company’s predecessor and its consolidated subsidiaries as
of the dates indicated, and the balance sheets, statements of operations, changes in shareholders’ equity and cash flows
of the Company’s predecessor and its consolidated subsidiaries for the periods specified; said financial statements have
been prepared in conformity with U.S. GAAP applied on a consistent basis throughout the periods involved and comply with the Commission’s
rules and guidelines with respect thereto. The supporting schedules included in the Registration Statement, the General Disclosure
Package and the Prospectus relating to the Company and its consolidated subsidiaries present fairly in accordance with U.S. GAAP
the information required to be stated therein. The selected financial data and the summary financial information included in the
Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the information
shown therein and have been compiled on a basis consistent with that of the audited, or unaudited as applicable, financial statements
of the Company’s predecessor included therein and comply with the Commission’s rules and guidelines with respect thereto.
The unaudited pro forma consolidated financial statements and the related notes thereto included in the Registration Statement,
the General Disclosure Package and the Prospectus present fairly in all material respects the information shown therein, comply
with the Commission’s rules and guidelines with respect to unaudited pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and circumstances referred to therein. Except as included therein,
no historical or unaudited pro forma financial statements or supporting schedules are required to be included in the Registration
Statement, the General Disclosure Package or the Prospectus under the Act or the Rules and Regulations. All disclosures contained
in the Registration Statement, the General Disclosure Package or the Prospectus regarding “non-GAAP financial measures”
(as such term is defined by the Rules and Regulations) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K
under the Act and the Exchange Act to the extent applicable.
|
|
|
(ll)
|
No Material Adverse Change in Business
. Since the respective dates as of which information
is given in the Registration Statement and the General Disclosure Package, and other than as set forth in the General Disclosure
Package, (i) there has not been any change in the capital stock or long-term debt of the Company, the Operating Partnership or
any of their respective subsidiaries, (ii) there has been no Material Adverse Effect, (iii) there have been no transactions entered
into by the Company or the Operating Partnership or any of its subsidiaries or any Predecessor Entity (or subsidiary thereof) which
are material with respect to the Transaction Entities and their respective subsidiaries considered as one enterprise, (iv) there
has been no dividend or distribution of any kind by any Transaction Entity or any Predecessor Entity (or subsidiary thereof) on
any class of its capital stock, OP Units or other form of ownership interests, and (v) except as would not, individually or in
the aggregate, have a Material Adverse Effect, neither of the Transaction Entities nor any of their respective subsidiaries has
sustained since the date of the latest audited financial statements included in the General Disclosure Package any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree.
|
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(mm)
|
Investment Company Act
. Neither of the Transaction Entities are and, after giving effect
to the issuance and sale of the OP Units and the Formation Shares in connection with the Formation Transactions, the offering and
sale of the Offered Securities and the application of the proceeds thereof, neither of the Transaction Entities will be required
to register as an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended (the
“
Investment Company Act
”).
|
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(nn)
|
Insurance
. Each of the Transaction Entities and their respective subsidiaries and each Predecessor
Entity (or subsidiary thereof) carry or are entitled to the benefits of insurance, with financially sound and reputable insurers,
in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar
business, and all such insurance is in full force and effect; neither of the Transaction Entities has any reason to believe
that it or any of their respective subsidiaries will not be able to (i) renew its existing coverage as and when such policies expire
or (ii) obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct their respective businesses
as now conducted and at a cost that would not have a Material Adverse Effect; neither of the Transaction Entities nor any
of their respective subsidiaries nor any Predecessor Entity (or subsidiary thereof) has been denied any material insurance coverage
which it has sought or for which it has applied; without limiting the generality of the foregoing, each of the Transaction
Entities and their respective subsidiaries, directly or indirectly, have obtained title insurance on the fee or leasehold interests,
as the case may be, in each of the Properties, in such amounts as is adequate for the conduct of its business and the value of
its Properties and is prudent and customary for companies engaged in similar businesses.
|
|
|
(oo)
|
Mortgages
. Except as disclosed in the Registration Statement, the General Disclosure Package
and the Prospectus, the mortgages and deeds of trust encumbering the Properties are not: (i) convertible (in the absence of foreclosure)
into an equity interest in the entity owning such Property or in the Transaction Entities or any of their respective subsidiaries;
(ii) cross-defaulted to any indebtedness other than indebtedness of the Transaction Entities or any of their respective subsidiaries;
or (iii) cross-collateralized to any property or assets not owned directly or indirectly by the Transaction Entities or any of
their respective subsidiaries.
|
|
|
(pp)
|
Tax Law Compliance
. The Company and its subsidiaries have filed or will file (i) all federal
and state income tax returns, (ii) all material franchise tax returns and (iii) all other material tax returns in a timely manner,
and all such tax returns are correct and complete in all material respects, and have paid all taxes required to be paid by any
of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except for any
taxes, assessments, fines or penalties that are not material and are being contested in good faith by appropriate proceedings.
No audits or other administrative proceedings or court proceedings are presently pending against the Company or any of its subsidiaries
with regard to any tax returns, and no taxing authority has notified the Company or any of its subsidiaries that it intends to
investigate its tax affairs. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus,
the Company and each of its subsidiaries have no knowledge of any tax deficiency which has been or is likely to be threatened or
asserted against the Company or any of its subsidiaries, as the case may be.
|
|
|
(qq)
|
Real Estate Investment Trust
. Commencing with its short taxable year ending December 31,
2019, the Company will be organized in conformity with the requirements for qualification and taxation as a real estate investment
trust (“
REIT
”) under the Internal Revenue Code of 1986, as amended (the “
Code
”), and the
Company’s proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT under
the Code for such taxable year and thereafter; all statements regarding the Company’s qualification and taxation as
a REIT and descriptions of the Company’s organization and proposed method of operation (inasmuch as they relate to the Company’s
qualification and taxation as a REIT) set forth in the Registration Statement, the General Disclosure Package and the Prospectus
are true, complete and correct in all material respects.
|
|
|
(rr)
|
Accuracy of Exhibits
. There are no contracts or other documents that are required to be
described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
|
|
|
(ss)
|
No Restriction on Subsidiaries
. Except as described in the Registration Statement, General
Disclosure Package or the Prospectus, (i) the Company is not currently prohibited, directly or indirectly, from making any distributions
to its stockholders, (ii) the Operating Partnership is not currently prohibited, directly or indirectly, from paying any distributions
to the Company to the extent permitted by applicable law, from making any other distribution on the OP Units or other partnership
interests of the Operating Partnership, or from repaying the Company for any loans or advances made by the Company to the Operating
Partnership, and (iii) no other subsidiary of the Transaction Entities is currently prohibited from paying any dividends or distributions
directly or indirectly to the Transaction Entities, from making any other distribution on such subsidiary’s capital stock
or other equity interests, from repaying, directly or indirectly, to the Transaction Entities any loans or advances to such subsidiary
from the Transaction Entities or from transferring any of such subsidiary’s property or assets directly or indirectly to
the Transaction Entities or any other subsidiary of the Transaction Entities.
|
|
|
(tt)
|
No Unlawful Payments
. None of the Transaction Entities, any of their respective subsidiaries,
any trustee, director, officer nor, to the knowledge of the Transaction Entities, any agent, employee, affiliate or other person
associated with or acting on behalf of either of the Transaction Entities or any of their respective subsidiaries has (i) made
any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) has violated,
or is in violation of, any provision of the Foreign Corrupt Practices Act of 1977; (iv) has violated, or is in violation of,
any provision of the Bribery Act 2010 of the United Kingdom; or (v) has made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment; and the Transaction Entities and their respective subsidiaries and affiliates have conducted
their respective businesses in compliance with applicable anti-corruption laws and have instituted and maintain and will continue
to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty
contained herein.
|
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|
(uu)
|
Compliance with Anti-Money Laundering Laws
. The operations of the Transaction Entities and
their respective subsidiaries are and have been conducted at all times in compliance with the requirements of applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any applicable governmental authority (collectively, the “
Money Laundering
Laws
”); and no action, suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Transaction Entities or any of their respective subsidiaries with respect to the Money Laundering Laws
is pending or, to the knowledge of the Transaction Entities, threatened.
|
|
|
(vv)
|
Compliance with OFAC
. None of the Transaction Entities, nor any of their respective subsidiaries,
any trustee, director, officer or, to the knowledge of the Transaction Entities, any agent, employee affiliate or representative
of the Transaction Entities or any of their respective subsidiaries is an individual or entity, or is controlled by an individual
or entity, that is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including,
without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“
OFAC
”), the
United Nations Security Council (“
UNSC
”), the European Union, or Her Majesty’s Treasury (“
HMT
”),
or other relevant sanctions authority (collectively, “
Sanctions
”), or located, organized or resident in a country
or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the offering
of the Offered Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture
partner or other individual or entity (i) to fund or facilitate any activities of or business with any individual or entity, or
in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in any other
manner that will result in a violation by any individual or entity (including any individual or entity participating in the transaction,
whether as underwriter, advisor, investor or otherwise) of Sanctions; since inception, the Transaction Entities and their
respective subsidiaries have not engaged in any transactions prohibited by Sanctions, that at the time of the transaction was known
to the Transaction Entities to be prohibited by such Sanctions; and the Transaction Entities and their respective subsidiaries
will not engage in any transactions prohibited by Sanctions, that at the time of the transaction is known to the Transaction Entities
to be prohibited by such Sanctions.
|
|
|
(ww)
|
Prior Sales of Securities
. Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company has not sold, issued or distributed any Securities during the six-month period
preceding the date hereof.
|
|
|
(xx)
|
Independent Accountants
. BDO USA LLP, who have certified the financial statements and supporting
schedules included in the Registration Statement, the General Disclosure Package and the Prospectus are and were during the periods
covered by their reports independent public accountants with respect to the Company and the Predecessor Entities as required by
the Act, the Rules and Regulations and are registered with the Public Company Accounting Oversight Board.
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|
|
(yy)
|
ERISA Matters
. Each employee benefit plan, within the meaning of Section 3(3) of ERISA,
for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled
group of corporations within the meaning of Section 414 of Code) would have any liability has been maintained in compliance with
its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to, ERISA and
the Code, except for such noncompliance, as would not, individually or in the aggregate have a Material Adverse Effect.
|
|
|
(zz)
|
Subsidiary Tax Classification
. Each subsidiary of the Transaction Entities that is not a taxable REIT subsidiary is a partnership or
a limited liability company under state law has been at all relevant times properly classified as a partnership or a disregarded
entity, and not as a corporation or an association taxable as a corporation, for federal income tax purposes (other than UPOI,
Inc., which is classified as a corporation for federal income tax purposes and intends to liquidate for federal income tax purposes
by converting into a limited liability company under state law that is classified as a disregarded entity for federal income tax
purposes and Nationwide Postal Management, Inc., which is classified as an S corporation for federal income tax purposes and intends
to liquidate for federal income tax purposes by converting into a limited liability company under state law that is classified
as a disregarded entity for federal income tax purposes).
|
|
|
(aaa)
|
Equity-Based Awards
. Except for grants which are disclosed in the General Disclosure Package
and the Prospectus, the Company has not granted to any person or entity, a stock option or other equity-based award to purchase
Common Stock, pursuant to an equity-based compensation plan or otherwise.
|
|
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(bbb)
|
Related-Party Transactions
. No relationship, direct or indirect, exists between or among
either of the Transaction Entities on the one hand, and the trustees, directors, officers, stockholders or other equity holders,
customers or suppliers of the Transaction Entities on the other hand, which is required to be described in the Registration Statement,
General Disclosure Package or the Prospectus which is not so described.
|
|
|
(ccc)
|
Investment Strategy
. The Company’s investment strategy described in the Registration
Statement, the General Disclosure Package and the Prospectus accurately reflect in all material respects the current intentions
of the Company with respect to the operation of the Company’s business, and no material deviation from such investment strategy
is currently contemplated.
|
|
|
(ddd)
|
Debt Securities and Preferred Stock
. The Company has no debt securities or preferred stock
that is rated by any “nationally recognized statistical rating agency” (as that term is defined by the Commission for
purposes of Section 3(a)(62) of the Exchange Act).
|
|
|
(eee)
|
Lending Relationships
. Except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, neither of the Transaction Entities nor any of their respective subsidiaries (i) has any material lending
or other relationship with any bank or lending affiliate of any Underwriter or (ii) intends to use any of the proceeds from the
sale of the Offered Securities to repay any outstanding debt owed to any affiliate of any Underwriter.
|
|
|
(fff)
|
Certificates of Officers
. Any certificate signed by any officer of the Company or the Operating
Partnership, as applicable, and delivered to the Representatives or counsel for the Underwriters in connection with the offering
of the Offered Securities shall be deemed a representation and warranty by the Company or the Operating Partnership, as applicable,
as to matters covered thereby to each Underwriter.
|
|
|
2.
|
Purchase, Sale and Delivery of Offered Securities
. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company agrees to sell to the several Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price of $[___] per
share, the respective number of Firm Securities set forth opposite the names of the Underwriters in
Schedule A
hereto.
|
The Company will deliver the
Firm Securities to or as instructed by the Representatives for the accounts of the several Underwriters in book entry form through
the facilities of The Depository Trust Company (“
DTC
”) against payment of the purchase price by the Underwriters
in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Representatives at 10:00 A.M., New York
time, on [______], 2019, or at such other time not later than seven (7) full business days thereafter as the Representatives and
the Company determine, such time being herein referred to as the “
First Closing Date
.” For purposes of Rule
15c6-1 under the Exchange Act, the First Closing Date (if later than the otherwise applicable settlement date) shall be the settlement
date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering contemplated
by this Agreement.
In addition, upon written notice
from the Representatives given to the Company from time to time not more than 30 days subsequent to the date of the Prospectus,
the Underwriters may purchase all or less than all of the Optional Securities at the purchase price per share to be paid for the
Firm Securities, less an amount per share equal to any dividends or distribution declared by the Company and payable on the Firm
Securities but not payable on the Optional Securities. The Company agrees to sell to the Underwriters the number of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly, to purchase such number of Optional Securities.
Such Optional Securities shall be purchased for the account of each Underwriter in the same proportion as the number of Firm Securities
set forth opposite such Underwriter’s name bears to the total number of Firm Securities (subject to adjustment by the Representatives
to eliminate fractions). No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from
time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representatives
to the Company.
Each time for the delivery of
and payment for the Optional Securities, being herein referred to as an “
Optional Closing Date
,” which may be
the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a “
Closing
Date
”), shall be determined by the Representatives but shall be not later than three (3) full business days after written
notice of election to purchase Optional Securities is given. The Company will deliver the Optional Securities being purchased on
each Optional Closing Date to or as instructed by the Representatives for the accounts of the several Underwriters in book entry
form through the facilities of DTC against payment of the purchase price therefor in Federal (same day) funds by wire transfer
to an account at a bank acceptable to the Representatives.
|
|
3.
|
Offering by Underwriters
. It is understood that the several Underwriters propose to offer
the Offered Securities for sale to the public as set forth in the Prospectus.
|
|
|
4.
|
Certain Agreements of the Transaction Entities
.
|
|
|
(a)
|
Each of the Transaction Entities, jointly and severally, agrees with the several Underwriters that:
|
|
|
(i)
|
Additional Filings
. Unless filed pursuant to Rule 462(c) as part of the Additional Registration
Statement in accordance with the next sentence, the Company will file the Prospectus, in a form approved by the Representatives,
with the Commission pursuant to and in accordance with subparagraph (1) (or, if applicable and if consented to by the Representatives,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the second business day following the execution and delivery
of this Agreement or (B) the fifteenth business day after the Effective Time of the Initial Registration Statement. The Company
will advise the Representatives promptly of any such filing pursuant to Rule 424(b) and provide satisfactory evidence to the Representatives
of such timely filing. If an Additional Registration Statement is necessary to register a portion of the Offered Securities under
the Act but the Effective Time thereof has not occurred as of the execution and delivery of this Agreement, the Company will file
the Additional Registration Statement or, if filed, will file a post-effective amendment thereto with the Commission pursuant to
and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement or, if earlier, on or
prior to the time the Prospectus is finalized and distributed to any Underwriter, or will make such filing at such later date as
shall have been consented to by the Representatives.
|
|
|
(ii)
|
Filing of Amendments; Response to Commission Requests
. The Company will promptly advise
the Representatives of any proposal to amend or supplement at any time the Initial Registration Statement, any Additional Registration
Statement or any Statutory Prospectus and will not affect such amendment or supplementation without the Representatives’
consent; and the Company will also advise the Representatives promptly of (A) the effectiveness of any Additional Registration
Statement (if its Effective Time is subsequent to the execution and delivery of this Agreement), (B) any amendment or supplementation
of a Registration Statement or any Statutory Prospectus, (C) any request by the Commission or its staff for any amendment to any
Registration Statement, for any supplement to any Statutory Prospectus or for any additional information, (D) the institution by
the Commission of any stop order proceedings in respect of a Registration Statement or, to the Company’s knowledge, the threatening
of any proceeding for that purpose, and (E) the receipt by the Company of any notification with respect to the suspension of the
qualification of the Offered Securities in any jurisdiction or the institution or, to the Company’s knowledge, the threatening
of any proceedings for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
|
|
|
(iii)
|
Continued Compliance with Securities Laws
. If, at any time when a prospectus relating to
the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter
or dealer, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to amend the Registration Statement or supplement
the Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare
and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request
of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6
of this Agreement.
|
|
|
(iv)
|
Issuer Free Writing Prospectuses and Section 5(d) Writings
.
The Company agrees that, if at any time following issuance of an Issuer Free Writing Prospectus or Section 5(d) Writing,
any event occurred or occurs as a result of which such Issuer Free Writing Prospectus or Section 5(d) Writing would conflict with
the information in the Registration Statement, the General Disclosure Package or the Prospectus or would include an untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances
in which they were made, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by
the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus, Section 5(d)
Writing or other document which will correct such conflict, statement or omission.
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(v)
|
Rule 158
. As soon as practicable, but not later than the Availability Date (as defined below),
the Company will make generally available to its securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Time of the Initial Registration Statement (or, if later, the Effective Time of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. For the purpose of the preceding
sentence, “
Availability Date
” means the day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Time on which the Company is required to file its Form 10-Q for such fiscal quarter except
that, if such fourth fiscal quarter is the last quarter of the Company’s fiscal year, “
Availability Date
”
means the day after the end of such fourth fiscal quarter on which the Company is required to file its Form 10-K.
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(vi)
|
Furnishing of Registration Statements and Prospectuses
. The Company will furnish to the
Representatives copies of each Registration Statement (including all exhibits thereto), each related Statutory Prospectus, and,
so long as a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered
under the Act, the Prospectus and all amendments and supplements to such documents, in each case in such quantities as the Representatives
request. The Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the business day following the execution
and delivery of this Agreement, or at such time as otherwise agreed to by the Representatives. All other documents shall be so
furnished as soon as available. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.
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(vii)
|
Blue Sky / Foreign Qualifications
. The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as the Representatives designate and will continue such qualifications
in effect so long as required for the distribution. To the extent the Representatives are required to file any reports of trade
in any jurisdictions in which the Offered Securities are distributed, the Company shall provide any reasonable assistance and information
that may be requested by the Representatives.
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(viii)
|
Reporting Requirements
. During the period of five (5) years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other Underwriters, as soon as practicable after the end of each
fiscal year, a copy of its annual report to shareholders for such year; and the Company will furnish to the Representatives (A)
as soon as available, a copy of each report and any definitive proxy statement of the Company filed with the Commission under the
Exchange Act or mailed to shareholders, and (B) from time to time, such other information concerning the Company as the Representatives
may reasonably request. However, so long as the Company is subject to the reporting requirements of either Section 13 or Section
15(d) of the Exchange Act and is timely filing reports with the Commission on its Electronic Data Gathering, Analysis and Retrieval
system (“
EDGAR
”), it is not required to furnish such reports or statements described in the preceding two sentences
to the Underwriters.
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(ix)
|
Payment of Expenses
. The Company will pay all expenses incident to the performance of its
obligations under this Agreement and all the costs and expenses in connection with the offering of the Offered Securities and including
but not limited to (A) any filing fees and expenses incurred in connection with qualification of the Offered Securities (including
any special foreign counsel fees and expenses) for sale under the laws of such jurisdictions as the Representatives designate and
the preparation and printing of blue sky surveys or legal investment surveys relating thereto, (B) costs and expenses related to
the review by FINRA of the Offered Securities (including filing fees and the fees and expenses of counsel for the Underwriters
relating to such review), (C) all actual, reasonable and documented fees and expenses of the Underwriters incurred in connection
with this Agreement and the offering of the Offered Securities, including fees and expenses of legal counsel for the Underwriters,
(D) costs and expenses relating to investor presentations, any “road show” in connection with the offering and sale
of the Offered Securities including, without limitation, (1) any travel expenses of the Transaction Entities’ officers and
employees and (2) any other expenses of the Transaction Entities, (E) the fees and expenses incident to listing the Offered Securities
on the NYSE, (F) the fees and expenses in connection with the registration of the Offered Securities under the Exchange Act, (G)
expenses incurred in distributing preliminary prospectuses and the Prospectus (including any amendments and supplements thereto)
to the Underwriters and (H) expenses incurred for preparing, printing and distributing any Issuer Free Writing Prospectuses to
investors or prospective investors.
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(x)
|
Use of Proceeds
. The Company will use the net proceeds received in connection with the offering
and sale of the Offered Securities in the manner described in the “Use of Proceeds” section of the Registration Statement,
the General Disclosure Package and the Prospectus, and, except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company does not intend to use any of the proceeds from the sale of the Offered Securities hereunder
to repay any outstanding debt owed to any affiliate of any Underwriter.
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(xi)
|
Absence of Manipulation
. The Transaction Entities will not, and will cause each of their
respective subsidiaries and controlled affiliates not to, take, directly or indirectly, any action designed to or that would constitute
or that might cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the
sale or resale of the Offered Securities.
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(xii)
|
Listing
. The Company will use its best efforts to effect and maintain the listing of the
Common Stock (including the Offered Securities) on the NYSE.
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(xiii)
|
Emerging Growth Company Status
. The Company will promptly notify the Representatives if
the Company ceases to be an Emerging Growth Company at any time prior to the later of (a) completion of the distribution of the
Offered Securities within the meaning of the Act and (b) completion of the Lock-Up Period.
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(xiv)
|
Company Restriction on Sale of Securities
. During the period beginning from the date hereof
and continuing to and including the date 180 days after the date of the Prospectus (the “
Lock-Up Period
”), the
Company shall not (a) offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer
or dispose of directly or indirectly, or file with the Commission a registration statement under the Act relating to, any securities
of the Company that are substantially similar to the Offered Securities, including but not limited to any options or warrants to
purchase Common Stock or any securities that are convertible into or exchangeable for, or that represent the right to receive,
Common Stock or any such substantially similar securities, or publicly disclose the intention to make any offer, sale, pledge,
disposition or filing or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock or any such other securities, whether any such transaction described in clause (a) or (b) above
is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, without the prior written consent
of the Representatives; provided, however, that the foregoing clause shall not apply to (1) the Offered Securities to be sold
hereunder, (2) Common Stock or securities convertible into or exercisable or exchangeable for Common Stock (including OP Units)
issued by the Company or the Operating Partnership in the Formation Transactions, (3) any Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock (including OP Units) issued or granted pursuant to any equity incentive plan
of the Company or the Operating Partnership or any other award referred to in the Registration Statement, the General Disclosure
Package and the Prospectus or (4) any Common Stock issued upon the conversion, exchange or exercise of securities convertible into
or exercisable or exchangeable for Common Stock outstanding as of the date of this Agreement.
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(xv)
|
Qualification and Taxation as a REIT
. The Company will use its best efforts to qualify for
taxation as a REIT under the Code for its short taxable year ending December 31, 2019, and thereafter will use its best efforts
to continue to qualify for taxation as a REIT under the Code, unless the Board of Directors of the Company determines that it is
no longer in the best interests of the Company to qualify as REIT.
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(xvi)
|
Compliance with Foreign Laws
. The Transaction Entities will comply with all applicable securities
and other applicable laws, rules and regulations in each foreign jurisdiction in which the Offered Securities are offered.
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5.
|
Free Writing Prospectuses
. The Company represents and agrees that, unless it obtains the
prior consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior consent of the
Company and the Representatives, it has not made and will not make any offer relating to the Offered Securities that would constitute
an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule
405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Representatives
is hereinafter referred to as a “
Permitted Free Writing Prospectus
.” The Company represents that it has treated
and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined
in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and record keeping. The Company represents that it has
satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic
road show.
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6.
|
Conditions of the Obligations of the Underwriters
. The obligations of the several Underwriters
to purchase and pay for the Firm Securities on the First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and warranties of the Transaction Entities (as though made
on such Closing Date), to the accuracy of the statements of the Transaction Entities made pursuant to the provisions hereof, to
the performance by the Transaction Entities of their respective obligations hereunder and to the following additional conditions
precedent:
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(a)
|
Accountants’ Comfort Letters
. The Representatives shall have received letters, dated
the date hereof and each Closing Date, of BDO USA LLP, confirming that they are a registered public accounting firm and independent
public accountants within the meaning of the Securities Laws and in form and substance satisfactory to the Representatives, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters
with respect to financial statements and certain financial information of the Company contained in the Registration Statement,
the General Disclosure Package and the Prospectus (except that, in any letter dated a Closing Date, the specified date of such
letter shall be no more than three (3) days prior to such Closing Date).
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(b)
|
Effectiveness of Registration Statement
. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later
than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Prospectus is finalized and distributed
to any Underwriter, or shall have occurred at such later time as shall have been consented to by the Representatives. The Prospectus
shall have been filed with the Commission in accordance with the Rule 424(b) under the Act and
Section 4(a)
hereof. Prior
to such Closing Date, no stop order suspending the effectiveness of a Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the Transaction Entities or the Representatives, shall be contemplated
by the Commission.
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(c)
|
No Material Adverse Change
. Subsequent to the execution and delivery of this Agreement and
prior to the Closing and each Optional Closing Date, if any, there shall not have occurred (i) any change, or any development or
event involving a prospective change, in the business, properties, general affairs, management, financial position, prospects,
stockholders’ equity or results of operations of the Transaction Entities and their respective subsidiaries, taken as a whole,
that, in the sole judgment of the Representatives, is material and adverse and makes it impractical or inadvisable to market the
Offered Securities; (ii) any change in either U.S. or international financial, political or economic conditions or currency exchange
rates or exchange controls the effect of which is such as to make it, in the judgment of the Representatives, impractical to market
or to enforce contracts for the sale of the Offered Securities, whether in the primary market or in respect of dealings in the
secondary market; (iii) any suspension or material limitation of trading in securities generally on the NYSE, or any setting of
minimum or maximum prices for trading on such exchange; (iv) or any suspension of trading of any securities of the Company on any
national securities exchange or in the over-the-counter market; (v) any banking moratorium declared by any U.S. federal or New
York authorities; (vi) any major disruption of settlements of securities, payment, or clearance services in the United States or
any other country where such securities are listed; or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism
involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if,
in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency
is such as to make it impractical or inadvisable to market the Offered Securities or to enforce contracts for the sale of the Offered
Securities.
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(d)
|
Opinion of Counsel for the Transaction Entities
. The Representatives shall have received
an opinion, dated such Closing Date, of Hunton Andrews Kurth LLP, counsel for the Transaction Entities, substantially in the form
attached hereto as
Annex II-A.
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(e)
|
Opinion of Counsel for the Company
. The Representatives shall have received an opinion,
dated such Closing Date, of Venable LLP, special counsel for the Company, substantially in the form attached hereto as
Annex
II-B
.
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(f)
|
Tax Opinion
. The Representatives shall have received a tax opinion, dated such Closing Date,
of Hunton Andrews Kurth LLP, counsel for the Transaction Entities, substantially in the form attached hereto as
Annex III
.
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(g)
|
Opinion of Counsel for Underwriters
. The Representatives shall have received from Winston
& Strawn LLP, counsel for the Underwriters, such opinion or opinions, dated such Closing Date, with respect to such matters
as the Representatives may require, and the Transaction Entities shall have furnished to such counsel such documents as they request
for the purpose of enabling them to opine upon such matters.
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(h)
|
Officers’ Certificates
. The Representatives shall have received a certificate, dated
such Closing Date, of the Chief Executive Officer of the Company and the Operating Partnership and the President and Treasurer
of the Company and the Operating Partnership in which such officers shall state that: the representations and warranties of the
Company and the Operating Partnership in this Agreement are true and correct as of such date; each of the Company and the Operating
Partnership has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to such Closing Date; no stop order suspending the effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to the best of their knowledge and after reasonable investigation, are contemplated
by the Commission; the Additional Registration Statement (if any) satisfying the requirements of subparagraphs (1) and (3) of Rule
462(b) was timely filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with Rule 111(a)
or (b) of Regulation S-T of the Commission; and, subsequent to the date of the most recent financial statements in the Registration
Statement, the General Disclosure Package and the Prospectus, there has been no change, nor any development or event involving
a prospective change, in the business, properties, general affairs, management, financial position, prospects, stockholders’
equity or results of operations of the Company or the Operating Partnership and its respective subsidiaries, taken as a whole,
that is material and adverse, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus
or as described in such certificate.
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(i)
|
Lock-up Agreements
. On or prior to the date hereof, the Representatives shall have received
a lock-up letter in the form of
Annex I
hereto executed by each of the persons listed on
Schedule D
hereto.
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(j)
|
Transaction Entities Good Standing
. The Representatives shall have received a certificate
of good standing of the Company and the Operating Partnership certified by the Maryland State Department of Assessments and Taxation
or the Secretary of State of the State of Delaware, as applicable, as of a date within three (3) business days of the Closing.
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(k)
|
Secretary’s Certificates
. The Representatives shall have received a certificate of
the secretary of the Company and the Operating Partnership certifying resolutions of the Company’s and the Operating Partnership’s
Board of Directors (or equivalent governing body) approving the Underwriting Agreement and the transactions contemplated thereby.
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(l)
|
FINRA Approval
. The Representatives shall have received a clearance letter from the Corporate
Finance Department of FINRA with respect to the offering.
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(m)
|
Listing
. The Offered Securities shall have been approved for listing on the NYSE.
|
The Company and the Operating
Partnership will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as
the Representatives reasonably request. The Representatives may in their sole discretion waive on behalf of the Underwriters compliance
with any conditions to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or otherwise.
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7.
|
Indemnification and Contribution
.
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(a)
|
Indemnification of Underwriters by the Transaction Entities
. The Transaction Entities, jointly
and severally, will indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees, affiliates
and each person, if any, who controls within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, a “
Controlling
Person
”) any Underwriter (each, an “
Underwriter Indemnified Party
”), against any and all losses, claims,
damages or liabilities, joint or several, to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange
Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in any part of any Registration Statement at any time, any Statutory Prospectus as of any time, the Prospectus, any Issuer
Free Writing Prospectus, the General Disclosure Package or any Section 5(d) Writing, or arise out of or are based upon the omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter Indemnified Party for any legal or other expenses reasonably incurred by such Underwriter Indemnified
Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation
or proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced,
and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred;
provided
,
however
, that the Transaction Entities will not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written information furnished to the Transaction Entities by
any Underwriter through the Representatives specifically for use therein, it being understood and agreed that such information
furnished by any Underwriter consists only of the information described as such in
Section 7(b)
below.
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(b)
|
Indemnification of Company
. Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Transaction Entities, the Company’s directors and each person, if any, who signs a registration statement
and each Controlling Person (each, a “
Company Indemnified Party
”), against any losses, claims, damages or liabilities
to which the Company Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law
or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of any Registration
Statement at any time, any Statutory Prospectus as of any time, the Prospectus or any Issuer Free Writing Prospectus or any Section
5(d) Writing, or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse
any legal or other expenses reasonably incurred by the Company in connection with investigating or defending against any such loss,
claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Company Indemnified Party
is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue
statement or omission as such expenses are incurred, it being understood and agreed that the only such information furnished by
any Underwriter consists of the information in the third paragraph, the second sentence of the seventh paragraph and the tenth
paragraph under the caption “Underwriting” in the Prospectus.
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(c)
|
Actions against Parties; Notification
. Promptly after receipt by an indemnified party of
notice of the commencement of any action against such indemnified party, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under subsections (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsections
(a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and
provided further
that the failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsections (a) or (b) above. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this
Section 7(c)
for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable
time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded
that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying
party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential
differing interest between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.
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(d)
|
Contribution
. If the indemnification provided for in this
Section 7
is unavailable
or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in
subsections (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Transaction
Entities on the one hand and by the Underwriters on the other hand from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Transaction Entities, on the one hand, and the Underwriters,
on the other, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well
as any other relevant equitable considerations. The relative benefits received by the Transaction Entities on the one hand and
by the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Transaction Entities bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied
by the Transaction Entities or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this
Section 7(d)
shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which
is the subject of this
Section 7(d)
. Notwithstanding the provisions of this
Section 7(d)
, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and
distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this
Section 7(d)
to contribute are several in proportion to their
respective underwriting obligations and not joint. The Transaction Entities and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this
Section 7(d)
were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable
considerations referred to in this
Section 7(d)
.
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8.
|
Default of Underwriters
. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on either the First Closing Date or any Optional Closing Date and the aggregate number
of shares of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed
10% of the total number of shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate
number of shares of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total number of
shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory
to the Representatives and the Company for the purchase of such Offered Securities by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in
Section 9
hereof (provided that if such default occurs with respect to Optional Securities after the
First Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior to such
termination). As used in this Agreement, the term “
Underwriter
” includes any person substituted for an Underwriter
under this
Section 8
. Nothing herein will relieve a defaulting Underwriter from liability for its default.
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9.
|
Survival of Certain Representations and Obligations
. The respective indemnities, agreements,
representations, warranties and other statements of the Transaction Entities or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the Transaction Entities, or any of their respective representatives,
officers or directors or any Controlling Person, and will survive delivery of and payment for the Offered Securities. If the purchase
of the Offered Securities by the Underwriters is not consummated for any reason other than solely because of the termination of
this Agreement pursuant to
Section 8
hereof, the Transaction Entities will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered
Securities, and the respective obligations of the Transaction Entities, on the one hand, and the Underwriters, on the other hand,
pursuant to
Section 7
hereof shall remain in effect. In addition, if any Offered Securities have been purchased hereunder,
the representations and warranties in
Section 2
and all obligations under
Section 4
shall also remain in effect.
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10.
|
Notices
. All communications hereunder will be in writing and, if sent to the Underwriters,
will be mailed or delivered and confirmed to the Representatives to Stifel, Nicolaus & Company, Incorporated, 501 North Broadway,
10
th
Floor, St. Louis, MO 63102, Attention: Chad Gorsuch (fax no. (314) 342-2775), Janney Montgomery Scott LLC, 1717
Arch Street, Philadelphia, PA 19103, Attention: David Doyle, (fax no. (215) 665-6197) and BMO Capital Markets Corp., 3 Times Square,
25
th
Floor, New York, NY 10036 Attention: David Raff (fax no. (212) 702-1205), with a copy to Winston & Strawn LLP,
35 West Wacker, Chicago, IL 60601, Attention: Christina T. Roupas (fax no. 312-558-5700) or if sent to the Transaction Entities,
will be mailed or delivered and confirmed to it at c/o Postal Realty Trust, Inc., 75 Columbia Avenue, Cedarhurst, NY 11516, Attention:
Andrew Spodek (fax no. (516) 295-2004) with a copy Hunton Andrews Kurth LLP, Riverfront Plaza, East Tower, 951 E. Byrd Street,
Richmond, VA 23219, Attention: David C. Wright;
provided
,
however
, that any notice to an Underwriter pursuant to
Section 7
will be mailed or delivered and confirmed to such Underwriter.
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11.
|
Successors
. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers, trustees, directors and Controlling Persons, and no other person will
have any right or obligation hereunder.
|
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12.
|
Representation of Underwriters
. The Representatives will act for the several Underwriters
in connection with this financing, and any action under this Agreement taken by the Representatives will be binding upon all the
Underwriters.
|
|
|
13.
|
Research Analyst Independence.
The Transaction Entities acknowledge that the Underwriters’
research analysts and research departments are required to be independent from their respective investment banking divisions and
are subject to certain regulations and internal policies, and that such Underwriters’ research analysts may hold views and
make statements or investment recommendations and/or publish research reports with respect to the Transaction Entities and/or the
offering of the Offered Securities that differ from the views of their respective investment bankers. The Transaction Entities
hereby waive and release, to the fullest extent permitted by law, any claims that the Transaction Entities may have against the
Underwriters with respect to any conflict of interest that may arise from the fact that the views expressed by their independent
research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Transaction
Entities by such Underwriters’ investment banking divisions. The Transaction Entities acknowledge that each of the Underwriters
is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions
for its own account or the account of its customers and hold long or short positions in debt or equity securities of the Company.
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14.
|
Counterparts
. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
|
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15.
|
Absence of Fiduciary Relationship
. The Transaction Entities acknowledge and agree that:
|
|
|
(a)
|
No Other Relationship
. The Underwriters have been retained solely to act as underwriters
in connection with the sale of Offered Securities and that no fiduciary, advisory or agency relationship between the Transaction
Entities on the one hand, and the Underwriters on the other has been created in respect of any of the transactions contemplated
by this Agreement or the Prospectus, irrespective of whether the Underwriters have advised or is advising the Transaction Entities
on other matters;
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(b)
|
Arms’ Length Negotiations
. The price of the Offered Securities set forth in this Agreement
was established by the Transaction Entities following discussions and arms’ length negotiations with the Underwriters, and
the Transaction Entities are capable of evaluating and understanding and understands and accepts the terms, risks and conditions
of the transactions contemplated by this Agreement;
|
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(c)
|
Absence of Obligation to Disclose
. The Transaction Entities have been advised that the Underwriters
and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Transaction
Entities, and that the Underwriters have no obligation to disclose such interests and transactions to the Transaction Entities
by virtue of any fiduciary, advisory or agency relationship; and
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(d)
|
Waiver
. The Transaction Entities waive, to the fullest extent permitted by law, any claims
they may have against the Underwriters for breach of fiduciary duty or alleged breach of fiduciary duty and agree that the Underwriters
shall have no liability (whether direct or indirect) to the Transaction Entities in respect of such a fiduciary duty claim or to
any person asserting a fiduciary duty claim on behalf of or in right of the Transaction Entities, including shareholders, employees
or creditors of the Transaction Entities.
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16.
|
Applicable Law
. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
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17.
|
Trial by Jury
. Each of the Transaction Entities (on its behalf and, to the extent permitted
by applicable law, on behalf of its respective stockholders and affiliates) and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
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18.
|
Jurisdiction
. The Transaction Entities hereby submit to the non-exclusive jurisdiction of
the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby. The Transaction Entities irrevocably and unconditionally waive any objection
to the laying of venue of any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient
forum.
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19.
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Termination
. Until the First Closing Date, this Agreement may be terminated by the Representatives
by giving notice (in the manner prescribed by Section 10 hereof) to the Company, if (i) either of the Transaction Entities shall
have failed, refused or been unable, at or prior to the First Closing Date, to perform any agreement on its part to be performed
hereunder unless the failure to perform any agreement is due to the default or omission by any Underwriter; (ii) any other condition
of the obligations of the Underwriters hereunder is not fulfilled; (iii) trading in securities generally on the NYSE, NYSE American,
or Nasdaq shall have been suspended or minimum or maximum prices shall have been established on either of such exchanges or such
market by the Commission or by such exchange or other regulatory body or governmental authority having jurisdiction; (iv) trading
or quotation in any of the Company’s securities shall have been suspended or materially limited by the Commission or by the
NYSE American, NYSE or Nasdaq or other regulatory body of governmental authority having jurisdiction; (v) a general banking moratorium
has been declared by Federal or New York authorities; (vi) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred; (vii) there shall have been any material adverse change in general economic,
political or financial conditions in the United States or in international conditions on the financial markets in the United States,
in each case, the effect of which is such as to make it, in the Representatives’ judgment, inadvisable to proceed with the
delivery of the Securities; or (viii) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism
involving the United States or any other national or international calamity or emergency has occurred if, in the Representatives’
reasonable judgment, the effect of any such attack, outbreak, escalation, declaration, act, calamity or emergency makes it impractical
or inadvisable to proceed with the completion of the public offering or the delivery of the Securities.
|
|
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20.
|
USA Patriot Act
. In accordance with the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)), as amended, the Underwriters are required to obtain, verify and record information
that identifies their respective clients, including the Transaction Entities, which information may include the name and address
of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective
clients.
|
|
|
21.
|
Definition of the term “business day
.
”
For purposes of this Agreement
(a) “business day” means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to close.
|
If the foregoing is in accordance with
the Representatives’ understanding of our agreement, kindly sign and return to the Transaction Entities one of the counterparts
hereof, whereupon it will become a binding agreement among the Transaction Entities and the several Underwriters in accordance
with its terms.
[Signature Page Follows]
|
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Very truly yours,
|
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POSTAL REALTY TRUST, INC.
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By:
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Name:
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Title:
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POSTAL OP REALTY LP
|
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By: Postal Realty Trust, Inc., its general partner
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By:
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Name:
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Title:
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[Signature Page to Underwriting Agreement]
The foregoing Agreement is hereby confirmed and accepted as
of the date first above written.
|
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Acting on behalf of themselves and as the
|
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|
Representatives of the several Underwriters.
|
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STIFEL, NICOLAUS & COMPANY, INCORPORATED
|
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By:
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Name:
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Title:
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JANNEY MONTGOMERY SCOTT LLC
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By:
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Name:
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Title:
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BMO CAPITAL MARKETS CORP.
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By:
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Name:
|
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Title:
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[Signature Page to Underwriting Agreement]
SCHEDULE
A
|
Underwriter
|
|
Number
of Firm Securities
|
|
Stifel, Nicolaus & Company, Incorporated
|
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[______]
|
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Janney Montgomery Scott LLC
|
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[______]
|
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BMO Capital Markets Corp.
|
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[______]
|
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Height Securities, LLC
|
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[______]
|
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B. Riley FBR, Inc.
|
|
[______]
|
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|
|
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D.A. Davidson & Co.
|
|
[______]
|
|
|
|
|
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Total
|
|
[______]
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SCHEDULE
B
Operative Documents
|
|
1.
|
Form of Agreement and Plan of Merger by and among Postal Realty Trust, Inc., PSTL Merger Sub LLC, United Postal Holdings, Inc.
and Andrew Spodek.
|
|
|
2.
|
Form of Contribution Agreement by and among the contributor party thereto, Postal Realty LP and Postal Realty Trust, Inc.
|
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3.
|
Form of Tier 2 Agreement of Purchase and Sale by and among the Sellers party thereto, Postal Realty LP and Postal Realty Trust,
Inc.
|
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4.
|
Form of Representation, Warranty and Indemnity Agreement by and among Postal Realty Trust, Inc., Postal Realty LP and Andrew
Spodek.
|
|
|
5.
|
Form of Tax Indemnification Agreement between Postal Realty Trust, Inc., UPH, Inc. and Andrew Spodek.
|
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6.
|
Form of Tax Protection Agreement, between Postal Realty Trust, Inc. and the protected party thereto.
|
|
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7.
|
Articles of Amendment and Restatement of Postal Realty Trust, Inc.
|
|
|
8.
|
Bylaws of Postal Realty Trust, Inc.
|
|
|
9.
|
First Amended and Restated Agreement of Limited Partnership of Postal Realty LP.
|
SCHEDULE C
|
|
1.
|
General Use Free Writing Prospectuses (included in the General Disclosure Package)
|
|
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A.
|
“General Use Issuer Free Writing Prospectus” includes each of the following documents:
|
[_____].
|
|
2.
|
Other Information Included in the General Disclosure Package
|
The following information
is also included in the General Disclosure Package:
Oral confirmation of the price and size of the offering.
|
|
3.
|
Section 5(d) Writings:
|
[_______]
SCHEDULE
D
Lock-up
Signatories
Andrew Spodek
Jeremy Garber
Matt Brandwein
Patrick Donahoe
Barry Lefkowitz
Jane Gural-Senders
Anton Feingold
Marc Lefkovich
Raphael Harel
Isaac Richter
Exhibit 4.1
|
|
SEE REVERSE FOR IMPORTANT NOTICE
|
|
|
ON TRANSFER RESTRICTIONS
|
|
|
AND OTHER INFORMATION
|
|
THIS CERTIFICATE IS TRANSFERABLE
|
CUSIP ___________
|
IN THE CITIES OF _________________
POSTAL REALTY TRUST, INC.
a Corporation Formed Under the Laws of the
State of Maryland
THIS CERTIFIES THAT
**Specimen** is the owner of **Zero (0)** fully paid and nonassessable shares of Class A Common Stock, $0.01 par value per share,
of
POSTAL REALTY TRUST, INC.
(the “Corporation”) transferable
on the books of the Corporation by the holder hereof in person or by its duly authorized attorney, upon surrender of this Certificate
properly endorsed. This Certificate and the shares represented hereby are issued and shall be held subject to all of the provisions
of the charter of the Corporation (the “Charter”) and the Bylaws of the Corporation and any amendments or supplements
thereto. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
IN WITNESS WHEREOF,
the Corporation has caused this Certificate to be executed on its behalf by its duly authorized officers.
|
DATED: __________________
|
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|
|
Countersigned and Registered:
|
|
|
|
Transfer Agent
|
__________________________________________
|
(SEAL)
|
|
and Registrar
|
President
|
|
|
|
|
|
|
By:___________________________
|
__________________________________________
|
|
|
Authorized Signature
|
Secretary
|
|
IMPORTANT NOTICE
The Corporation will furnish to any stockholder,
on request and without charge, a full statement of the information required by Section 2-211(b) of the Corporations and Associations
Article of the Annotated Code of Maryland with respect to the designations and any preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption
of the stock of each class which the Corporation has authority to issue and, if the Corporation is authorized to issue any preferred
or special class in series, (i) the differences in the relative rights and preferences between the shares of each series to the
extent set, and (ii) the authority of the Board of Directors to set such rights and preferences of subsequent series. The foregoing
summary does not purport to be complete and is subject to and qualified in its entirety by reference to the Charter, a copy of
which will be sent without charge to each stockholder who so requests. Such request must be made to the Secretary of the Corporation
at its principal office.
The shares represented by this certificate
are subject to restrictions on Beneficial Ownership and Constructive Ownership and Transfer for the purpose, among others, of the
Corporation’s maintenance of its status as a Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended
(the “Code”). Subject to certain further restrictions and except as expressly provided in the Corporation’s Charter,
(i) no Person may Beneficially Own or Constructively Own shares of the Corporation’s Common Stock in excess of the Common
Stock Ownership Limit unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (ii)
no Person may Beneficially Own or Constructively Own shares of Preferred Stock of the Corporation in excess of the Preferred Stock
Ownership Limit, unless such Person is an Excepted Holder (in which case the Excepted Holder Limit shall be applicable); (iii)
no Person may Beneficially Own or Constructively Own Capital Stock that would result in the Corporation being “closely held”
under Section 856(h) of the Code or otherwise cause the Corporation to fail to qualify as a REIT; (iv) no Person may Transfer shares
of Capital Stock if such Transfer would result in the Capital Stock of the Corporation being owned by fewer than 100 Persons; and
(v) No Person shall Beneficially Own or Constructively Own shares of Capital Stock to the extent such Beneficial Ownership or Constructive
Ownership would cause the Corporation to Constructively Own ten percent (10%) or more of the ownership interests in a tenant (other
than a TRS) of the Corporation’s real property within the meaning of Section 856(d)(2)(B) of the Code. Any Person who Beneficially
Owns or Constructively Owns or attempts or intends to Beneficially Own or Constructively Own shares of Capital Stock which cause
or will cause a Person to Beneficially Own or Constructively Own shares of Capital Stock in excess or in violation of the above
limitations must immediately notify the Corporation. If any of the restrictions on Transfer or ownership provided in (i), (ii),
(iii) or (v) above are violated, the shares of Capital Stock in excess or in violation of the above limitations will be automatically
transferred to a Trustee of a Trust for the benefit of one or more Charitable Beneficiaries. In addition, the Corporation may redeem
shares upon the terms and conditions specified by the Board of Directors in its sole and absolute discretion if the Board of Directors
determines that ownership or a Transfer or other event may violate the restrictions described above. Furthermore, if the ownership
restrictions provided in (iv) above would be violated or upon the occurrence of certain events, attempted Transfers in violation
of the restrictions described above may be void ab initio. All capitalized terms in this legend have the meanings defined in the
Charter of the Corporation, as the same may be amended from time to time, a copy of which, including the restrictions on transfer
and ownership, will be furnished to each holder of shares of Capital Stock of the Corporation on request and without charge. Requests
for such a copy may be directed to the Secretary of the Corporation at its Principal Office.
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF
IT IS LOST, STOLEN OR DESTROYED, THE CORPORATION MAY REQUIRE
A BOND OF INDEMNITY AS A CONDITION TO THE
ISSUANCE OF A REPLACEMENT CERTIFICATE.
The following abbreviations,
when used in the inscription on the face of this Certificate, shall be construed as though they were written out in full according
to applicable laws or regulations:
|
TEN COM
|
-
|
as tenants in common
|
UNIF GIFT MIN ACT ___________ Custodian _________
|
|
|
TEN ENT
|
-
|
as tenants by the entireties
|
(Custodian) (Minor)
|
|
|
JT TEN
|
-
|
as joint tenants with right of
|
Under the Uniform Gifts to Minors Act of _______________
|
|
|
|
|
survivorship and not as tenants in common
|
(State)
|
|
FOR VALUE RECEIVED, ________________HEREBY SELLS, ASSIGNS AND
TRANSFERS UNTO ________________________________________________________________________________________________
(NAME & ADDRESS, INCLUDING ZIP CODE & SS# OR OTHER IDENTIFYING
# OF ASSIGNEE)
______________________________________(________________) shares
of stock of the Corporation represented by this Certificate and does hereby irrevocably constitute and appoint
_______________________________________ attorney to transfer
the said shares on the books of the Corporation, with full power of substitution in the premises.
Dated: _______________________
|
|
|
|
|
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY OTHER CHANGE.
|
Exhibit 5.1
[LETTERHEAD OF VENABLE LLP]
May 6, 2019
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Re:
Registration Statement on Form S-11 (File
No. 333-230684)
Ladies and Gentlemen:
We have served as Maryland counsel to Postal Realty
Trust, Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law relating to
the registration by the Company of up to 5,750,000 shares (the “Shares”) of Class A common stock, $0.01 par value per
share, of the Company (including up to 750,000 Shares which the underwriters in the initial public offering have the option to
purchase), covered by the above-referenced Registration Statement, and all amendments thereto (the “Registration Statement”),
filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities
Act of 1933, as amended (the “1933 Act”).
In connection with our representation of the Company,
and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to
our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
1. The
Registration Statement and the related form of prospectus included therein in the form in which it was transmitted to the Commission
under the 1933 Act;
2. The
charter of the Company (the “Charter”), certified by the State Department of Assessments and Taxation of Maryland (the
“SDAT”);
3. The
form of Articles of Amendment and Restatement of the Company to be filed with the SDAT prior to the issuance of the Shares (the
“Articles of Amendment and Restatement”), certified as of the date hereof by an officer of the Company;
4. The
Bylaws of the Company, certified as of the date hereof by an officer of the Company;
5. A
certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
6. Resolutions
adopted by the Board of Directors of the Company (the “Board”) relating to, among other matters, the authorization
of the sale and issuance of the Shares (the “Resolutions”), certified as of the date hereof by an officer of the Company;
Postal Realty Trust, Inc.
May 6, 2019
Page 2
7. A
certificate executed by an officer of the Company, dated as of the date hereof; and
8. Such
other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions,
limitations and qualifications stated herein.
In expressing the opinion set forth below, we
have assumed the following:
1. Each
individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each
individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each
of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the
Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding
and are enforceable in accordance with all stated terms.
4. All
Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts
do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All
Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents
are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties,
statements and information contained in the Documents are true and complete. There has been no oral or written modification of
or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission
of the parties or otherwise.
5. The
Shares will not be issued or transferred in violation of any restrictions on transfer and ownership contained in the Articles of
Amendment and Restatement.
6. Prior
to the issuance of the Shares, the Articles of Amendment and Restatement will be filed with and accepted for record by the SDAT
(the “Corporate Proceedings”).
Based upon the foregoing, and subject to the assumptions,
limitations and qualifications stated herein, it is our opinion that:
1. The
Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good
standing with the SDAT.
Postal Realty Trust, Inc.
May 6, 2019
Page 3
2. The
issuance of the Shares has been duly authorized and, when issued and delivered by the Company in accordance with the Resolutions
(and any other resolutions adopted by the Board with respect thereto), the Corporate Proceedings and the Registration Statement
against payment of the consideration set forth therein, the Shares will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the laws of
the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to the applicability
or effect of federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state
laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed
by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed
herein is subject to the effect of any judicial decision which may permit the introduction of parol evidence to modify the terms
or the interpretation of agreements.
The opinion expressed herein is limited to the
matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no
obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that
might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission
to the Commission as an exhibit to the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of the name of our firm therein. In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the 1933 Act.
|
|
Very truly yours,
|
|
|
|
|
|
/s/ Venable LLP
|
142383-499113
Exhibit 8.1
|
|
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Tel 804 • 788 •
8200
Fax 804 • 788
• 8218
|
|
|
File No: 88502.2
|
May 6, 201
9
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Postal Realty Trust, Inc.
Qualification as a
Real Estate Investment Trust
Ladies and Gentlemen:
We have acted as counsel
to Postal Realty Trust, Inc., a Maryland corporation (the “
Company
”), in connection with the preparation of
a Registration Statement on Form S-11 (File No. 333-230684) filed with the Securities and Exchange Commission on April 2, 2019,
as amended through the date hereof (the “
Registration Statement
”), with respect to the offer and sale of up
to 5,750,000 shares of Class A common stock, par value $0.01 per share, of the Company. You have requested our opinion regarding
certain U.S. federal income tax matters.
In giving this opinion letter,
we have examined the following:
|
|
1.
|
the Registration Statement and the prospectus (the “
Prospectus
”) filed as part
of the Registration Statement;
|
|
|
2.
|
the Company’s Articles of Incorporation filed on November 19, 2018 with the Department of
Assessments and Taxation of the State of Maryland, and the form of Articles of Amendment and Restatement;
|
|
|
3.
|
the Amended and Restated Agreement of Limited Partnership of the Postal Realty LP;
|
|
|
4.
|
the earnings and profits report obtained by the Company from
Shanholt
Glassman Klein Kramer & Co.
(the “
E&P Report
”); and
|
|
|
5.
|
such other documents as we have deemed necessary or appropriate for purposes of this opinion.
|
ATLANTA AUSTIN BANGKOK BEIJING
BOSTON BRUSSELS CHARLOTTE DALLAS DUBAI HOUSTON LONDON
LOS ANGELES MIAMI NEW YORK NORFOLK
RICHMOND SAN FRANCISCO THE WOODLANDS TYSONS WASHINGTON, DC
www.HuntonAK.com
Postal Realty Trust, Inc.
May 6, 2019
Page 2
In connection with the opinions
rendered below, we have assumed, with your consent, that:
1. each
of the documents referred to above has been duly authorized, executed, and delivered; is authentic, if an original, or is accurate,
if a copy; and has not been amended;
2. during
its short taxable year ending December 31, 2019, and future taxable years, the Company will operate in a manner that will make
the factual representations contained in a certificate, dated the date hereof and executed by a duly appointed officer of the Company
(the “
Officer’s Certificate
”), true for such years;
3. the
Company will not make any amendments to its organizational documents after the date of this opinion that would adversely affect
the Company’s qualification as a real estate investment trust (a “
REIT
”) for any taxable year; and
4. no
action will be taken by the Company after the date hereof that would have the effect of altering the facts upon which the opinions
set forth below are based.
In connection with the opinions
rendered below, we also have relied upon the correctness, without regard to any qualification as to knowledge or belief, of the
factual representations contained in the Officer’s Certificate, the conclusions in the E&P Report, and the factual matters
discussed in the Prospectus. We are not aware of any facts that are inconsistent with the representations contained in the Officer’s
Certificate.
Based solely on the documents
and assumptions set forth above, the representations set forth in the Officer’s Certificate, and the discussion in the Prospectus
under the caption “Material Federal Income Tax Considerations” (which is incorporated herein by reference), we are
of the opinion that:
(a) commencing
with its short taxable year ending December 31, 2019, the Company will be organized in conformity with the requirements for qualification
and taxation as a REIT pursuant to sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “
Code
”),
and the Company’s proposed method of operation will enable it to satisfy the requirements for qualification and taxation
as a REIT under the Code for its taxable year ending December 31, 2019 and thereafter; and
(b) the
descriptions of the law and the legal conclusions in the Prospectus under the caption “Material Federal Income Tax Considerations”
are correct in all material respects.
Postal Realty Trust, Inc.
May 6, 2019
Page 3
We will not review on a continuing
basis the Company’s compliance with the documents or assumptions set forth above, or the representations set forth in the
Officer’s Certificate. Accordingly, no assurance can be given that the actual results of the Company’s operations for
any given taxable year will satisfy the requirements for qualification and taxation as a REIT. Although we have made such inquiries
and performed such investigations as we have deemed necessary to fulfill our professional responsibilities as counsel, we have
not undertaken an independent investigation of all the facts referred to in this opinion letter or the Officer’s Certificate.
The foregoing opinions
are based on current provisions of the Code, the Treasury regulations thereunder (the “
Regulations
”), published
administrative interpretations thereof, and published court decisions. The Internal Revenue Service has not issued Regulations
or administrative interpretations with respect to various provisions of the Code relating to REIT qualification. No assurance can
be given that the law will not change in a way that will prevent the Company from qualifying as a REIT.
The foregoing opinions
are limited to the U.S. federal income tax matters addressed herein, and no other opinions are rendered with respect to other U.S.
federal tax matters or to any issues arising under the tax laws of any other country, or any state or locality. We undertake no
obligation to update the opinions expressed herein after the date of this letter. This opinion letter speaks only as of the date
hereof. Except as provided in the next paragraph, this opinion letter may not be distributed, quoted in whole or in part or otherwise
reproduced in any document, or filed with any governmental agency without our express written consent.
We hereby consent to the
filing of this opinion as an exhibit to the Prospectus. We also consent to the references to Hunton Andrews Kurth LLP under the
captions “Material Federal Income Tax Considerations” and “Legal Matters” in the Prospectus. In giving
this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Securities Act
of 1933, as amended, or the rules and regulations promulgated thereunder by the SEC.
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Very truly yours,
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/s/ Hunton Andrews Kurth LLP
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Exhibit 10.2
Postal
Realty Trust, INC.
2019 EQUITY INCENTIVE PLAN
TABLE OF CONTENTS
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Section
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Page
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Article I DEFINITIONS
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1
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1.01.
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Affiliate
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1
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1.02.
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Agreement
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1
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1.03.
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Board
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1
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1.04.
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Change in Control
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1
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1.05.
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Code
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2
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1.06.
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Committee
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3
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1.07.
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Common Stock
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3
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1.08.
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Company
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3
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1.09.
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Control Change Date
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3
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1.10.
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Corresponding SAR
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3
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1.11.
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Dividend Equivalent Right
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3
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1.12.
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Exchange Act
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4
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1.13.
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Fair Market Value
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4
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1.14.
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Incentive Award
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4
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1.15.
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Initial Value
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4
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1.16.
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LTIP Unit
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4
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1.17.
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Non-Employee Director
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4
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1.18.
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Operating Partnership
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4
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1.19.
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Option
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5
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1.20.
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Other Equity-Based Award
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5
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1.21.
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Participant
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5
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1.22.
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Performance Goal
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5
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1.23.
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Performance Units
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6
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1.24.
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Plan
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6
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1.25.
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SAR
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6
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1.26.
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Stock Award
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6
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1.27.
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Ten Percent Stockholder
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6
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Article II PURPOSES
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7
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Article III ADMINISTRATION
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7
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Article IV ELIGIBILITY
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8
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Article V COMMON STOCK SUBJECT TO PLAN
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9
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5.01.
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Common Stock Issued
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9
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5.02.
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Aggregate Limit
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9
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5.03.
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Non-Employee Director Grant Limit
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9
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5.04.
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Reallocation of Shares
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10
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Article VI OPTIONS
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10
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6.01.
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Award
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10
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6.02.
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Option Price
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10
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6.03.
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Maximum Option Period
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11
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6.04.
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Nontransferability
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11
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6.05.
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Transferable Options
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11
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6.06.
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Employee Status
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11
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6.07.
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Exercise
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12
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6.08.
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Payment
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12
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6.09.
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Stockholder Rights
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12
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6.10.
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Disposition of Shares
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12
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Article VII SARS
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13
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7.01.
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Award
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13
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7.02.
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Maximum SAR Period
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13
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7.03.
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Nontransferability
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13
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7.04.
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Transferable SARs
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13
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7.05.
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Exercise
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14
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7.06.
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Employee Status
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14
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7.07.
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Settlement
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14
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7.08.
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Stockholder Rights
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14
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7.09.
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No Reduction of Initial Value
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14
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Article VIII STOCK AWARDS
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15
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8.01.
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Award
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15
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8.02.
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Vesting
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15
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8.03.
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Employee Status
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15
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8.04.
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Stockholder Rights
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15
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Article IX PERFORMANCE UNIT AWARDS
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16
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9.01.
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Award
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16
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9.02.
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Earning the Award
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16
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9.03.
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Payment
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16
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9.04.
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Stockholder Rights
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16
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9.05.
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Nontransferability
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17
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9.06.
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Transferable Performance Units
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17
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9.07.
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Employee Status
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17
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Article X OTHER EQUITY–BASED AWARDS
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17
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10.01.
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Award
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17
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10.02.
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Terms and Conditions
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18
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10.03.
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Payment or Settlement
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18
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10.04.
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Employee Status
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18
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10.05.
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Stockholder Rights
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18
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Article XI INCENTIVE AWARDS
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19
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11.01.
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Award
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19
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11.02.
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Terms and Conditions
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19
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11.03.
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Nontransferability
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19
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11.04.
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Employee Status
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19
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11.05.
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Settlement
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19
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11.06.
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Stockholder Rights
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20
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Article XII ADJUSTMENT UPON CHANGE IN COMMON STOCK
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20
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Article XIII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
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21
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Article XIV GENERAL PROVISIONS
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21
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14.01.
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Effect on Employment and Service
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21
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14.02.
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Unfunded Plan
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21
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14.03.
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Rules of Construction
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22
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14.04.
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Section 409A Compliance
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22
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14.05.
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Withholding Taxes
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22
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14.06.
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Return of Awards; Repayment
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23
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Article XV CHANGE IN CONTROL
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24
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15.01.
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Impact of Change in Control.
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24
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15.02.
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Assumption Upon Change in Control.
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24
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15.03.
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Cash-Out Upon Change in Control.
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24
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15.04.
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Limitation of Benefits
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25
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Article XVI AMENDMENT
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26
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Article XVII DURATION OF PLAN
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27
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Article XVIII EFFECTIVE DATE OF PLAN
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27
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Article
I
DEFINITIONS
Affiliate means any
entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including,
but not limited to, joint ventures, limited liability companies and partnerships). For this purpose, the term “control”
shall mean ownership of 50% or more of the total combined voting power or value of all classes of shares or interests in the entity,
or the power to direct the management and policies of the entity, by contract or otherwise.
Agreement means a written
agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the terms and conditions
of a Stock Award, an Incentive Award, an award of Performance Units, an Option, SAR or Other Equity-Based Award (including an LTIP
Unit) granted to such Participant.
Board means the Board
of Directors of the Company.
“Change in Control”
shall mean a change in control of the Company which will be deemed to have occurred after the date hereof if:
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(a)
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any “person” as such term is used in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof except that such term shall not include (A) the Company or any of its subsidiaries,
(B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (C)
an underwriter temporarily holding securities pursuant to an offering of such securities, (D) any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the Company’s
common stock, or (E) any person or group as used in Rule 13d-1(b) under the Exchange Act, is or becomes the Beneficial Owner, as
such term is defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of the Company representing at
least 50% of the combined voting power or common stock of the Company;
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(b)
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during any period of two consecutive years, individuals who at the beginning of such period constitute
the Board, and any new director (other than (A) a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (1), (3), or (4) of this Section 1.04 or (B) a director whose
initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease
for any reason to constitute at least a majority thereof;
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(c)
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there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary
of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, more than 50% of the
combined voting power and common stock of the Company or such surviving entity or any parent thereof outstanding immediately after
such merger or consolidation; or
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(d)
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there is consummated a sale or disposition by the Company of all or substantially all of the Company’s
assets (or any transaction having a similar effect, including a liquidation) other than a sale or disposition by the Company of
all or substantially all of the Company’s assets to an entity, more than fifty percent (50%) of the combined voting power
and common stock of which is owned by stockholders of the Company in substantially the same proportions as their ownership of the
common stock of the Company immediately prior to such sale.
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Notwithstanding the foregoing,
if an award under this Plan constitutes “deferred compensation” under Section 409A of the Code, no payment shall be
made under such award on account of a Change in Control unless the occurrence of one or more of the preceding events also constitutes
a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the Company’s
assets, all as determined in accordance with the regulations under Section 409A of the Code.
Code means the Internal
Revenue Code of 1986, and any amendments thereto.
Committee means the
Compensation Committee of the Board; provided, however, that if there is no Compensation Committee, then “Committee”
means the Board; and provided, further that with respect to awards made to a Non-Employee Director, “Committee” means
the Board.
Common Stock means
the Class A common stock, par value $0.01 per share, of the Company.
Postal Realty Trust,
Inc., a Maryland corporation.
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1.09.
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Control Change Date
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Control Change Date
means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the “Control
Change Date” is the date of the last of such transactions.
Corresponding SAR means
a SAR that is granted in relation to a particular Option and that can be exercised only upon the surrender to the Company, unexercised,
of that portion of the Option to which the SAR relates.
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1.11.
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Dividend Equivalent Right
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Dividend Equivalent
Right means the right, subject to the terms and conditions prescribed by the Committee, of a Participant to receive (or have credited)
cash, shares or other property in amounts equivalent to the cash, shares or other property dividends declared on shares of Common
Stock with respect to specified Performance Units or Common Shares subject to an Other Equity-Based Award, as determined by the
Committee, in its sole discretion. The Committee shall provide that Dividend Equivalent Rights (if any) payable with respect to
any award that does not vest or become exercisable solely on account of continued employment or service shall be distributed only
when, and to the extent that, the underlying award is vested and also may provide that Dividend Equivalent Rights (if any) shall
be deemed to have been reinvested in additional shares of Common Stock or otherwise reinvested.
Exchange Act means
the Securities Exchange Act of 1934, as amended.
Fair Market Value means,
on any given date, the reported “closing” price of a share of Common Stock on the New York Stock Exchange. If, on any
given date, the Common Stock is not listed for trading on the New York Stock Exchange, then Fair Market Value shall be the “closing”
price of a share of Common Stock on such other exchange on which the Common Stock is listed for trading or, if the Common Stock
is not listed on any exchange, the amount determined by the Committee using any reasonable method in good faith and in accordance
with the regulations under Section 409A of the Code.
Incentive Award means
an award under Article XI which, subject to the terms and conditions prescribed by the Committee, entitles the Participant to receive
a payment from the Company or an Affiliate.
Initial Value means,
with respect to a Corresponding SAR, the option price per share of the related Option and, with respect to a SAR granted independently
of an Option, the price per share of Common Stock as determined by the Committee on the date of grant; provided, however, that
the price shall not be less than the Fair Market Value on the date of grant.
LTIP Unit means an
“LTIP Unit” as defined in the Operating Partnership’s partnership agreement. An LTIP Unit granted under this
Plan represents the right to receive the benefits, payments or other rights set forth in that partnership agreement, subject to
the terms and conditions of the applicable Agreement and that partnership agreement.
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1.17.
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Non-Employee Director
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Non-Employee Director
means a member of the Board who is not an employee of the Company or an Affiliate.
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1.18.
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Operating Partnership
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Postal Realty LP.
Option means a share
option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in
an Agreement.
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1.20.
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Other Equity-Based Award
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Other Equity-Based
Award means any award other than an Option, SAR, Incentive Award, a Performance Unit award or a Stock Award which, subject to such
terms and conditions as may be prescribed by the Committee, entitles a Participant to receive shares of Common Stock or rights
or units valued in whole or in part by reference to, or otherwise based on, shares of Common Stock (including securities convertible
into Common Stock) or other equity interests including LTIP Units.
Participant means an
employee or officer of the Company or an Affiliate, a member of the Board, or an individual who provides significant services to
the Company or an Affiliate (including an individual who provides services to the Company or an Affiliate by virtue of employment
with, or providing services to, the Operating Partnership), and who satisfies the requirements of Article IV and, in accordance
with the terms of the Plan, is selected by the Committee to receive an award of Performance Units, a Stock Award, an Incentive
Award, Option, SAR, Other Equity-Based Award or a combination thereof.
Performance Goal
means a performance objective that is stated with respect to one or more of the following, alone or in combination: funds
from operations; adjusted funds from operations; earnings before interest, taxes, depreciation and amortization
(“EBITDA”); adjusted EBITDA; return on capital assets, development, investment or equity; total earnings;
revenues or sales; earnings per share of Common Stock; return on capital; Fair Market Value; total stockholder return; cash
flow; acquisitions or strategic transactions; operating income (loss); gross or net profit levels; productivity; expenses;
margins; operating efficiency; working capital; portfolio or regional occupancy rates; or performance or yield on development
or redevelopment activities, same store NOI growth, balance sheet metrics such as leverage ratio, debt/EBITDA, and fixed
charge coverage.
A Performance Goal
may be expressed on an absolute basis or relative to the performance of one or more peer companies or a published
index. When establishing Performance Goals, the Committee may exclude any or all special, unusual or extraordinary items as determined
under U.S. generally accepted accounting principles, including, without limitation, the charges or costs associated with restructurings
of the Company, discontinued operations, other unusual or non-recurring items and the cumulative effects of accounting changes.
Performance Units means
an award, in the amount determined by the Committee, stated with reference to a specified number of shares of Common Stock or other
securities or property, that in accordance with the terms of an Agreement entitles the holder to receive a payment for each specified
unit equal to the Fair Market Value of the Common Stock on the date of payment.
Plan means this Postal
Realty Trust, Inc. 2019 Equity Incentive Plan.
SAR means a stock appreciation
right that in accordance with the terms of an Agreement entitles the holder to receive, with respect to each share of Common Stock
encompassed by the exercise of the SAR, the excess, if any, of the Fair Market Value at the time of exercise over the Initial Value.
References to “SARs” include both Corresponding SARs and SARs granted independently of Options, unless the context
requires otherwise.
Stock Award means shares
of Common Stock awarded to a Participant under Article VIII.
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1.27.
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Ten Percent Stockholder
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Ten Percent Stockholder
means any individual owning more than ten percent (10%) of the total combined voting power of all classes of shares of the Company
or of a “parent corporation” or “subsidiary corporation” (as such terms are defined in Section 424 of the
Code) of the Company. An individual shall be considered to own any voting shares owned (directly or indirectly) by or for his or
her brothers, sisters, spouse, ancestors or lineal descendants and shall be considered to own proportionately any voting shares
owned (directly or indirectly) by or for a corporation, partnership, estate or trust of which such individual is a stockholder,
partner or beneficiary.
Article
II
PURPOSES
The Plan is intended
to assist the Company and its Affiliates in recruiting and retaining individuals and other service providers with ability and initiative
by enabling such persons to participate in the future success of the Company and its Affiliates and to associate their interests
with those of the Company and its stockholders. The Plan is intended to permit the grant of both Options qualifying under Section 422
of the Code (“incentive stock options”) and Options not so qualifying, and the grant of SARs, Stock Awards, Incentive
Awards, Performance Units, and Other Equity-Based Awards in accordance with the Plan and any procedures that may be established
by the Committee. No Option that is intended to be an incentive stock option shall be invalid for failure to qualify as an incentive
stock option. The proceeds received by the Company from the sale of Common Stock pursuant to this Plan shall be used for general
corporate purposes.
Article
III
ADMINISTRATION
The Plan shall be administered
by the Committee. The Committee shall have authority to grant SARs, Stock Awards, Incentive Awards, Performance Units, Options
and Other Equity-Based Awards upon such terms (not inconsistent with the provisions of this Plan), as the Committee may consider
appropriate. Such terms may include conditions (in addition to those contained in this Plan), on the exercisability of all or any
part of an Option or SAR or on the transferability or forfeitability of a Stock Award, an Incentive Award, an award of Performance
Units or an Other Equity-Based Award. Notwithstanding any such conditions, the Committee may, in its discretion, accelerate the
time at which any Option or SAR may be exercised, or the time at which a Stock Award, an Incentive Award or Other Equity-Based
Award may become transferable or nonforfeitable or the time at which an Other Equity-Based Award, an Incentive Award or an award
of Performance Units may be settled. In addition, the Committee shall have complete authority to interpret all provisions of this
Plan; to prescribe the form of Agreements; to adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan (including rules and regulations that require or allow Participants to defer the payment of benefits under the Plan);
and to make all other determinations necessary or advisable for the administration of this Plan. Additionally, the Committee shall
have the sole authority to amend the terms of any outstanding award, including the discretionary authority to extend the post-termination
exercise period of Options and to allow Participants to satisfy withholding tax obligations by electing to have the Company withhold
from the shares of Common Stock or cash to be issued upon exercise or vesting of an award the number of shares of Common Stock
or cash having a Fair Market Value equal to the amount required to be withhold up to the maximum individual income tax rate in
the applicable jurisdiction. Committee’s determinations under the Plan (including without limitation, determinations of the
individuals to receive awards under the Plan, the form, amount and timing of such awards, the terms and provisions of such awards
and the Agreements) need not be uniform and may be made by the Committee selectively among individuals who receive, or are eligible
to receive, awards under the Plan, whether or not such persons are similarly situated. The express grant in the Plan of any specific
power to the Committee shall not be construed as limiting any power or authority of the Committee. Any decision made, or action
taken, by the Committee in connection with the administration of this Plan shall be final and conclusive. The members of the Committee
shall not be liable for any act done in good faith with respect to this Plan or any Agreement, Option, SAR, Stock Award, Incentive
Award, Other Equity-Based Award or award of Performance Units. All expenses of administering this Plan shall be borne by the Company.
The Committee, in its
discretion, may delegate to a designated officer of the Company all or part of the Committee’s authority and duties with
respect to grants and awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange
Act. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions
of the Committee’s delegate that were consistent with the terms of the Plan and the Committee’s prior delegation. References
to the “Committee” in the Plan include the Committee’s delegate to the extent consistent with the Committee’s
delegation.
Article
IV
ELIGIBILITY
Any employee of the
Company or an Affiliate (including a trade or business that becomes an Affiliate after the adoption of this Plan) and any member
of the Board is eligible to participate in this Plan; provided that Incentive Awards may not be granted to a Non-Employee Director.
In addition, any other individual who provides significant services to the Company or an Affiliate (including an individual who
provides services to the Company or an Affiliate by virtue of employment with, or providing services to, the Operating Partnership)
is eligible to participate in this Plan if the Committee, in its sole discretion, determines that the participation of such individual
is in the best interest of the Company. The Committee may also grant Options, SARs, Stock Awards, Incentive Awards, Performance
Units and Other Equity-Based Awards to an individual as an inducement to such individual becoming eligible to participate in the
Plan and prior to the date that the individual first performs services for the Company, an Affiliate or the Operating Partnership,
provided that such awards will not become vested or exercisable, and no shares of Common Stock shall be issued or other payment
made to such individual with respect to such awards prior to the date the individual first performs services for the Company, an
Affiliate or the Operating Partnership.
Article
V
COMMON STOCK SUBJECT TO PLAN
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5.01.
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Common Stock Issued
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Upon the award of Common
Stock pursuant to a Stock Award, an Other Equity-Based Award or in settlement of an award of Performance Units or Incentive Award,
the Company may deliver to the Participant shares of Common Stock from its treasury shares or authorized but unissued Common Stock.
Upon the exercise of any Option, SAR or Other Equity-Based Award denominated in shares of Common Stock, the Company may deliver
to the Participant (or the Participant’s broker if the Participant so directs), shares of Common Stock from its treasury
shares or authorized but unissued Common Stock.
(a) The
maximum aggregate number of Common Shares that may be issued under this Plan pursuant to the exercise of Options and SARs, the
grant of Stock Awards or Other Equity-Based Awards and the settlement of Performance Units and Incentive Awards is 541,584 shares,
all of which may be subject to incentive stock option treatment. Other Equity-Based Awards that are LTIP Units shall reduce the
maximum aggregate number of shares of Common Stock that may be issued under this Plan on a one-for-one basis,
i.e.
, each
such unit shall be treated as an award of Common Stock.
(b) The
maximum number of shares of Common Stock that may be issued under this Plan in accordance with Section 5.02(a) shall be subject
to adjustment as provided in Article XII.
(c) The
maximum number of shares of Common Stock that may be issued upon the exercise of Options that are incentive stock options or Corresponding
SARs that are related to incentive stock options shall be determined in accordance with Sections 5.02(a) and 5.02(b).
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5.03.
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Non-Employee Director Grant Limit
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A Non-Employee Director
may not be granted Options, SARs, Stock Awards, Performance Units and Other Equity-Based Awards in any calendar year with respect
to that number of shares of Common Stock that has a Fair Market Value on the date of the award in excess of $500,000. For purposes
of this Section 5.03, the value of an Option or a SAR will be the fair market value of such award on the date of grant as determined
by the Committee using a Black-Scholes option pricing model or any other reasonable valuation method approved by the Committee.
For purposes of this Section 5.03, an award of LTIP Units shall be treated as an award of Common Stock and an Option and Corresponding
SAR shall be treated as a single award.
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5.04.
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Reallocation of Shares
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If any award or grant
under the Plan (including LTIP Units) expires, is forfeited or is terminated without having been exercised or is paid in cash without
delivery of shares of Common Stock, then any shares of Common Stock covered by such lapsed, cancelled, expired, unexercised or
cash-settled portion of such award or grant and any forfeited, lapsed, cancelled or expired LTIP Units shall be available for the
grant of other Options, SARs, Stock Awards, Other Equity-Based Awards and settlement of Performance Units and Incentive Awards
under this Plan. Any shares of Common Stock tendered or withheld to satisfy the grant or exercise price or tax withholding obligation
pursuant to any award shall be available for future grants or awards.
Article
VI
OPTIONS
In accordance with
the provisions of Article IV, the Committee will designate each individual to whom an Option is to be granted and, subject to Section
5.03, will specify the number of shares of Common Stock covered by such awards. Notwithstanding anything herein to the contrary,
Options that are intended to be incentive stock options may be granted only to persons who are, as of the date of grant, common-law
employees of the Company or a subsidiary (as such term is defined in Code Sections 424(e) and (f)).
The price per share
of Common Stock purchased on the exercise of an Option shall be determined by the Committee on the date of grant, but shall not
be less than the Fair Market Value on the date the Option is granted. Notwithstanding the preceding sentence, the price per share
of Common Stock purchased on the exercise of any Option that is an incentive stock option granted to an individual who is a Ten
Percent Stockholder on the date such option is granted, shall not be less than one hundred ten percent (110%) of the Fair Market
Value on the date the Option is granted. Except as provided in Article XII, the price per share of an outstanding Option may not
be reduced (by amendment, cancellation and new grant or otherwise) without the approval of stockholders. In addition, without the
approval of stockholders, no payment shall be made in cancellation of an Option if, on the date of cancellation, the option price
per share exceeds Fair Market Value.
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6.03.
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Maximum Option Period
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The maximum period
in which an Option may be exercised shall be determined by the Committee on the date of grant except that no Option shall be exercisable
after the expiration of ten years from the date such Option was granted. In the case of an incentive stock option granted to a
Participant who is a Ten Percent Stockholder on the date of grant, such Option shall not be exercisable after the expiration of
five years from the date of grant. The terms of any Option may provide that it is exercisable for a period less than such maximum
period.
Except as provided
in Section 6.05, each Option granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution.
In the event of any transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR that relates
to such Option must be transferred to the same person or persons or entity or entities. Except as provided in Section 6.05, during
the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant. No right or
interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
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6.05.
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Transferable Options
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Section 6.04 to the
contrary notwithstanding, if the Agreement provides, an Option that is not an incentive stock option may be transferred by a Participant
to the Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be permitted under Rule 16b-3 under the
Exchange Act as in effect from time to time. The holder of an Option transferred pursuant to this Section shall be bound by the
same terms and conditions that governed the Option during the period that it was held by the Participant; provided, however, that
such transferee may not transfer the Option except by will or the laws of descent and distribution. In the event of any transfer
of an Option (by the Participant or his transferee), the Option and any Corresponding SAR that relates to such Option must be transferred
to the same person or persons or entity or entities.
For purposes of determining
the applicability of Section 422 of the Code (relating to incentive stock options), or in the event that the terms of any
Option provide that it may be exercised only during employment or continued service or within a specified period of time after
termination of employment or continued service, the Committee may decide to what extent leaves of absence for governmental or military
service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service.
Subject to the provisions
of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at such
times and in compliance with such requirements as the Committee shall determine; provided, however, that incentive stock options
(granted under the Plan and all plans of the Company and its Affiliates) may not be first exercisable in a calendar year for Common
Shares having a Fair Market Value (determined as of the date an Option is granted) exceeding $100,000. An Option granted under
this Plan may be exercised with respect to any number of whole shares less than the full number for which the Option could be exercised.
A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan
and the applicable Agreement with respect to the remaining shares subject to the Option. The exercise of an Option shall result
in the termination of any Corresponding SAR to the extent of the number of shares with respect to which the Option is exercised.
Subject to rules established
by the Committee and unless otherwise provided in an Agreement, payment of all or part of the Option price may be made in cash,
certified check, by tendering shares of Common Stock or by attestation of ownership of shares of Common Stock or by a broker-assisted
cashless exercise. If shares of Common Stock are used to pay all or part of the Option price, the sum of the cash and cash equivalent
and the Fair Market Value (determined on the date of exercise) of the shares surrendered must not be less than the Option price
of the shares for which the Option is being exercised.
No Participant shall
have any rights as a stockholder with respect to shares of Common Stock subject to an Option until the date of exercise of such
Option.
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6.10.
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Disposition of Shares
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A Participant shall
notify the Company of any sale or other disposition of shares of Common Stock acquired pursuant to an Option that was an incentive
stock option if such sale or disposition occurs (i) within two years of the grant of an Option or (ii) within one year
of the issuance of the shares of Common Stock to the Participant. Such notice shall be in writing and directed to the Secretary
of the Company.
Article
VII
SARS
In accordance with
the provisions of Article IV, the Committee will designate each individual to whom SARs are to be granted and will, subject to
Section 5.03, specify the number of shares of Common Stock covered by such awards.
The term of each SAR
shall be determined by the Committee on the date of grant, except that no SAR shall have a term of more than ten years from the
date of grant. In the case of a Corresponding SAR that is related to an incentive stock option granted to a Participant who is
a Ten Percent Stockholder on the date of grant, such Corresponding SAR shall not be exercisable after the expiration of five years
from the date of grant. The terms of any SAR may provide that it has a term that is less than such maximum period.
Except as provided
in Section 7.04, each SAR granted under this Plan shall be nontransferable except by will or by the laws of descent and distribution.
In the event of any such transfer, a Corresponding SAR and the related Option must be transferred to the same person or persons
or entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to whom the SAR is granted, the
SAR may be exercised only by the Participant. No right or interest of a Participant in any SAR shall be liable for, or subject
to, any lien, obligation, or liability of such Participant.
Section 7.03 to the
contrary notwithstanding, if the Agreement provides, a SAR, other than a Corresponding SAR that is related to an incentive stock
option, may be transferred by a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for
the benefit of such family members or a partnership in which such family members are the only partners, on such terms and conditions
as may be permitted under Rule 16b-3 under the Exchange Act as in effect from time to time. The holder of a SAR transferred pursuant
to this Section shall be bound by the same terms and conditions that governed the SAR during the period that it was held by the
Participant; provided, however, that such transferee may not transfer the SAR except by will or the laws of descent and distribution.
In the event of any transfer of a Corresponding SAR (by the Participant or his transferee), the Corresponding SAR and the related
Option must be transferred to the same person or person or entity or entities.
Subject to the provisions
of this Plan and the applicable Agreement, a SAR may be exercised in whole at any time or in part from time to time at such times
and in compliance with such requirements as the Committee shall determine; provided, however, that a Corresponding SAR that is
related to an incentive stock option may be exercised only to the extent that the related Option is exercisable and only when the
Fair Market Value exceeds the option price of the related Option. A SAR granted under this Plan may be exercised with respect to
any number of whole shares less than the full number for which the SAR could be exercised. A partial exercise of a SAR shall not
affect the right to exercise the SAR from time to time in accordance with this Plan and the applicable Agreement with respect to
the remaining shares subject to the SAR. The exercise of a Corresponding SAR shall result in the termination of the related Option
to the extent of the number of shares with respect to which the SAR is exercised.
If the terms of any
SAR provide that it may be exercised only during employment or continued service or within a specified period of time after termination
of employment or continued service, the Committee may decide to what extent leaves of absence for governmental or military service,
illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment or service.
At the Committee’s
discretion, the amount payable as a result of the exercise of a SAR may be settled in cash, Common Stock, or a combination of cash
and Common Stock. No fractional share will be deliverable upon the exercise of a SAR but a cash payment will be made in lieu thereof.
No Participant shall,
as a result of receiving a SAR, have any rights as a stockholder of the Company or any Affiliate until the date that the SAR is
exercised and then only to the extent that the SAR is settled by the issuance of Common Stock.
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7.09.
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No Reduction of Initial Value
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Except as provided
in Article XII, the Initial Value of an outstanding SAR may not be reduced (by amendment, cancellation and new grant or otherwise)
without the approval of stockholders. In addition, without the approval of stockholders, no payment shall be made in cancellation
of a SAR if, on the date of cancellation, the Initial Value exceeds Fair Market Value.
Article
VIII
STOCK AWARDS
In accordance with
the provisions of Article IV, the Committee will designate each individual to whom a Stock Award is to be made and will, subject
to Section 5.03, specify the number of shares of Common Stock covered by such awards.
The Committee, on the
date of the award, may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or otherwise restricted
for a period of time or subject to such conditions as may be set forth in the Agreement. By way of example and not of limitation,
the Committee may prescribe that a Participant’s rights in a Stock Award shall be subject to a requirement that the Participant
complete a specified period of employment or service with the Company or an Affiliate or shall be forfeitable or otherwise restricted
subject to the attainment of objectives stated with reference to the Company’s, an Affiliate’s or a business unit’s
attainment of objectives stated with respect to performance criteria established by the Committee, including the attainment of
objectives stated with respect to one or more Performance Goals.
In the event that the
terms of any Stock Award provide that shares may become transferable and nonforfeitable thereunder only after completion of a specified
period of employment or continuous service, the Committee may decide in each case to what extent leaves of absence for governmental
or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment
or service.
Unless otherwise specified
in accordance with the applicable Agreement, while the shares of Common Stock granted pursuant to the Stock Award may be forfeited
or are nontransferable, a Participant will have all rights of a stockholder with respect to a Stock Award, including the right
to receive dividends and vote the shares; provided, however, that dividends payable on shares of Common Stock subject to a Stock
Award that does not become nonforfeitable and transferable solely on account of continued employment or service, shall be distributed
only when, and to the extent that, the underlying Stock Award is nonforfeitable and transferable and the Committee may provide
that such dividends shall be deemed to have been reinvested in additional shares of Common Stock. During the period that the shares
of Common Stock granted pursuant to the Stock Award may be forfeited or are nontransferable (i) a Participant may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of shares granted pursuant to a Stock Award, (ii) the Company shall retain
custody of any certificates evidencing shares granted pursuant to a Stock Award, and (iii) the Participant will deliver to the
Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set forth in the preceding sentence
shall not apply after the shares granted under the Stock Award are transferable and are no longer forfeitable.
Article
IX
PERFORMANCE UNIT AWARDS
In accordance with
the provisions of Article IV, the Committee will designate each individual to whom an award of Performance Units is to be
made and will, subject to Section 5.03, specify the number of shares of Common Stock or other securities or property covered by
such awards. The Committee also will specify whether Dividend Equivalent Rights are granted in conjunction with the Performance
Units.
The Committee, on the
date of the grant of an award, may prescribe that the Performance Units will be earned, and the Participant will be entitled to
receive payment pursuant to the award of Performance Units, upon the satisfaction of certain conditions. By way of example, and
not of limitation, the Committee may prescribe that payment of an award of Performance Units will be subject to a requirement that
the Participant complete a specified period of employment or service with the Company or an Affiliate or the attainment of objectives
stated with reference to the Company’s, an Affiliate’s or a business unit’s attainment of objectives stated with
respect to performance criteria established by the Committee, including the attainment of objectives stated with respect to one
or more Performance Goals.
In the discretion of
the Committee, the amount payable when an award of Performance Units is earned may be settled in cash, by the issuance of Common
Stock, by the delivery of other securities or property or a combination thereof. A fractional share of Common Stock shall not be
deliverable when an award of Performance Units is earned, but a cash payment will be made in lieu thereof. The amount payable when
an award of Performance Units is earned shall be paid in a lump sum.
A Participant, as a
result of receiving an award of Performance Units, shall not have any rights as a stockholder until, and then only to the extent
that, the award of Performance Units is earned and settled in shares of Common Stock. After an award of Performance Units is earned
and settled in shares of Common Stock, a Participant will have all the rights of a stockholder as described in Section 8.04.
Except as provided
in Section 9.06, Performance Units granted under this Plan shall be nontransferable except by will or by the laws of descent
and distribution. No right or interest of a Participant in any Performance Units shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
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9.06.
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Transferable Performance Units
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Section 9.05 to
the contrary notwithstanding, if the Agreement provides, an award of Performance Units may be transferred by a Participant to the
Participant’s children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be permitted under Rule 16b-3 under the
Exchange Act as in effect from time to time. The holder of Performance Units transferred pursuant to this Section shall be bound
by the same terms and conditions that governed the Performance Units during the period that they were held by the Participant;
provided, however that such transferee may not transfer Performance Units except by will or the laws of descent and distribution.
In the event that the
terms of any Performance Unit award provide that no payment will be made unless the Participant completes a stated period of employment
or continued service, the Committee may decide to what extent leaves of absence for government or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions of continuous employment or service.
Article
X
OTHER EQUITY–BASED AWARDS
In accordance with
the provisions of Article IV, the Committee will designate each individual to whom an Other Equity-Based Award is to be made
and will, subject to Section 5.03, specify the number of shares of Common Stock or other equity interests (including LTIP Units)
covered by such awards. The grant of LTIP Units must satisfy the requirements of the partnership agreement of the Operating Partnership
as in effect on the date of grant. The Committee also will specify whether Dividend Equivalent Rights are granted in conjunction
with the Other Equity-Based Award.
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10.02.
|
Terms and Conditions
|
The Committee, at the
time an Other Equity-Based Award is made, shall specify the terms and conditions which govern the award. The terms and conditions
of an Other Equity-Based Award may prescribe that a Participant’s rights in the Other Equity-Based Award shall be forfeitable,
nontransferable or otherwise restricted for a period of time or subject to such other conditions as may be determined by the Committee,
in its discretion and set forth in the Agreement, including the attainment of objectives stated with respect to one or more Performance
Goals. Other Equity-Based Awards may be granted to Participants, either alone or in addition to other awards granted under the
Plan, and Other Equity-Based Awards may be granted in the settlement of other Awards granted under the Plan.
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10.03.
|
Payment or Settlement
|
Other Equity-Based
Awards valued in whole or in part by reference to, or otherwise based on, shares of Common Stock, shall be payable or settled in
shares of Common Stock, cash or a combination of Common Stock and cash, as determined by the Committee in its discretion; provided,
however, that any shares of Common Stock that are issued on account of the conversion of LTIP Units into Common Stock shall not
be issued under the Plan. Other Equity-Based Awards denominated as equity interests other than Common Stock may be paid or settled
in shares or units of such equity interests or cash or a combination of both as determined by the Committee in its discretion.
If the terms of any
Other Equity-Based Award provides that it may be earned or exercised only during employment or continued service or within a specified
period of time after termination of employment or continued service, the Committee may decide to what extent leaves of absence
for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous
employment or service.
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10.05.
|
Stockholder Rights
|
A Participant, as a
result of receiving an Other Equity-Based Award, shall not have any rights as a stockholder until, and then only to the extent
that, shares of Common Stock are issued under the Other Equity-Based Award.
Article
XI
INCENTIVE AWARDS
In accordance with
the provisions of Article IV, the Committee will designate each individual to whom an Incentive Award is to be made and the amount
payable under each Incentive Award. In accordance with Article IV and notwithstanding the preceding sentence, Incentive Awards
may not be granted to a Non-Employee Director.
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11.02.
|
Terms and Conditions
|
The Committee, at the
time an Incentive Award is made, shall specify the terms and conditions that govern the award. Such terms and conditions may prescribe
that the Incentive Award shall be earned only to the extent that the Participant, the Company or an Affiliate, achieves objectives
stated with reference to one or more performance measures or criteria prescribed by the Committee, including the attainment of
objectives stated with respect to one or more Performance Goals. Such terms and conditions also may include other limitations on
the payment of Incentive Awards including, by way of example and not of limitation, requirements that the Participant complete
a specified period of employment or service with the Company or an Affiliate or that the Company, an Affiliate, as a prerequisite
to payment under an Incentive Award.
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11.03.
|
Nontransferability
|
Incentive Awards granted
under this Plan shall be nontransferable except by will or by the laws of descent and distribution. No right or interest of a Participant
in an Incentive Award shall be liable for, or subject to, any lien, obligation, or liability of such Participant.
If the terms of an
Incentive Award provide that a payment will be made thereunder only if the Participant completes a stated period of employment
or continued service the Committee may decide to what extent leaves of absence for governmental or military service, illness, temporary
disability or other reasons shall not be deemed interruptions of continuous employment or service.
An Incentive Award
that is earned shall be settled with a single lump sum payment which may be in cash, shares of Common Stock or a combination of
cash and Common Stock, as determined by the Committee.
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11.06.
|
Stockholder Rights
|
No participant shall,
as a result of receiving an Incentive Award, have any rights as a stockholder of the Company or an Affiliate until the date that
the Incentive Award is settled and then only to the extent that the Incentive Award is settled by the issuance of Common Stock.
Article
XII
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number
of shares of Common Stock as to which Options, SARs, Performance Units, Stock Awards and Other Equity-Based Awards may be granted
and the terms of outstanding Stock Awards, Options, SARs, Incentive Awards, Performance Units and Other Equity-Based Awards shall
be adjusted as determined by the Board in the event that (i) the Company (a) effects one or more nonreciprocal transactions between
the Company and its stockholders such as a share dividend, extra-ordinary cash dividend, share split-up, subdivision or consolidation
of shares that affects the number of shares or kind of Common Stock (or other securities of the Company) or the Fair Market Value
(or the value of other Company securities) and causes a change in the Fair Market Value of the Common Stock subject to outstanding
awards or (b) engages in a transaction to which Section 424 of the Code applies or (ii) there occurs any other event which,
in the judgment of the Board necessitates such action. Any determination made under this Article XII by the Board shall be
final and conclusive.
The issuance by the
Company of shares of any class, or securities convertible into shares of any class, for cash or property, or for labor or services,
either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the maximum number of shares as to which Options, SARs, Performance Units, Stock Awards and Other Equity-Based
Awards may be granted or the terms of outstanding Stock Awards, Options, SARs, Incentive Awards, Performance Shares or Other Equity-Based
Awards.
The Committee may grant
Stock Awards, Options, SARs, Performance Units or Other Equity-Based Awards in substitution for performance shares, phantom shares,
stock awards, stock options, stock appreciation rights, or similar awards held by an individual who becomes an employee of the
Company or an Affiliate in connection with a transaction described in the first paragraph of this Article XII. Notwithstanding
any provision of the Plan (other than the limitation of Section 5.02), the terms of such substituted Stock Awards, SARs, Other
Equity-Based Awards, Options or Performance Units shall be as the Committee, in its discretion, determines is appropriate.
Article
XIII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option or SAR shall
be exercisable, no Common Stock shall be issued, no certificates for Common Stock shall be delivered, and no payment shall be made
under this Plan except in compliance with all applicable federal and state laws and regulations (including, without limitation,
withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges
on which the Company’s shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to
such compliance. Any certificate issued to evidence Common Stock when a Stock Award is granted, a Performance Unit, Incentive Award
or Other Equity-Based Award is settled or for which an Option or SAR is exercised may bear such legends and statements as the Committee
may deem advisable to assure compliance with federal and state laws and regulations. No Option or SAR shall be exercisable, no
Stock Award or Performance Unit shall be granted, no Common Stock shall be issued, no certificate for Common Stock shall be delivered,
and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Committee may deem
advisable from regulatory bodies having jurisdiction over such matters.
Article
XIV
GENERAL PROVISIONS
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14.01.
|
Effect on Employment and Service
|
Neither the adoption
of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof), shall confer upon any
individual any right to continue in the employ or service of the Company or an Affiliate or in any way affect any right and power
of the Company or an Affiliate to terminate the employment or service of any individual at any time with or without assigning a
reason therefor.
This Plan, insofar
as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time
be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan
shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company
shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.
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14.03.
|
Rules of Construction
|
Headings are given
to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation,
or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.
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14.04.
|
Section 409A Compliance
|
All awards made under
this Plan are intended to comply with, or otherwise be exempt from, Section 409A of the Code (“Section 409A”), after
giving effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12). This Plan and all Agreements shall
be administered, interpreted and construed in a manner consistent with Section 409A. If any provision of this Plan or any Agreement
is found not to comply with, or otherwise not be exempt from, the provisions of Section 409A, it shall be modified and given effect,
in the sole discretion of the Committee and without requiring the Participant’s consent, in such manner as the Committee
determines to be necessary or appropriate to comply with, or effectuate an exemption from, Section 409A. Each payment under an
award granted under this Plan shall be treated as a separate identified payment for purposes of Section 409A.
If a payment obligation
under an award or an Agreement arises on account of the Participant’s termination of employment and such payment obligation
constitutes “deferred compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving effect
to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)), it shall be payable only after the Participant’s
“separation from service” (as defined under Treasury Regulation section 1.409A-1(h)); provided, however, that if the
Participant is a “specified employee” (as defined under Treasury Regulation section 1.409A-1(i)), any such payment
that is scheduled to be paid within six months after such separation from service shall accrue without interest and shall be paid
on the first day of the seventh month beginning after the date of the Participant’s separation from service or, if earlier,
within fifteen days after the appointment of the personal representative or executor of the Participant’s estate following
the Participant’s death.
Each Participant shall
be responsible for satisfying any income and employment tax withholding obligations attributable to participation in the Plan.
Unless otherwise provided by the Agreement, any such withholding tax obligations may be satisfied in cash (including from any cash
payable in settlement of an award of Performance Units, SARs, Incentive Awards or Other Equity-Based Award) or a cash equivalent
acceptable to the Committee. Any statutory federal, state, district or city withholding tax obligations also may be satisfied (a)
by surrendering to the Company shares of Common Stock previously acquired by the Participant; (b) by authorizing the Company to
withhold or reduce the number of shares of Common Stock otherwise issuable to the Participant upon the exercise of an Option or
SAR, the settlement of a Performance Unit award, Incentive Award or an Other Equity-Based Award (if applicable) or the grant or
vesting of a Stock Award up to the maximum individual income tax rate in the applicable jurisdiction; or (c) by any other method
as may be approved by the Committee. If Common Stock is used to pay all or part of such withholding tax obligation, the Fair Market
Value of the shares surrendered, withheld or reduced shall be determined as of the day the tax liability arises.
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14.06.
|
Return of Awards; Repayment
|
Each Stock Award, Option,
SAR, Performance Unit award, Incentive Award and Other Equity-Based Award granted under the Plan, as amended and restated herein,
is subject to the condition that the Company may require that such award be returned and that any payment made with respect to
such award must be repaid if such action is required under the terms of any Company “clawback” policy as in effect
on the date that the payment was made, on the date the award was granted or, as applicable, the date the Option or SAR was exercised
or the date the Stock Award, Performance Unit award or Other Equity-Based Award is vested or earned.
The Plan shall be governed
by and construed in accordance with the laws of the state of Delaware, without giving effect to principles of conflicts of law
of such state.
Each person who is
or has been a member of the Committee or the Board will be indemnified and held harmless by the Company from and against any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or as a result of
any claim, action, suit or proceeding to which he or she may be a party or in which he or she may be involved by reason of any
action taken, or failure to act, under the Plan. Each such person will also be indemnified and held harmless by the Company from
and against any and all amounts paid by him or her in a settlement approved by the Company, or paid by him or her in satisfaction
of any judgment, of or in a claim, action, suit or proceeding against him or her and described in the previous sentence, so long
as he or she gives the Company an opportunity, at its own expense, to handle and defend the claim, action, suit or proceeding before
he or she undertakes to handle and defend it. The foregoing right of indemnification will not be exclusive of any other rights
of indemnification to which a person who is or has been a member of the Committee or the Board may be entitled under the Company’s
Articles of Amendment and Restatement, as a matter of law, or otherwise, or any power that the Company may have to indemnify him
or her or hold him or her harmless.
Article
XV
CHANGE IN CONTROL
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15.01.
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Impact of Change in Control.
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Upon a Change in Control,
the Committee is authorized to cause (i) outstanding Options and SARs to become fully exercisable, (ii) outstanding Stock Awards
to become transferable and nonforfeitable and (iii) outstanding Performance Units, Incentive Awards and Other Equity-Based Awards
to become earned and nonforfeitable in their entirety.
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15.02.
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Assumption Upon Change in Control.
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In the event of a Change
in Control, the Committee, in its discretion and without the need for a Participant’s consent, may provide that an outstanding
Option, SAR, Incentive Award, Stock Award, Performance Unit or Other Equity-Based Award shall be assumed by, or a substitute award
granted by, the surviving entity in the Change in Control. Such assumed or substituted award shall be of the same type of award
as the original Option, SAR, Incentive Award, Stock Award, Performance Unit or Other Equity-Based Award being assumed or substituted.
The assumed or substituted award shall have an intrinsic value, as of the Control Change Date, that is substantially equal to the
intrinsic value of the original award (or the difference between the Fair Market Value and the option price or Initial Value in
the case of Options and SARs) as the Committee determines is equitably required and such other terms and conditions as may be prescribed
by the Committee.
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15.03.
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Cash-Out Upon Change in Control.
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In the event of a Change
in Control, the Committee, in its discretion and without the need of a Participant’s consent, may provide that each Option,
SAR, Incentive Award, Stock Award and Performance Unit and Other Equity-Based Award shall be cancelled in exchange for a payment.
The payment may be in cash, Common Stock or other securities or consideration received by stockholders in the Change in Control
transaction. The amount of the payment shall be an amount that is substantially equal to (i) the amount by which the price per
share received by stockholders in the Change in Control exceeds the option price or Initial Value in the case of an Option and
SAR, or (ii) the price per share received by stockholders for each share of Common Stock subject to a Stock Award, Performance
Unit or Other Equity-Based Award, (iii) the value of the other securities or property in which the Performance Unit or Other Equity-Based
award is denominated or (iv) the amount payable under an Incentive Award on account of meeting employment or service requirements
or meeting performance objectives (including, without limitation, Performance Goals). If the option price or Initial Value exceeds
the price per share received by stockholders in the Change in Control transaction, the Option or SAR may be cancelled under this
Section 15.03 without any payment to the Participant.
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15.04.
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Limitation of Benefits
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The benefits that a
Participant may be entitled to receive under this Plan and other benefits that a Participant is entitled to receive under other
plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”),
may constitute Parachute Payments that are subject to Sections 280G and 4999 of the Code. As provided in this Section 15.04, the
Parachute Payments will be reduced if, and only to the extent that, a reduction will allow a Participant to receive a greater Net
After Tax Amount than a Participant would receive absent a reduction.
The Accounting Firm
will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm also will determine
the Net After Tax Amount attributable to the Participant’s total Parachute Payments.
The Accounting Firm
will next determine the largest amount of Payments that may be made to the Participant without subjecting the Participant to tax
under Section 4999 of the Code (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After
Tax Amount attributable to the Capped Payments.
The Participant will
receive the total Parachute Payments or the Capped Payments, whichever provides the Participant with the higher Net After Tax Amount.
If the Participant will receive the Capped Payments, the total Parachute Payments will be reduced until the value of the remaining
Parachute Payments for purposes of Section 280G of the Code equals the Capped Payments. The reduction shall be effected by the
Committee by first reducing the amount of any benefits under this Plan or any other plan, agreement or arrangement that are not
subject to Section 409A of the Code (by reducing such benefits in the order that maximizes the reduction in value of the Parachute
Payments under Section 280G of the Code) and then by the Committee reducing the amount of any benefits under this Plan or any other
plan, agreement or arrangement that are subject to Section 409A of the Code (by reducing such benefits in the order that maximizes
the reduction in the value of the Parachute Payments under Section 280G of the Code). The Accounting Firm will notify the Participant
and the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and will send the Participant
and the Company a copy of its detailed calculations supporting that determination.
As a result of the
uncertainty in the application of Sections 280G and 4999 of the Code at the time that the Accounting Firm makes its determinations
under this Article XV, it is possible that amounts will have been paid or distributed to the Participant that should not have been
paid or distributed under this Section 15.04 (“Overpayments”), or that additional amounts should be paid or distributed
to the Participant under this Section 15.04 (“Underpayments”). If the Accounting Firm determines, based on either the
assertion of a deficiency by the Internal Revenue Service against the Company or the Participant, which assertion the Accounting
Firm believes has a high probability of success or controlling precedent or substantial authority, that an Overpayment has been
made, the Participant must repay to the Company, without interest; provided, however, that no amount will be payable by the Participant
to the Company unless, and then only to the extent that, the repayment would either reduce the amount on which the Participant
is subject to tax under Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If the Accounting
Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm
will notify the Participant and the Company of that determination and the amount of that Underpayment will be paid to the Participant
promptly by the Company.
For purposes of this
Section 15.04, the term “Accounting Firm” means the independent accounting firm engaged by the Company immediately
before the Control Change Date. For purposes of this Section 15.04, the term “Net After Tax Amount” means the amount
of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed under Sections 1, 3101(b) and 4999 of the Code
and any State or local income taxes applicable to the Participant on the date of payment. The determination of the Net After Tax
Amount shall be made using the highest combined effective rate imposed by the foregoing taxes on income of the same character as
the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. For purposes of this Section 15.04,
the term “Parachute Payment” means a payment that is described in Section 280G(b)(2) of the Code, determined in accordance
with Section 280G of the Code and the regulations promulgated or proposed thereunder.
Notwithstanding any
other provision of this Section 15.04, a Participant’s Parachute Payments cannot exceed the Capped Amount if the Participant,
pursuant to an agreement with the Company or the terms of another plan maintained by the Company, is not entitled to receive or
retain Parachute Payments that exceed the Capped Amount.
Article
XVI
AMENDMENT
The Board may amend
or terminate this Plan at any time; provided, however, that no amendment may adversely impair the rights of a Participant with
respect to outstanding awards without the Participant’s consent. In addition, an amendment will be contingent on approval
of the Company’s stockholders if such approval is required by law or the rules of any exchange on which the Common Shares
are listed or if the amendment would materially increase the benefits accruing to Participants under the Plan, materially increase
the aggregate number of shares of Common Stock that may be issued under the Plan or materially modify the requirements as to eligibility
for participation in the Plan.
Article
XVII
DURATION OF PLAN
No Stock Award, Performance
Unit Award, Incentive Award, Option, SAR or Other Equity-Based Award may be granted under this Plan after the day before the tenth
anniversary of the date the Board adopted this Plan. Stock Awards, Performance Unit awards, Incentive Awards, Options, SARs and
Other Equity-Based Awards granted before such date shall remain valid in accordance with their terms.
Article
XVIII
EFFECTIVE DATE OF PLAN
Options, Stock Awards,
Performance Units, Incentive Awards and Other Equity-Based Awards may be granted under this Plan on and after the date that the
Plan is adopted by the Board, provided that, this Plan shall not be effective unless it is approved by a majority of the votes
cast by the stockholders of the Company, voting either in person or by proxy, at a duly held meeting of the stockholders of the
Company within twelve months of the Plan’s adoption by the Board.
Exhibit 10.3
Postal Realty
Trust, Inc.
ALIGNMENT
OF INTEREST PROGRAM
1.
Purpose
. The Postal Realty Trust, Inc. 2019 Incentive Plan (the “Plan”) was adopted to promote
the interests of Postal Realty Trust, Inc. (the “Company”) and its stockholders by
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strengthening the Company’s ability to attract, motivate, and retain
officers upon whose judgment, initiative, and efforts the financial success and growth of the business of the Company largely depend;
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offering such officers additional incentives to put forth maximum efforts for the success of the
business; and
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affording such officers an opportunity to acquire a proprietary interest
in the Company through stock ownership and other performance-based rights.
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This Alignment of Interest
Program is being adopted in accordance with the Plan and is intended to further the purposes of the Plan by providing incentives
to the Company’s officers and directors to receive either long-term incentive partnership units in the Company’s operating
partnership (“LTIP Units”) or restricted shares of the Company’s Class A common stock (the “Restricted
Stock”) with long-term vesting. The Committee believes that utilizing LTIP Units and Restricted Stock with long-term vesting
aligns the interests of the Company’s officers and directors with those of the Company’s stockholders.
2.
Definitions
. Whenever capitalized terms are used herein, but not defined, they shall have the meanings
attributed to such terms in the Plan.
3.
Participation
. The Participants in this Alignment of Interest Program are the officers and directors who
have been named by the Corporate Governance and Compensation Committee of the Company’s Board of Directors (the “Committee”)
to participate in this program.
4.
Awards
. Each year, Participants may (i) elect to reduce compensation that might be payable in cash the
subsequent year (the “Reduction Year”) by, for officers, a percentage amount to be applied to the acquisition of LTIP
Units, and for directors, Restricted Stock (the “Acquisition Shares”) and (ii) receive an award (an “Award”)
based upon a multiple of the Acquisition Shares determined by the restriction period selected by the Participant (the “Restriction
Multiple”).
The minimum and maximum
percentage of each compensation type that a Participant may elect to be reduced and applied to Acquisition Shares shall be determined
by the Committee. See Exhibit A for the current percentages.
The amount of base
salary, cash bonus, retainer, fees or other compensation applied to the acquisition of LTIP Units or Restricted Stock shall reduce
the base salary, cash bonus, retainer, fees or other compensation of the Participant for the Reduction Year.
The “Determination
Date” shall be January 15 of the year following the Participant’s effective election, or, if such date is not a trading
day, then the trading day immediately preceding January 15. Notwithstanding the foregoing, the following two exceptions apply:
(i)
for a Participant’s initial year of participation in the Program, the Determination Date shall be the date that is
the fifteenth (15th) business day following the Participant’s effective election, and
(ii)
if the dollar amount of any reduced compensation has not been determined by January 15, then the Determination Date shall
be the fifteenth (15th) business day following the date on which the amount of such compensation (e.g., bonus) is fixed and determined.
The number of Acquisition Shares
granted to a Participant shall be determined as follows:
(i)
For elections made prior to the effective date of the Company’s Initial Public Offering (“IPO Effective Date”),
the number of LTIP Units shall be determined as of the IPO Effective Date by the Committee, the number of shares of Restricted
Stock shall be determined as of the IPO Effective Date by dividing the total of the Participant’s elected reduced Salary
or retainer, fees for the remainder of such year by the price per share sold to the public by the underwriters of the Company’s
Initial Public Offering; or
(ii)
For all periods after the IPO Effective Date, the number of LTIP Units shall be determined as of the Determination Date
by the Committee and the number of shares of Restricted Stock shall be determined as of the Determination Date by dividing the
total of the Participant’s elected reduced Salary, cash bonus, retainer, fees or other compensation by the volume weighted
average price of the common stock for the 10 trading days immediately preceding the Determination Date.
The Restriction Multiple
and restriction period shall be established by the Committee in its sole discretion. See Exhibit A for the current multiples. The
Restriction Multiple shall be determined by Participant’s selection of a restriction period.
Each Participant must
deliver written notice of Participant’s election to obtain an Award pursuant to this Section 4 to the Committee, or other
person appointed by the Committee, prior to the end of the last business day before the beginning of the Reduction Year. The notice
shall contain the percentage reduction and the restriction period selected by the Participant. Unless otherwise approved by the
Committee, this election shall be irrevocable by the Participant.
The product of the
Restriction Multiple multiplied by the Acquisition Shares, rounded to the nearest share, shall be the number of shares constituting
an Award (the “Award Shares”) pursuant to this Section 4. See Exhibit B for illustrative examples of the calculations.
Acquisition Shares and Award Shares determined pursuant to this Section 4 shall be delivered to each Participant as soon as administratively
feasible, but generally prior to the record date for payment of the dividend declared in January of the Reduction Year. Each Participant
must be an Eligible Person at the date of delivery of the Award to receive the Award Shares.
The Committee shall
have the discretion to alter the administration of awards under this Alignment of Interest Program at any time prior to the grant
of any such award, in accordance with Article III and Article XVI of the Plan.
5.
Termination of Employment
. In the event of termination of a Participant’s employment, the disposition
of any unvested Awards will be determined in accordance with such Participant’s written employment agreement and Agreement,
if applicable. If a Participant is not employed pursuant to a written employment agreement and voluntarily terminates his or her
employment, or is terminated for cause (as defined by the Committee in its reasonable discretion), such Participant will forfeit
any unvested Awards. If a Participant is not employed pursuant to a written employment agreement and such employment is terminated
by the Company without Cause, or by reason of Participant’s death, disability or retirement (upon attainment of eligibility
to retire in accordance with any applicable Company policy then in effect) all unvested Awards will immediately vest. The provisions
of Article XV of the Plan will govern in the event of a Change in Control and are not intended to be altered by this Section 5.
6.
Amendments
. The Committee may from time to time amend or modify this Alignment of Interest Program, provided
that no such action shall adversely affect Awards previously granted hereunder.
7.
Survival
. This Alignment of Interest Program shall continue in effect as long as the Plan is in effect
or until terminated by the Committee.
Exhibit 10.4
POSTAL REALTY TRUST, INC.
2019 EMPLOYEE STOCK PURCHASE PLAN
1.
Purpose
of the Plan
.
The Plan is intended to assist the Company and its Participating Subsidiaries in recruiting and retaining
individuals by enabling such persons to participate in the future success of the Company through the purchase of Common Stock
under the Plan. The Plan is also intended to encourage such persons to voluntarily align their interests with the interests of
the Company and its shareholders. The Plan is intended to satisfy the requirements of Section 423 of the Code and the Plan shall
be interpreted and administered consistent with that intent.
2.
Definitions
.
(a) "
Board
"
means the Board of Directors of the Company.
(b) "
Business
Day
" means a day on which the national exchange or trading system on which the Common Stock is traded is available
and open for trading.
(c) "
Code
"
means the Internal Revenue Code of 1986, as amended from time to time.
(d) "
Change-in-Control
"
means a Change in Control as defined in the Postal Realty Trust, Inc. 2019 Equity Incentive Plan, as amended from time to time.
(e) "
Committee
"
means the Compensation Committee of the Board or such other designee assigned by the Compensation Committee to administer the Plan.
(f) "
Common
Stock
" means Class A common stock, $0.01 par value, of the Company.
(g) "
Company
"
means Postal Realty Trust, Inc., a Maryland corporation.
(h) "
Compensation
"
means the base compensation (which includes regular salary, wages, and salary continuance during a short-term disability paid to
an Eligible Employee by the Company or a Participating Subsidiary, prior to withholding and prior to Employee elective contributions
to a plan described in Sections 125 or 401(k) of the Code, during the applicable pay period). Compensation also includes any differential
wage payments made by the Company or a Participating Subsidiary to an Eligible Employee during active military duty in the uniformed
services. Compensation does not include commissions, bonus, award, or incentive payments, including sales incentive compensation,
or any other remuneration paid to an Eligible Employee, such as relocation expenses, tax gross ups, tuition reimbursement, the
imputed value of life insurance, or any income realized as a result of participation in any stock option, stock purchase, or similar
plan of the Company or a Participating Subsidiary.
(i) "
Eligible
Employee
" means every Employee of the Company or a Participating Subsidiary, except that the following shall not be
considered an Eligible Employee: (i) any Employee owning (directly or through attribution) stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of common stock of the Company, a Parent or a Subsidiary (as determined
under Section 423(b)(3) of the Code); (ii) any Employee whose customary employment is less than twenty hours per week or less than
five months in any calendar year; (iii) any Employee who has been continuously employed by the Company or a Participating Subsidiary
less than ninety (90) days; or (iv) any Employee who is a highly compensated employee within the meaning of Section 423(b)(4)(D)
of the Code, and/or any Employee who has not satisfied a service requirement designated by the Committee pursuant to Section 423(b)(4)(A)
of the Code (which service requirement may not exceed two (2) years), provided, however, that the limitation contained in this
Section 2(i)(iv) shall only apply to the extent the Committee expressly provides for such limitation, and then, such limitation
shall only apply to such Offering Period. Determinations of whether an Employee qualifies as an Eligible Employee shall be made
by the Committee in its sole and absolute discretion, and such decision shall be binding and conclusive as to the Employee irrespective
of whether any government agency subsequently determines otherwise.
(j)
"
Employee
" means any officer or other employee (as defined in accordance with Section 3401(c) of the Code)
of the Company or a Participating Subsidiary. For purposes of the Plan, an individual shall cease to be an Employee either upon
an actual termination of employment with the Company or a Participating Subsidiary, or upon a Participating Subsidiary employing
such individual ceasing to be a Subsidiary. For purposes of the Plan, an individual shall not cease to be an Employee while such
individual is on any military leave, sick leave, statutory leave (as determined under local law) or other bona fide leave of absence
(as determined under local law). The Committee shall determine in good faith and in the exercise of its discretion whether an individual
has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment,
as the case may be. Determinations of whether an individual qualifies as an Employee shall be made by the Committee in its sole
and absolute discretion, and such decision shall be binding and conclusive as to the individual irrespective of whether any governmental
agency subsequently determines otherwise.
(k) "
Employer
"
means the Company or a Participating Subsidiary that employs an Employee.
(l) "
Enrollment
Period
" means the period within which an Eligible Employee may, in accordance with procedures prescribed by the Committee,
elect to participate in an Offering. The duration and timing of an Enrollment Period may be changed or modified by the Committee
from time to time, however, the Enrollment Period must conclude prior to the Grant Date.
(m) "
Expiration
Date
" means the last day of an Offering. The initial Expiration Date is December 31, 2019 for the Offering Period
with a Grant Date of July 1, 2019. Thereafter the Expiration Date shall be each June 30 (for each Offering Period with a Grant
Date of January 1) and each December 31 (for each Offering Period with a Grant Date of July 1). If the Expiration Date falls on
a day that is not a Business Day, then the Expiration Date shall be the next preceding day which is a Business Day. The Committee
shall have the power to change the duration of an Offering (including the related Grant Dates) with respect to future offerings
if such change is announced at least five Business Days prior to the Grant Date of the first Offering to be affected thereafter.
(n) "
Fair
Market Value
" means as of any given date, the preceding day’s closing price of a share of Common Stock as reported
by the principal exchange on which the Common Stock is traded, or, if no shares of Common Stock were traded on such exchange on
such date, on the last preceding date on which the Common Stock was so traded.
(o) "
Grant
Date
" means the first day of an Offering. The initial Grant Date shall be July 1, 2019. Thereafter the Grant Date
shall be each January 1 and each July 1. If the Grant Date falls on a day that is not a Business Day, then the Grant Date shall
be the next following day which is a Business Day.
(p) "
Offering
"
means the grant of Purchase Rights under the Plan.
(q) "
Offering
Period
" means a period of six (6) months, or such other period (not to exceed twelve (12) months) as determined by
the Committee with respect to an Offering, during which funds may be accumulated in a Participant’s account by means of payroll
deductions for the purpose of exercising an option under the Offering.
(r) "
Participant
"
means any Eligible Employee who has elected to participate in the Plan.
(s) "
Participating
Subsidiary
" means a Subsidiary that has been designated by the Committee, as determined from time to time in its sole
discretion, as being eligible to participate in one or more Offerings under the Plan; provided however that a Subsidiary may
be designated as a Participating Subsidiary only if the grant of Purchase Rights to the Eligible Employees of such Subsidiary would
not cause the Company to incur material adverse accounting charges.
(t) "
Plan
"
means the Postal Realty Trust, Inc. 2019 Employee Stock Purchase Plan, as amended from time to time.
(u) "
Purchase
Rights
" means rights of a Participant to purchase shares of Common Stock under the Plan on the terms or conditions
set forth herein and as determined by the Committee.
(v) "
Subsidiary
"
means an entity, domestic or foreign, of which not less than 50% of the combined voting power is held by the Company, either directly
or indirectly, whether or not such entity now exists or is hereafter organized or acquired by the Company or a Subsidiary. In all
cases, the determination of whether an entity is a Subsidiary will be made in accordance with Section 424(f) of the Code.
3.
Administration
of the Plan
.
The Committee shall administer the Plan. The Committee may delegate to one or more designees authority
to administer the Plan subject to any terms and limitations imposed by the Committee. The Committee, or the designee, shall have
full power and authority to construe and interpret the Plan and may from time to time adopt such rules and regulations for carrying
out the Plan as it may deem best, including:
(a) To
determine when and how Purchase Rights shall be granted and the provisions of each Offering of such rights (which need not be identical),
including establishing the timing and length of Offering Periods and establishing minimum and maximum contribution rates;
(b) To
establish new or changing limits on the number of shares of Common Stock a Participant may elect to purchase with respect to any
Offering Period, if such limits are announced prior to the first Offering Period to be affected;
(c) To
designate from time to time which Subsidiaries of the Company shall be a Participating Subsidiaries, which designation may be made
without the approval of the shareholders of the Company; and
(d) To
construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration.
The Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully effective.
Decisions of the Committee
shall be final, conclusive and binding upon all parties, including the Company, its shareholders and its employees. The Company
intends that the Committee shall consist of at least two "nonemployee directors" as defined in Rule 16b-3. No member
of the Board, the Committee or its designee shall be personally liable for any action or determination taken or made in good faith
with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with
respect to any such action or determination.
4.
Participation
in the Plan
.
(a) The
individuals who shall be eligible to receive grants of Purchase Rights under an Offering shall be all Eligible Employees of the
Company or of any Participating Subsidiary who are so employed by the Company or Participating Subsidiary during the applicable
Enrollment Period and on the Grant Date of such Offering. Notwithstanding the preceding sentence to the contrary, no Eligible Employee
shall be eligible to effect a purchase under an Offering if immediately thereafter and after giving effect thereto, the aggregate
value or voting power of all shares of stock of the Company and any Subsidiary then owned by such individual, either directly or
indirectly, within the meaning of the applicable sections of the Code and including all shares of stock with respect to which such
individual holds options, would equal or exceed in the aggregate 5% of the total value or combined voting power of all classes
of stock of the Company or any Subsidiary.
(b) An
Eligible Employee may become a Participant in the Plan for an Offering by completing an enrollment form or other required documents
prescribed by the Committee and submitting them in the form and manner designated by the Committee on or before the last day of
the applicable Enrollment Period and in accordance with the Company’s policy.
(c) Unless
otherwise determined by the Company, payroll deductions in respect of an Offering shall commence with the first payroll check date
coincident with or subsequent to the Grant Date of such Offering and shall end with the payroll check date that is coincident with
or immediately preceding the Expiration Date, unless such deductions are sooner terminated, as provided in Section 9. An Participant’s
payroll deductions shall be credited to a Plan account which shall be established for bookkeeping purposes only. Payroll deductions
credited to a Participant’s account shall be deposited or held with the general funds of the Company unless applicable law
requires that such amounts be segregated from the Company’s general funds or held by an independent third party. Amounts
credited to a Participant’s Plan account shall not be credited with interest or other notional earnings.
5.
Shares
of Common Stock Subject to the Plan
.
(a) The
Common Stock subject to an Offering may be from (a) authorized but unissued shares of stock, (b) shares of stock held in treasury
of the Company, or (c) shares of stock acquired by the Company, including shares purchased on the open market. Subject to adjustment
in accordance with the provisions of Section 10(g) hereof, the total number of shares of Common Stock which may be the subject
of Offerings under the Plan shall not exceed in the aggregate 100,000 shares of Common Stock.
(b) In
the event that any shares of Common Stock, which are the subject of an Offering, are not purchased, such unpurchased shares of
Common Stock shall again be available for subsequent Offerings.
6.
Number
of Shares That an Participant May Purchase
.
(a) The
number of shares of Common Stock that a Participant may purchase in an Offering shall be determined by dividing such Participant’s
contributions credited to such Employee’s Plan account as of the applicable Expiration Date by the purchase price determined
under Section 10(b); provided, however, that such purchase shall be subject to the limitations set forth in Sections 6(b)
and 6(c).
(b) The
maximum number of shares of Common Stock that a Participant may purchase in an Offering is that number of shares of Common Stock
that has a Fair Market Value on the Grant Date of the Offering equal to $25,000.
(c) Notwithstanding
the foregoing provisions of the Plan, no Participant may purchase under Offerings in any single calendar year a number of shares
of Common Stock which, together with all other shares in the Company and Subsidiaries which the Participant may be entitled to
purchase in such year pursuant to Offerings and under any other employee stock purchase plan, as defined in Section 423 of the
Code, has an aggregate Fair Market Value (measured in each case as of the applicable Grant Date) in excess of $25,000. For the
avoidance of doubt (i) if during the Offering that begins on January 1 a Participant purchases shares of Common Stock with a Fair
Market Value (as of the January 1 Grant Date) that equals $25,000, then the Employee shall not be eligible to participate
in the Offering that begins on the following July 1 and (ii) the number of shares of Common Stock a Participant may purchase in
the Offering that begins on July 1 is equal to the number of shares of Common Stock with a Fair Market Value (as of the July 1
Grant Date) equal to $25,000
reduced by
the Fair Market Value (as of the preceding January 1 Grant Date) of the shares of
Common Stock purchased in the preceding Offering.
7.
Method
of Payment of Contributions
.
(a) A
Participant shall elect to have payroll deductions made on each payday during the Offering with a minimum payroll deduction for
each pay period of $10.00 and a maximum payroll deduction of ten percent (10%) of such Participant’s Compensation during
the Offering. All payroll deductions made by a Participant shall be credited to his or her account under the Plan. If the election
is reduced to zero percent (0%), the Participant is considered withdrawn from the Plan and money will be refunded pursuant to Section
9(a).
(b) A
Participant may discontinue his or her participation in the Plan as provided in Section 9.
(c) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 7 hereof, the Company may
cause a Participant’s payroll deductions to be decreased in respect of an Offering year to zero percent (0%).
8.
Exercise
of Purchase Rights
.
Unless a Participant withdraws from an Offering or terminates his or her Employee status as provided
in Section 9 prior to the Expiration Date of an Offering, his or her right to purchase shares of Common Stock in the Offering will
be exercised and shares will be deposited to the Participant’s individual Plan designated brokerage accounts as soon as administratively
practicable after each Offering Period’s Expiration Date. The number of shares of Common Stock purchased using each Expiration
Date as the effective purchase date shall equal that number of shares that is the quotient of the amount credited to the Participant’s
account under the Plan on the Expiration Date and the purchase price determined under Section 10(b). Whole and fractional shares
shall be purchased, unless the Committee determines that the purchase of fractional shares is administratively impracticable; any
payroll deductions accumulated in a participant’s account and not applied to the purchase of shares shall be retained in
the participant’s account and applied in the next Offering Period, subject to withdrawal by the participant pursuant to Section
9.
9.
Voluntary
Withdrawals; Termination of Employment
.
(a) A
Participant may withdraw all but not less than all of the contributions credited to his or her account under the Plan by delivering
a notice of withdrawal in the form and manner prescribed by the Committee and in accordance with the Policy of the Company, provided
such notice is received no later than one month before the Expiration Date. All of Participant’s contributions credited to
his or her account will be paid to him or her not later than sixty (60) days after receipt of his or her notice of withdrawal and
his or her Purchase Right for the then current Offering will be automatically terminated, and no further contributions by such
Employee for the purchase of Common Stock will be permitted or made during such Offering.
(b) Upon
termination of a Participant’s status as an Eligible Employee prior to the Expiration Date of an Offering for any reason,
whether voluntary or involuntary, including retirement or death, the contributions credited to his or her account will be returned
to him or her or, in the case of his or her death, to the Participant’s estate, not later than sixty (60) days after the
termination of the Participant’s status as an Eligible Employee, and his or her Purchase Right will be automatically terminated.
(c) A
Participant’s voluntary withdrawal from an Offering will not have any effect upon his or her eligibility to participate in
a succeeding Offering or in any similar plan that may hereafter be adopted by the Company.
(d) If
a Participant participated in an Offering elects to not participate or is not eligible to participate in the next following Offering,
then any contributions credited to his or her Plan account that were not used to purchase shares as of the preceding Offering Period’s
Expiration Date will be returned to him or her not later than sixty (60) days after the Grant Date of such next following Offering.
10.
Terms
and Conditions of Offerings
.
(a)
General
.
The Offerings shall be in such form as the Committee shall from time to time approve, and shall contain such terms and conditions
as the Committee shall prescribe not inconsistent with the Plan.
(b)
Purchase
Price
. The purchase price per share of shares covered by Purchase Rights will be 85% of the lower of (i) the Fair Market Value
of a share of Common Stock on the Grant Date and (ii) the Fair Market Value of a share of Common Stock on the Expiration Date.
(c)
Term
of Offerings
. Each Offering shall commence on the Grant Date and terminate, subject to earlier termination by the Committee,
on the Expiration Date.
(d)
Evergreen
Elections
. A Participant’s payroll deduction authorization shall remain in effect for successive Offering Periods unless
the authorization is terminated as stated in Section 9, or the Participant submits a new payroll deduction authorization during
a subsequent Enrollment Period or reduces the rate of payroll deductions to zero as stated in Section 7.
(e)
Employee’s
Purchase Directions
. Each Offering shall provide that the Participant shall purchase shares of Common Stock as soon as administratively
practicable after the Expiration Date of each Offering as provided in Section 8.
(f)
Change-in-Control
.
Upon a Change-in-Control, the Committee may direct that (a) an Expiration Date shall be deemed to have occurred immediately prior
to such Change-in-Control and, unless a Participant shall have withdrawn from the Offering as provided in Section 9, all then outstanding
Purchase Rights shall be deemed to have been exercised on such Expiration Date as provided in Section 8 or (b) the current
Offering Period shall be terminated without the exercise of any Purchase Rights, in which event the amount credited to each Participant’s
Plan accounts shall be returned to him or her not later than sixty (60) days after the Change-in-Control.
(g)
Adjustments
.
In the event that the Committee shall determine that any stock dividend, stock split, reverse stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, offering to purchase
Common Stock at a price substantially below Fair Market Value, or other similar event affects the Common Stock such that an adjustment
is required in order to preserve or prevent an enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in its sole discretion, and in such manner as the Committee may deem equitable, adjust
any or all of (1) the number and kind of shares which thereafter may be made the subject of Offerings under the Plan, (2) the number
and kind of shares subject to outstanding Offerings and (3) the purchase price with respect to any of the foregoing and/or, if
deemed appropriate, make provision for a cash payment to a person who has outstanding Purchase Rights.
(h)
Assignability
.
No rights hereunder shall be assignable or transferable.
(i)
Employee’s
Agreement
. If, at the time of the purchase of shares of Common Stock covered by Purchase Rights under an Offering, in the opinion
of counsel for the Company, it is necessary or desirable, in order to comply with any applicable laws or regulations relating to
the sale of securities, that the Participant purchasing such shares shall agree that such Participant will purchase such shares
for investment and not with any present intention to resell the same, the Participant will, upon the request of the Company, execute
and deliver to the Company an agreement to such effect. The Company may also require that a legend setting forth such investment
intention be stamped or otherwise written on the certificates for shares purchased pursuant to the Plan or otherwise evidenced
on the records with respect to shares purchased pursuant to the Plan, including records relating to uncertificated shares.
(j)
Rights
as a Shareholder; No Employment Rights
. A Participant who has been granted Purchase Rights hereunder shall have no rights as
a shareholder of the Company with respect to shares of Common Stock covered by such Purchase Rights until the date of the issuance
of the shares to the Participant. No adjustment will be made for dividends or other rights for which the record date is prior to
the date of such issuance. For purposes of the Plan, the Company, in lieu of the issuance of certificates, may utilize a book entry
account system for recording ownership of shares of Common Stock, subject to the rules generally applicable to such system.
Neither the Plan nor
an Eligible Employee’s participation in the Plan or an Offering shall confer upon the Eligible Employee any right to continued
employment with any Employer. Neither the Plan nor an Eligible Employee’s participation in the Plan or an Offering shall
limit the right of an Employer to terminate the employment of the Eligible Employee.
(k)
Interest
.
No interest shall accrue on payroll deductions made under or pursuant to the Plan or any Offering hereunder.
11.
Term
of Plan
.
The Plan will terminate automatically and no Purchase Rights may be granted under the Plan after June 30, 2029.
The final Grant Date under the Plan will be no later than January 1, 2029.
12.
Amendments
.
The Plan is wholly discretionary in nature. As such, the Committee may, in its sole discretion, from time to time alter, amend,
suspend, or discontinue the Plan or alter or amend any and all Purchase Rights or terminate any Offering; provided, however, that
no such action of the Committee may, without the approval of the shareholders, make any amendment for which shareholder approval
is necessary to comply with any tax or regulatory requirement with which the Committee has determined it is necessary or advisable
to have the Company comply. Subject to the limitations in this Section 12 relating to shareholder approval, the Committee may,
in its sole discretion, make such amendment or modification to the Plan or any Purchase Rights granted hereunder as is necessary
or desirable to comply with, or effectuate administration of, the Plan under the laws, rules or regulations of the U.S. or any
foreign jurisdiction, the laws of which may be applicable to the Plan or any Participants in the Plan.
13.
Application
of Funds
.
The proceeds received by the Company from the sale of the Common Stock pursuant to an Offering will be used
for general corporate purposes.
14.
Governing
Law
.
The Plan and all Offerings shall be construed in accordance with and governed by the laws of the State of Maryland
without regard to the choice of law rules thereunder.
15.
Additional
Restrictions of Rule 16b-3
.
The terms and conditions of Purchase Rights granted hereunder to, and the purchase of shares
of Common Stock by, persons subject to Section 16 of the Securities Exchange Act of 1934 shall comply with the applicable provisions
of Rule 16b-3 thereunder. The Plan shall be deemed to contain, and such Purchase Rights shall contain, and the shares of Common
Stock issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required by such
Rule 16b-3 to qualify for the maximum exemption from such Section 16 with respect to Plan transactions.
* * * * *
Exhibit 10.5
POSTAL REALTY TRUST, INC.
2019 EQUITY INCENTIVE PLAN
NOTICE OF STOCK AWARD
Subject
to the terms and conditions of this Notice of Stock Award (this "
Notice
"),
the Stock Award Agreement attached hereto (the "
Award Agreement
"), and
the Postal Realty Trust, Inc. 2019 Equity Incentive Plan (the "
Plan
"),
the below individual (the "
Participant
") is hereby granted the below
number of shares of Common Stock (the "
Covered Shares
") in Postal Realty
Trust, Inc., a Maryland corporation (the "
Company
"). Unless otherwise
specifically indicated, all terms used in this Notice have the meanings set forth in the Award Agreement or the Plan.
Identifying Information:
|
Participant
Name
|
|
Number of
"Covered Shares":
|
|
|
and Address:
|
|
Vesting Commencement
Date:
|
|
|
|
|
Date of Grant:
|
|
Vesting Schedule:
Subject to the Participant's
continuous status as an employee of the Company or an Affiliate or a Non-Employee Director (each, a "
Service
Provider
"), and the terms of the Plan, this Notice and the Award Agreement, the Covered Shares vest over a ___
year period in accordance with the following vesting schedule (the "
Vesting Schedule
"):
|
Vesting Date
|
Nonforfeitable Percentage
|
|
________________________
|
________________________
|
|
________________________
|
________________________
|
|
________________________
|
________________________
|
Representations and Agreements of the
Participant:
The Participant has reviewed this Notice,
the Award Agreement and
Annex A
and the Plan in their entirety, has had an opportunity to have them reviewed by his or her
legal and tax advisers, and hereby represents that he or she is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents or Affiliates. The Participant represents to the Company that he or she is familiar with the
terms of this Notice, the Award Agreement and
Annex A
and the Plan, and hereby accepts the Covered Shares subject to
all of their terms. The Participant hereby agrees that all questions of interpretation and administration relating to this Notice,
the Award Agreement and the Plan will be resolved solely by the Committee.
Electronic Signature:
This Notice may be executed by the Participant
and the Company by means of electronic or digital signatures, which have the same force and effect as manual signatures. The Participant
agrees that clicking "I Accept" (or a tab of similar intent) in connection with or response to any electronic communication
or other medium has the effect of affixing the Participant's electronic signature to this Notice. This award of Covered Shares
will be forfeited by the Participant if it is not duly executed by electronic signature by the Participant prior to the deadline
set forth in the electronic transmission of this Award Agreement.
POSTAL REALTY TRUST, INC.
2019 EQUITY INCENTIVE PLAN
STOCK AWARD AGREEMENT
Subject
to the terms and conditions of the Notice of Stock Award (the "
Notice
"),
this Stock Award Agreement (this "
Award Agreement
"), and the Postal Realty
Trust, Inc. 2019 Equity Incentive Plan (the "
Plan
"), Postal Realty Trust,
Inc., a Maryland corporation (the "
Company
"), hereby grants the
individual set forth in the Notice (the "
Participant
") Shares of
Common Stock (the "
Covered Shares
"). Unless otherwise specifically indicated,
all terms used in this Award Agreement have the meanings set forth in the Notice or the Plan.
1.
Grant
of Stock Award
. The principal features of the Stock Award, including the number of Covered Shares, are set forth in the Notice.
The grant of the Covered Shares will not be effective until the Date of Grant set forth in the Notice.
2.
Vesting
Schedule and Risk of Forfeiture
.
(a)
Vesting
Schedule
. Subject to the Participant's continuous status with the Company as a Service Provider and any other limitations set
forth in the Notice, the Plan or this Award Agreement, the Covered Shares will vest in accordance with the Vesting Schedule provided
in the Notice (the "
Vesting Schedule
").
(a)
Risk
of Forfeiture
. The Covered Shares will be subject to a risk of forfeiture until such time the Covered Shares vest in accordance
with the Vesting Schedule. All or any portion of the Covered Shares subject to a risk of forfeiture will automatically be forfeited
and immediately returned to the Company if the Participant's continuous status as a Service Provider is interrupted or terminated
for any reason other than as permitted under the Plan. Additionally, and notwithstanding anything in the Notice or this Award Agreement
to the contrary, the vested and unvested Covered Shares will automatically and immediately be forfeited upon the earlier of: (i)
the date the Participant's continuous status as a Service Provider is terminated for Cause, and (ii) the date the Participant breaches
(as determined by the Board) any provision of the Notice, this Award Agreement or the Plan. The Company may implement any
forfeiture under this
Section 2(b)
in a unilateral manner, without the Participant's consent, and with no payment to the
Participant, cash or otherwise, for the forfeited Covered Shares. For the purposes of this Award Agreement, "
Cause
"
means, if the Participant is a party to an employment agreement or similar agreement between the Participant and the Company and
such agreement provides for a definition of "Cause" (or substantially similar term), the definition contained therein.
If no such agreement exists, or if any such agreement exists but "Cause" (or substantially similar term) is not defined
therein, then Cause means (as determined by the Committee in its sole and absolute discretion) the occurrence of any one or more
of the following events: (i) any act or omission that constitutes a material breach by the Participant of any of his or her material
obligations under the Plan, this Award Agreement or any other material agreement between the Participant and the Company; (ii)
the Participant's conviction of, or plea of nolo contendere to, (A) any felony or (B) another crime involving dishonesty or
moral turpitude or which could reflect negatively upon the Company or otherwise impair or impede its operations; (iii) the Participant
engaging in any misconduct, negligence, dishonesty, violence or threat of violence (including any violation of federal securities
laws) that is demonstrably and materially injurious to the Company or any of its subsidiaries or Affiliates; (iv) the Participant's
material and knowing breach of a material written policy of the Company or the rules of any governmental or regulatory body applicable
to the Company; or (v) any other willful misconduct by the Participant which is or could be materially injurious to the financial
condition, operations or business reputation of the Company or any of its subsidiaries or Affiliates.
3.
Transfer
Restrictions
. The Covered Shares issued to the Participant hereunder may not be sold, transferred by gift, pledged, hypothecated,
or otherwise transferred or disposed of by the Participant (other than by will or by the laws of descent or distribution) prior
to the date when the Covered Shares vest pursuant to the Vesting Schedule. Any attempt to transfer Covered Shares in violation
of this
Section 3
will be null and void and will be disregarded. The terms of the Plan and this Award Agreement are binding
upon the executors, administrators, heirs, successors and assigns of the Participant.
4.
Escrow
of Shares
. For purposes of facilitating the enforcement of the provisions of the Notice, this Award Agreement and the Plan,
the Participant agrees, immediately upon his or her deemed receipt of the certificate(s) for the Covered Shares, to deliver such
certificate(s) (or electronic equivalent), together with a Stock Assignment Separate from Certificate in the form attached hereto
as
Annex A
(executed in blank by the Participant and with
respect to each such certificate) to the Secretary or Assistant Secretary of the Company, or their designee, as escrow agent (the
"
Escrow Agent
"), to hold in escrow for so long as such Covered Shares have not vested pursuant to the Vesting
Schedule or until such time as this Award Agreement is no longer in effect. The Escrow Agent will have the authority to take all
such actions and to effectuate all such transfers and/or releases as may be necessary or appropriate to accomplish the objectives
of this Award Agreement in accordance with the terms hereof. The Participant hereby acknowledges that the appointment of the Escrow
Agent hereunder with the stated authorities is a material inducement to the Company to enter into the Notice and this Award Agreement
and that such appointment is coupled with an interest and is irrevocable. The Participant agrees that the Escrow Agent will not
be liable to any party hereto (or to any other person) for any actions or omissions unless such Escrow Agent is grossly negligent
relative thereto. The Escrow Agent may rely upon any letter, notice or other document executed by any signature purported to be
genuine and may resign at any time. Upon the vesting of Covered Shares, the Escrow Agent will, without further order or instruction,
transmit to the Participant the certificate (or electronic equivalent) evidencing such Shares, subject, however, to satisfaction
of any withholding obligations provided in
Section 7
below.
5.
Additional
Securities
. Any securities or cash received as the result of an adjustment provided for in
Article XII
of the Plan (the
"
Additional Securities
") will be retained in escrow in the same manner and subject to the same conditions
and restrictions as the Covered Shares with respect to which they were issued, including the Vesting Schedule. If the Additional
Securities consist of a convertible security, the Participant may exercise any conversion right, and any securities so acquired
will constitute Additional Securities. In the event of any change in certificates (or electronic equivalent) evidencing the Shares
or the Additional Securities by reason of any transaction under
Article XII
of the Plan, the Escrow Agent is authorized
to deliver to the issuer the certificates (or electronic equivalent) evidencing the Shares or Additional Securities in exchange
for the certificates (or electronic equivalent) of the replacement securities.
6.
Distributions
.
The Company will disburse to the Participant all regular cash dividends with respect to the Shares and Additional Securities, whether
vested or otherwise, less the amount to satisfy any applicable withholding obligations. Such dividends will be fully vested on
the date the dividends are disbursed and will not be subject to the Vesting Schedule.
7.
Taxes
.
The Participant hereby acknowledges and understands that he or she may suffer adverse tax consequences as a result of the Participant's
receipt of (or purchase of), vesting in, or disposition of, the Covered Shares.
(a)
Representations
.
The Participant has reviewed with the Participant's tax advisors the tax consequences of this Award Agreement and the Covered Shares
granted hereunder, including any U.S. federal, state and local tax laws, and any other applicable taxing jurisdiction. The Participant
is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Participant
hereby acknowledges and understands that the Participant (and not the Company) will be responsible for the Participant's tax liability
that may arise as a result of the Participant receiving this Award Agreement and the Covered Shares granted hereunder.
(b)
Payment
of Withholding Taxes
. The Participant will make appropriate arrangements with the Company for the satisfaction of all U.S.
federal, state, local and non-U.S. income and employment tax withholding requirements applicable to any Covered Shares. The Participant
hereby acknowledges the Company's obligations under this Award Agreement are fully contingent on the Participant first satisfying
this
Section 7(b)
. Therefore, a failure of the Participant to reasonably satisfy this
Section 7
in accordance with
the Committee's sole and absolute discretion will result in the automatic termination and expiration of this Award Agreement and
the Company's obligations hereunder. The Participant hereby agrees that a breach of this
Section 7(b)
will be deemed to
be a material breach of this Award Agreement.
8.
Legality
of Initial Issuance
. No Covered Shares will be issued unless and until the Committee has determined that: (i) the Company and
the Participant have taken all actions required to register the Covered Shares under the Securities Act or to perfect an exemption
from the registration requirements thereof, if applicable; (ii) all applicable listing requirements of any stock exchange or other
securities market on which the Covered Shares are listed has been satisfied; and (iii) any other applicable provision of any applicable
law has been satisfied.
9.
Restrictive
Legends
. The certificate evidencing the Covered Shares issued hereunder will be endorsed with the following legends (in addition
to any legend required under applicable U.S. federal, state securities laws and under any other applicable law):
(a) On
the face of the certificate:
"TRANSFER OF THESE SHARES
OF COMMON STOCK IS RESTRICTED IN ACCORDANCE WITH THE CONDITIONS PRINTED ON THE REVERSE OF THIS CERTIFICATE."
(b) On
the reverse of the certificate:
"THE SHARES OF COMMON STOCK
REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO THE TERMS OF THE POSTAL REALTY TRUST, INC. 2019 EQUITY INCENTIVE PLAN
AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE ENCUMBERED IN ANY MANNER EXCEPT AS IS SET FORTH IN THE TERMS OF
SUCH PLAN OR ANY RELATED AGREEMENT."
However, in instances where Covered Shares
are issued electronically, this
Section 9
will apply only to the extent administratively practical.
10.
Restrictions
on Transfer
.
(a)
Stop-Transfer
Notices
. The Participant agrees that, in order to ensure compliance with the restrictions referred to herein and applicable
law, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same effect in its own records.
(b)
Rights
of the Company
. The Company will not (i) record on its books the transfer of any Covered Shares that have been sold or transferred
in contravention of this Award Agreement or (ii) treat as the owner of Covered Shares, or otherwise accord voting, dividend or
liquidation rights to, any transferee to whom Covered Shares have been transferred in contravention of this Award Agreement. Any
transfer of Covered Shares not made in conformance with this Award Agreement will be null and void and will not be recognized by
the Company.
11.
Notice
.
Any notice required by the terms of this Award Agreement must be given in writing and will be deemed to be effective upon personal
delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid.
Notice must be addressed to the Company at its principal executive office and to the Participant at the address that he or she
most recently provided to the Company.
12.
Successors
and Assigns
. Except as provided herein to the contrary, this Award Agreement is binding upon and will inure to the benefit
of the parties to this Award Agreement, their respective successors and permitted assigns.
13.
No
Assignment
. Except as otherwise provided in this Award Agreement, the Participant may not assign any of his or her rights under
the Notice or this Award Agreement without the prior written consent of the Company, which consent may be withheld in its sole
discretion. The Company is permitted to assign its rights or obligations under the Notice and this Award Agreement.
14.
Construction;
Severability
. The captions used in this Award Agreement are inserted for convenience and are not to be deemed to be a part
of this Award Agreement for construction or interpretation. Except where otherwise indicated by the context, the singular form
includes the plural form and the plural form includes the singular form. Use of the term "or" is not intended to be exclusive,
unless the context clearly requires otherwise. The validity, legality or enforceability of the remainder of this Award Agreement
will not be affected even if one or more of the provisions of this Award Agreement are held to be invalid, illegal or unenforceable
in any respect.
15.
Administration
and Interpretation
. Any determination by the Committee in connection with any question or issue arising under the Notice, the
Plan or this Award Agreement will be final, conclusive and binding on the Participant, the Company and all other persons. Any question
or dispute regarding the interpretation of this Award Agreement or the receipt of the Covered Shares or shares of Common Stock
hereunder must be submitted by the Participant to the Committee. The resolution of such question or dispute by the Committee will
be final and binding on all parties.
16.
Counterparts
.
The Notice may be executed in any number of counterparts, any of which may be executed and transmitted by facsimile, and each of
which will be deemed to be an original, but all of which together will be deemed to be one and the same instrument.
17.
Entire
Agreement; Governing Law; and Amendments
. The provisions of the Plan and the Notice are incorporated herein by reference. The
Plan, the Notice and this Award Agreement, including
Annex A
, constitute the entire agreement of the parties with respect
to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant
with respect to the subject matter hereof, and may not be modified adversely to the Participant's interest except by means of a
writing signed by the Company and the Participant. This Award Agreement is governed by the laws of the State of New York applicable
to contracts executed in and to be performed in that State.
18.
Venue
.
The Company, the Participant and the Participant's assignees agree that any suit, action or proceeding arising out of or related
to the Notice, this Award Agreement or the Plan must be brought in the United States District Court for the Eastern District of
New York (or should such court lack jurisdiction to hear such action, suit or proceeding, in a state court in Nassau County, New
York) and that all parties submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted
by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court.
If any one or more provisions of this
Section 18
are for any reason held invalid or unenforceable, it is the specific intent
of the parties that such provisions be modified to the minimum extent necessary to make it or its application valid and enforceable.
19.
No Guarantee
of Continued Service
. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF COVERED SHARES PURSUANT TO THE VESTING SCHEDULE
IS EARNED ONLY BY CONTINUOUS STATUS AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THE COVERED SHARES OR ACQUIRING SHARES OF COMMON STOCK HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AWARD AGREEMENT, THE COVERED SHARES GRANTED HEREUNDER, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND DO NOT INTERFERE IN ANY WAY WITH THE PARTICIPANT'S RIGHT OR THE COMPANY'S (OR ANY AFFILIATE'S) RIGHT
TO TERMINATE THE PARTICIPANT'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
20.
Waiver
.
Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed to be a waiver
of such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with,
any right or power hereunder at any one or more times be deemed to be a waiver or relinquishment of such right or power at any
other time or times.
* * * * *
ANNEX A
POSTAL REALTY TRUST, INC.
2019 EQUITY INCENTIVE PLAN
STOCK AWARD AGREEMENT
Stock Assignment Separate From Certificate
[Please sign this document but do not date it. The date and
information of the transferee will be completed if and when the shares are assigned.]
FOR VALUE RECEIVED,
(the "
Participant
") hereby sells, assigns and transfers unto
,
(
) shares of
the Common Stock of Postal Realty Trust, Inc., a Maryland corporation (the "
Company
"), standing in
his or her name on the books of the Company represented by Certificate No.
(or electronic equivalent) herewith, and does hereby irrevocably constitute and appoint the Secretary of the Company with the power
of attorney to transfer the said stock in the books of the Company with full power of substitution. This assignment may be executed
by the Participant by means of electronic or digital signatures, which have the same force and effect as manual signatures. The
Participant agrees that clicking "I Accept" (or a tab of similar intent) in connection with or response to any electronic
communication or other medium has the effect of affixing the Participant's electronic signature to this assignment.
|
Dated:_______________
|
|
|
|
Signature of the Participant
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Print Name
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Exhibit 10.6
POSTAL REALTY TRUST, INC.
2019 EQUITY INCENTIVE PLAN
NOTICE OF LTIP UNIT AWARD
Subject
to the terms and conditions of this Notice of LTIP Unit Award (this "
Notice
"),
the LTIP Unit Award Agreement attached hereto (the "
Award Agreement
"),
the Postal Realty Trust, Inc. 2019 Equity Incentive Plan (the "
Plan
"),
and the First Amended and Restated Agreement of Limited Partnership of Postal Realty LP, dated as of _______, 2019, as amended
from time to time (the "
Partnership Agreement
"), Postal Realty Trust,
Inc., a Maryland corporation (the "
Company
"), as the sole general partner
of Postal Realty LP (the "
Partnership
"), hereby grants the below individual
(the "
Participant
") the below number of LTIP Units. Unless otherwise
specifically indicated, capitalized terms used in this Notice but not otherwise defined herein shall have their respective meanings
set forth in the Award Agreement or the Plan.
Identifying Information:
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Name and Address of the
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Participant:
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Date of Grant:
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Number of LTIP Units:
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Vesting Schedule:
Subject to the Participant's continuous
status as an employee of the Company ("
Continuous Service
"), and the terms
of the Plan, the Partnership Agreement, this Notice and the Award Agreement, the LTIP Units vest in accordance with the following
vesting schedule (the "
Vesting Schedule
"):
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Vesting Date
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Nonforfeitable Percentage
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Representations and Agreements of the
Participant:
The Participant has reviewed this Notice,
the Award Agreement, the Plan and the Partnership Agreement in their entirety, has had an opportunity to have them reviewed by
his or her legal and tax advisers, and hereby represents that he or she is relying solely on such advisors and not on any statements
or representations of the Company, the Partnership, any Affiliate or any of their agents. The Participant represents that he or
she is familiar with the terms of this Notice, the Award Agreement, the Plan and the Partnership Agreement, and hereby accepts
the LTIP Units subject to all of their terms. The Participant hereby agrees that all questions of interpretation and administration
relating to this Notice, the Award Agreement and the Plan will be resolved solely by the Committee.
Electronic Signature:
This Notice may be executed by the Participant,
the Company and the Partnership by means of electronic or digital signatures, which have the same force and effect as manual signatures.
The Participant agrees that clicking "I Accept" (or a tab of similar intent) in connection with or response to any electronic
communication or other medium has the effect of affixing the Participant's electronic signature to this Notice. This award of LTIP
Units will be forfeited by the Participant if it is not duly executed by electronic signature by the Participant prior to the deadline
set forth in the electronic transmission of this Notice and the Award Agreement.
POSTAL REALTY TRUST, INC.
2019 EQUITY INCENTIVE PLAN
LTIP UNIT AWARD AGREEMENT
Subject
to the terms and conditions of the Notice of LTIP Unit Award (the "
Notice
"),
this LTIP Unit Award Agreement (this "
Award Agreement
"), the Postal Realty
Trust, Inc. 2019 Equity Incentive Plan (the "
Plan
"), and the First Amended
and Restated Agreement of Limited Partnership of Postal Realty LP, dated as of _________, 2019, as amended from time to time (the
"
Partnership Agreement
"), Postal Realty Trust, Inc., a Maryland corporation
(the "
Company
"), as the sole general partner of Postal Realty LP (the
"
Partnership
"), hereby grants the individual set forth in the Notice
(the "
Participant
") the number of LTIP Units set forth in the Notice.
Unless otherwise specifically indicated, capitalized terms used in this Award Agreement but not otherwise defined herein shall
have their respective meanings set forth in the Notice or the Plan.
1.
Award
in Exchange for Performance of Services
. In consideration of the Participant's provision of services to or for the benefit
of the Partnership in a partner capacity or in anticipation of being a partner, the Company grants the number of LTIP Units indicated
in the Notice, effective as of the Date of Grant set forth in the Notice, and on the terms and conditions set forth in the Notice,
this Award Agreement, the Plan and the Partnership Agreement. Upon receipt of the LTIP Units, the Participant shall, automatically
and without further action on his or her part, be deemed to be a party to, signatory of and bound by the Partnership Agreement.
Notwithstanding the foregoing, at the request of the Company or the Partnership, the Participant shall execute the Partnership
Agreement or a joinder or counterpart signature page thereto before this Award Agreement and the underlying grant becomes effective.
2.
Vesting
Schedule
. Subject to the Participant's Continuous Service and any other limitations set forth in the Notice, the Plan, the
Partnership Agreement or this Award Agreement, the LTIP Units will vest in accordance with the Vesting Schedule provided in the
Notice.
3.
Risk
of Forfeiture and Clawback
.
(a)
Risk
of Forfeiture - Vesting
. The LTIP Units shall be subject to a risk of forfeiture until such time the risk of forfeiture lapses
in accordance with the Vesting Schedule. All or any portion of the LTIP Units subject to a risk of forfeiture shall immediately
and automatically be forfeited and terminated if the Participant's Continuous Service is interrupted or terminated for any reason
other than as permitted hereunder, and the Company shall make no payment to the Participant, cash or otherwise, for any unvested
LTIP Units that are forfeited.
(b)
Risk
of Forfeiture - Clawback
. Notwithstanding anything in this Award Agreement, the Plan or the Partnership Agreement to the contrary,
the Participant hereby grants to the Company the unilateral right to forfeit/clawback/redeem any LTIP Units held by the Participant,
whether vested or unvested, if either: (i) the Participant's services to the Company, the Partnership or an Affiliate are
terminated by the Company, the Partnership or an Affiliate for Cause; or (ii) the date the Participant breaches (as determined
by the Board) any provision of the Notice, this Award Agreement, the Plan or the Partnership Agreement. Any implementation of this
Section 3(b)
shall be for no monetary consideration (
i.e
., this
Section 3(b)
is consideration
for the grant to the Participant of the LTIP Units in the first instance). For purposes of this
Section 3(b)
, the term "
Cause
"
shall mean, if the Participant is a party to an employment agreement or similar agreement between the Participant and the Company,
the Partnership or an Affiliate and such agreement provides for a definition of "Cause" (or substantially similar term),
the definition contained therein. If no such agreement exists, or if any such agreement exists but "Cause" (or substantially
similar term) is not defined therein, then Cause means (as determined by the Committee in its sole and absolute discretion) the
occurrence of any one or more of the following events: (i) any act or omission that constitutes a material breach by the Participant
of any of his or her material obligations under the Plan, this Award Agreement, the Partnership Agreement or any other material
agreement between the Participant and the Company, the Partnership or an Affiliate; (ii) the Participant's conviction of, or plea
of nolo contendere to, (A) any felony or (B) another crime involving dishonesty or moral turpitude or which could reflect
negatively upon the Company or otherwise impair or impede its operations; (iii) the Participant engaging in any misconduct, negligence,
dishonesty, violence or threat of violence (including any violation of federal securities laws) that is demonstrably and materially
injurious to the Company, the Partnership, an Affiliate or any of their subsidiaries; (iv) the Participant's material and knowing
breach of a material written policy of the Company, the Partnership or any Affiliate or the rules of any governmental or regulatory
body applicable to the Company; or (v) any other willful misconduct by the Participant which is or could be materially injurious
to the financial condition, operations or business reputation of the Company, the Partnership, an Affiliate or any of their subsidiaries.
4.
Capital
Contribution
. No Capital Contribution (as defined in the Partnership Agreement) is required of the Participant under the Partnership
Agreement or this Award Agreement in connection with the Participant's receipt of the LTIP Units.
5.
Acceleration
of Forfeiture Period in Special Circumstances
.
(a) All
LTIP Units granted herein that have not already become fully vested in accordance with Section 2 hereof shall automatically become
fully vested on the date specified below if the Participant remains in the continuous employ of the Company, the Partnership or
any affiliate of the Company or the Partnership from the Grant Date until such date:
i) the
date that the Participant’s employment with the Company, the Partnership or any affiliate of the Company or the Partnership
is terminated by the Company, the Partnership or any affiliate of the Company or the Partnership for any reason other than “Cause”
(as such term is defined in Section 3(b)); or
ii) the
date on which the Participant’s employment with the Company, the Partnership or any affiliate of the Company or the Partnership
terminates on account of the Participant’s death or “disability” (for purposes of this Agreement, the term “disability”
means that the Participant is entitled to benefits under a long-term disability insurance policy or plan maintained by the Company,
the Partnership or any affiliate of the Company or the Partnership or, if there is no such policy or plan in effect, “disability”
means that the Participant is totally and permanently disabled within the meaning of Section 22(e)(3) of the Code).
(b) All
LTIP Units granted herein that have not already become fully vested in accordance with Section 2 hereof shall automatically become
fully vested on a Change in Control (as defined in the Plan).
6.
Transfer
Restrictions
. The Participant hereby acknowledges and agrees that the LTIP Units may not be sold, transferred, pledged, exchanged,
hypothecated or otherwise disposed of by the Participant prior to vesting and are subject to transfer restrictions and other restrictions
set forth in the Partnership Agreement. Any transfer or attempted transfer of any LTIP Units in violation of the Partnership Agreement
shall be void. Any attempt to transfer LTIP Units in violation of this
Section 6
will be null and void and will be disregarded.
The terms of the Plan, the Notice, this Award Agreement and the Partnership Agreement are binding upon the executors, administrators,
heirs, successors and assigns of the Participant.
7.
Representations,
Warranties, Covenants, and Acknowledgments of the Participant
. The Participant hereby represents, warrants, covenants, acknowledges
and agrees, that:
(a)
Investment
.
The Participant is holding the LTIP Units for the Participant's own account and not for the account of any other person. The Participant
is holding the LTIP Units for investment and not with a view to any distribution or resale thereof except in compliance with applicable
laws regulating securities.
(b)
Relation
to the Company
. The LTIP Units are being offered to the Participant as an inducement to provide services to or for the benefit
of the Partnership.
(c)
Access
to Information
. The Participant has had the opportunity to ask questions of, and to receive answers from, the Company and the
Partnership with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business,
affairs, financial conditions, and results of operations of the Company and the Partnership.
(d)
Registration
.
The Participant understands that the LTIP Units have not been registered under the Securities Act of 1933, as amended (the "
Securities
Act
"), and that the LTIP Units cannot be transferred by the Participant other than in accordance with the terms and
conditions set forth in this Award Agreement and the Partnership Agreement and, in any event, unless such transfer is registered
under the Securities Act, as well as applicable state securities laws, or an exemption from such registration is available. The
Company and the Partnership have made no agreement, covenant or undertaking whatsoever to register the transfer of the LTIP Units
under the Securities Act on the ground that the grant of the LTIP Units is exempt from registration under the Securities Act pursuant
to Rule 701 or Section 4(2) promulgated thereunder.
(e)
Public
Trading
. None of the Partnership's securities are presently publicly traded, and the Company and the Partnership have made
no representation, covenant or agreement as to whether there will be a public market for any of its securities.
8.
Distributions
and Allocations
. Any entitlement to distributions and/or allocations from the Participant's holding vested and unvested LTIP
Units shall be governed by the Partnership Agreement.
9.
Taxes
.
(a)
Section
83(b) Election
. The Participant is solely responsible for the determination of whether to make an 83(b) election with respect
to the LTIP Units, and the Participant has consulted with its tax advisors as to whether such election should be made. For convenience
only, a form of the 83(b) election is attached hereto as
Exhibit A
. If the Participant determines to make such
an election, the Participant acknowledges that it is Participant's sole responsibility, and not the responsibility of the Company
or the Partnership, to file such protective election, and such shall be the result even if the Participant requests that the Board,
the Company, the Partnership or their officers, employees or authorized representatives (including attorneys, accountants, consultants,
bankers, lenders, prospective lenders and financial representatives) assist in making such filing.
(b)
Tax
Advice
. The Company and the Partnership have made no warranty or representation to the Participant with respect to the income
tax consequences of the issuance of the LTIP Units or the transactions contemplated by this Award Agreement, and the Participant
is in no manner relying on the Company, the Partnership or their representatives for an assessment of such tax consequences. The
Participant is advised to consult with its own tax advisor with respect to such tax consequences and its ownership of the LTIP
Units.
(c)
Section
409A of the Code
. The Company, the Partnership and the Participant intend for the issuance of the LTIP Units to be a transfer
of property within the meaning of Section 83 of the Code. Accordingly,
n
either
this Award Agreement
nor the LTIP Units are intended to constitute or provide for "nonqualified deferred compensation"
within the meaning of Section 409A of the Code ("
Section 409A
"). However, notwithstanding any other
provision of this Award Agreement, if at any time the Committee determines that this Award Agreement or the LTIP Units may be subject
to Section 409A, the Committee shall have the right, in its sole discretion, to adopt such amendments to this Award Agreement or
take such other actions (including amendments and actions with retroactive effect) as the Committee determines are necessary or
appropriate for this Award Agreement and/or the LTIP Units to be exempt from the application of Section 409A or to comply with
the requirements of Section 409A. Notwithstanding the foregoing, the Committee shall have no obligation to adopt any such
amendment or take any such other action, and nothing contained in this
Section 9(c)
shall create any such obligation.
(d) The
Participant hereby recognizes that the IRS has proposed regulations under Section 83 and 704 of the Internal Revenue Code and may
propose regulations under Section 1061 of the Internal Revenue Code that may affect the treatment of the LTIP Units. In the event
that those proposed regulations are finalized, the Participant hereby agrees to cooperate with the Partnership in amending this
Agreement and the Partnership Agreement, and to take other actions required to conform to such regulations.
10.
Remedies
.
The Participant shall be liable to the Company and the Partnership for all costs and damages, including incidental and consequential
damages, resulting from a disposition of the LTIP Units that is in violation of the provisions of this Award Agreement. Without
limiting the generality of the foregoing, the Participant agrees that the Company and the Partnership shall be entitled to obtain
specific performance of the obligations of the Participant under this Award Agreement and immediate injunctive relief in the event
any action or proceeding is brought in equity to enforce the same. The Participant shall not urge as a defense that there is an
adequate remedy at law.
11.
LTIP
Units Certificate Restrictive Legends
. Certificates evidencing this Award Agreement, to the extent such certificates are issued,
may bear such restrictive legends as the Company, the Partnership and/or the their counsel may deem necessary or advisable under
applicable law or pursuant to this Award Agreement, including, without limitation, the following legends:
"The
offering and sale of the securities represented hereby have not been registered under the Securities Act of 1933, as amended (the
"
Securities Act
"). Any transfer of such securities will be invalid unless
a Registration Statement under the Securities Act is in effect as to such transfer or in the opinion of counsel for the Company
and the Partnership such registration is unnecessary in order for such transfer to comply with the Securities Act."
"The
securities represented hereby are subject to transferability restrictions and certain other restrictions as set forth in the (i) First
Amended and Restated Agreement of Limited Partnership of Postal Realty LP, dated as of ________, 2019, as it may be amended or
restated from time to time, and (ii) Postal Realty Trust, Inc. 2019 Equity Incentive Plan, and such securities may not be sold
or otherwise transferred except pursuant to the provisions of such documents."
12.
Notice
.
The notice provisions of the Partnership Agreement shall apply for purposes of any notice being provided under the Notice or this
Award Agreement.
13.
Successors
and Assigns
. Except as provided herein to the contrary, this Award Agreement is binding upon and will inure to the benefit
of the parties to this Award Agreement, their respective successors and permitted assigns.
14.
No
Assignment
. Except as otherwise provided in this Award Agreement, the Participant may not assign any of his or her rights under
the Notice or this Award Agreement without the prior written consent of the Company and the Partnership, which consent may be withheld
in their sole discretion. The Company and the Partnership are permitted to assign their rights or obligations under the Notice
and this Award Agreement.
15.
Construction;
Severability
. The captions used in this Award Agreement are inserted for convenience and are not to be deemed to be a part
of this Award Agreement for construction or interpretation. Except where otherwise indicated by the context, the singular form
includes the plural form and the plural form includes the singular form. Use of the term "or" is not intended to be exclusive,
unless the context clearly requires otherwise. The validity, legality or enforceability of the remainder of this Award Agreement
will not be affected even if one or more of the provisions of this Award Agreement are held to be invalid, illegal or unenforceable
in any respect.
16.
Administration
and Interpretation
. Any determination by the Committee in connection with any question or issue arising under the Notice, the
Plan or this Award Agreement will be final, conclusive and binding on the Participant, the Company, the Partnership and all other
persons. Any question or dispute regarding the interpretation of this Award Agreement or the receipt of the LTIP Units hereunder
must be submitted by the Participant to the Committee. The resolution of such question or dispute by the Committee will be final
and binding on all parties.
17.
Counterparts
.
The Notice may be executed in any number of counterparts, any of which may be executed and transmitted by facsimile or portable
electronic format (pdf), and each of which will be deemed to be an original, but all of which together will be deemed to be one
and the same instrument.
18.
Entire
Agreement; Governing Law; and Amendments
. The provisions of the Plan, the Partnership Agreement and the Notice are incorporated
herein by reference. The Plan, the Notice, this Award Agreement and the Partnership Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of
the Company, the Partnership, and the Participant with respect to the subject matter hereof. This Award Agreement may not be amended
except in an instrument in writing signed by the Participant, the Company and the Partnership. This Award Agreement is governed
by the laws of the State of Delaware.
19.
Venue
.
The Company, the Partnership, the Participant and the Participant's assignees agree that any suit, action or proceeding arising
out of or related to the Notice, this Award Agreement, the Plan or the Partnership Agreement must be brought in the United States
District Court for the Eastern District of New York (or should such court lack jurisdiction to hear such action, suit or proceeding,
in a state court in Nassau County, New York) and that all parties submit to the jurisdiction of such court. The parties irrevocably
waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action
or proceeding brought in such court. If any one or more provisions of this
Section 19
are for any reason held invalid or
unenforceable, it is the specific intent of the parties that such provisions be modified to the minimum extent necessary to make
it or its application valid and enforceable.
20.
No
Guarantee of Continued Service
. THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE LTIP UNITS ARE EARNED ONLY BY CONTINUOUS SERVICE
AT THE WILL OF THE COMPANY, THE PARTNERSHIP OR AN AFFILIATE (NOT THROUGH THE ACT OF BEING GRANTED THE LTIP UNITS). THE PARTICIPANT
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE RIGHTS GRANTED HEREUNDER, THE TRANSACTIONS CONTEMPLATED HEREUNDER
AND THE VESTING TERMS SET FORTH IN THIS AWARD AGREEMENT DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT
AS A SERVICE PROVIDER FOR THE VESTING PERIOD OR FOR ANY PERIOD.
21.
Waiver
.
Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed to be a waiver
of such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with,
any right or power hereunder at any one or more times be deemed to be a waiver or relinquishment of such right or power at any
other time or times.
* * * * *
EXHIBIT A
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
This statement is made under Section 83(b)
of the Internal Revenue Code of 1986, as amended, pursuant to Section 1.83-2 of the regulations.
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1.
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The taxpayer who performed the services is:
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Name:
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________________________________________
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Address:
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________________________________________
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Social Security No.:
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________________________________________
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Taxable Year:
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________________________________________
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2.
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The property with respect to which the election is made
is __________ LTIP Units of Postal Realty LP, a Delaware limited partnership.
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3.
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The property was transferred to the undersigned on _______________.
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4.
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The property is subject to a forfeiture condition pursuant
to which the issuer has the right to acquire the property without compensation to the taxpayer if taxpayer's service with the
issuer or its affiliates is terminated under certain circumstances. The forfeiture condition lapses depending on certain conditions
set forth in an award agreement.
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5.
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The fair market value of such property at the time of transfer
(determined without regard to any restriction other than a restriction which by its terms will never lapse) is $_____ per LTIP
Unit x ______ LTIP Units = $_______.
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6.
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For the property transferred, the undersigned paid $______
per LTIP Unit x ______ LTIP Units = $______.
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7.
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The amount to include in gross income is $_____
[The
result of the amount reported in Item 5 minus the amount reported in Item 6.]
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8.
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A copy of this statement was furnished to the Company for
whom taxpayer rendered the services underlying the transfer of such property.
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9.
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This statement is executed on ___________, ____.
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Signature of Taxpayer:
Signature
of Spouse (if any):
This election must be filed within 30 days
after the date of transfer with the Internal Revenue Service Center with which the undersigned files his or her federal income
tax returns. This filing should be made by registered or certified mail, return receipt requested. The undersigned must retain
two copies of the completed form for filing with his or her federal and state tax returns for the current tax year and an additional
copy for his or her records, and deliver another additional copy to the Company.
Exhibit 10.7
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”)
is made and entered into as of the _____ day of _________, 20__, by and between Postal Realty Trust, Inc., a Maryland corporation
(the “Company”), and ________________________ (“Indemnitee”).
WHEREAS, at the request of the Company,
Indemnitee currently serves as
[a director] [and] [an officer]
of the Company and may, therefore, be subjected to claims,
suits or proceedings arising as a result of such service;
WHEREAS, as an inducement to Indemnitee
to serve or continue to serve in such capacity, the Company has agreed to indemnify Indemnitee and to advance expenses and costs
incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law; and
WHEREAS, the parties by this Agreement desire
to set forth their agreement regarding indemnification and advance of expenses;
NOW, THEREFORE, in consideration of the
premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:
Section 1.
Definitions
.
For purposes of this Agreement:
(a) “Change
in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether
or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if, after the Effective Date (i) any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of all of the
Company’s then-outstanding securities entitled to vote generally in the election of directors without the prior approval
of at least two-thirds of the members of the Board of Directors in office immediately prior to such person’s attaining such
percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization
not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members
of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who
were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company’s
stockholders was approved by the affirmative vote of at least two-thirds of the directors then in office who were directors as
of the Effective Date or whose election or nomination for election was previously so approved.
(b) “Corporate
Status” means the status of a person as a present or former director, officer, employee or agent of the Company or as a director,
trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation,
real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise
that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the
circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at
the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise
(1) of which a majority of the voting power or equity interest is or was owned directly or indirectly by the Company or (2) the
management of which is controlled directly or indirectly by the Company and (ii) if, as a result of Indemnitee’s service
to the Company or any of its affiliated entities, Indemnitee is subject to duties to, or required to perform services for, an employee
benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof.
(c) “Disinterested
Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which
indemnification and/or advance of Expenses is sought by Indemnitee and has no financial state in the outcome of the
Proceeding or determination referred to in Section 10 hereof.
(d) “Effective
Date” means the date set forth in the first paragraph of this Agreement.
(e) “Expenses”
means any and all reasonable and out-of-pocket attorneys’ fees and costs, retainers, court costs, arbitration and
mediation costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding
costs, telephone charges, postage, delivery service fees, federal, state, local or foreign taxes imposed on Indemnitee as a
result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other
disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include
Expenses incurred in connection with any appeal resulting from any Proceeding, including, without limitation, the premium
for, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent and any
expenses incurred establishing a right of indemnification.
(f) “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither
is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee (or any major shareholder
thereof) or any affiliate of either such party in any matter material to either such party (other than with respect to matters
concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements),
or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification
or advance of Expenses hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement. The Company agrees to pay fees and expenses of Independent Counsel.
(g) “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing, claim, demand or discovery request or any other actual, threatened or completed proceeding, whether brought
by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal,
administrative or investigative (formal or informal) nature, including any appeal therefrom, except one pending or completed on
or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably
believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered
a Proceeding.
Section 2.
Services
by Indemnitee
. Indemnitee serves or will serve in the capacity or capacities set forth in the first WHEREAS clause above. However,
this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee’s service
to the Company. This Agreement shall not be deemed an employment contract between the Company (or any other entity) and Indemnitee.
Section 3.
General
.
The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise
to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however,
that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland
law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 3 shall include, without limitation,
the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by the Maryland
General Corporation Law (the “MGCL”), including, without limitation, Section 2-418 of the MGCL.
Section 4.
Standard
for Indemnification
. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made a party
to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement
and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding
unless it is established that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding
and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually
received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee
had reasonable cause to believe that Indemnitee’s conduct was unlawful.
Section 5.
Certain
Limits on Indemnification
. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not
be entitled to:
(a) indemnification
hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged, in a final adjudication of the
Proceeding not subject to further appeal, to be liable to the Company;
(b) indemnification
hereunder if Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable on the
basis that personal benefit in money, property or services was improperly received in any Proceeding charging improper personal
benefit to Indemnitee, whether or not involving action in Indemnitee’s Corporate Status; or
(c) indemnification
or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce
indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement,
or (ii) the Company’s charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election
of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly
provide otherwise.
Section 6.
Court-Ordered
Indemnification
. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application
of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following
circumstances:
(a) if
such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order
indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or
(b) if
such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances,
whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has
been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification
as the court shall deem proper without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii)
of the MGCL.
Section 7.
Indemnification
for Expenses of an Indemnitee Who is Wholly or Partially Successful
. Notwithstanding any other provision of this Agreement,
and without limiting any such provision, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status,
made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense
of such Proceeding, the Company shall indemnify Indemnitee for all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall
indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of
this Section 7 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or
without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 8.
Advance
of Expenses for Indemnitee
. If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be, made
a party to any Proceeding, the Company shall, without requiring a preliminary determination of Indemnitee’s ultimate entitlement
to indemnification hereunder, advance all Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding. The
Company shall make such advance of incurred Expenses within ten days after the receipt by the Company of a statement or statements
requesting such advance from time to time, whether prior to or after final disposition of such Proceeding, which advance may be
in the form of, in the reasonable discretion of Indemnitee (but without duplication), (a) payment of such Expenses directly to
third parties on behalf of Indemnitee, (b) advance of funds to Indemnitee in an amount sufficient to pay such Expenses or (c) reimbursement
to Indemnitee for Indemnitee’s payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses
incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee and a written undertaking
by or on behalf of Indemnitee, in substantially the form attached hereto as
Exhibit A
or in such form as may be required
under applicable law as in effect at the time of the execution thereof. To the extent that Expenses advanced to Indemnitee do not
relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate
basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee and shall
be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement
to post security therefor.
Section 9.
Indemnification
and Advance of Expenses as a Witness or Other Participant
. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is or may be, by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to participate
in any Proceeding, whether instituted by the Company or any other person, and to which Indemnitee is not a party, Indemnitee shall
be advanced and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance
or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee. In connection with any such advance of Expenses, the Company may
require Indemnitee to provide an undertaking and affirmation substantially in the form attached hereto as
Exhibit A
or in
such form as may be required under applicable law as in effect at the time of execution thereof.
Section 10.
Procedure
for Determination of Entitlement to Indemnification
.
(a) To
obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee and is reasonably necessary or appropriate to determine
whether and to what extent Indemnitee is entitled to indemnification. Indemnitee may submit one or more such requests from time
to time and at such time(s) as Indemnitee deems appropriate in Indemnitee’s sole discretion. The officer of the Company receiving
any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors
in writing that Indemnitee has requested indemnification.
(b) Upon
written request by Indemnitee for indemnification pursuant to Section 10(a) above, a determination, if required by applicable law,
with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control
has occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee,
which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii)
of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control has not occurred, (A) by a
majority vote of the Disinterested Directors or by the majority vote of a group of Disinterested Directors designated by the Disinterested
Directors to make the determination, (B) if Independent Counsel has been selected by the Board of Directors in accordance with
Section 2-418(e)(2)(ii) of the MGCL and approved by Indemnitee, which approval shall not be unreasonably withheld or delayed, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if
so directed by the Board of Directors, by the stockholders of the Company, other than directors or officers who are parties to
the Proceeding. If it is so determined that Indemnitee is entitled to indemnification, the Company shall make payment to Indemnitee
within ten days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable
advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary or appropriate to such determination in the discretion of the Board of Directors
or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so
cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company shall indemnify and hold Indemnitee harmless therefrom.
(c) The
Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed.
Section 11.
Presumptions
and Effect of Certain Proceedings
.
(a) In
making any determination with respect to entitlement to indemnification hereunder, the person or persons (including any court having
jurisdiction over the matter) making such determination shall presume that Indemnitee is entitled to indemnification under this
Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and
the Company shall have the burden of overcoming that presumption in connection with the making of any determination contrary to
that presumption.
(b) The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea
of
nolo contendere
or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption
that Indemnitee did not meet the requisite standard of conduct described herein for indemnification.
(c) The
knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director,
trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation,
real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise
shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement.
Section 12.
Remedies
of Indemnitee
.
(a) If
(i) a determination is made pursuant to Section 10(b) of this Agreement that Indemnitee is not entitled
to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of
this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(b)
of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment
of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of
a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or
the charter or Bylaws of the Company is not made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of
Maryland, or in any other court of competent jurisdiction, or, at Indemnitee’s option, in an arbitration conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association (provided, however,
that the Company and the Indemnitee agree to use reasonable efforts to ensure that the arbitrator makes a ruling in any such
arbitration under this Section 12(a) within 60 days of the commencement of such arbitration), of Indemnitee’s entitlement to
indemnification or advance of Expenses. Indemnitee shall commence a proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant
to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by
Indemnitee to enforce Indemnitee’s rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law
(without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose
Indemnitee’s right to seek any such adjudication or award in arbitration.
(b) In
any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled
to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving
that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. If Indemnitee commences a judicial
proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 8 of this Agreement until a final determination is made with respect to Indemnitee’s entitlement to indemnification
(as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law,
be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all of the provisions of this Agreement.
(c) If
a determination shall have been made pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12,
absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification that was not disclosed in connection with
the determination.
(d) In
the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration
to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by
Indemnitee in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration
that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.
(e) Interest
shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial
Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period
(i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with
Sections 8 or 9 of this Agreement or the 60
th
day after the date on which the Company was requested to make the determination
of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment
is made to Indemnitee by the Company.
Section 13.
Defense
of the Underlying Proceeding
.
(a) Indemnitee
shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request
or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder
and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding.
The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right
of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend
in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only
to the extent the Company is thereby actually so prejudiced.
(b) Subject
to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right
to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall
notify Indemnitee of any such decision to defend within 15 days following receipt of notice of any such Proceeding under Section 13(a)
above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed,
consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise with respect to Indemnitee which
(i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release
of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory
to Indemnitee, or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b)
shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement.
(c) Notwithstanding
the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Corporate
Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall
not be unreasonably withheld or delayed, that Indemnitee may have separate defenses or counterclaims to assert with respect to
any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based
upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that an actual
or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if
the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by
separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which approval shall not be
unreasonably withheld or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations
under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable,
or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder,
Indemnitee shall have the right to retain counsel of Indemnitee’s choice, subject to the prior approval of the Company, which
approval shall not be unreasonably withheld or delayed, at the expense of the Company (subject to Section 12(d) of this Agreement),
to represent Indemnitee in connection with any such matter.
Section 14.
Non-Exclusivity;
Survival of Rights; Subrogation
.
(a) The
rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a
resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise.
Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of the charter or Bylaws of the Company, this
Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal, regardless
of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal.
No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall
be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment
of any other right or remedy.
(b) In
the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
Section 15.
Insurance
.
(a) The
Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed
appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against Indemnitee by
reason of Indemnitee’s Corporate Status and covering the Company for any indemnification or advance of Expenses made by the
Company to Indemnitee for any claims made against Indemnitee by reason of Indemnitee’s Corporate Status. In the event of
a Change in Control, the Company shall maintain in force any and all directors and officers liability insurance policies that were
maintained by the Company immediately prior to the Change in Control for a period of six years with the insurance carrier or carriers
and through the insurance broker in place at the time of the Change in Control; provided, however, (i) if the carriers will not
offer the same policy and an expiring policy needs to be replaced, a policy substantially comparable in scope and amount shall
be obtained and (ii) if any replacement insurance carrier is necessary to obtain a policy substantially comparable in scope and
amount, such insurance carrier shall have an AM Best rating that is the same or better than the AM Best rating of the existing
insurance carrier; provided, further, however, in no event shall the Company be required to expend in the aggregate in excess of
250% of the annual premium or premiums paid by the Company for directors and officers liability insurance in effect on the date
of the Change in Control. In the event that 250% of the annual premium paid by the Company for such existing directors and officers
liability insurance is insufficient for such coverage, the Company shall spend up to that amount to purchase such lesser coverage
as may be obtained with such amount.
(b) Without
in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee
which would otherwise be indemnifiable hereunder arising out of the amount of any deductible or retention and the amount of any
excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with
a Proceeding over the coverage of any insurance referred to in Section 15(a). The purchase, establishment and maintenance of any
such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement
except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in
any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company
receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise) the
Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies.
(c) The
Indemnitee shall cooperate with the Company or any insurance carrier of the Company with respect to any Proceeding.
Section 16.
Coordination
of Payments
. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or
payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
Section 17.
Contribution
.
If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any
reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5,
then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding),
to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall
pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments, penalties, and/or amounts
paid or to be paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment,
and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee.
Section 18.
Reports
to Stockholders
. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of
any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or
in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment
of any such indemnification or advance of Expenses or prior to such meeting.
Section 19.
Duration
of Agreement; Binding Effect
.
(a) This
Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a
director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity
at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including
any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement).
(b) The
indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable
by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee
who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing
member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited
liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity
at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.
(c) The
Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
(d) The
Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable
and difficult to ascertain, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties
hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without
any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee
shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further
be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions
and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges
that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives
any such requirement of such a bond or undertaking.
Section 20.
Severability
.
If any provision or provisions of this Agreement shall be held to be invalid, void, illegal or otherwise unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including,
without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to
be invalid, void, illegal or otherwise unenforceable that is not itself invalid, void, illegal or otherwise unenforceable) shall
not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such
provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect
to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to
be invalid, void, illegal or otherwise unenforceable, that is not itself invalid, void, illegal or otherwise unenforceable) shall
be construed so as to give effect to the intent manifested thereby.
Section 21.
Counterparts
.
This Agreement may be executed in one or more counterparts, (delivery of which may be by facsimile, or via e-mail as a portable
document format (.pdf) or other electronic format), each of which will be deemed to be an original, and it will not be necessary
in making proof of this Agreement or the terms of this Agreement to produce or account for more than one such counterpart. One
such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this
Agreement.
Section 22.
Headings
.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
Section 23.
Modification
and Waiver
. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor, unless otherwise expressly stated, shall such waiver constitute a continuing
waiver.
Section 24.
Notices
.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:
(a) If
to Indemnitee, to the address set forth on the signature page hereto.
(b) If
to the Company, to:
________________________
________________________
________________________
or to such other address as may have been furnished in writing
to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
Section 25.
Governing
Law
. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland,
without regard to its conflicts of laws rules.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.
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POSTAL REALTY TRUST, INC.
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By:
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Name:
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Title:
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INDEMNITEE:
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Name:
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Address:
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EXHIBIT A
AFFIRMATION
AND UNDERTAKING TO REPAY EXPENSES ADVANCED
To: The Board of Directors of Postal Realty Trust, Inc.
Re: Affirmation and Undertaking
Ladies and Gentlemen:
This Affirmation and Undertaking is being
provided pursuant to that certain Indemnification Agreement dated the _____ day of ______________, 20____, by and between Postal
Realty Trust, Inc., a Maryland corporation (the “Company”), and the undersigned Indemnitee (the “Indemnification
Agreement”), pursuant to which I am entitled to advance of Expenses in connection with
[Description of Proceeding]
(the “Proceeding”).
Terms used herein and not otherwise defined
shall have the meanings specified in the Indemnification Agreement.
I am subject to the Proceeding by reason
of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief
that at all times, insofar as I was involved as
[a director] [and] [an officer]
of the Company, in any of the facts or events
giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive
any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable
cause to believe that any act or omission by me was unlawful.
In consideration of the advance by the Company
for Expenses incurred by me in connection with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in
connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise
to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I
actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding,
I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced
Expenses relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established.
IN WITNESS WHEREOF, I have executed this
Affirmation and Undertaking on this ___ day of ____________________, 20____.
Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT
AGREEMENT,
effective as of the Effective Date (as hereinafter defined) between POSTAL REALTY TRUST, INC., a Maryland
corporation (the "
Company
"), and Andrew Spodek (the "
Executive
"), recites
and provides as follows:
WHEREAS
, the
Company desires to employ the Executive as its Chief Executive Officer, subject to the terms and conditions of this Agreement.
NOW, THEREFORE
,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive
hereby agree as follows:
1.
Employment and Duties
.
(a)
General.
The Company shall employ the Executive, and the Executive agrees to be so employed, in the capacity of the Company’s Chief
Executive Officer to serve for the Term (as hereinafter defined) hereof, subject to earlier termination as hereinafter provided.
The
Executive shall have such duties and responsibilities commensurate with such title and
as the Board may designate from time to time. The Executive shall at all times be the highest ranking officer of the Company
and shall report exclusively to the Board and/or such committees thereof as the Board may designate. In addition, the Executive
shall be appointed to serve as a director on the Board and, at each annual stockholders meeting during the Term of Employment,
shall be nominated for re-election to the Board, in each case to the extent not inconsistent with the fiduciary duties of the Board
in making such appointment and re-nomination. The Executive shall be based at the Company’s corporate headquarters
in Cedarhurst, New York, unless and until the corporate headquarters are moved to another location, which will then be the location
where the Executive is based.
(b)
Exclusive
Services
. The Executive shall devote substantially all of the Executive’s business time, attention and effort to the
Company’s affairs. Notwithstanding the foregoing, the Executive may (i) serve on corporate boards, provided the Executive
receives prior permission from the Board; and (ii) serve on corporate, civic and children sports organizations or charitable
boards or engage in charitable activities without remuneration therefor, provided that such activity does not contravene the first
sentence of this Section.
(c)
Dodd-Frank,
Sarbanes-Oxley and Other Applicable Law Requirements
. The Executive agrees (i) to abide by any compensation recovery, recoupment,
anti-hedging or other policy applicable to executives of the Company and its affiliates that is hereafter adopted by the Board
or a duly authorized committee thereof to comply with applicable law as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the
"
Dodd-Frank Act
"
),
the Sarbanes-Oxley Act of 2002 (
"
Sarbanes-Oxley
"
),
or other applicable law; and (ii) that the terms and conditions of this Agreement shall be deemed automatically and unilaterally
amended to the minimum extent necessary to ensure compliance by the Executive and this Agreement with such policies, the Dodd-Frank
Act, Sarbanes-Oxley, and any other applicable law.
2.
Term
. The Initial Term of the Executive’s employment hereunder (the
"
Initial
Term
"
) shall be for a period of three (3) years
commencing on the closing date of the initial public offering of the Company’s Common stock (the
"
Effective
Date
"
), and continuing until the third
anniversary of the Effective Date. The term of this Agreement shall be extended automatically for up to two, successive
twelve (12) month periods, beginning on the last day of the Initial Term and each twelve (12) month renewal period thereafter
unless the Company or the Executive has provided the other with written notice of an intention to terminate this Agreement at
least ninety (90) days before the end of the Initial Term (or any subsequent renewal period). For purposes of this
Agreement, the word
"
Term
"
means
the Initial Term and any renewal period pursuant to the preceding sentence and any extension pursuant to clause (ii) of
the following sentence. Notwithstanding the preceding sentences (i) this Agreement may be terminated earlier as provided
herein and (ii) if a Change in Control (as defined in the 2019 Equity Incentive Plan) occurs during the Term, then the Term
shall not end before the first anniversary of the Control Change Date or the date this Agreement is terminated earlier as
provided herein.
3.
Compensation and Benefits
.
(a)
Base
Salary
. During the Term, the Company will pay the Executive a base salary of $350,000 per year (
"
Base
Salary
"
), less payroll deductions and all required
withholdings, payable in accordance with the Company's payroll practices and prorated for any partial month of employment. The
annual base salary may be increased, but not decreased, by the Compensation Committee of the Board of Directors of the Company
(the
"
Compensation Committee
"
)
in its discretion pursuant to the Company's policies as in effect from time to time, and such increased amount thereafter will
be the Executive’s base salary per year for purposes of this Agreement.
(b)
Annual
Bonus
. The Executive shall also be eligible to receive an annual incentive bonus for each calendar year ending during the Term
with a target bonus of 125% of Base Salary, with the actual amount of such bonus to be determined by the Compensation Committee,
using such performance measures as mutually agreed upon by the Company and the Executive. Such bonus, if any, shall be paid
to the Executive in the form of a lump sum no later than sixty (60) days after the end of the year to which the bonus relates.
Except as otherwise provided in
Section 4
: (i) the annual bonus will be subject to the terms of any Company bonus plan
under which it is granted and (ii) in order to be eligible to receive an annual bonus, the Executive must be employed by the
Company on the last day of the calendar year to which the performance relates.
(c)
Long-Term
Incentives
. During the Term of this Agreement, the Executive shall be eligible to participate in the Company’s 2019 Long-Term
Incentive Plan, or any other equity compensation plan adopted by the Company, on terms no less favorable than those that apply
to similarly situated executive officers of the Company.
(d)
Health
Insurance and Medical Exam
. During the Term of this Agreement, the Company shall (i) provide the Executive and his dependents
with health insurance, life insurance and disability coverage no less favorable than that made available to other key executives
and (ii) pay or reimburse the Executive for all reasonable costs of an annual medical exam of the Executive by a physician of his
choice.
(e)
Paid
Time Off
. During the Term of this Agreement, the Executive shall be entitled to paid time off (
"
PTO
"
)
in accordance with the Company’s PTO policy, as it may be amended from time to time, but in no event shall it be less than
four weeks per year.
(f)
Business
Expenses
. The Executive shall be entitled to reimbursement of business expenses that are incurred in the ordinary course
of business, in accordance with the applicable expense reimbursement policies and procedures of the Company as in effect from time
to time.
(g)
Other
Benefits
. In addition to the benefits provided pursuant to the preceding paragraphs of this
Section 3
, the Executive
shall be eligible to participate in such other executive compensation and retirement plans of the Company as are applicable generally
to other executive officers, and in such welfare plans, programs, practices and policies of the Company as are generally applicable
to other executive officers, unless such participation would duplicate, directly or indirectly, benefits already accorded to the
Executive. In addition, the Company agrees to reimburse the Executive up to $30,000 per annum for reasonable additional benefits
that may cover, amongst other things, life insurance premiums, financial and tax planning assistance, etc.
(h)
Indemnification
.
To the fullest extent permitted by the indemnification provisions of the articles of incorporation (or similar document) and Bylaws
of the Company in effect from time to time and the indemnification provisions of the corporate statute of the jurisdiction of the
Company’s incorporation in effect from time to time (collectively the "
Indemnification Provisions
"),
and in each case subject to the conditions thereof, the Company shall (i) indemnify the Executive, as a director and officer
of the Company or a trustee or fiduciary of an employee benefit plan of the Company against all liabilities and reasonable expenses
that the Executive may incur in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal or administrative,
or investigative and whether formal or informal, because the Executive is or was a director or officer of the Company or a trustee
or fiduciary of such employee benefit plan, and against which the Executive may be indemnified by the Company, and (ii) pay
for or reimburse the reasonable expenses incurred by the Executive in the defense of any proceeding to which the Executive is a
party because the Executive is or was a director or officer of the Company or a trustee or fiduciary of such employee benefit plan.
The rights of the Executive under the Indemnification Provisions shall survive the termination of the employment of the Executive
by the Company. Additionally, to the extent that the Company maintains a directors’ and officers’ liability insurance
policy (or policies), or an errors and omissions liability insurance policy (or policies), in place covering individuals who are
current or former officers or directors of the Company, the Executive shall be entitled to coverage under such policies on the
same terms and conditions (including, without limitation, with respect to scope, exclusions, amounts and deductibles) as are available
to other senior executives of the Company, while the Executive is employed with the Company and thereafter until the sixth anniversary
of the Executive’s termination date. Nothing in this Agreement shall require the Company to purchase or maintain any such
insurance policy.
4.
Payments Upon Termination of Employment
.
(a)
Termination
by the Company without Cause, or Termination by the Executive for Good Reason, or Termination Due to the Executive’s Death
or Disability
. If during the Term of this Agreement the Executive’s employment is terminated (x) by the Company
without Cause or (y) by the Executive for Good Reason or (z) due to the Executive’s death or Disability, then the Executive
shall be entitled to the following from the Company: (1) Base Salary accrued through the date of termination, based on the number
of days in such year that had elapsed as of the termination date; (2) any accrued but unpaid PTO through the date of termination;
(3) any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;
(4) any vested benefits due to the Executive under the terms of any deferred compensation, incentive or other benefit plans maintained
by the Company, payable in accordance with the terms of the applicable plan; (5) any expenses owed to the Executive under
Sections
3(f)
, or
3(g)
; (6) all of the Executive’s outstanding stock options, restricted stock or other equity awards
with time-based vesting shall become fully vested and, in the case of stock options, exercisable in full; (7) the treatment of
all of the Executive’s outstanding stock options, restricted stock, restricted stock units or other equity awards with performance-based
vesting shall be determined in accordance with the long-term incentive plan, and any other plans, pursuant to which such awards
were granted and the applicable award agreement; (8) a lump sum payment equal to the sum of: (A) three times the Executive’s
Base Salary and (B) three times the Executive’s target bonus opportunity for the year within which his employment is terminated
(however, if such target opportunity has not been set by the Board or the Compensation Committee as of the Executive’s termination,
then this
subsection 4(a)(8)(B)
shall be equal to three times the Executive’s Base Salary); and (9) a lump sum amount
equal to twelve months of the monthly premium payment to continue the Executive’s (and the Executive’s family’s)
existing group health, dental coverage and vision, calculated under the applicable provisions of Section 4980B of the Code, and
calculated without regard to whether the Executive actually elects such continuation coverage. All payments required to be made
pursuant to this
Section 4(a)
shall be made to the Executive within sixty (60) days following the date of such termination
of employment and within any shorter time period required by law.
(i) For
purposes of this Agreement, "
Cause
" shall mean: (1) the Executive’s intentional failure to perform
a material duty as directed by the Board (other than a failure to perform by reason of the Executive’s death or Disability);
(2) the Executive’s knowing material breach of an obligation in this Agreement or a knowing breach of a material written
policy of the Company; (3) the Executive’s knowing breach of a material duty to the Company; (4) intentional conduct by the
Executive that is demonstrably and material injurious to the Company; or (5) the Executive’s conviction of, or plea of guilty
or
nolo contender
to, (y) a felony or (z) a crime involving moral turpitude or fraud involving the assets of the Company.
Notwithstanding anything in this
Section 4(a)(i)
to the contrary, no event or condition described in the foregoing (1) through
(4) shall constitute Cause unless (x) within ninety (90) days from the Board first acquiring actual knowledge of the existence
of the Cause condition, the Board provides the Executive written notice of its intention to terminate the Executive’s employment
for Cause and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected
by the Executive within thirty (30) days of the Executive’s receipt of such notice (or, in the event that such grounds cannot
be corrected within such thirty-day (30 period, the Executive has not taken all reasonable steps within such thirty-day (30) period
to correct such grounds as promptly as practicable thereafter); and (z) the Board terminates the Executive’s employment with
the Company immediately following expiration of such thirty-day (30) period. For purposes of the foregoing, any attempt by
the Executive to correct a stated Cause shall not be deemed an admission by the Executive that the Board’s assertion of Cause
is valid.
(ii) For
purposes of this Agreement, "
Good Reason
" shall mean: (1) the assignment of duties materially inconsistent
with the Executive’s title and position; (2) a material diminution in the Executive’s annual Base Salary or annual
bonus opportunity; (3) a material diminution in the Executive’s authority, duties or responsibilities (e.g., such material
diminution includes the Company ceasing to be a reporting company under the Securities Exchange Act of 1934), or the Company or
the Board prevents the Executive from fulfilling or exercising such authority, duties or responsibilities; (4) a material breach
by the Company of this Agreement, (5) this Agreement is not assumed by the successor to the Company in a Change in Control transaction
or (6) the Company requiring the Executive to be based at any office or location more than fifty miles from Cedarhurst, New York,
however, notwithstanding the foregoing to the contrary, any relocation required of the Executive due to the Company relocating
its headquarters shall not be deemed to violate this
subsection 4(a)(ii)(6)
or provide the Executive with rights to Good
Reason under this Agreement. No event or condition described in the foregoing shall constitute Good Reason unless, (x) within ninety
(90) days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in the foregoing,
the Executive provides the Board written notice of the Executive’s intention to terminate the Executive’s employment
for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected
by the Board within thirty (30) days of the Board’s receipt of such notice (or, in the event that such grounds cannot be
corrected within such thirty-day (30) period, the Board has not taken all reasonable steps within such thirty-day (30) period to
correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates the Executive’s employment
with the Company immediately following expiration of such thirty-day (30) period. For purposes of the foregoing, any attempt by
the Board to correct a stated Good Reason shall not be deemed an admission by the Board that the Executive’s assertion of
Good Reason is valid.
(iii) For
purposes of this Agreement, "
Disability
" shall mean that the Executive has been unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result
in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence
and degree of which shall be supported by medical evidence satisfactory to the Board. The determination of a Disability for purposes
of this Agreement shall be made by the Board in its sole and absolute discretion.
(b)
Termination
of the Executive’s Employment by the Company for Cause, or by the Executive without Good Reason or Upon Expiration of the
Term
. If the Executive’s employment is terminated by the Company for Cause or by the Executive without Good Reason or
upon expiration of the Term without this Agreement being renewed, then the Executive shall only be entitled to the payments set
forth in
subsections 4(a)(1)-(6)
. All payments required to be made pursuant to this
subsection 4(b)
shall be made
to the Executive within sixty (60) days following the date of such termination of employment and within any shorter time period
required by law.
(c)
Waiver
and Release
. Notwithstanding any other provisions of this Agreement to the contrary, the Company shall not make or provide
for the payments in
Section 4(a)
unless the Executive timely executes and delivers to the Company a general release
(which shall be provided by the Company not later than five (5) days from the date on which the Executive’s employment
is terminated and be substantially in the form attached hereto as
Exhibit A
, the "
Waiver and Release
"),
and such Waiver and Release remains in full force and effect, has not been revoked and is no longer subject to revocation, within
sixty (60) calendar days after the date of termination. If the requirements of this
Section 4(c)
are not satisfied by the
Executive (or the Executive’s estate or legally appointed personal representative), then no payments pursuant to
Section
4(a)
shall be due to the Executive (or the Executive’s estate) pursuant to this Agreement. The foregoing payments subject
to this
Section 4(c)
shall not be paid until the first scheduled payment date following the date the Waiver and Release
is executed and no longer subject to revocation;
provided
, that if the period during which the Executive has discretion
to execute or revoke the Waiver and Release straddles two calendar years, then the payments subject to this
Section 4(c)
shall be paid or commence being paid, as applicable, in the second calendar year, with the first such payment being in an amount
equal to the total amount to which the Executive would otherwise have been entitled during the period following the date of termination
if such deferral had not been required.
(d)
Resignation
from Directorships, Officerships and Fiduciary Titles
. The termination of the Executive’s employment for any reason shall
constitute the Executive’s immediate resignation from (i) any officer or employee position the Executive has with the Company,
unless mutually agreed upon by the Executive and the Board; (ii) any position on the Board; and (iii) all fiduciary positions (including
as a trustee) the Executive holds with respect to any employee benefit plans or trusts established by the Company. The Executive
agrees that this Agreement shall serve as written notice of resignation in this circumstance.
5.
Section 280G
. Notwithstanding anything else in this Agreement to the contrary, in the
event that it shall be determined that any payments or distributions by the Company to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (together, the
"
Payments
") would constitute "parachute payments" within the meaning of Section 280G of the
Code, then the Payments shall be payable either in (i) full or (ii) as to such lesser amount which would result in no portion
of such Payments being subject to the excise tax imposed under Section 4999 of the Code, such that the Executive shall
receive the greater, on an after-tax basis, of either (i) or (ii) above, as determined by an independent accountant or tax
advisor ("
Independent Tax Advisor
") selected by the Company. In the event that the Payments are
to be reduced pursuant to this
Section 5
, such Payments shall be reduced as determined by the Independent Tax
Advisor such that the reduction of compensation to be provided to or for the benefit of the Executive as a result of
this
Section 5
is minimized and to effectuate that, Payments shall be reduced (i) by first reducing or
eliminating the portion of such Payments which is not payable in cash (other than that portion of such payments that is
subject to clause (iii) below), (ii) then by reducing or eliminating cash Payments (other than that portion of such Payments
subject to clause (iii) below) and (iii) then by reducing or eliminating the portion of such Payments (whether or not payable
in cash) to which Treas. Reg. §1.280G-1 Q/A 24(c) (or any successor provision thereto) applies, in each case in reverse
order beginning with Payments which are to be paid the farthest in time from the date of the transaction constituting a
change in ownership of the Company within the meaning of Section 280G of the Code. Any reductions made pursuant to
this
Section 5
shall be made in a manner consistent with the requirements of Section 409A and where two
economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a
pro rata basis but not below zero. If any dispute arises between the Company (or any successor) and the Executive regarding
the Executive’s right to payments under this
Section 5
, the Executive shall be entitled to recover his
attorneys’ fees and costs incurred in connection with such dispute if the Executive is determined to be the prevailing
party. The following additional terms and conditions shall apply to the reimbursement of any attorneys’ fees and
costs: (i) the attorneys’ fees and costs must be incurred by the Executive within five years following the date of the
Executive’s termination or resignation; (ii) the attorneys’ fees and costs shall be paid by the Company by the
end of the taxable year following the year in which the attorneys’ fees and costs were incurred; (iii) the amount of
any attorneys’ fees and costs paid by the Company in one taxable year shall not affect the amount of any
attorneys’ fees and costs to be paid by the Company in any other taxable year; and (iv) the Executive’s right to
receive attorneys’ fees and costs may not be liquidated or exchanged for any other benefit.
6.
Withholding and Section 409A Compliance
.
(a)
Withholding
.
The Company shall, to the fullest extent not prohibited by law, have the right to withhold and deduct from any payment hereunder
any federal, state or local taxes of any kind required by law to be withheld with respect to any such payment.
(b)
Section
409A of the Code
. This Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption thereunder,
and shall be interpreted and construed consistently with such intent. The payments to the Executive pursuant to this Agreement
are intended to be exempt from Section 409A of the Code to the maximum extent possible, under the separation pay exemption, as
short-term deferrals, or otherwise. For purposes of Section 409A of the Code, each installment payment provided under this
Agreement shall be treated as a separate payment. In the event the terms of this Agreement would subject the Executive to
additional income taxes, interest or penalties under Section 409A of the Code ("
409A Penalties
"), the Company
and the Executive shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible.
To the extent any amounts under this Agreement are payable by reference to the Executive’s "termination," "termination
of employment," or similar phrases, such term shall be deemed to refer to the Executive’s "separation from service"
(as defined in Section 409A of the Code). Notwithstanding any other provision in this Agreement, including but not limited
to
Sections 4 and 5
, if the Executive is a "specified employee" (as defined in Section 409A(a)(2)(b)(i)),
then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation,
within the meaning of Section 409A of the Code, (ii) is payable upon the Executive’s separation from service, and (iii) under
the terms of this Agreement would be payable prior to the six-month anniversary of the Executive’s separation from service,
such payment shall be delayed and paid to the Executive, on the first day of the first calendar month beginning at least six months
following the date of termination, or, if earlier, within ninety (90) days following the Executive’s death to the Executive’s
surviving spouse (or such other beneficiary as the Executive may designate in writing). Any reimbursement or advancement
payable to the Executive pursuant to this Agreement shall be conditioned on the submission by the Executive of all expense reports
reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to the Executive within
thirty (30) days following receipt of such expense reports, but in no event later than the last day of the calendar year following
the calendar year in which the Executive incurred the reimbursable expense. Any amount of expenses eligible for reimbursement,
or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind
benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this
Agreement shall not be subject to liquidation or exchange for any other benefit.
7.
Protection of Confidential Information
. The Executive hereby
agrees that, during his employment with the Company and thereafter, he shall not, directly or indirectly, disclose or make
available to any person, firm, Company, association or other entity for any reason or purpose whatsoever, any Confidential
Information (defined below). The Executive further agrees that, upon the date of the Executive’s termination, all
Confidential Information in his possession that is in written or other tangible form shall be returned to the Company and
shall not be retained by the Executive or furnished to any third party, in any form except as provided herein.
Notwithstanding the foregoing, this
Section 7
shall not apply to Confidential Information that (i) was publicly
known at the time of disclosure to the Executive, (ii) becomes publicly known or available thereafter other than by any means
in violation of this Agreement or any other duty owed to the Company by the Executive, (iii) is lawfully disclosed to
the Executive by a third party, or (iv) is required to be disclosed by law or by any court, arbitrator or administrative or
legislative body with actual or apparent jurisdiction to order the Executive to disclose or make accessible any
information. As used in this Agreement, Confidential Information means, without limitation, any non-public confidential
or proprietary information disclosed to the Executive or known by the Executive as a consequence of or through the
Executive’s relationship with the Company, in any form, including electronic media. Confidential Information also
includes, but is not limited to the Company’s business plans and financial information, marketing plans, and business
opportunities. Nothing herein shall limit in any way any obligation the Executive may have relating to Confidential
Information under any other agreement or promise to the Company.
The Executive specifically
acknowledges that all such Confidential Information, whether reduced to writing, maintained on any form of electronic media, or
maintained in the mind or memory of the Executive and whether compiled by the Company, and/or the Executive, derives independent
economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been made by the Company to maintain the secrecy of such information, that such
information is the sole property of the Company and that any retention and use of such information by the Executive during his
employment with the Company (except in the course of performing his duties and obligations to the Company) or after the termination
of his employment shall constitute a misappropriation of the Company’s trade secrets.
The Executive agrees
that Confidential Information gained by the Executive during the Executive’s association with the Company, has been developed
by the Company through substantial expenditures of time, effort and money and constitute valuable and unique property of the Company.
The Executive recognizes that because his work for the Company will bring him into contact with confidential and proprietary information
of the Company, the restrictions of this
Section 7
are required for the reasonable protection of the Company and
its investments and for the Company’s reliance on and confidence in the Executive. The Executive further understands
and agrees that the foregoing makes it necessary for the protection of the Company’s business that the Executive not compete
with the Company during his employment with the Company and not compete with the Company for a reasonable period thereafter, as
further provided in the following
Section 8
.
8.
Covenant Not to Compete
. The Executive hereby agrees that he will not, either
during the Term or at all times until the earlier of one year from the time his employment ceases or a Change in Control of
the Company (such earlier of being, the "
Restricted Period
"), engage in the (i) ownership or
operation of post office facilities; (ii) investment in or lending to post office facilities; (iii) management of post office
facilities; or (iv) provision of any planning, development or executive services for post office facilities. The Executive
will be deemed to be engaged in such competitive business activities if he participates in such a business enterprise as an
employee, officer, director, consultant, agent, partner, proprietor, or other participant; provided that the ownership of no
more than two percent (2%) of the stock of a publicly traded Company engaged in a competitive business shall not be deemed to
be engaging in competitive business activities.
During the Restricted
Period, the Executive will be prohibited, to the fullest extent allowed by applicable law, from directly or indirectly, individually
or on behalf of any person or entity, encouraging, inducing, attempting to induce, recruiting, attempting to recruit, soliciting
or attempting to solicit or participating in the recruitment for employment, contractor or consulting opportunities anyone who
is employed at that time by the Company or any subsidiary or affiliate.
During his employment
with the Company and thereafter, the Executive will not make or authorize anyone else to make on the Executive’s behalf any
disparaging or untruthful remarks or statements, whether oral or written, about the Company, its operations or its products, services,
affiliates, officers, directors, employees, or agents, or issue any communication that reflects adversely on or encourages any
adverse action against the Company. The Executive will not make any direct or indirect written or oral statements to the
press, television, radio or other media or other external persons or entities concerning any matters pertaining to the business
and affairs of the Company, its affiliates or any of its officers or directors.
While employed by the
Company and during the Restricted Period, the Executive will communicate the contents of this
Section 8
to any
person, firm, association, partnership, Company or other entity that the Executive intends to be employed by, associated with,
or represent.
9.
Injunctive Relief
. The Executive acknowledges and agrees that it would be difficult to fully
compensate the Company for damages resulting from the breach or threatened breach of the covenants set forth
in
Sections 7 and 8
of this Agreement and accordingly agrees that the Company shall be entitled to temporary and
injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the
need to post any bond, to enforce such provisions in any action or proceeding instituted in any court in the State of New
York having subject matter jurisdiction. This provision with respect to injunctive relief shall not, however, diminish
the Company’s right to claim and recover damages.
10.
Notices
.
All notices or communications hereunder shall be in writing and sent by overnight courier, certified mail, or registered mail (return
receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from
time to time):
If to the Company:
Postal Realty Trust, Inc.
75 Columbia Ave.
Cedarhurst, NY 11516
Attention: Chairman of the Compensation Committee
If to the Executive,
at the address on file with the Company’s Human Resources department.
The actual date of
mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given.
11.
Separability
.
If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability
shall not affect the remaining provisions hereof which shall remain in full force and effect. It is expressly understood and agreed
that although the parties consider the restrictions contained in this Agreement to be reasonable, if a court determines that
the time or territory or any other restriction contained in this Agreement is an unenforceable restriction on the activities of
the Executive, no such provision of this Agreement shall be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such extent as such court may judicially determine or indicate to be reasonable.
12.
Assignment
.
This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the assigns
and successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise
subject to hypothecation by the Executive.
13.
Entire
Agreement
. This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the Company and the Executive (including the Prior Employment Agreement). This Agreement
may be amended at any time by mutual written agreement of the parties hereto.
14.
Governing
Law and Arbitration
. This Agreement shall be construed, interpreted, and governed in accordance with the laws of the State
of New York, without regard to principles of conflicts of laws. Any dispute, controversy or claim arising out of or related to
this Agreement or any breach of this Agreement shall be submitted to and decided by binding arbitration. Arbitration shall be administered
exclusively by the American Arbitration Association and shall be conducted in accordance with the National Rules for the Resolution
of Employment Disputes. Any arbitral award determination shall be final and binding upon the parties. Judgment may be entered in
any court having jurisdiction. Notwithstanding the foregoing, the Company shall be entitled to seek a restraining order or injunction
in any court of competent jurisdiction to prevent any continuation of any violation of
Sections 7 or 8
hereof. Notwithstanding
anything in this Agreement or any other agreement to the contrary, in the event a legal dispute occurs between the Company and
the Executive, then the Company shall reimburse the Executive for his legal fees irrespective of whether the Executive is the prevailing
party.
15.
Survival
.
Subject to any limits on applicability contained therein,
Sections 7 through 10
,
Section 12
, and
Section 14
hereof shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Term or this
Agreement.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF
,
the Company has caused this Agreement to be duly executed, and the Executive has hereunto set his hand, as of the day and year
first above written.
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POSTAL REALTY TRUST, INC.
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EXECUTIVE
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By:
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Its:
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Print Name:
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Dated:
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Dated:
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Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT
AGREEMENT,
effective as of the Effective Date (as hereinafter defined) between POSTAL REALTY TRUST, INC., a Maryland
corporation (the "
Company
"), and Jeremy Garber (the "
Executive
"), recites
and provides as follows:
WHEREAS
, the
Company desires to employ the Executive as its President, Treasurer and Secretary, subject to the terms and conditions of this
Agreement.
NOW, THEREFORE
,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive
hereby agree as follows:
1.
Employment and Duties
.
(a)
General.
The Company shall employ the Executive, and the Executive agrees to be so employed, in the capacity of the Company’s President,
Treasurer and Secretary to serve for the Term (as hereinafter defined) hereof, subject to earlier termination as hereinafter provided.
The
Executive shall have such duties and responsibilities commensurate with such title and
as the Board or the Chief Executive Officer may designate from time to time. The Executive shall report to the Chief Executive
Officer. The Executive shall be based at the Company’s corporate headquarters in Cedarhurst, New York, unless and until the
corporate headquarters are moved to another location, which will then be the location where the Executive is based.
(b)
Exclusive
Services
. The Executive shall devote substantially all of the Executive’s business time, attention and effort to the
Company’s affairs. Notwithstanding the foregoing, the Executive may (i) serve on corporate boards, provided the Executive
receives prior permission from the Board; and (ii) serve on corporate, civic and children sports organizations or charitable
boards or engage in charitable activities without remuneration therefor, provided that such activity does not contravene the first
sentence of this Section.
(c)
Dodd-Frank,
Sarbanes-Oxley and Other Applicable Law Requirements
. The Executive agrees (i) to abide by any compensation recovery, recoupment,
anti-hedging or other policy applicable to executives of the Company and its affiliates that is hereafter adopted by the Board
or a duly authorized committee thereof to comply with applicable law as required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the
"
Dodd-Frank Act
"
),
the Sarbanes-Oxley Act of 2002 (
"
Sarbanes-Oxley
"
),
or other applicable law; and (ii) that the terms and conditions of this Agreement shall be deemed automatically and unilaterally
amended to the minimum extent necessary to ensure compliance by the Executive and this Agreement with such policies, the Dodd-Frank
Act, Sarbanes-Oxley, and any other applicable law.
2.
Term
. The Initial Term of the Executive’s employment hereunder (the
"
Initial
Term
"
) shall be for a period of three (3) years
commencing on the closing date of the initial public offering of the Company’s Common stock (the
"
Effective
Date
"
), and continuing until the third
anniversary of the Effective Date. The term of this Agreement shall be extended automatically for up to two, successive
twelve (12) month periods, beginning on the last day of the Initial Term and each twelve (12) month renewal period thereafter
unless the Company or the Executive has provided the other with written notice of an intention to terminate this Agreement at
least ninety (90) days before the end of the Initial Term (or any subsequent renewal period). For purposes of this
Agreement, the word
"
Term
"
means
the Initial Term and any renewal period pursuant to the preceding sentence and any extension pursuant to clause (ii) of
the following sentence. Notwithstanding the preceding sentences (i) this Agreement may be terminated earlier as provided
herein and (ii) if a Change in Control (as defined in the 2019 Equity Incentive Plan) occurs during the Term, then the Term
shall not end before the first anniversary of the Control Change Date or the date this Agreement is terminated earlier as
provided herein.
3.
Compensation and Benefits
.
(a)
Base
Salary
. During the Term, the Company will pay the Executive a base salary of $290,000 per year (
"
Base
Salary
"
), less payroll deductions and all required
withholdings, payable in accordance with the Company's payroll practices and prorated for any partial month of employment. The
annual base salary may be increased, but not decreased, by the Compensation Committee of the Board of Directors of the Company
(the
"
Compensation Committee
"
)
in its discretion pursuant to the Company's policies as in effect from time to time, and such increased amount thereafter will
be the Executive’s base salary per year for purposes of this Agreement.
(b)
Annual
Bonus
. The Executive shall also be eligible to receive an annual incentive bonus for each calendar year ending during the Term
with a target bonus of 112.5% of Base Salary, with the actual amount of such bonus to be determined by the Compensation Committee,
using such performance measures as the Compensation Committee deems to be appropriate. Such bonus, if any, shall be paid
to the Executive in the form of a lump sum no later than sixty (60) days after the end of the year to which the bonus relates.
Except as otherwise provided in
Section 4
: (i) the annual bonus will be subject to the terms of any Company bonus plan
under which it is granted and (ii) in order to be eligible to receive an annual bonus, the Executive must be employed by the
Company on the last day of the calendar year to which the performance relates.
(c)
Long-Term
Incentives
. During the Term of this Agreement, the Executive shall be eligible to participate in the Company’s 2019 Long-Term
Incentive Plan, or any other equity compensation plan adopted by the Company, on terms no less favorable than those that apply
to similarly situated executive officers of the Company.
(d)
Health
Insurance and Medical Exam
. During the Term of this Agreement, the Company shall provide the Executive and his dependents with
health insurance, life insurance and disability coverage no less favorable than that made available to other key executives.
(e)
Paid
Time Off
. During the Term of this Agreement, the Executive shall be entitled to paid time off (
"
PTO
"
)
in accordance with the Company’s PTO policy, as it may be amended from time to time, but in no event shall it be less than
four weeks per year.
(f)
Business
Expenses
. The Executive shall be entitled to reimbursement of business expenses that are incurred in the ordinary course
of business, in accordance with the applicable expense reimbursement policies and procedures of the Company as in effect from time
to time.
(g)
Other
Benefits
. In addition to the benefits provided pursuant to the preceding paragraphs of this
Section 3
, the Executive
shall be eligible to participate in such other executive compensation and retirement plans of the Company as are applicable generally
to other executive officers, and in such welfare plans, programs, practices and policies of the Company as are generally applicable
to other executive officers, unless such participation would duplicate, directly or indirectly, benefits already accorded to the
Executive.
(h)
Indemnification
.
To the fullest extent permitted by the indemnification provisions of the articles of incorporation (or similar document) and Bylaws
of the Company in effect from time to time and the indemnification provisions of the corporate statute of the jurisdiction of the
Company’s incorporation in effect from time to time (collectively the "
Indemnification Provisions
"),
and in each case subject to the conditions thereof, the Company shall (i) indemnify the Executive, as a director and officer
of the Company or a trustee or fiduciary of an employee benefit plan of the Company against all liabilities and reasonable expenses
that the Executive may incur in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal or administrative,
or investigative and whether formal or informal, because the Executive is or was a director or officer of the Company or a trustee
or fiduciary of such employee benefit plan, and against which the Executive may be indemnified by the Company, and (ii) pay
for or reimburse the reasonable expenses incurred by the Executive in the defense of any proceeding to which the Executive is a
party because the Executive is or was a director or officer of the Company or a trustee or fiduciary of such employee benefit plan.
The rights of the Executive under the Indemnification Provisions shall survive the termination of the employment of the Executive
by the Company. Additionally, to the extent that the Company maintains a directors’ and officers’ liability insurance
policy (or policies), or an errors and omissions liability insurance policy (or policies), in place covering individuals who are
current or former officers or directors of the Company, the Executive shall be entitled to coverage under such policies on the
same terms and conditions (including, without limitation, with respect to scope, exclusions, amounts and deductibles) as are available
to other senior executives of the Company, while the Executive is employed with the Company and thereafter until the sixth anniversary
of the Executive’s termination date. Nothing in this Agreement shall require the Company to purchase or maintain any such
insurance policy.
4.
Payments Upon Termination of Employment
.
(a)
Termination
by the Company without Cause, or Termination by the Executive for Good Reason, or Termination Due to the Executive’s Death
or Disability
. If during the Term of this Agreement the Executive’s employment is terminated (x) by the Company
without Cause or (y) by the Executive for Good Reason or (z) due to the Executive’s death or Disability, then the Executive
shall be entitled to the following from the Company: (1) Base Salary accrued through the date of termination, based on the
number of days in such year that had elapsed as of the termination date; (2) any accrued but unpaid PTO through the date of termination;
(3) any bonuses earned but unpaid with respect to fiscal years or other completed bonus periods preceding the termination date;
(4) any vested benefits due to the Executive under the terms of any deferred compensation, incentive or other benefit plans
maintained by the Company, payable in accordance with the terms of the applicable plan; (5) any expenses owed to the Executive
under
Sections 3(f)
, or 3
(g)
; (6) all of the Executive’s outstanding stock options, restricted stock
or other equity awards with time-based vesting shall become fully vested and, in the case of stock options, exercisable in full;
(7) the treatment of all of the Executive’s outstanding stock options, restricted stock, restricted stock units or other
equity awards with performance-based vesting shall be determined in accordance with the long-term incentive plan, and any other
plans, pursuant to which such awards were granted and the applicable award agreement; (8) a lump sum payment equal to the sum of:
(A) one times the Executive’s Base Salary and (B) one times the Executive’s target bonus opportunity for the year within
which his employment is terminated (however, if such target opportunity has not been set by the Board or the Compensation Committee
as of the Executive’s termination, then this
subsection 4(a)(8)(B)
shall be equal to one times the Executive’s
Base Salary); and (9) a lump sum amount equal to twelve months of the monthly premium payment to continue the Executive’s
(and the Executive’s family’s) existing group health, dental coverage and vision, calculated under the applicable provisions
of Section 4980B of the Code, and calculated without regard to whether the Executive actually elects such continuation coverage.
All payments required to be made pursuant to this
Section 4(a)
shall be made to the Executive within sixty (60) days following
the date of such termination of employment and within any shorter time period required by law.
(i) For
purposes of this Agreement, "
Cause
" shall mean: (1) the Executive’s failure to perform a material
duty as directed by the Board (other than a failure to perform by reason of the Executive’s death or Disability); (2) the
Executive’s material breach of an obligation in this Agreement or a breach of a material written policy of the Company; (3)
the Executive’s breach of a material duty to the Company; (4) intentional conduct by the Executive that is demonstrably and
material injurious to the Company; or (5) the Executive’s conviction of, or plea of guilty or
nolo contender
to, (y)
a felony or (z) a crime involving moral turpitude or fraud involving the assets of the Company. Notwithstanding anything in this
Section 4(a)(i)
to the contrary, no event or condition described in the foregoing (1) through (4) shall constitute Cause
unless (x) within ninety (90) days from the Board first acquiring actual knowledge of the existence of the Cause condition,
the Board provides the Executive written notice of its intention to terminate the Executive’s employment for Cause and the
grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the Executive
within thirty (30) days of the Executive’s receipt of such notice (or, in the event that such grounds cannot be corrected
within such thirty-day (30 period, the Executive has not taken all reasonable steps within such thirty-day (30) period to correct
such grounds as promptly as practicable thereafter); and (z) the Board terminates the Executive’s employment with the Company
immediately following expiration of such thirty-day (30) period. For purposes of the foregoing, any attempt by the Executive
to correct a stated Cause shall not be deemed an admission by the Executive that the Board’s assertion of Cause is valid.
(ii) For
purposes of this Agreement, "
Good Reason
" shall mean: (1) the assignment of duties materially inconsistent
with the Executive’s title and position; (2) a material diminution in the Executive’s annual Base Salary or annual
bonus opportunity; (3) a material diminution in the Executive’s authority, duties or responsibilities (
e.g
., such
material diminution includes the Company ceasing to be a reporting company under the Securities Exchange Act of 1934), or the Company
or the Board prevents the Executive from fulfilling or exercising such authority, duties or responsibilities; (4) a material breach
by the Company of this Agreement, (5) this Agreement is not assumed by the successor to the Company in a Change in Control transaction
or (6) the Company requiring the Executive to be based at any office or location more than fifty miles from Cedarhurst, New York,
however, notwithstanding the foregoing to the contrary, any relocation required of the Executive due to the Company relocating
its headquarters shall not be deemed to violate this
subsection 4(a)(ii)(6)
or provide the Executive with rights to Good
Reason under this Agreement. No event or condition described in the foregoing shall constitute Good Reason unless, (x) within ninety
(90) days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in the foregoing,
the Executive provides the Board written notice of the Executive’s intention to terminate the Executive’s employment
for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected
by the Board within thirty (30) days of the Board’s receipt of such notice (or, in the event that such grounds cannot be
corrected within such thirty-day (30) period, the Board has not taken all reasonable steps within such thirty-day (30) period to
correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates the Executive’s employment
with the Company immediately following expiration of such thirty-day (30) period. For purposes of the foregoing, any attempt by
the Board to correct a stated Good Reason shall not be deemed an admission by the Board that the Executive’s assertion of
Good Reason is valid.
(iii) For
purposes of this Agreement, "
Disability
" shall mean that the Executive has been unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result
in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence
and degree of which shall be supported by medical evidence satisfactory to the Board. The determination of a Disability for purposes
of this Agreement shall be made by the Board in its sole and absolute discretion.
(b)
Termination
of the Executive’s Employment by the Company for Cause, or by the Executive without Good Reason, or Upon Expiration of the
Term
. If the Executive’s employment is terminated by the Company for Cause or by the Executive without Good Reason or
upon expiration of the Term without this Agreement being renewed, then the Executive shall only be entitled to the payments set
forth in
subsections 4(a)(1)-(6)
. All payments required to be made pursuant to this
subsection 4(b)
shall be made
to the Executive within sixty (60) days following the date of such termination of employment and within any shorter time period
required by law.
(c)
Waiver
and Release
. Notwithstanding any other provisions of this Agreement to the contrary, the Company shall not make or provide
for the payments in
Section 4(a)
unless the Executive timely executes and delivers to the Company a general release
(which shall be provided by the Company not later than five (5) days from the date on which the Executive’s employment
is terminated and be substantially in the form attached hereto as
Exhibit A
, the "
Waiver and Release
"),
and such Waiver and Release remains in full force and effect, has not been revoked and is no longer subject to revocation, within
sixty (60) calendar days after the date of termination. If the requirements of this
Section 4(c)
are not satisfied by the
Executive (or the Executive’s estate or legally appointed personal representative), then no payments pursuant to
Section
4(a)
shall be due to the Executive (or the Executive’s estate) pursuant to this Agreement. The foregoing payments subject
to this
Section 4(c)
shall not be paid until the first scheduled payment date following the date the Waiver and Release
is executed and no longer subject to revocation;
provided
, that if the period during which the Executive has discretion
to execute or revoke the Waiver and Release straddles two calendar years, then the payments subject to this
Section 4(c)
shall be paid or commence being paid, as applicable, in the second calendar year, with the first such payment being in an amount
equal to the total amount to which the Executive would otherwise have been entitled during the period following the date of termination
if such deferral had not been required.
(d)
Resignation
from Directorships, Officerships and Fiduciary Titles
. The termination of the Executive’s employment for any reason shall
constitute the Executive’s immediate resignation from (i) any officer or employee position the Executive has with the Company,
unless mutually agreed upon by the Executive and the Board; (ii) any position on the Board; and (iii) all fiduciary positions (including
as a trustee) the Executive holds with respect to any employee benefit plans or trusts established by the Company. The Executive
agrees that this Agreement shall serve as written notice of resignation in this circumstance.
5.
Section 280G
. Notwithstanding anything else in this Agreement to
the contrary, in the event that it shall be determined that any payments or distributions by the Company to or for the
benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (together, the "
Payments
") would constitute "parachute payments" within the
meaning of Section 280G of the Code, then the Payments shall be payable either in (i) full or (ii) as to such lesser amount
which would result in no portion of such Payments being subject to the excise tax imposed under Section 4999 of the Code,
such that the Executive shall receive the greater, on an after-tax basis, of either (i) or (ii) above, as determined by an
independent accountant or tax advisor ("
Independent Tax Advisor
") selected by the Company. In
the event that the Payments are to be reduced pursuant to this
Section 5
, such Payments shall be reduced as
determined by the Independent Tax Advisor such that the reduction of compensation to be provided to or for the benefit of the
Executive as a result of this
Section 5
is minimized and to effectuate that, Payments shall be reduced (i)
by first reducing or eliminating the portion of such Payments which is not payable in cash (other than that portion of such
payments that is subject to clause (iii) below), (ii) then by reducing or eliminating cash Payments (other than that portion
of such Payments subject to clause (iii) below) and (iii) then by reducing or eliminating the portion of such Payments
(whether or not payable in cash) to which Treas. Reg. §1.280G-1 Q/A 24(c) (or any successor provision thereto) applies,
in each case in reverse order beginning with Payments which are to be paid the farthest in time from the date of the
transaction constituting a change in ownership of the Company within the meaning of Section 280G of the Code. Any
reductions made pursuant to this
Section 5
shall be made in a manner consistent with the requirements of
Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such
amounts shall be reduced on a pro rata basis but not below zero. If any dispute arises between the Company (or any successor)
and the Executive regarding the Executive’s right to payments under this
Section 5
, the Executive shall be
entitled to recover his attorneys’ fees and costs incurred in connection with such dispute if the Executive is
determined to be the prevailing party. The following additional terms and conditions shall apply to the reimbursement
of any attorneys’ fees and costs: (i) the attorneys’ fees and costs must be incurred by the Executive within five
years following the date of the Executive’s termination or resignation; (ii) the attorneys’ fees and costs shall
be paid by the Company by the end of the taxable year following the year in which the attorneys’ fees and costs
were incurred; (iii) the amount of any attorneys’ fees and costs paid by the Company in one taxable year shall not
affect the amount of any attorneys’ fees and costs to be paid by the Company in any other taxable year; and (iv) the
Executive’s right to receive attorneys’ fees and costs may not be liquidated or exchanged for any other
benefit.
6.
Withholding and Section 409A Compliance
.
(a)
Withholding
.
The Company shall, to the fullest extent not prohibited by law, have the right to withhold and deduct from any payment hereunder
any federal, state or local taxes of any kind required by law to be withheld with respect to any such payment.
(b)
Section
409A of the Code
. This Agreement is intended to comply with the requirements of Section 409A of the Code or an exemption thereunder,
and shall be interpreted and construed consistently with such intent. The payments to the Executive pursuant to this Agreement
are intended to be exempt from Section 409A of the Code to the maximum extent possible, under the separation pay exemption, as
short-term deferrals, or otherwise. For purposes of Section 409A of the Code, each installment payment provided under this
Agreement shall be treated as a separate payment. In the event the terms of this Agreement would subject the Executive to
additional income taxes, interest or penalties under Section 409A of the Code ("
409A Penalties
"), the Company
and the Executive shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible.
To the extent any amounts under this Agreement are payable by reference to the Executive’s "termination," "termination
of employment," or similar phrases, such term shall be deemed to refer to the Executive’s "separation from service"
(as defined in Section 409A of the Code). Notwithstanding any other provision in this Agreement, including but not limited
to
Sections 4 and 5
, if the Executive is a "specified employee" (as defined in Section 409A(a)(2)(b)(i)),
then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within
the meaning of Section 409A of the Code, (ii) is payable upon the Executive’s separation from service, and (iii) under the
terms of this Agreement would be payable prior to the six-month anniversary of the Executive’s separation from service, such
payment shall be delayed and paid to the Executive, on the first day of the first calendar month beginning at least six months
following the date of termination, or, if earlier, within ninety (90) days following the Executive’s death to the Executive’s
surviving spouse (or such other beneficiary as the Executive may designate in writing). Any reimbursement or advancement
payable to the Executive pursuant to this Agreement shall be conditioned on the submission by the Executive of all expense reports
reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to the Executive within
thirty (30) days following receipt of such expense reports, but in no event later than the last day of the calendar year following
the calendar year in which the Executive incurred the reimbursable expense. Any amount of expenses eligible for reimbursement,
or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind
benefit to be provided, during any other calendar year. The right to any reimbursement or in-kind benefit pursuant to this
Agreement shall not be subject to liquidation or exchange for any other benefit.
7.
Protection of Confidential Information
. The Executive hereby agrees that, during
his employment with the Company and thereafter, he shall not, directly or indirectly, disclose or make available to any
person, firm, Company, association or other entity for any reason or purpose whatsoever, any Confidential Information
(defined below). The Executive further agrees that, upon the date of the Executive’s termination, all
Confidential Information in his possession that is in written or other tangible form shall be returned to the Company and
shall not be retained by the Executive or furnished to any third party, in any form except as provided herein.
Notwithstanding the foregoing, this
Section 7
shall not apply to Confidential Information that (i) was publicly
known at the time of disclosure to the Executive, (ii) becomes publicly known or available thereafter other than by any means
in violation of this Agreement or any other duty owed to the Company by the Executive, (iii) is lawfully disclosed to
the Executive by a third party, or (iv) is required to be disclosed by law or by any court, arbitrator or administrative or
legislative body with actual or apparent jurisdiction to order the Executive to disclose or make accessible any
information. As used in this Agreement, Confidential Information means, without limitation, any non-public confidential
or proprietary information disclosed to the Executive or known by the Executive as a consequence of or through the
Executive’s relationship with the Company, in any form, including electronic media. Confidential Information also
includes, but is not limited to the Company’s business plans and financial information, marketing plans, and business
opportunities. Nothing herein shall limit in any way any obligation the Executive may have relating to Confidential
Information under any other agreement or promise to the Company.
The Executive specifically
acknowledges that all such Confidential Information, whether reduced to writing, maintained on any form of electronic media, or
maintained in the mind or memory of the Executive and whether compiled by the Company, and/or the Executive, derives independent
economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been made by the Company to maintain the secrecy of such information, that such
information is the sole property of the Company and that any retention and use of such information by the Executive during his
employment with the Company (except in the course of performing his duties and obligations to the Company) or after the termination
of his employment shall constitute a misappropriation of the Company’s trade secrets.
The Executive agrees
that Confidential Information gained by the Executive during the Executive’s association with the Company, has been developed
by the Company through substantial expenditures of time, effort and money and constitute valuable and unique property of the Company.
The Executive recognizes that because his work for the Company will bring him into contact with confidential and proprietary information
of the Company, the restrictions of this
Section 7
are required for the reasonable protection of the Company and
its investments and for the Company’s reliance on and confidence in the Executive. The Executive further understands
and agrees that the foregoing makes it necessary for the protection of the Company’s business that the Executive not compete
with the Company during his employment with the Company and not compete with the Company for a reasonable period thereafter, as
further provided in the following
Section 8
.
8.
Covenant Not to Compete
. The Executive hereby agrees that he will not,
either during the Term or at all times until the earlier of two years from the time his employment ceases or a Change in
Control of the Company (such earlier of being, the "
Restricted Period
"), engage in the (i) ownership
or operation of post office facilities; (ii) investment in or lending to post office facilities; (iii) management of post
office facilities; or (iv) provision of any planning, development or executive services for post office facilities. The
Executive will be deemed to be engaged in such competitive business activities if he participates in such a business
enterprise as an employee, officer, director, consultant, agent, partner, proprietor, or other participant; provided that the
ownership of no more than two percent (2%) of the stock of a publicly traded Company engaged in a competitive business shall
not be deemed to be engaging in competitive business activities.
During the Restricted
Period, the Executive will be prohibited, to the fullest extent allowed by applicable law, from directly or indirectly, individually
or on behalf of any person or entity, encouraging, inducing, attempting to induce, recruiting, attempting to recruit, soliciting
or attempting to solicit or participating in the recruitment for employment, contractor or consulting opportunities anyone who
is employed at that time by the Company or any subsidiary or affiliate.
During his employment
with the Company and thereafter, the Executive will not make or authorize anyone else to make on the Executive’s behalf any
disparaging or untruthful remarks or statements, whether oral or written, about the Company, its operations or its products, services,
affiliates, officers, directors, employees, or agents, or issue any communication that reflects adversely on or encourages any
adverse action against the Company. The Executive will not make any direct or indirect written or oral statements to the
press, television, radio or other media or other external persons or entities concerning any matters pertaining to the business
and affairs of the Company, its affiliates or any of its officers or directors.
While employed by the
Company and during the Restricted Period, the Executive will communicate the contents of this
Section 8
to any
person, firm, association, partnership, Company or other entity that the Executive intends to be employed by, associated with,
or represent.
9.
Injunctive Relief
. The Executive acknowledges and agrees that it would be
difficult to fully compensate the Company for damages resulting from the breach or threatened breach of the covenants set
forth in
Sections 7 and 8
of this Agreement and accordingly agrees that the Company shall be entitled
to temporary and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent
injunctions, without the need to post any bond, to enforce such provisions in any action or proceeding instituted in any
court in the State of New York having subject matter jurisdiction. This provision with respect to injunctive relief
shall not, however, diminish the Company’s right to claim and recover damages.
10.
Notices
.
All notices or communications hereunder shall be in writing and sent by overnight courier, certified mail, or registered mail (return
receipt requested), postage prepaid, addressed as follows (or to such other address as such party may designate in writing from
time to time):
If to the Company:
Postal Realty Trust, Inc.
75 Columbia Ave.
Cedarhurst, NY 11516
Attention: Chief Executive Officer and Chairman of the Compensation Committee
If to the Executive,
at the address on file with the Company’s Human Resources department.
The actual date of
mailing, as shown by a mailing receipt therefor, shall determine the time at which notice was given.
11.
Separability
.
If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability
shall not affect the remaining provisions hereof which shall remain in full force and effect. It is expressly understood and agreed
that although the parties consider the restrictions contained in this Agreement to be reasonable, if a court determines that
the time or territory or any other restriction contained in this Agreement is an unenforceable restriction on the activities of
the Executive, no such provision of this Agreement shall be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such extent as such court may judicially determine or indicate to be reasonable.
12.
Assignment
.
This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the assigns
and successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise
subject to hypothecation by the Executive.
13.
Entire
Agreement
. This Agreement represents the entire agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the Company and the Executive (including the Prior Employment Agreement). This Agreement
may be amended at any time by mutual written agreement of the parties hereto.
14.
Governing
Law and Arbitration
. This Agreement shall be construed, interpreted, and governed in accordance with the laws of the State
of New York, without regard to principles of conflicts of laws. Any dispute, controversy or claim arising out of or related to
this Agreement or any breach of this Agreement shall be submitted to and decided by binding arbitration. Arbitration shall be administered
exclusively by the American Arbitration Association and shall be conducted in accordance with the National Rules for the Resolution
of Employment Disputes. Any arbitral award determination shall be final and binding upon the parties. Judgment may be entered in
any court having jurisdiction. Notwithstanding the foregoing, the Company shall be entitled to seek a restraining order or injunction
in any court of competent jurisdiction to prevent any continuation of any violation of
Sections 7 or 8
hereof.
15.
Survival
.
Subject to any limits on applicability contained therein,
Sections 7 through 10
,
Section 12
, and
Section 14
hereof shall survive and continue in full force in accordance with their terms notwithstanding any termination of the Term or this
Agreement.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF
,
the Company has caused this Agreement to be duly executed, and the Executive has hereunto set his hand, as of the day and year
first above written.
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POSTAL REALTY TRUST, INC.
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EXECUTIVE
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By:
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Its:
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Print Name:
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Dated:
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Dated:
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Exhibit 10.10
TAX PROTECTION AGREEMENT
THIS TAX PROTECTION AGREEMENT
(this “
Agreement
”) is made and entered into as of ,
2019 by and among Postal Realty LP, a Delaware limited partnership (the “
Partnership
”), Postal Realty Trust,
Inc., a Maryland corporation (the “
REIT
”), and the sole general partner of the Partnership, and Andrew Spodek,
Tayaka Holdings, LLC, and IDJ Holdings, LLC, as contributors (the “
Contributors
”) (together with the Partnership
and the REIT, the “
Parties
”).
WHEREAS, the Contributors,
pursuant to that certain Contribution Agreement, dated the date hereof, by and among the Contributors and the Partnership (the
“
Contribution Agreement
”), are contributing limited liability company interests (the “
Contribution
”),
in each Entity (as defined below), to the Partnership in exchange for common units of limited partnership interest in the Partnership
(“
OP Units
”);
WHEREAS, it is intended
for federal income tax purposes that the Contribution for OP Units will be treated as a tax-deferred contribution of the interests
in the Entities, or the Properties (as defined below), in the case of any Entities that are disregarded as separate from a Contributor
for federal income tax purposes, to the Partnership for OP Units under Section 721 of the Code;
WHEREAS, Tayaka Holdings,
LLC and IDJ Holdings, LLC are treated as disregarded entities wholly owned by Andrew Spodek;
WHEREAS, in consideration
for the agreement of the Contributors to make the Contribution, the Parties desire to enter into this Agreement regarding certain
tax matters as set forth herein; and
WHEREAS, the REIT and the
Partnership desire to evidence their agreement regarding amounts that may be payable in the event of certain actions being taken
by the Partnership regarding the disposition of certain of the Properties held within the Entities, and regarding certain minimum
debt obligations of the Partnership and its subsidiaries.
NOW, THEREFORE, in consideration
of the promises and the mutual representations, warranties, covenants and agreements contained herein and in the Contribution Agreement,
the Parties hereby agree as follows:
ARTICLE
1
DEFINITIONS
To the extent not otherwise
defined herein, capitalized terms used in this Agreement have the meanings ascribed to them in the Partnership Agreement (as defined
below).
“
Accounting Firm
”
has the meaning set forth in the
Section 4.2
.
“
Agreement
”
has the meaning set forth in the Preamble.
“
Book Gain
”
means any gain that would not be required under Section 704(c) of the Code and the applicable regulations to be specially allocated
to the Protected Partners for federal income tax purposes (for example, any gain attributable to appreciation in the actual value
of the Gain Limitation Property following the Closing Date or any gain resulting from reductions in the “book value”
of the Gain Limitation Property following the Closing Date).
“
Cash Consideration
”
has the meaning set forth in
Section 2.1(a)
.
“
Closing Date
”
means the date on which the Contribution will be effective.
“
Code
”
means the Internal Revenue Code of 1986, as amended.
“
Contribution
”
has the meaning set forth in the Recitals.
“
Contribution
Agreement
” has the meaning set forth in the Recitals.
“
Deficit Restoration
Obligation
” means a written obligation by a Protected Partner to restore part or all of its deficit capital account in
the Partnership upon the occurrence of certain events (which written obligation may provide for an indemnity in favor of the REIT
as general partner of the Partnership).
“
Entity
”
means each limited liability company in which the Contributor is contributing its limited liability company interests as described
in the Preamble and as set forth next to each Gain Limitation Property on
Schedule 2.1(b)
hereto.
“
Final Determination
”
means (i) a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree
or other order has become final after all allowable appeals by either party to the action have been exhausted or after the time
for filing such appeals has expired, (ii) a binding settlement agreement entered into in connection with an administrative or judicial
proceeding (iii) the expiration of the time for instituting a claim for refund, or if such a claim was filed, the expiration of
the time for instituting suit with respect thereto or (iv) the expiration of the time for instituting suit with respect to a claimed
deficiency.
“
Gain Limitation
Property
” means (i) each property or asset identified on
Schedule 2.1(b)
hereto as a Gain Limitation Property;
(ii) any direct or indirect interest owned by the Partnership in any entity that owns an interest in a Gain Limitation Property,
if the disposition of that interest would result in the recognition of Protected Gain by a Protected Partner; and (iii) any
other property that the Partnership directly or indirectly receives that is in whole or in part a “substituted basis property”
as defined in Section 7701(a)(42) of the Code with respect to a Gain Limitation Property.
“
Guaranteed Amount
”
means the aggregate amount of each Guaranteed Debt that is guaranteed at any time by Partner Guarantors.
“
Guaranteed Debt
”
means any loans incurred (or assumed) by the Partnership or any of its subsidiaries that are guaranteed by Partner Guarantors at
any time after the Closing Date pursuant to
Article 3
hereof.
“
Indirect Owner
”
means, in the case of a Protected Partner that is an entity that is classified as a partnership, disregarded entity or subchapter
S corporation or real estate investment trust for federal income tax purposes, any person owning an equity interest in such Protected
Partner, and in the case of any Indirect Owner that itself is an entity that is classified as a partnership, disregarded entity,
subchapter S corporation or real estate investment trust for federal income tax purposes, any person owning an equity interest
in such entity.
“
Maintained Debt
”
means (1) that certain Business Loan Agreement, dated December 13, 2017, between Missouri & Minnesota Postal Holdings
LLC, as borrower, and First Oklahoma Bank, as lender (the “Minnesota Loan”) and (2) that certain Business Loan
Agreement, dated as of January 30, 2018, between Ohio Postal Holdings LLC, as borrower, and Vision Bank, NA, as lender (the “Reynoldsburg
Loan”).
“
Maintained Debt
Guarantees
” means (1) that certain Commercial Guaranty, dated as of December 13, 2017, by Andrew Spodek, as guarantor,
in favor of First Oklahoma Bank related to the Minnesota Loan and (2) that certain Commercial Guaranty, dated as of January 30,
2018, by Andrew Spodek, as guarantor, in favor of Vision Bank, NA, related to the Reynoldsburg Loan.
“
Minimum Liability
Amount
” means, for each Protected Partner, the amount set forth next to such Protected Partner’s name on
Schedule
3.2(a)
hereto.
“
Nonrecourse Liability
”
has the meaning set forth in Treasury Regulations Section 1.752-1(a)(2).
“
Notice Period
”
means the period commencing on [●], 2029, and ending [●], 2031, provided, however, that the Notice Period shall terminate
at such time as such Protected Partner has disposed of 100% of the OP units received upon the Contribution in one or more taxable
transactions.
“
OP Units
”
has the meaning set forth in the Recitals.
“
Parties
”
has the meaning set forth in the Preamble.
“
Partner Guarantors
”
means those Protected Partners who have guaranteed any portion of the Guaranteed Debt.
“
Partnership
”
has the meaning set forth in the Preamble.
“
Partnership Agreement
”
means the Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of ,
2019, as amended, and as the same may be further amended in accordance with the terms thereof.
“
Partnership Interest
Consideration
” has the meaning set forth in
Section 2.1(a)
.
“
Property
”
or “
Properties
” means the real property assets or other assets of an Entity.
“
Protected Gain
”
shall mean the gain that would be allocable to and recognized by a Protected Partner for federal income tax purposes under Section
704(c) of the Code in the event of the sale of a Gain Limitation Property in a fully taxable transaction. The initial amount of
Protected Gain with respect to each Protected Partner shall be determined as if the Partnership sold each Gain Limitation Property
in a fully taxable transaction on the Closing Date for consideration equal to the Section 704(c) Value of such Gain Limitation
Property on the Closing Date, and is set forth on
Schedule 2.1(b)
hereto. After the Closing Date, Protected Gain shall be
reduced from time to time to reflect reductions in the “book-tax disparity” with respect to each Property in accordance
with Treasury Regulations § 1.704-3 as provided in Article 6 below. Book Gain shall not be considered Protected Gain.
“
Protected Partner
”
means the Contributors and any person who (i) acquires OP Units from a Protected Partner in a transaction in which gain or
loss is not recognized in whole or in part and in which such transferee’s adjusted basis for federal income tax purposes
is determined in whole or in part by reference to the adjusted basis of the Protected Partner in such OP Units, (ii) has notified
the Partnership of its status as a Protected Partner and (iii) provides all documentation reasonably requested by the Partnership
to verify such status (including any applicable debt guarantee), but excludes any person that ceases to be a Protected Partner
pursuant to this Agreement.
“
Section 704(c)
Value
” means the fair market value of any Gain Limitation Property as of the Closing Date, as determined by the Partnership
and as set forth next to each Gain Limitation Property on
Schedule 2.1(b)
hereto. The Partnership shall initially carry
the Gain Limitation Property on its books at a value equal to the Section 704(c) Value as set forth on Schedule 2.1.
“
Subsidiary
”
means any entity in which the Partnership owns a direct or indirect interest that owns a Gain Limitation Property on the Closing
Date or that thereafter is a successor to the Partnership’s direct or indirect interests in a Gain Limitation Property.
“
Successor Partnership
”
has the meaning set forth in
Section 2.1(b)
.
“
Tax Protection
Period
” means the period commencing on the Closing Date and ending at 12:01 AM on , 2029, provided, however, that with
respect to a Protected Partner, the Tax Protection Period shall terminate at such time as (i) such Protected Partner has disposed
of one hundred percent (100%) of the OP Units received on the Contribution in one or more taxable transactions or (ii) there
is a Final Determination that no portion of the Contribution qualified for tax-deferred treatment under Section 721 of the Code.
“
Vertical Slice
Guarantee
” has the meaning set forth in
Section 3.2(a)
.
ARTICLE
2
RESTRICTIONS ON DISPOSITIONS OF
GAIN LIMITATION PROPERTIES
2.1
Restrictions
on Disposition of Gain Limitation Properties
.
(a) The
Partnership agrees for the benefit of each Protected Partner, for the term of the Tax Protection Period, not to directly or indirectly
sell, exchange, transfer, or otherwise dispose of a Gain Limitation Property or any interest therein, without regard to whether
such disposition is voluntary or involuntary, in a transaction that would cause any Protected Partner to recognize any Protected
Gain.
Without limiting the foregoing,
the term “sale, exchange, transfer or disposition” by the Partnership shall be deemed to include, and the prohibition
shall extend to:
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(i)
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any direct or indirect disposition by any direct or indirect Subsidiary of any Gain Limitation
Property or any interest therein;
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(ii)
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any direct or indirect disposition by the Partnership of any Gain Limitation Property (or any direct
or indirect interest therein) that is subject to Section 704(c)(1)(B) of the Code and the Treasury Regulations thereunder; and
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(iii)
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any distribution by the Partnership to a Protected Partner that is subject to Section 737 of the
Code and the Treasury Regulations thereunder.
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Without limiting the foregoing,
a disposition shall include any transfer, voluntary or involuntary, by the Partnership or any Subsidiary in a foreclosure proceeding,
pursuant to a deed in lieu of foreclosure, or in a bankruptcy proceeding.
Notwithstanding the foregoing,
this
Section 2.1
shall not apply to a voluntary, actual disposition by a Protected Partner of OP Units in connection with
a merger or consolidation of the Partnership pursuant to which (1) the Protected Partner is offered as consideration for the
OP Units either cash or property treated as cash pursuant to Section 731 of the Code (“
Cash Consideration
”)
or partnership interests and the receipt of such partnership interests would not result in the recognition of gain for federal
income tax purposes by the Protected Partner (“
Partnership Interest Consideration
”); (2) the Protected
Partner has the right to elect to receive solely Partnership Interest Consideration in exchange for his OP Units, and the continuing
partnership has agreed in writing to assume the obligations of the Partnership under this Agreement; (3) no Protected Gain
is recognized by the Partnership as a result of any partner of the Partnership receiving Cash Consideration; and (4) the Protected
Partner elects or is deemed to elect to receive solely Cash Consideration.
(b) Notwithstanding
the restriction set forth in this
Section 2.1
, the Partnership and any Subsidiary may dispose of any Gain Limitation Property
(or any interest therein) if such disposition qualifies as a “like-kind exchange” under Section 1031 of the Code, or
an involuntary conversion under Section 1033 of the Code, or other transaction (including, but not limited to, a contribution of
property to any entity that qualifies for the non-recognition of gain under Section 721 or Section 351 of the Code, or a merger
or consolidation of the Partnership with or into another entity that qualifies for taxation as a “partnership” for
federal income tax purposes (a “
Successor Partnership
”)) that, as to each of the foregoing, does not result
in the recognition of any taxable income or gain to any Protected Partner with respect to any of the OP Units; provided, however,
that in the case of a “like-kind exchange” under Section 1031 of the Code, if such exchange is with a “related
party” within the meaning of Section 1031(f)(3) of the Code, any direct or indirect disposition by such related party of
the Gain Limitation Property or any other transaction prior to the expiration of the two (2) year period following such exchange
that would cause Section 1031(f)(1) of the Code to apply with respect to such Gain Limitation Property (including by reason of
the application of Section 1031(f)(4) of the Code) shall be considered a violation of this
Section 2.1
by the Partnership.
ARTICLE
3
ALLOCATION OF LIABILITIES; GUARANTEE AND DEFICIT RESTORATION OBLIGATION OPPORTUNITY; NOTIFICATION OF REDUCTION OF LIABILITIES;
COOPERATION REGARDING ADDITIONAL ALLOCATION OF LIABILITIES
3.1
Maintenance
of Specific Indebtedness
. As of the date hereof, Andrew Spodek has entered into the Maintained Debt Guarantees. Until ,
2023, the Partnership shall maintain the Maintained Debt, provided that the Partnership may make any required debt service payments
on the Maintained Debt pursuant to the terms as of the date hereof, and the Partnership may refinance the Maintained Debt with
property level debt secured by the same properties that currently secure the Maintained Debt so long as the refinancing debt has
a term and payment schedule no earlier than the Maintained Debt. If the Partnership refinances the Maintained Debt, the Partnership
will offer to each Protected Partner the opportunity to enter into a guarantee with terms comparable to the Maintained Debt Guarantee
with respect to such refinancing debt. After , 2023,
subject to the entrepreneurial risk of the Partnership, the Partnership may, but is not required to, reduce the Maintained Debt,
provided that the obligation to allocate the Minimum Liability Amount to the extent required by this Article 3 shall continue to
apply.
3.2
Maintenance
of Indebtedness
. During the Tax Protection Period, the Partnership shall maintain an amount of indebtedness sufficient to allow
each Protected Partner, after taking advantage of the provisions of this
Article 3
, to be allocated Partnership liabilities
for purposes of Section 752 of the Code, and to be “at risk” with respect to Partnership liabilities for purposes of
Section 465 of the Code, in each case in an amount no less than such Protected Partner’s Minimum Liability Amount. For the
avoidance of doubt, the parties acknowledge that in addition to the Maintained Debt Guarantees, the Contributors as of the date
hereof have also provided a guarantee of the full amount of that certain Loan Agreement, dated as of September 8, 2016, between
Florida Postal Holdings, LLC, Pennsylvania Postal Holdings, LLC, Colorado Postal Holdings, LLC, Mass Postal Holdings, LLC, Michigan
Postal Holdings, LLC, Unlimited Postal Holdings, LP, Ohio Postal Holdings, LLC, Kinston Metro Postal, LLC and Wisconsin Postal
Holdings, LLC, as borrowers, and Vision Bank, NA, as lender, pursuant to that certain Unconditional and Continuing Guaranty dated
as of September 8, 2016, by Andrew Spodek, as guarantor, in favor of Vision Bank, NA.
3.3
Minimum
Liability Allocation
.
(a) During
the Tax Protection Period, the Partnership will offer to each Protected Partner the opportunity, in the Partnership’s discretion,
either (i) to enter into a “vertical slice guarantee” of certain liabilities of the Partnership (substantially
in the form set forth in
Schedule 3.2(b)
) pursuant to which the lender for such Guaranteed Debt is required to pursue all
other collateral and security for the Guaranteed Debt (other than any “vertical slice guarantees”) prior to seeking
to collect on such a Partner Guarantor, and the Protected Partner will guarantee a fractional share of each dollar of the Guaranteed
Debt, and the maximum aggregate liability of each partner for all Guaranteed Debt shall be limited to the amount actually guaranteed
by such Partner Guarantor (a “
Vertical Slice Guarantee
”) or (ii) in the event that the Partnership has
sufficient recourse debt outstanding, to enter into a Deficit Restoration Obligation, in such amount or amounts so as to cause
a special allocation of partnership liabilities to such Protected Partner for purposes of Section 752 of the Code such that the
Protected Partner’s allocable share of Partnership liabilities equals such Protected Partner’s Minimum Liability Amount
and to cause a special allocation of partnership liabilities for purposes of Section 465 of the Code that increases the Protected
Partner’s “at risk” amount such that the Protected Partner’s “at-risk” amount equals such Protected
Partner’s Minimum Liability Amount. In order to minimize the need for Protected Partners to enter into such Vertical Slice
Guarantees or Deficit Restoration Obligations, the Partnership will use the additional method under Treasury Regulations Section
1.752-3(a)(3) to allocate Nonrecourse Liabilities considered secured by a Gain Limitation Property to the Protected Partners to
the extent that the “built-in gain” with respect to those properties exceeds the amount of the Nonrecourse Liabilities
considered secured by such Gain Limitation Property allocated to the Protected Partners under Treasury Regulations Section 1.752-3(a)(2).
(b) Notwithstanding
the foregoing, if, due to a change in law, a Protected Partner reasonably believes that such Protected Partner may no longer continue
to be allocated such Guaranteed Amount of a Guaranteed Debt, such Protected Partner may request a modification of such Vertical
Slice Guarantee and the Partnership will use its commercially reasonable efforts to work with the lender with respect to such Guaranteed
Debt to have the Vertical Slice Guarantee amended in a manner that will permit such Protected Partner to be allocated such Protected
Partner’s Guaranteed Amount with respect to the Guaranteed Debt or, in the event the Partnership has sufficient recourse
debt outstanding, such Protected Partner, at its option, shall be offered the opportunity to enter into a Deficit Restoration Obligation
in an amount equal to such Guaranteed Amount so that, assuming such Deficit Restoration Obligation is effective under applicable
law, the amount of Partnership liabilities allocated to such Protected Partner shall not decrease as a result of the change in
law. Furthermore, if, due to a change in law, a Protected Partner reasonably believes such Protected Partner may no longer continue
to be allocated Partnership liabilities with respect to a Deficit Restoration Obligation, such Protected Partner may request a
modification of the terms of such Deficit Restoration Obligation and the Partnership will use commercially reasonable efforts to
modify such Deficit Restoration Obligation in a manner that will permit such Protected Partner to be allocated Partnership liabilities
in an amount so as to cause such Protected Partner’s allocable share of Partnership liabilities to equal such Protected Partner’s
Minimum Liability Amount.
3.4
Notification
Requirement
. During the Tax Protection Period, the Partnership shall provide prior written notice to a Protected Partner if
the Partnership intends to repay, retire, refinance or otherwise reduce (other than due to scheduled amortization) the amount of
liabilities with respect to a Gain Limitation Property in a manner that would cause a Protected Partner to recognize gain for federal
income tax purposes as a result of a decrease of the Protected Partner’s share of Partnership liabilities below the Minimum
Liability Amount (determined as of the Closing Date).
3.5
Additional
Allocation of Liabilities
. If the Partnership provides notice to a Protected Partner pursuant to
Section 3.3
, the Partnership
shall cooperate with the Protected Partner to arrange an additional allocation of liabilities of the Partnership to the Protected
Partner in such amount or amounts so as to increase the amount of partnership liabilities allocated to such Protected Partner for
purposes of Section 752 of the Code by an amount necessary to prevent the Protected Partner from recognizing gain for federal income
tax purposes up to the Minimum Liability Amount (determined as of the Closing Date) as a result of the intended repayment, retirement,
refinancing or other reduction (other than scheduled amortization) in the amount of liabilities with respect to a Gain Limitation
Property, including, without limitation, offering to the Protected Partner the opportunity, in the Partnership’s discretion,
either (i) to enter into additional Vertical Slice Guarantees (substantially in the form set forth in
Schedule 3.2(b)
or
(ii) to enter into additional Deficit Restoration Obligations, in either case to the extent of the amount of the Minimum Liability
Amount (determined as of the Closing Date). In order to minimize the need to make additional special allocations of liabilities
of the Partnership pursuant to the preceding sentence, the Partnership will use the additional method under Treasury Regulations
Section 1.752-3(a)(3) to allocate Nonrecourse Liabilities considered secured by a Gain Limitation Property to the Protected Partner
to the extent that the “built-in gain” with respect to those properties exceeds the amount of the Nonrecourse Liabilities
considered secured by such Gain Limitation Property and allocated to the Protected Partner under Treasury Regulations Section 1.752-3(a)(2).
3.6
Deficit
Restoration Obligation
. In the event that the Partnership otherwise has sufficient recourse debt outstanding and a Protected
Partner has elected to enter into a Deficit Restoration Obligation, the Partnership will maintain an amount of indebtedness of
the Partnership that is considered “recourse” indebtedness (taking into account all of the facts and circumstances
related to the indebtedness, the Partnership and the general partner) equal to or greater than the sum of the amounts subject to
a Deficit Restoration Obligation of all Protected Partners and other partners in the Partnership. The Deficit Restoration Obligation
shall be conclusively presumed to cause the Protected Partner to be allocated an amount of liabilities equal to the Deficit Restoration
Obligation amount of such Protected Partner for purposes of Sections 465 and 752 of the Code, provided that (1) the Partnership
maintains an amount of debt that is considered “recourse” indebtedness (determined for purposes of Section 752 of the
Code and taking into account all of the facts and circumstances related to the indebtedness, the Partnership and the general partner)
equal to the aggregate Deficit Restoration Obligation amounts of all partners of the Partnership and (2) all other terms and conditions
of the Partnership Agreement with respect to such Deficit Restoration Obligation are met.
ARTICLE
4
REMEDIES FOR BREACH
4.1
Monetary
Damages
. In the event that the Partnership breaches its obligations set forth in
Article 2
or
Article 3
with
respect to a Protected Partner, the Protected Partner’s sole remedy shall be to receive from the Partnership, and the Partnership
shall pay to such Protected Partner as damages, an amount equal to:
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(a)
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in the case of a violation of
Article 2
, the aggregate federal, state, and local income
taxes incurred by the Protected Partner or an Indirect Owner with respect to the Protected Gain that is allocable to such Protected
Partner under the Partnership Agreement as a result of the disposition of the Gain Limitation Property; and
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(b)
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in the case of a violation of
Article 3
, the aggregate federal, state and local income taxes
incurred by the Protected Partner or an Indirect Owner as a result of the income or gain allocated to, or otherwise recognized
by, such Protected Partner with respect to its OP Units by reason of such breach.
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In addition, the Partnership
shall pay to the Protected Partner or Indirect Owner an amount equal to the aggregate federal, state, and local income taxes payable
by the Protected Partner or Indirect Owner as a result of the receipt of any payment required under this Section 4.1.
For the avoidance of doubt,
so long as the Partnership provides the opportunities referenced in
Sections 3.2
and
3.4
and complies with the notification
requirement of
Section 3.3
, the Partnership shall have no liability pursuant to this
Section 4.1
in the event it
is determined that a Protected Partner has not been specially allocated for purposes of Section 752 of the Code an amount of partnership
liabilities equal to such Protected Partner’s Minimum Liability Amount or is not treated as receiving a special allocation
of partnership liabilities for purposes of Section 465 of the Code that increases such Protected Partner’s “at risk”
amount by an amount equal to such Protected Partner’s Minimum Liability Amount. Furthermore, the Partnership shall have no
liability pursuant to this
Section 4.1
if the Partnership merges into another entity treated as a partnership for federal
income tax purposes or the Protected Partner accepts an offer to exchange its OP Units for equity interests in another entity treated
as a partnership for federal income tax purposes so long as, in either case, such successor entity assumes or agrees to assume
the Partnership’s obligations pursuant to this Agreement.
For purposes of computing
the amount of federal, state, and local income taxes required to be paid by a Protected Partner (or Indirect Owner), (i) any deduction
for state income taxes payable as a result thereof actually allowed in computing federal income taxes shall be taken into account,
and (ii) a Protected Partner’s (or Indirect Owner’s) tax liability shall be computed using the highest federal, state
and local marginal income tax rates (plus the tax rate on net investment income, if applicable) that would be applicable to such
Protected Partner’s (or Indirect Owner’s) taxable income (taking into account the character and type of such income
or gain) for the year with respect to which the taxes must be paid, without regard to any deductions, losses or credits that may
be available to such Protected Partner (or Indirect Owner) that would reduce or offset its actual taxable income or actual tax
liability if such deductions, losses or credits could be utilized by the Protected Partner (or Indirect Owner) to offset other
income, gain or taxes of the Protected Partner (or Indirect Owner), either in the current year, in earlier years, or in later years.
4.2
Process
for Determining Damages
. If the Partnership has breached or violated any of the covenants set forth in
Article 2
or
Article 3
(or a Protected Partner asserts that the Partnership has breached or violated any of the covenants set forth in
Article 2
or
Article 3
), the Partnership and the Protected Partner (or Indirect Owner) agree to negotiate in good
faith to resolve any disagreements regarding any such breach or violation and the amount of damages, if any, payable to such Protected
Partner (or Indirect Owner) under
Section 4.1
. If any such disagreement cannot be resolved by the Partnership and such Protected
Partner (or Indirect Owner) within sixty (60) days after the receipt of notice from the Partnership of such breach and the amount
of income to be recognized by reason thereof (or, if applicable, receipt by the Partnership of an assertion by a Protected Partner
that the Partnership has breached or violated any of the covenants set forth in
Article 2
or
Article 3
), the Partnership
and the Protected Partner shall jointly retain a nationally recognized independent public accounting firm (an “
Accounting
Firm
”) to act as an arbitrator to resolve as expeditiously as possible all points of any such disagreement (including,
without limitation, whether a breach of any of the covenants set forth in
Article 2
or
Article 3
, has occurred and,
if so, the amount of damages to which the Protected Partner is entitled as a result thereof, determined as set forth in
Section
4.1
). The Partnership and the Protected Partner shall cooperate with the Accounting Firm and shall furnish the Accounting Firm
with all information reasonably requested by the Accounting Firm. All determinations made by the Accounting Firm with respect to
the resolution of any breach or violation of any of the covenants set forth in
Article 2
or
Article 3
and the amount
of damages payable to the Protected Partner under
Section 4.1
shall be final, conclusive and binding on the Partnership
and the Protected Partner. The fees and expenses of any Accounting Firm incurred in connection with any such determination shall
be shared equally by the Partnership and the Protected Partner, provided that if the amount determined by the Accounting Firm to
be owed by the Partnership to the Protected Partner is more than five percent (5%) higher than the amount proposed by the Partnership
to be owed to such Protected Partner prior to the submission of the matter to the Accounting Firm, then all of the fees and expenses
of any Accounting Firm incurred in connection with any such determination shall be paid by the Partnership and if the amount determined
by the Accounting Firm to be owed by the Partnership to the Protected Partner is more than five percent (5%) less than the amount
proposed by the Partnership to be owed to such Protected Partner prior to the submission of the matter to the Accounting Firm,
then all of the fees and expenses of any Accounting Firm incurred in connection with any such determination shall be paid by the
Protected Partner.
4.3
Required
Notices; Time for Payment
. In the event that there has been a breach of
Article 2
or
Article 3
, the Partnership
shall provide to each affected Protected Partner notice of the transaction or event giving rise to such breach not later than at
such time as the Partnership provides to the Protected Partners the IRS Schedule K-1’s to the Partnership’s federal
income tax return for the year of such transaction. All payments required to be made under this
Article 4
to any Protected
Partner shall be made to such Protected Partner on or before April 15 of the year following the year in which the gain recognition
event giving rise to such payment took place; provided that, if the Protected Partner is required to make estimated tax payments
that would include such gain (taking into account all available safe harbors), the Partnership shall make a payment to the Protected
Partner on or before the due date for such estimated tax payment and such payment from the Partnership shall be in an amount that
corresponds to the amount of the estimated tax being paid by such Protected Partner at such time as a result of the gain recognition
event, which payment shall be credited against the total amount payable under this Article 4. In the event of a payment made after
the date required pursuant to this
Section 4.3
, interest shall accrue on the aggregate amount required to be paid from such
date to the date of actual payment at a rate equal to the “prime rate” of interest, as published in the Wall Street
Journal (or if no longer published there, an equivalent publication) effective as of the date the payment is required to be made.
ARTICLE 5
NOTICE OF INTENTION TO
SELL GAIN LIMITATION PROPERTY DURING NOTICE PERIOD
During the Notice Period,
if the Partnership intends to dispose of a Gain Limitation Property in a taxable transaction, the Partnership shall use commercially
reasonable efforts to provide at least 90 days’ prior written notice (prior to the closing of such disposition) to the Protected
Partners.
ARTICLE
6
SECTION 704(C) METHOD AND ALLOCATIONS
Notwithstanding any provision
of the Partnership Agreement, the Partnership shall use the “traditional method” under Treasury Regulations Section
1.704-3(b) for purposes of making all allocations under Section 704(c) of the Code with respect to any Gain Limitation Property.
ARTICLE
7
AMENDMENT OF THIS AGREEMENT; WAIVER OF CERTAIN PROVISIONS
7.1
Amendment
.
This Agreement may not be amended, directly or indirectly (including by reason of a merger between either the Partnership or the
REIT and another entity) except by a written instrument signed by the REIT, the Partnership, and each of the Protected Partners
to be subject to such amendment, except that the Partnership may amend
Schedules 2.1(a)
and
3.2(a)
upon a person
becoming a Protected Partner as a result of a transfer of OP Units.
7.2
Waiver
.
Notwithstanding the foregoing, upon written request by the Partnership, each Protected Partner, in its sole discretion, may waive
the payment of any damages or indemnification amount that is otherwise payable to such Protected Partner pursuant to
Article
4
hereof. Such a waiver shall be effective only if obtained in writing from the affected Protected Partner.
ARTICLE
8
MISCELLANEOUS
8.1
Additional
Actions and Documents
. Each of the Parties hereby agrees to take or cause to be taken such further actions, to execute, deliver,
and file or cause to be executed, delivered and filed such further documents, and will obtain such consents, as may be necessary
or as may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.
8.2
Assignment
.
No Party shall assign its or his rights or obligations under this Agreement, in whole or in part, except by operation of law, without
the prior written consent of the other Parties, and any such assignment contrary to the terms hereof shall be null and void and
of no force and effect.
8.3
Successors
and Assigns
. This Agreement shall be binding upon and shall inure to the benefit of the Protected Partners and their respective
successors and permitted assigns, whether so expressed or not. This Agreement shall be binding upon the REIT, the Partnership,
and any entity that is a direct or indirect successor, whether by merger, transfer, spin-off or otherwise, to all or substantially
all of the assets of either the REIT or the Partnership (or any prior successor thereto as set forth in the preceding portion of
this sentence), provided that none of the foregoing shall result in the release of liability of the REIT and the Partnership hereunder.
The REIT and the Partnership covenant with and for the benefit of the Protected Partners not to undertake any transfer of all or
substantially all of the assets of either entity (whether by merger, transfer, spin-off or otherwise) unless the transferee has
acknowledged in writing and agreed in writing to be bound by this Agreement, provided that the foregoing shall not be deemed to
permit any transaction otherwise prohibited by this Agreement.
8.4
Modification;
Waiver
. No failure or delay on the part of any Party in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such
a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies
of the Parties are cumulative and not exclusive of any rights or remedies which they would otherwise have. No modification or waiver
of any provision of this Agreement, nor consent to any departure by any Party therefrom, shall in any event be effective unless
the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Party in any case shall entitle such Party to any other or further notice or demand
in similar or other circumstances.
8.5
Representations
and Warranties Regarding Authority; Noncontravention
. Each of the REIT and the Partnership has the requisite corporate or other
(as the case may be) power and authority to enter into this Agreement and to perform its respective obligations hereunder. The
execution and delivery of this Agreement by each of the REIT and the Partnership and the performance of each of its respective
obligations hereunder have been duly authorized by all necessary trust, partnership, or other (as the case may be) action on the
part of each of the REIT and the Partnership. This Agreement has been duly executed and delivered by each of the REIT and the Partnership
and constitutes a valid and binding obligation of each of the REIT and the Partnership, enforceable against each of the REIT and
the Partnership in accordance with its terms, except as such enforcement may be limited by (i) applicable bankruptcy or insolvency
laws (or other laws affecting creditors’ rights generally) or (ii) general principles of equity. The execution and delivery
of this Agreement by each of the REIT and the Partnership do not, and the performance by each of its respective obligations hereunder
will not, conflict with, or result in any violation of (i) the Partnership Agreement or (ii) any other agreement applicable
to the REIT and/or the Partnership, other than, in the case of clause (ii), any such conflicts or violations that would not materially
adversely affect the performance by the Partnership and the REIT of their obligations hereunder.
8.6
Captions
.
The Article and Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed
to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of
any of the provisions hereof.
8.7
Notices
.
All notices and other communications given or made pursuant hereto shall be in writing, shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective upon receipt, if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt requested) to the Parties at the following addresses (or at such
other address for a Party as shall be specified by like changes of address) or sent by electronic transmission to the telecopier
number specified below:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: President
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(b)
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if to the Partnership, to:
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Postal Realty LP
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: General Partner
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(c)
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if to a Protected Partner, to the address on file with the Partnership.
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Each Party may designate by notice in writing
a new address to which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand,
request, or communication which shall be hand delivered, sent, mailed, telecopied or telexed in the manner described above, or
which shall be delivered to a telegraph company, shall be deemed sufficiently given, served, sent, received or delivered for all
purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or (with respect to a
telecopy or telex) the answerback being deemed conclusive, but not exclusive, evidence of such delivery) or at such time as delivery
is refused by the addressee upon presentation.
8.8
Counterparts
.
This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and each
of which shall be deemed an original.
8.9
Governing
Law
. The interpretation and construction of this Agreement, and all matters relating thereto, shall be governed by the laws
of the State of New York, without regard to the choice of law provisions thereof.
8.10
Consent
to Jurisdiction; Enforceability
.
(a) This Agreement and the
duties and obligations of the Parties shall be enforceable against any of the other Parties in the courts of the State of New York.
For such purpose, each Party and the Protected Partners hereby irrevocably submits to the nonexclusive jurisdiction of such courts
and agrees that all claims in respect of this Agreement may be heard and determined in any of such courts.
(b) Each Party hereby irrevocably
agrees that a final judgment of any of the courts specified above in any action or proceeding relating to this Agreement shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
8.11
Severability
.
If any part of any provision of this Agreement shall be invalid or unenforceable in any respect, such part shall be ineffective
to the extent of such invalidity or unenforceability only, without in any way affecting the remaining parts of such provision or
the remaining provisions of this Agreement.
8.12
Costs
of Disputes
. Except as otherwise expressly set forth in this Agreement, the nonprevailing Party in any dispute arising hereunder
shall bear and pay the costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred
by the prevailing Party or Parties in connection with resolving such dispute.
Agreement to be signed
by their respective officers, general partners, or delegates thereunto duly authorized all as of the date first written above.
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POSTAL REALTY TRUST, INC.,
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a Maryland corporation
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By:
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Name:
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Title:
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POSTAL REALTY LP,
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a Delaware limited partnership
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By:
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Name:
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Title:
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[CONTRIBUTORS]
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By:
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Name:
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Exhibit 10.11
FORM OF
third party PROPERTY MANAGEMENT AGREEMENT
This PROPERTY MANAGEMENT
AGREEMENT (this “
Management Agreement
”) is made and entered into as of this [∙] of [∙], 20[∙],
by and among [∙] (“
Owner
”), and POSTAL REALTY MANAGEMENT TRS, LLC, a Delaware limited liability company
(the “
Manager
”).
WHEREAS, Owner desires
to retain Manager to manage real estate properties owned by Owner as set forth on
Exhibit A
hereto (individually a “
Property
”,
and collectively, the “
Properties
”) upon the terms and subject to the conditions set forth in this Management
Agreement.
NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound hereby, do hereby agree, as follows:
ARTICLE
I
DEFINITIONS
Except as otherwise
specified or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes
of this Management Agreement, and the definitions of such terms are equally applicable both to the singular and plural forms thereof:
1.1
“
Account
”
has the meaning set forth in
Section 2.5
.
1.2
“
Affiliate
”
means, except as otherwise provided herein, with respect to any Person, any other Person which, at the time of determination, directly
or indirectly controls, is controlled by or is under common control with, such Person. For the purposes of this definition, “
control
”
(including, with correlative meaning, the terms “
controlling
,” “
controlled by
” and “
under
common control with
”) means the possession, directly or indirectly, of the power to direct or cause the direction of
management and policies of such Person through the ownership of voting securities, by contract or otherwise.
1.3
“
Agreement
”
means any loan agreement, mortgage, indenture, deed of trust, lease, sublease, contract, covenant, plan, insurance policy or other
agreement, instrument, arrangement, obligation, understanding or commitment, permit, concession, franchise or license, whether
oral or written, expressed or implied.
1.4
“
Business
Day
” means any day other than a Saturday or a Sunday or a day on which banks located in New York, New York generally
are authorized or required by Law or regulation to close.
1.5
“
Claim
”
means any threatened, pending or completed claim, action, suit, litigation, arbitration, alternative dispute resolution mechanism,
investigation, hearing or any other proceeding, whether civil (including intentional and unintentional tort claims), criminal,
administrative, regulatory, investigative or other, or any inquiry or investigation that might lead to the institution of any such
claim, action, suit, litigation or other proceeding, whether civil (including intentional and unintentional tort claims), criminal,
administrative, regulatory, investigative or other.
1.6
“
Construction
Work
” has the meaning set forth in
Section 5.2
.
1.7
“
Contracts
”
has the meaning set forth in
Section 3.2(d)
.
1.8
“
Damages
”
means any and all costs, losses, damages, Liabilities, obligations, lawsuits, deficiencies, Claims, demands, penalties, assessments,
fines, return of any consideration, Judgments, arbitration awards, indemnification payments, reasonable costs and reasonable expenses,
of any nature whatsoever, reasonable costs and reasonable expenditures required or incurred to comply with any Judgment, and all
reasonable amounts paid in investigation, defense or settlement of any of the foregoing. All Damages shall be calculated on a pre-Tax
basis, without reduction or other adjustment for any Tax consequences arising out of the payment of such Damages.
1.9
“
Equity
Interests
” means (i) with respect to a corporation, as determined under the Laws of the jurisdiction of organization
of such entity, shares of capital stock (whether common, preferred or treasury), (ii) with respect to a partnership, limited
liability company, limited liability partnership or similar Person, as determined under the Laws of the jurisdiction of organization
of such entity, units, interests, or other partnership or limited liability company interests, or (ii) any other equity ownership.
1.10
“
GAAP
” means United States generally accepted accounting principles in effect on the Original Effective Date,
consistently applied.
1.11
“
Governmental
Authority
” means any United States or other international, national, state or local government, any political subdivision
thereof or any other governmental, judicial, public or statutory instrumentality, authority, body, agency, department, bureau,
commission or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government,
or any arbitrator with authority to bind a party at law, including, for the avoidance of doubt and without limitation, the United
States Postal Service.
1.12
“
Gross
Revenues
” means all amounts actually collected as rents or other charges for the use and occupancy of the Properties,
but excluding (i) interest and other investment income of Owner, (ii) proceeds received by Owner from a sale, exchange,
condemnation, eminent domain taking, casualty or other disposition of assets of Owner, and (iii) proceeds received by Owner
from any financing.
1.13
“
Improvements
”
means any buildings, structures and equipment from time to time located on a Property and all parking and public common areas located
on a Property.
1.14
“
Indemnified
Parties
” has the meaning set forth in
Section 6.5(a)
.
1.15
“
Judgments
” means any judgments, injunctions, orders, decrees, writs, rulings, stipulations, consents, settlements,
or awards of any court or other judicial authority or any other Governmental Authority.
1.16
“
Laws
”
means all laws, statutes, by-laws, ordinances, rules, regulations, common law or Judgments of any Governmental Authority.
1.17
“
Lease
”
means, unless the context otherwise requires, any lease or sublease made by Owner or by its predecessor, as landlord, with respect
to a Property.
1.18
“
Licensing
Claim
” shall mean any Claim that Manager does not possess a real estate brokerage or similar license required by any
Law in connection with services provided by the Manager or its employees to Owner, or any Claim that arises from or relates to
the foregoing.
1.19
“
Liabilities
”
means any liability, indebtedness, guaranty, assurance, commitment, claim, loss, damage, deficiency, assessment, obligation or
responsibility, whether fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued or unaccrued,
absolute, known or unknown, contingent or unmatured, liquidated or unliquidated, asserted or unasserted, due or to become due,
whenever or however arising (including whether arising out of any Contract or tort based on negligence or strict liability) and
whether or not the same would be required by GAAP to be stated in financial statements or disclosed in the notes thereto.
1.20
“
Losses
”
has the meaning set forth in
Section 6.5(a)
.
1.21
“
Management
Agreement
” has the meaning set forth in the Preamble.
1.22
“
Management
Fees
” has the meaning set forth in
Section 5.1
.
1.23
“
Manager
”
has the meaning set forth in the Preamble.
1.24
“
Notice
”
has the meaning set forth in
Section 8.1
.
1.25
“
Effective
Date
” means [∙].
1.26
“
Oversight
Fee
” has the meaning set forth in
Section 5.1
.
1.27
“
Owner
”
means [∙].
1.28
“
Person
” means an individual, corporation, association, business trust, estate, trust, partnership, limited
liability company or other legal entity.
1.29
“
Properties
”
means the properties described on
Exhibit A
hereto. “Property” shall have the correlative meaning. For the avoidance
of doubt, if at any time Owner ceases to own any interest in a Property, it shall no longer be considered a “Property”
for the purposes of this Management Agreement.
1.30
“
Proprietary
Properties
” means all modeling algorithms, tools, computer programs, know-how, methodologies, processes, technologies,
ideas, concepts, skills, routines, subroutines, operating instructions and other materials and aides used in performing the duties
set forth in
Article II
that relate to management advice, services and techniques regarding current and potential Properties,
and all modifications, enhancements and derivative works of the foregoing.
1.31
“
Tax
Return
” means any report, return (including information return), election, document, estimated tax filing, declaration
or other filing required to be supplied to any taxing or other Governmental Authority with respect to Taxes, including any amendments
thereto.
1.32
“
Taxes
”
shall mean all taxes, charges, fees, levies or other assessments, including income, gross receipts, excise, property, sales, withholding,
social security, occupation, use, service, service and use, license, payroll, franchise, transfer and recording taxes, fees and
charges, imposed by the United States, or any state, local or foreign government or subdivision or agency thereof whether computed
on a separate, consolidated, unitary, combined or any other basis; and such term shall include any interest, fines, penalties or
additional amounts attributable to or imposed on or with respect to any such taxes, charges, fees, levies or other assessments
and (ii) any Liability for the payment of amounts determined by reference to amounts described in clause (i) as a result
of being a member of an affiliated, consolidated, combined or unitary group.
ARTICLE
II
APPOINTMENT AND STATUS OF MANAGER; SERVICES TO BE PERFORMED
2.1
Appointment
of Manager
. Owner hereby engages and retains Manager as the manager and as tenant coordinating agent of the Properties, and
Manager hereby accepts such appointment on the terms and conditions hereinafter set forth; it being understood that this Management
Agreement shall cause Manager to be, at law, Owner’s agent upon the terms contained herein.
2.2
[Reserved]
.
2.3
General
Duties
. Manager shall devote its commercially reasonable efforts to performing its duties hereunder to manage, operate and
maintain the Properties. The services of Manager are to be of scope and quality not less than those generally performed by professional
property managers of other similar properties in that geographic area.
2.4
Specific
Duties
. In addition to the specific authority granted to Manager by Owner pursuant to
Article III
of this Management
Agreement, but subject to the terms hereof, Manager’s duties include the following:
(a)
Lease
Obligations
. Manager shall perform all duties of the landlord under all Leases insofar as such duties relate to operation,
maintenance, and day-to-day management. Manager shall also cause to be provided, at 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.
(b)
Permits;
Notice of Violations
. At Owner’s request and cost and expense, Manager shall use commercially reasonable efforts to obtain
required permits for each Property and take all commercially reasonable steps to ensure compliance in all material respects with
applicable Laws. Manager shall forward to 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
any notice as Manager believes is appropriate.
(c)
Technology
Use and Support
. Manager shall utilize the software and technology platforms that it believes are appropriate in connection
with fulfilling its duties under this Management Agreement. In addition, Manager shall provide technical support and maintenance
with respect to any technology used in the maintenance, operation, management and leasing of the Properties.
2.5
The
Account
. Manager shall establish and maintain a separate checking account (the “
Account
”) into which all
rent and other monies collected from tenants shall be deposited. 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 Owner and shall be withdrawn and disbursed by Manager for the
account of Owner only as expressly permitted by this Management Agreement. No monies collected by Manager on Owner’s behalf
shall be commingled with funds of Manager. The Account shall be maintained, and monies shall be deposited therein and withdrawn
therefrom, in accordance with the following:
(a)
All
sums received from rents and other income from the Properties shall be promptly deposited by Manager in the Account. Manager may
endorse any and all checks received in connection with the operation of any Property and drawn to the order of Owner, and Owner
shall, upon request by Manager, furnish Manager’s depository with an appropriate authorization for Manager to make such endorsement.
Manager shall have the right to designate two or more persons who shall be authorized to draw against the Account, but only for
purposes authorized by this Management Agreement.
(b)
All
sums due to Manager hereunder, whether (i) for compensation, (ii) reimbursement for expenditures approved by Owner or
(iii) permitted under
Section 2.6(c)
shall be a charge against the operating revenues of the Properties and
shall be paid or withdrawn by Manager or Owner from the Account prior to the making of any other disbursements therefrom.
(c)
By
the [∙] day after the end of each month, Manager shall forward to Owner all monies contained in the Account other than a
reserve of $[∙] and any other amounts otherwise provided in the budget for the relevant property which shall remain in the
Account.
Notwithstanding
the foregoing provisions of this
Section 2.5
, Manager hereby acknowledges that (A) Owner may obtain one or more
mortgage loans secured by one or more of the Properties and (B) Manager will act in conformity with the commercially reasonable
provisions of the documents evidencing or securing such mortgage loans, provided that Manager has been furnished copies of all
relevant loan documents that purport to impose obligations upon Manager. For the avoidance of doubt, neither this Management Agreement
nor the rights of Manager under this Management Agreement shall be subordinated to any future mortgage loans secured by one or
more of the Properties or any renegotiation, amendment, or other modification to any such existing mortgage loans, in each case,
without the prior written consent of Manager, which consent may be withheld or granted in Manager’s sole discretion.
Notwithstanding
the forgoing provisions of this
Section 2.5
, Manager shall not have the duties and responsibilities set forth in this
Section 2.5
to the extent Owner performs the respective activity or function contemplated by this
Section 2.5
.
2.6
Accounting,
Records and Reports
.
(a)
Records
.
Manager shall maintain the necessary books and records in connection with the maintenance and operation of the Properties, including
but not limited to, copies of invoices, leases, billing records, recovery calculations and budget data. Owner and persons designated
by Owner shall at all reasonable time 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 Manager agrees to keep safe, available and separate from any records not pertaining to the Properties, at a place recommended
by Manager and approved by Owner.
(b)
Copies
of Contracts
. Manager shall provide the original copies of all contracts entered into by Manager on behalf of Owner during
such period, if requested by Owner upon 15 days’ prior written notice.
(c)
Additional
Costs
. Manager will not incur any costs with respect to any Property except for reasonable 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
persons (or to avoid the suspension of any necessary service of the Property) or as otherwise required in this Management Agreement.
ARTICLE
III
AUTHORITY GRANTED TO MANAGER AND CERTAIN OWNER OBLIGATIONS
3.1
Authority
As To Tenants, Etc.
Owner agrees and does hereby give Manager the following authority and powers (all of which, unless
otherwise provided herein, shall be exercised either as Manager for Owner, or in the name of Owner entered into by Manager as Owner’s
authorized agent, and Owner shall assume all expenses in connection with such matters):
(a)
to
advertise each Property or any part thereof and to display signs thereon, as permitted by law and subject to the terms and conditions
of the Leases;
(b)
to
collect from tenants all or any of the following: a late rent administrative charge, a non-negotiable check charge, a subleasing
administrative charge or broker’s commission;
(c)
with
Owner’s prior written authorization, to terminate tenancies and to sign and serve in the name of Owner of each Property such
notices related thereto as are deemed necessary by Manager; and
(d)
with
Owner’s prior written authorization, to sue for and in the name of Owner and recover rent and other sums due; and to settle,
compromise, and release such actions or suits, or reinstate such tenancies. All expenses of litigation that Manager participates
in, at Owner’s prior written request, including, but not limited to, attorneys’ fees, filing fees and court costs that
Manager shall incur in connection with the collecting of rent and other sums, or to recover possession of any Property or any portion
thereof, shall be deemed to be an operational expense of the Property. Manager and Owner shall concur on the selection of the attorneys
to handle such litigation.
3.2
Operational
Authority
. Owner agrees and does hereby give Manager the following authority and powers (all of which, unless otherwise provided
herein, shall be exercised either as Manager for Owner, or in the name of Owner entered into by Manager as Owner’s authorized
agent, and, unless otherwise provided herein, Owner shall assume all expenses in connection with such matters:
(a)
to
hire, supervise, discharge, and pay all labor required for maintenance of each Property, including but not limited to on-site personnel,
managers, assistant managers, leasing consultants, engineers, janitors, maintenance supervisors and other employees required for
the operation and maintenance of the Property, including personnel spending a portion of their working hours (to be charged on
a pro rata basis) at the Property;
provided
,
however
, that Manager shall not hire any new personnel, unless the cost
and expenses related to such new personnel or previously approved by Owner in writing. Any personnel hired by Manager to maintain
and lease the Properties shall be the employees of Manager or independent contractors . Manager shall use due care in selecting
and supervising these employees or independent contractors. With respect to these employees, Manager shall be responsible for maintaining
timekeeping records, processing regular payroll, filing payroll tax reports on a timely basis, ensuring compliance with wage and
tax laws and tracking benefit hours and garnishments and child support orders. All expenses of these employees’ employment
shall be deemed operational expenses of the Property.
(b)
to
perform the duties assigned to Manager in
Section 2.4(b)
;
(c)
to
administer any Leases;
(d)
to
prepare, negotiate and enter into, as Manager of the Property, (i) contracts for all items on budgets that have been approved
by Owner, any emergency services or repairs for items not exceeding $[∙], (ii) appropriate service agreements and labor
agreements for normal operation of the Property, (iii) agreements for all budgeted maintenance, minor alterations, and utility
services, including, but not limited to, electricity, gas, fuel, water, telephone, window washing, scavenger service, landscaping,
snow removal, pest exterminating, decorating and legal services, in connection with the Leases and relating to the Property and
(iv) any other service agreements as Manager may reasonably consider appropriate, consistent with past practice (collectively,
the “
Contracts
”); and
(e)
to
purchase supplies and pay all bills as permitted under
Section 2.6
.
Manager shall use its
commercially reasonable efforts to obtain the foregoing services and utilities for each Property on terms consistent with, or substantially
similar to, those available to similar postal properties in the geographic region in which the Property is located. Owner hereby
appoints Manager as Owner’s authorized Manager for the purpose of executing, as Manager for said Owner, all Contracts. Manager
shall secure the approval of, and execution of appropriate Contracts by, Owner for any non-budgeted and non-emergency/contingency
capital items, alterations or other expenditures in excess of $[∙] for any one item. Manager shall have the right from time
to time during the term hereof, to contract with and make purchases from Affiliates of Manager,
provided
that contract rates
and prices are no less favorable to Owner than those available from unaffiliated third parties. Manager may at any time and from
time to time request and receive the prior written authorization of Owner of the Property of any one or more purchases or other
expenditures, notwithstanding that Manager may otherwise be authorized hereunder to make such purchases or expenditures.
3.3
Rent
and Other Collections
. Owner agrees and does hereby give Manager the authority and powers (all of which, unless otherwise provided
herein, shall be exercised either as Manager for Owner, or in the name of Owner entered into by Manager as Owner’s authorized
agent, and Owner shall assume all expenses in connection with such matters) to collect rents, assessments and other items, including
but not limited to tenant payments for real estate taxes, property liability and other insurance, damages and repairs, common area
maintenance, tax reduction fees and all other tenant reimbursements, administrative charges, proceeds of rental interruption insurance,
parking fees, income from coin operated machines and other miscellaneous income, due or to become due and give receipts therefor
and to deposit all such Gross Revenue collected hereunder in the Account. Manager shall also have the authority to collect and
handle tenants’ security deposits, including the right to apply such security deposits to unpaid rent, and to comply, on
behalf of Owner of the Property, with applicable state or local laws concerning security deposits and interest thereon, if any.
3.4
Advances
.
Manager shall not be required to advance any monies for the care or management of any Property, but Owner agrees to advance all
monies necessary therefor. If Manager shall elect to advance any money in connection with a Property, Owner agrees to reimburse
Manager within 30 days, and hereby authorizes Manager to deduct such advances from any monies due Owner. In connection with any
insured losses or damages relating to any Property, Manager and Owner shall each reasonably cooperate with respect to all steps
necessary regarding any such claim. Manager will not make any adjustments or settlements in excess of $[∙] without Owner’s
prior written consent.
3.5
Payment
of Expenses
. Owner agrees and does hereby give Manager the authority and power (all of which shall be exercised either as Manager
for Owner, or in the name of Owner entered into by Manager as Owner’s authorized agent, and Owner shall assume and be responsible
for all expenses in connection with such matters;
provided
,
however
, that Owner will not assume or be responsible
for any costs or expenses that have not been previously approved by Owner in writing (including, without limitation, as set forth
herein), or (z) are not permitted under
Section 2.6(c)
) to pay all expenses of the Property, including utility
and water charges, sewer rent and assessments, from the Gross Revenue collected in accordance with
Section 3.3
above,
subject to any lender requirements, from the Account. All bills shall be paid by Manager within the time required to obtain discounts,
if any. Owner may from time to time request that Manager forward certain bills to Owner promptly after receipt, and Manager shall
comply with any such request. All expenses shall be billed at net cost (i.e., less all rebates, commissions, discounts and allowances,
however designed).
It is understood that
the Gross Revenue will be used first to pay the compensation to Manager as contained in
Article V
below, then operational
expenses and then any mortgage indebtedness, including real estate tax and insurance impounds, but only as directed by Owner in
writing and only if sufficient Gross Revenue is available for such payments. Nothing in this Management Agreement shall be interpreted
in such a manner as to obligate Manager to pay from Gross Revenue, any expenses incurred by Owner prior to the commencement of
this Management Agreement, except to the extent Owner advances additional funds to pay such expenses.
3.6
Environmental
Matters
. Owner hereby warrants and represents to Manager that to the best of Owner’s knowledge, no Property has been
or will be used to treat, deposit, store, dispose of or place any hazardous substance that may subject Manager to liability or
claims under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.A. Section 9607) or
any constitutional provision, statute, ordinance, law, or regulation of any governmental body or of any order or ruling of any
public authority or official thereof, having or claiming to have jurisdiction thereover.
3.7
Legal
Status of Properties
. Owner represents that to the best of its knowledge each Property and any equipment thereon complies with
all legal requirements and authorizes Manager to disclose the identity of the Owner of the Property to any governmental or regulatory
officials. In the event it is alleged or charged that any Improvement or any equipment on a Property or any act or failure to act
by Owner with respect to the Property or the sale, rental, or other disposition thereof fails to comply with, or is in violation
of, any of the requirements of any constitutional provision, statute, ordinance, law, or regulation of any governmental body or
any order or ruling of any public authority or official thereof having or claiming to have jurisdiction thereover, and Manager,
in its sole and absolute discretion, considers that the action or position of Owner, with respect thereto may result in damage
or liability to Manager, Manager shall have the right to stop providing services with respect to such Property at any time by written
cancellation notice to Owner of its election so to do, which cancellation shall be effective upon the service of such notice. Such
cancellation shall not (a) terminate this Management Agreement, (b) release the indemnities of Owner set forth in this
Management Agreement or (c) terminate any liability or obligation of Owner to Manager for any payment, reimbursement, or other
sum of money then due and payable to Manager hereunder.
3.8
Extraordinary
Payments
. Owner agrees to give adequate advance written notice to Manager if Owner desires that Manager make any extraordinary
payment, out of Gross Revenue, to the extent funds are available after the payment of Manager’s compensation as provided
for herein and all operational expenses, of mortgage indebtedness, general taxes, special assessments, or insurance premiums.
ARTICLE
IV
EXPENSES
4.1
Owner’s
Expenses
. Except as otherwise specifically provided, all costs and expenses incurred hereunder by Manager in fulfilling its
duties to Owner, other than wages and other employee-related expenses of Manager shall be for the account of and on behalf of Owner.
All costs and expenses for which Owner is responsible under this Management Agreement shall be paid by Manager out of the Account.
In the event the Account does not contain sufficient funds to pay all said expenses, Owner shall fund all sums necessary to meet
such additional costs and expenses.
4.2
Manager’s
Expenses
. Manager shall, out of its own funds, pay all of its general overhead and administrative expenses.
ARTICLE
V
MANAGER’S COMPENSATION
5.1
Management
Fees
. Owner shall pay to Manager property management fees in an amount equal to [∙] percent ([∙]%) of Gross Revenues
(the “
Management Fees
”) on a monthly basis;
provided
,
however
, the Management Fees shall not be
less than the following amounts for any Property on a monthly basis:
5.2
Audit
Adjustment
. If any audit of the records, books or accounts relating to the Properties discloses an overpayment or underpayment
of Management Fees, Owner or Manager shall promptly pay to the other party the amount of such overpayment or underpayment, as the
case may be. If such audit discloses an overpayment of Management Fees for any fiscal year of more than the correct Management
Fees for such fiscal year, Manager shall bear the cost of such audit.
ARTICLE
VI
INSURANCE AND INDEMNIFICATION
6.1
Insurance
to be Carried
.
(a)
Manager
shall obtain and keep in full force and effect insurance liability policies that shall provide sufficient insurance satisfactory
to both Owner and Manager consistent with past practice and shall contain waivers of subrogation for the benefit of Owner.
(b)
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 Manager at the Properties and all persons engaged in the performance
of any work required hereunder, and Manager shall furnish Owner certificates of insurers naming Owner as an additional insured
and evidencing that such insurance is in effect. If any work under this Management Agreement is subcontracted as permitted herein,
Manager shall include in each subcontract a provision that the subcontractor shall also furnish Owner with such a certificate.
6.2
Insurance
Expenses
. Premiums and other expenses of such insurance, as well as any applicable payments in respect of deductibles shall
be borne by Owner.
6.3
Cooperation
with Insurers
. Manager shall cooperate with and provide reasonable access to the Properties to representatives of insurance
companies and insurance brokers or agents with respect to insurance that is in effect or for which application has been made. Manager
shall use its best efforts to comply with all requirements of insurers.
6.4
Accidents
and Claims
. Manager shall promptly investigate and shall report in detail to Owner all accidents, claims for damage relating
to Ownership, operation or maintenance of the Properties, and any damage or destruction to the Properties and the estimated costs
of repair thereof, and shall prepare for approval by Owner all reports required by an insurance company in connection with any
such accident, claim, damage, or destruction. Such reports shall be given to Owner promptly consistent with past practice. Manager
and Owner shall cooperate with respect to settling any claim against an insurance company arising out of any policy. Manager will
not settle any claim related to a Property against an insurance company arising out of any policy and, in connection with any such
claim, will not execute proofs of loss and adjustments of loss and to collect and receipt for loss proceeds.
6.5
Indemnification
.
(a)
Indemnification
of Manager
. Owner agrees to indemnify, defend, protect, save and hold harmless Manager and its stockholders, partners, members,
officers, directors, employees, managers, successors and assigns (collectively, the “
Indemnified Parties
”) from
any and all claims, causes of action, demands, suits, proceedings, loss, judgments, damage, awards, liens, fines, costs, attorney’s
fees and expenses, of every kind and nature whatsoever (collectively, “
Losses
”) in connection with or in any
way related to (i) any Contract, (ii) each Property, including any past, current or future allegations regarding treatment,
depositing, storage, disposal or placement by any party other than Manager of hazardous substances on the Property, from liability
for damage to each Property and injuries to or death of any person whomsoever, and damage to Property, and from liability arising
out of or related to a Property that Owner has abandoned or ceased funding operating shortfalls and (iii) the willful misconduct,
gross negligence or unlawful acts (such unlawfulness having been adjudicated by a court of proper jurisdiction) of Owner, or the
failure of Owner to correct any present or future violation or alleged violation of any and all present or future laws, ordinances,
statutes, or regulations of any public authority or official thereof, having or claiming to have jurisdiction thereover, of which
it has actual notice;
provided
,
however
, that the indemnification and exculpation shall not extend to any such Losses
arising out of the willful misconduct, gross negligence or unlawful acts (the unlawfulness having been adjudicated by a court of
proper jurisdiction) of Manager, its agents, servants, or employees;
provided
,
further
, that the indemnification
and exculpation shall be limited to the extent that Manager recovers insurance proceeds with respect to that matter. Manager shall
not be liable for any error of judgment or for any mistake of fact or law, or for anything that it may do or refrain from doing,
except in cases of willful misconduct, gross negligence or unlawful acts (the unlawfulness having been adjudicated by a court of
proper jurisdiction).
(b)
Indemnification
of Owner
. Manager agrees to indemnify, defend, protect, save and hold harmless Owner and its stockholders, partners, members,
officers, directors, employees, managers, successors and assigns from any and all Losses for any injury or damage to any person
or property whatsoever for which Manager is responsible occurring in, on, or about the Properties, including, without limitation,
the Improvements, when the injury or damage shall be caused by the willful misconduct, gross negligence or unlawful acts (the unlawfulness
having been adjudicated by a court of proper jurisdiction) of Manager, its agents, servants, or employees, except to the extent
that Owner recovers insurance proceeds with respect to such matter.
ARTICLE
VII
TERM AND TERMINATION
7.1
Term
.
This Management Agreement shall commence on the Effective Date and shall continue with respect to each Property until [∙],
subject to automatic renewals of additional successive one-year periods unless either the Owner or the Manager provides at least
[∙] days’ advance notice of non-renewal or (y) Owner’s sale of the Property.
7.2
Manager’s
Obligations Upon Termination
. Upon termination of this Management Agreement, Manager shall cooperate with Owner and take all
reasonable steps requested by Owner to make an orderly transition of the Manager’s services, including without limitation:
(a)
Manager
shall deliver to Owner or its designee, all books and records with respect to the Properties.
(b)
Manager
shall transfer and assign to 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 Manager. Manager shall also, for a period of
[∙] days immediately following the date of such termination, make itself available to consult with and advise Owner, or its
designee, regarding the operation, and maintenance of the Properties.
(c)
Manager
shall render to Owner an accounting of all funds of Owner in its possession and shall deliver to Owner a statement of all Management
Fees claimed to be due to Manager and shall cause funds of Owner held by Manager relating to the Properties to be paid to Owner
or its designee.
7.3
Owner’s
Obligations Upon Termination
. Upon termination of this Management Agreement, Owner shall cooperate with Manager and take all
reasonable steps to make an orderly transition of the Manager’s services to Owner or Owner’s designee, including without
limitation:
(a)
Owner
shall pay or reimburse Manager for any sums of money due Manager under this Management Agreement for services and expenses prior
to termination of this Management Agreement. The parties understand and agree that Manager may withhold funds for [∙] days
after the end of the month in which this Management Agreement is terminated to pay bills previously incurred but not yet invoiced
and to close accounts. Should the funds withheld be insufficient to meet the obligation of Manager to pay bills previously incurred,
Owner will, upon demand, advance sufficient funds to Manager to ensure fulfillment of Manager’s obligation to do so, within
10 days of receipt of notice and an itemization of such unpaid bills.
(b)
Owner
shall assume in writing all obligations under all Contracts entered into by Manager, on behalf of Owner of the Property and in
accordance with this Management Agreement, upon termination of this Management Agreement.
ARTICLE
VIII
MISCELLANEOUS
8.1
Notices
.
Any notice, report, approval, authorization, waiver, consent or other communication (each, a “
Notice
”) required
or permitted to be given hereunder shall be in writing and shall be deemed given or delivered: (i) when delivered personally;
(ii) one business day following deposit with a recognized overnight courier service that obtains a receipt, provided such
receipt is obtained, and provided further that the deposit occurs prior to the deadline imposed by such service for overnight delivery;
(iii) when transmitted, if sent by electronic mail, provided a read receipt is delivered to the sender, in each case provided
such communication is addressed to the intended recipient thereof as set forth below:
If to Owner, to:
[∙]
If to Manager:
Postal Realty Management TRS, LLC
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Jeremy Garber
Either party shall,
as soon as reasonably practicable, give Notice in writing to the other party of a change in its address for the purposes of this
Section 8.1
. The failure of any Party to give notice shall not relieve any other Party of its obligations under this
Management Agreement except to the extent that such Party is actually prejudiced by such failure to give notice.
8.2
Governing
Law: Venue
. This provisions of this Management Agreement shall be construed and interpreted in accordance with the laws of
the State of New York, and venue for any action brought with respect to any claims arising out of this Management Agreement shall
be brought exclusively in the borough of Manhattan.
8.3
Assignment
.
(a)
Neither
this Management Agreement nor any of the rights, interests or obligations hereunder shall be assigned, transferred, delegated or
otherwise disposed of (whether voluntarily or involuntarily, directly or indirectly, by operation of law, merger, sale of stock,
sale of assets or otherwise), by Manager without the prior written consent of Owner. Notwithstanding the foregoing, (i) Manager
may, without the prior consent of Owner, assign, transfer, delegate or otherwise dispose of, this Management Agreement, or any
of its rights, interests or obligations hereunder to any Affiliate of the Manager, in whole or in part;
provided
, however,
that such Affiliate remains an Affiliate of the Manager at all times following such assignment, transfer, delegation or other disposition
and (if this Management Agreement is in whole assigned, transferred, delegated or disposed to such an Affiliate) signs a joinder
agreement and is bound hereunder, but no such assignment, transfer, delegation or other disposition shall relieve Manager of any
of its obligations hereunder. Any purported assignment, transfer, delegation or disposition by Manager in violation of this
Section 8.3
shall be null and void ab initio.
(b)
Subject to the foregoing, Owner acknowledges and agrees that any or all of the duties of Manager as contained herein may be delegated
pursuant to this
Section 8.3(b)
by Manager and performed by a person or entity (“
Submanager
”)
with whom Manager contracts for the purpose of performing such duties. Owner specifically grants Manager the authority to enter
into such a contract with a Submanager;
provided
,
however
, that, unless Owner otherwise agrees in writing with such
Submanager, Owner shall have no liability or responsibility to any such Submanager for the payment of the Submanager’s fee
or for reimbursement to the Submanager of its expenses or to indemnify the Submanager in any manner for any matter. Any contract
entered into between Manager and a Submanager pursuant to this
Section 8.3
shall be consistent with the provisions
of this Management Agreement, except to the extent Owner otherwise specifically agrees in writing. This Management Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors and permitted assigns.
8.4
No
Waiver
. The failure of Owner to seek redress for violation or to insist upon the strict performance of any covenant or condition
of this Management Agreement shall not constitute a waiver thereof for the future.
8.5
Amendments
.
This Management Agreement may be amended only by an instrument in writing signed by the party against whom enforcement of the amendment
is sought.
8.6
Headings
.
The titles and headings of sections and subsections contained in this Management Agreement are for convenience only, and they neither
form a part of this Management Agreement nor are they to be used in the construction or interpretation hereof.
8.7
Counterparts
.
This Management Agreement may be executed with counterpart signature pages or in multiple counterparts, each of which shall
be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one
and the same instrument. This Management Agreement shall become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as the signatories.
8.8
Facsimile
Signatures
. A facsimile or other electronic signature on the signature pages hereto shall for all purposes be deemed an
original and shall bind the signor as if such facsimile or other electronic signature were an original.
8.9
Entire
Agreement
. Subject to express references to past practices contained herein, this Management Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements,
understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject
matter hereof.
8.10
Disputes
.
If there shall be a dispute between Owner and Manager relating to this Management Agreement resulting in litigation, the prevailing
party in such litigation shall be entitled to recover from the other party to such litigation such amount as the court shall fix
as reasonable attorneys’ fees.
8.11
Activities
of Manager
. The obligations of Manager pursuant to the terms and provisions of this Management Agreement shall not be construed
to preclude Manager from engaging in other activities or business ventures, whether or not such other activities or ventures are
in competition with Owner or the business of Owner.
8.12
Independent
Contractor
. Manager and Owner shall not be construed as joint venturers or partners of each other pursuant to this Management
Agreement, and neither shall have the power to bind or obligate the other except as set forth herein. In all respects, the status
of Manager to Owner under this Management Agreement is that of an independent contractor.
8.13
No
Third-Party Rights
. Nothing expressed or referred to in this Management Agreement will be construed to give any Person other
than the parties to this Management Agreement any legal or equitable right, remedy or claim under or with respect to this Management
Agreement or any provision of this Management Agreement, except such rights as shall inure to a successor or permitted assignee
pursuant to
Section 8.3
.
8.14
Licensing
Claims
. Owner shall not (i) bring or cause to be brought or support any Licensing Claim or (ii) seek to avoid the
observance or performance of any of the terms to be observed or performed under this Management Agreement (including, for the avoidance
of doubt, Owner’s past or future payment to Manager of fees and expenses under this Management Agreement) as result of or
with respect to any Licensing Claim. For the avoidance of doubt, Owner may respond to requests for information from any Governmental
Authority with respect to Licensing Claims. Owner shall not have any indemnification obligations under
Section 6.5
or otherwise with respect to Licensing Claims or any Losses arising from Licensing Claims.
8.15
Tax
Cooperation
. Each of Owner and Manager shall provide the other with such assistance and non-privileged information relating
to their respective businesses as may reasonably be requested in connection with the preparation of any Tax Return or the performance
of any audit, examination or any other proceeding by any Governmental Authority, whether conducted in a judicial or administrative
forum; provided, however, that the requesting party shall bear all reasonable costs and expenses associated with such request.
8.16
No
Presumption Against Drafter
. Each of the parties has jointly participated in the negotiation and drafting of this Management
Agreement. In the event of an ambiguity or a question of intent or interpretation arises, this Management Agreement shall be construed
as if drafted jointly by each of the parties, and no presumptions or burdens of proof shall arise favoring any party by virtue
of the authorship of any of the provisions of this Management Agreement.
IN WITNESS WHEREOF,
the parties have executed this Management Agreement as of the date first above written.
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POSTAL REALTY MANAGEMENT TRS, LLC
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Exhibit
10.12
CONTRIBUTION
AGREEMENT
This
CONTRIBUTION AGREEMENT (this “
Agreement
”) is made as of __________, 2019 by and among Unlimited Postal
Holdings, LP, a Texas limited partnership, (“
Contributor
”), Postal Realty LP, a Delaware limited
partnership (the “
Operating Partnership
”), and Postal Realty Trust, Inc., a Maryland corporation (the
“
REIT
”), the sole general partner of the Operating Partnership.
RECITALS
WHEREAS
, Contributor
is the record and beneficial owner of equity interests in the amount or percentage described on
Exhibit A
hereto (the
“
Contributed Interests
”) in each of the entities described in
Exhibit A
hereto (each, a “
Contributed
Entity
” and collectively, the “
Contributed Entities
”);
WHEREAS
, the
Contributed Entities are the direct or indirect owners of the properties described on
Exhibit A
hereto (each a “
Property
”
and collectively, the “
Properties
”); and
WHEREAS
, Contributor
desires to contribute the Contributed Interests to the Operating Partnership, and the Operating Partnership desires to acquire
the Contributed Interests from Contributor, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE
,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE CONTRIBUTION
1.1
Contribution
of Contributed Interests
. Contributor irrevocably agrees to contribute, transfer and assign at the Closing (as defined herein)
the Contributed Interests, together with any other interests such Contributor may have in any of the Contributed Entities, and
the Operating Partnership agrees to accept transfer of the Contributed Interests and any such other interests pursuant to the terms
and subject to the conditions set forth in this Agreement. Contributor shall transfer the Contributed Interests to the Operating
Partnership free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances,
conditions, restrictions, claims, and any other matters affecting title thereto.
1.2
Consideration
.
(a)
Consideration
Amount
. The total consideration (the “
Consideration
”) for which Contributor agrees to
contribute, transfer and assign the Contributed Interests to the Operating Partnership, and for which the Operating
Partnership agrees to pay, issue or deliver to Contributor, subject to the terms of this Agreement, at Closing shall be the
amount set forth on
Exhibit A
as “Total Consideration.” The Consideration may be adjusted, upward or
downward, by the amount of any adjustments arising from the Prorations (as defined herein). Any decrease or increase in the
Consideration as a result of the Prorations will adjust the Consideration payable hereunder in the form of OP Units pursuant
to Section 1.2(a)(2). Contributor shall be credited with Contributor’s share of any cash held by or for the benefit of
any Contributed Entity or in respect of any Contributed Interest as of the date of Closing. Contributor shall be responsible
for all one time tenant improvement costs, tenant allowances, broker’s fees and commissions and all other costs and
expenses associated with existing leases of the Property;
provided, however
, that the Operating Partnership shall be
responsible for all tenant improvement costs, tenant allowances, broker’s fees and commissions and other one-time costs
and expenses associated with new leases of the Property entered into after the date of this Agreement with the consent of the
Operating Partnership.
(1) The
Operating Partnership shall take each Contributed Interest and Contributed Entity subject to existing indebtedness, and the Contributor
shall receive a credit against the Consideration in an amount equal to the principal balance of the existing indebtedness, plus
all accrued interest to the Closing Date plus any prepayment premium and any other charges incurred by the Operating Partnership
and required by the lender in connection with the transactions contemplated by this Agreement. In addition, the Operating Partnership
shall be charged with, and the Contributor shall be credited for, the amount of the sums being held in escrow by the lender and
being assigned and transferred to or otherwise acquired by the Operating Partnership.
(2) The
Consideration shall be the issuance to Contributor of a number of common units of limited partnership interests of the Operating
Partnership (“
OP Units
”) equal to (a) (x) the amount set forth on
Exhibit A
as “Total Consideration”
less (y) the amount assumed pursuant to Section 1.2(a)(1), (b) divided by the IPO Price.
(b)
OP
Units
. Any portion of the Consideration payable hereunder to be in the form of OP Units shall be registered in the name of
Contributor. OP Units will not be delivered to Contributor unless Section 2.2(j) hereof is true and correct as of the Closing Date
(as defined herein). No fractional OP Units will be issued and OP Units will be rounded to the nearest whole number. The Consideration,
whether in cash, in OP Units or a combination thereof, may be reduced by the amount the Operating Partnership reasonably determines
must be withheld for tax purposes. The rights and obligations of holders of OP Units as of the Closing will be as set forth in
the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership (the “
Partnership Agreement
”),
the form of which was filed as Exhibit 10.1 to the REIT’s Registration Statement on Form S-11 (File No. 333- 230684), which
the REIT filed with the U.S. Securities and Exchange Commission (the “
SEC
”) on April 2, 2019. Although initially
the OP Units will not be certificated, certificates, if any, subsequently evidencing the OP Units will bear appropriate legends
(i) indicating that the OP Units have not been registered under the Securities Act of 1933, as amended (the “
Securities
Act
”), (ii) indicating that the Partnership Agreement will restrict the transfer of the OP Units, and (iii) describing
the ownership limitations and transfer restrictions imposed by the charter of the REIT with respect to shares of the REIT’s
capital stock.
1.3
No
Further Interest
. Contributor acknowledges and agrees that effective upon the Closing, and without any further action by Contributor,
the Contributed Interests shall be transferred, assigned and conveyed to the Operating Partnership, or a subsidiary thereof, and
Contributor shall no longer be an equity holder of any of the Contributed Entities, shall no longer be entitled to receive any
distributions from any of the Contributed Entities, and shall have no further right, title or interest in any of the Contributed
Interests, the Contributed Entities or the Property Entities, other than indirectly through the ownership of any OP Units.
1.4
Tax
Consequences to Contributor
. Notwithstanding anything to the contrary contained in this Agreement, including without
limitation the use of words and phrases such as “sell,” “sale,” “purchase,” and
“pay,” the parties hereto acknowledge and agree that (i) all indebtedness to be assumed by the Operating
Partnership or any of its affiliates pursuant to the transactions contemplated by this Agreement be treated as
“qualified liabilities” within the meaning of Treasury Regulation Section 1.707-5(a)(5); and (ii) therefore, the Contribution be treated as a nontaxable contribution by the
Contributor of the Contributed Interests, Contributed Entity or Property to the Operating Partnership under Section 721(a) of
the Code, with no gain required to be recognized by the Contributor or any partner in the Contributor as a result thereof. Except as otherwise provided in the Tax
Protection Agreement, no Party shall take any position on any tax return that is inconsistent with the foregoing treatment
except as required by law.
1.5
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“
Contributor’s
Percentage Interest
” means, with respect to each Contributed Entity, the percentage set forth on
Exhibit A
hereto
under the heading “Contributed Interest”, which reflects the Contributor’s percentage ownership interest in each
Contributed Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Contributed
Entity.
“
IPO
”
means the underwritten initial public offering of shares of Class A common stock, par value $0.01 per share, of the REIT.
“
IPO Price
”
means the public offering price set forth on the front cover of the final prospectus for the IPO (the “
Prospectus
”),
to be filed by the REIT with the SEC.
“
Post-Closing
Tax Period
” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“
Pre-Closing
Tax Period
” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the
case of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“
Property
Entity
” means an entity owning a Property, as set forth on
Exhibit A
hereto.
“
Prorations
”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date. Contributor shall be entitled to Contributor’s share of all income and responsible for Contributor’s
share of all expenses of the Contributed Interest, Contributed Entity and the Property for the period of time up to but not including
the Closing Date, and the Operating Partnership shall be entitled to all such income and responsible for all such expenses for
the period of time after and including the Closing Date. Without limiting the generality of the foregoing, the following items
of income and expense shall be prorated at Closing:
(A)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
the Closing;
(B)
Utilities
.
All telephone, electric, sewer, water and other utility bills, trash removal bills, janitorial and maintenance service bills and
all other expenses relating to a Property, if any, that are obligations of the Property Entity and which are allocable to the period
prior to the Closing Date shall be determined and paid, or caused to be paid, by the Property Entity or Contributed Entity before
the Closing, if possible, or if such is not determinable before the Closing, then the Parties shall use their commercially reasonable
efforts to determine and pay such amounts as promptly as possible following the Closing and the Operating Partnership may withhold
from any cash amount of the Consideration payable at the Closing hereunder an amount of cash reasonably estimated to cover any
estimated Proration for the items described in this subsection (B);
(C)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Property and all other income from the Property shall be prorated at
the Closing; and
(D)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at the Closing.
“
Representation,
Warranty and Indemnity Agreement
” means the Representation, Warranty and Indemnity Agreement dated ___________, 2019
by and among the REIT, the Operating Partnership and Andrew Spodek.
“
Straddle
Period
” means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the Operating Partnership
. The Operating Partnership hereby represents and warrants to Contributor that the following statements
are true, correct, and complete as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power
. The Operating Partnership is duly organized, validly existing, and in good standing under the laws of the State
of Delaware, and has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement and the performance by the Operating Partnership of its obligations
hereunder have been duly authorized by all requisite action of the Operating Partnership and require no further action or approval
of the Operating Partnership’s partners or of any other individuals or entities in order to constitute this Agreement as
a binding and enforceable obligation of the Operating Partnership.
(b)
OP
Units Validly Issued
. The OP Units, when issued in accordance with the terms of this Agreement and the Partnership Agreement,
will be duly and validly authorized and issued, free of any preemptive or similar rights, and will be without any obligation to
restore capital, except as required by the Delaware Revised Uniform Limited Partnership Act (the “
Limited Partnership
Act
”).
2.2
Representations
by Contributor
. Contributor hereby represents and warrants to the Operating Partnership that the following statements are true,
correct, and complete as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. Contributor, if an entity or trust, is duly incorporated, formed or organized, validly existing,
and in good standing under the laws of its state of incorporation, formation or organization. Contributor has full right, power,
and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement; and the execution
and delivery of this Agreement and the performance by Contributor of its obligations hereunder have been duly authorized by all
requisite action of Contributor and require no further action or approval of Contributor’s members, partners, stockholders,
managers, board of directors, trustees or of any other individuals or entities, as applicable, in order to constitute this Agreement
as a binding and enforceable obligation of Contributor. This Agreement, and each agreement, document and instrument executed and
delivered by or on behalf of Contributor pursuant to this Agreement, constitutes, or when executed and delivered will constitute,
the legal, valid and binding obligation of Contributor, enforceable against Contributor in accordance with its terms, except as
such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by Contributor has resulted, or will result,
in any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to Contributor or to any Contributed
Interests, any Contributed Entity or any Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting Contributor in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of Contributor, any Contributed Entity,
Property Entity or Property, (3) could adversely affect the ability of Contributor to perform its obligations hereunder, or under
any document to be delivered pursuant hereto, (4) could create a lien on the Contributed Interests, any part thereof, or any interest
therein, or (5) could adversely affect the Contributed Interests, any part thereof, or any interest therein.
(d)
Good
Title
.
Exhibit A
accurately sets forth Contributor’s Percentage Interest. Contributor is the sole record and beneficial
owner of the Contributed Interests and has full power and authority to convey the Contributed Interests pursuant to the terms of
this Agreement. Contributor has good and marketable title to the Contributed Interests. No person has any community property rights,
by virtue of marriage or otherwise, with respect to the Contributed Interests. The Contributed Interests are free and clear of
all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions, restrictions,
claims or any other matters affecting title thereto and at the Closing will be contributed to the Operating Partnership free and
clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, claims or other matters affecting title thereto. No other person or entity has an option to purchase or a right of
first refusal to purchase the Contributed Interests nor are there any agreements or understandings with respect to the voting,
ownership or disposition of the Contributed Interests that could adversely affect Contributor’s ability to perform its obligations
hereunder or the Operating Partnership’s ownership of the Contributed Interests following the Closing.
(e)
Contributed
Interests
. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights relating
to the Contributed Interests or any equity interest in any Contributed Entity, Property Entity or Property that will be in effect
as of the Closing.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by Contributor has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement, contract or agreement of any Contributed Entity, or among the partners, members or stockholders
of any Contributed Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and performance of this
Agreement and the contribution, acquisition and transfer of the Contributed Interests has been obtained or will be obtained on
or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, Contributor shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Contributed Interests or the Operating Partnership’s
ownership thereof, or any material adverse effect on the assets, business, condition (financial or otherwise), results or operation
of any Property or any Contributed Entity or Property Entity after the Closing Date or (2) cause any of the representations and
warranties contained in this Section 2.2 to be untrue as of the Closing Date.
(h)
Governing
Agreements
. Contributor has performed all of its obligations under the partnership agreement, limited liability company agreement,
operating agreement, charter and bylaws, as such may have been amended from time to time, as applicable, of each Contributed Entity
(each, a “
Governing Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Securities
Law Matters
.
(1) In
deciding to engage in the transactions contemplated by this Agreement, including, if applicable, acquiring OP Units, neither Contributor
nor any equity holder thereof is relying upon any representations made to it by the Operating Partnership, or any of its partners,
officers, employees, or agents that are not contained herein. Contributor is aware of the risks involved in investing in the OP
Units and in the securities issuable upon redemption of the OP Units. Contributor is knowledgeable, sophisticated and experienced
in business and financial matters and fully understands the limitations on transfer imposed by the federal securities laws and
as described in this Agreement and related materials, including the Partnership Agreement. Contributor has received the Partnership
Agreement and related materials, including the registration statement filed by the REIT with the Securities and Exchange Commission
in connection with the IPO, has reviewed all documents and has had an opportunity to ask questions of, and to receive answers from,
the Operating Partnership and the REIT or a person or persons authorized to act on their behalf, concerning the terms and conditions
of an investment in the OP Units and the financial condition, affairs, and business of the Operating Partnership and the REIT.
Contributor confirms that all documents, records, and information pertaining to its investment in OP Units that have been requested
by Contributor have been made available or delivered to Contributor prior to the date hereof.
(2) Contributor
and each equity holder thereof understands that the offer and sale of OP Units have not been registered under any state or federal
securities laws and are instead being offered and sold in reliance on an exemption from such registration requirements and that
the Operating Partnership’s reliance on such exemption is predicated in part on the accuracy and completeness of the representations
and warranties of Contributor contained herein. The OP Units issuable to Contributor are being acquired by Contributor solely for
its own account, for investment, and are not being acquired with a view to, or for resale in connection with, any distribution,
subdivision, or fractionalization thereof, in violation of such laws, and Contributor does not have any present intention to enter
into any contract, undertaking, agreement, or arrangement with respect to any such resale.
(3) Contributor
is able to bear the economic risk of holding the OP Units for an indefinite period and is able to afford the complete loss of its
investment in the OP Units.
(4) Contributor
understands that no federal agency (including the SEC) or state agency has made or will make any finding or determination as to
the fairness of an investment in the OP Units (including as to the value of the Consideration payable in OP Units).
(5) Contributor
understands that there is no established public, private or other market for the OP Units to be issued to Contributor hereunder
and it is not anticipated that there will be any public, private or other market for such OP Units in the foreseeable future.
(6) Contributor
understands that Rule 144 promulgated under the Securities Act is not currently available with respect to the sale of OP Units.
(j)
Accredited
Investor
. If Contributor has elected to receive OP Units as some or all of the Consideration as set forth on
Exhibit B
,
Contributor is an “accredited investor,” as that term is defined in Rule 501 of Regulation D under the Securities
Act, and has previously provided the Operating Partnership and the REIT with a duly executed questionnaire confirming Contributor’s
accredited investor status. No event or circumstance has occurred since delivery of such questionnaire to make the statements therein
false or misleading.
(k)
Tax
Matters
. Contributor represents and warrants that it has obtained from its own tax advisors advice regarding the tax consequences
of (i) the transfer of the Contributed Interests to the Operating Partnership and the receipt of OP Units and/or cash or deemed
assumption of debt as the Consideration therefor, (ii) its admission as a limited partner of the Operating Partnership, if
applicable, (iii) any other transaction contemplated by this Agreement and (iv) ownership of OP Units, including the effect
of Section 704(c) of the Code. Neither the Operating Partnership nor the REIT has made any representation to Contributor regarding
the tax treatment of the transactions contemplated by this Agreement, and Contributor further represents and warrants that it has
not relied on the Operating Partnership or the Operating Partnership’s representatives or counsel for any tax advice.
(l)
Bankruptcy
with respect to Contributor
. No Act of Bankruptcy (as defined below) has occurred with respect to Contributor. As used herein,
“
Act of Bankruptcy
” means if Contributor or any equity holder, partner, manager or director thereof shall (A) apply
for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (B) admit in writing its inability to pay its debts as they become due, (C) make
a general assignment for the benefit of its creditors, (D) file a voluntary petition or commence a voluntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), (E) be adjudicated bankrupt or insolvent, (F) file
a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, receivership, dissolution,
winding-up or composition or adjustment of debts, (G) fail to controvert in a timely and appropriate manner, or acquiesce
in writing to, any petition filed against it in an involuntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), or (H) take any entity action for the purpose of effecting any of the foregoing.
(m)
Brokerage
Commission
. Contributor has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions described herein.
(n)
No
Other Ownership
. Except for the Contributed Interests, neither Contributor nor any of its affiliates owns any interest in any
Property other than through the Contributed Interests.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) Subject
to Section 3.5 hereof, all representations and warranties of Contributor contained in this Agreement or in any Schedule, Exhibit,
certificate or affidavit delivered pursuant to this Agreement shall survive the Closing.
(b) Subject
to the limitations set forth in Section 3.4 hereof, following the Closing, Contributor shall be liable under this Agreement for
monetary damages (or otherwise) for breach of any of its representations, warranties, covenants and obligations contained in this
Agreement or in any Schedule, Exhibit, certificate or affidavit delivered by Contributor pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, Contributor shall indemnify, hold harmless and defend the Operating Partnership and the REIT, and their
respective officers, directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified
Party
”), from and against any and all claims, losses, damages, liabilities and expenses, including, without limitation,
interest, penalties, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, judicial or administrative
proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “
Losses
”) asserted
against, imposed upon or incurred by the Indemnified Party, to the extent resulting from any breach of a representation, warranty
or covenant of Contributor contained in this Agreement, or in any Schedule, Exhibit, certificate or affidavit delivered by Contributor
pursuant thereto. In each case, Contributor shall only bear the fees, costs or expenses in connection with the employment of one
counsel and any necessary local counsel (regardless of the number of Indemnified Parties).
(b) Contributor
shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed upon
or incurred by the Indemnified Parties to the extent resulting a third-party claim relating to the Contributed Interests arising
from matters that occurred prior to the Closing.
(c) With
respect to any indemnification claim by an Indemnified Party pursuant to this Section 3.2, to the extent available, the Operating
Partnership agrees to use diligent good faith efforts to pursue and collect any and all available proceeds and benefits of any
right to defense under any insurance policy that covers the matter which is the subject of the indemnification prior to seeking
indemnification from Contributor until all proceeds and benefits, if any, to which the Operating Partnership or the Indemnified
Party is entitled pursuant to such insurance policy have been exhausted; provided, however, that the Operating Partnership may
make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which case, if the Indemnified Party
later receives insurance proceeds with respect to any Losses paid by Contributor for the benefit of any Indemnified Party, then
the Indemnified Party shall reimburse Contributor in an amount equivalent to such proceeds in excess of any deductible amount pursuant
to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by Contributor to the Indemnified Party in connection
with such indemnification (it being understood that all costs and expenses incurred by Contributor with respect to insurance coverage
disputes shall constitute Losses paid by Contributor for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to Contributor, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to Contributor will not relieve
Contributor from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of Contributor by reason of the inability or failure of Contributor (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to Contributor, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit Contributor,
at Contributor’s option and expense, to assume the defense of any such claim by counsel selected by Contributor and reasonably
satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that Contributor shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by Contributor.
If Contributor shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of Contributor and at Contributor’s
sole cost and expense (subject to the limitations in Section 3.4 hereof).
3.4
Limitations
on Indemnification Under Section 3.2(a)
.
(a) Contributor
shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Parties under
Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration (valuing OP Units at the IPO Price) and
then only to the extent of such excess. Contributor’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of Contributor and subject to the limitations
set forth in the following sentence, the Indemnified Parties shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III, (and agree to treat any return of OP Units in satisfaction of indemnification obligations hereunder
as an adjustment to the Consideration delivered to Contributor hereunder). Notwithstanding anything to the contrary in this Agreement,
except in the case of fraud or in the event of Losses relating to a third-party claim, Contributor shall not be liable to the Indemnified
Parties for any indirect, special or consequential damages, loss of profits, taxes relating to tax years beginning on or after
the Closing, loss of value or other similar speculative damages asserted or claimed by the Indemnified Parties.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of Contributor with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between Contributor and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by Contributor in the form of cash or OP Units. To the extent indemnification
is made through delivery by Contributor of OP Units, such OP Units shall be valued at an amount per OP Unit equal to the IPO Price.
Contributor hereby authorizes the REIT, as general partner of the Operating Partnership, to take all such action as may be necessary
to amend the Partnership Agreement, and any exhibits or schedules thereto, to reflect the delivery of any OP Units by Contributor
to the Operating Partnership as an indemnification payment hereunder and to reflect that Contributor has no further right, title
or interest with respect to any such OP Units.
ARTICLE
IV
COVENANTS
4.1
Covenants
of Contributor
.
(a)
Satisfaction
of Conditions
. Contributor hereby covenants that Contributor shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to the Closing set forth herein, and (B) cooperate and assist in the Operating Partnership’s
efforts to satisfy all of the conditions to the Closing set forth herein, and agrees that the Operating Partnership shall not have
any obligation to consummate the Closing hereunder unless and until such conditions have been satisfied or waived by the Operating
Partnership in writing.
(b)
Consent
to Transfers
. Contributor hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to Contributor under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Contributed Entity, Property Entity or Property or
any other company or property being contributed or transferred to the Operating Partnership pursuant to a separate contribution
or other agreement.
(c)
No
Disposition or Encumbrance of Contributed Interests
. From the date hereof through the Closing, except as specifically contemplated
by this Agreement, Contributor shall not, without the prior written consent of the Operating Partnership: (i) sell, transfer (or
agree to sell or transfer) or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing)
all or any portion of the Contributed Interests or all or any portion of its interest in any Property Partnership or Property;
or (ii) mortgage, assign, pledge or otherwise encumber in any manner the Contributed Interests, the Property Entity or the Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, Contributor
shall, to the extent within its control, cause each Contributed Entity and Property Entity to conduct its business in the ordinary
course of business consistent with past practice, and shall, to the extent within its control, not permit any Contributed Entity
or any Property Entity without the prior written consent of the Operating Partnership, to: (i) enter into any material transaction
not in the ordinary course of business; (ii) mortgage, pledge or encumber any assets of the Contributed Entity any Property Entity
or any Property, (iii) cause or permit any change to the existing use of any Property; (iv) cause or take any action that would
render any of the representations or warranties set forth herein untrue; (v) file an entity classification election pursuant to
Treasury Regulations Section 301.7701-3(c) on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the
Contributed Entity as an association taxable as a corporation for federal income tax purposes; (vi) make or change any other tax
elections; (vii) settle or compromise any claim, notice, audit report or assessment in respect of taxes; (viii) change any annual
tax accounting period; (ix) adopt or change any method of tax accounting; (x) file any amended return, report or form (including
an election, declaration, amendment, schedule, information return or attachment thereto) required to be filed with a governmental
authority with respect to taxes (each, a “
Tax Return
”); (xi) enter into any tax allocation agreement, tax sharing
agreement, tax indemnity agreement or closing agreement relating to any tax; (xii) surrender any right to claim a tax refund; (xiii)
consent to any extension or waiver of the statute of limitations period applicable to any tax claim or assessment; or (xiv) make
any distribution to its partners or members, except for cash distributions in the ordinary course of business consistent with past
practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a) Tax
Returns.
(A)
Pre-Closing
Tax Periods
. Contributor shall prepare and timely file all Tax Returns (other than amended Tax Returns) of the Contributed
Entities for any Pre-Closing Tax Periods, and Contributor shall remit or cause to be remitted any Taxes due in respect of such
Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except as otherwise required
by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent with positions
taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions, elections
or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to
periods ending on or before the Closing Date). For the avoidance of doubt, the Operating Partnership will have authority to sign
any Tax Returns relating to the Contributed Entities that are filed after the Closing Date.
(B)
Straddle
Periods and Post-Closing Periods
. The Operating Partnership shall prepare and timely file all Tax Returns of the Contributed
Entities for all taxable periods other than the Pre-Closing Tax Periods, and the Operating Partnership shall remit or cause to
be remitted any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax
Return for a Straddle Period (and before the Operating Partnership files such Tax Return), the Operating Partnership shall furnish
to Contributor a draft of such Tax Return and Contributor shall have the right to review, provide written comments on, and approve
the portion of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which Contributor
is responsible.
(b)
Tax
Matters
. Contributor shall pay and indemnify, without duplication, the Operating Partnership for the following Taxes (and all
related Adverse Consequences, including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(A) all
such Taxes resulting from a breach of any representation in Section 1.14 of the Representations, Warranty and Indemnity Agreement
or a breach of any provision of this
Section 4.2
;
(B) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Contributed Entities; (ii) all
such Taxes of any other Person that the Contributed Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Contributed Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(C) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Contributed Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other person that a Contributed Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Contributor under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(A) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(B) Except
for Taxes for which the Operating Partnership is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
(1) in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
(2) in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause (i), any item determined
on an annual or periodic basis (including amortization and depreciation deductions and the effects of graduated rates) shall be
allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number of days in such portion
of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of Contributor to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that Contributor’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, Contributor’s obligations under this
Section 4.2
shall not expire until sixty (60)
days after the expiration of such Contributor’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of Contributor under this
Section 4.2
shall survive until fully performed.
(e) Contributor
and the Operating Partnership shall provide each other with such cooperation and information relating to any of the Contributed
Interests, the Contributed Entities, their subsidiaries, the Property Entities or the Properties as the parties reasonably may
request in (i) filing any Tax Return, amended Tax Return or claim for tax refund, (ii) determining any liability for taxes or a
right to a tax refund, (iii) conducting or defending any proceeding in respect of taxes, or (iv) performing tax diligence, including
with respect to the impact of this transaction on the REIT’s tax status as a REIT. Such reasonable cooperation shall include
making employees available on a mutually convenient basis to provide additional information and explanation of any material provided
hereunder. The Operating Partnership shall promptly notify Contributor upon receipt by the Operating Partnership or any of its
affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income, properties or operations
of any of the Contributed Entities, their subsidiaries, the Property Entities or their subsidiaries or with respect to any Property
and (ii) any pending or threatened federal, state, local or foreign tax audits or assessments of the Operating Partnership or any
of its affiliates, in each case, which may affect the liabilities for taxes of Contributor with respect to any tax period ending
before or as a result of the Closing. Contributor shall promptly notify the Operating Partnership in writing upon receipt by Contributor
or any of its affiliates of notice of any pending or threatened federal, state, local or foreign tax audits or assessments relating
to the income, properties or operations of any of the Contributed Entities, the Property Entities or their subsidiaries or with
respect to any Property. Each of the Operating Partnership and Contributor may participate at its own expense in the prosecution
of any claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided,
that Contributor shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such
Contributor has acknowledged liability (except as a partner of the Operating Partnership) for the payment of any additional tax
liability, and the Operating Partnership shall have the right to control any other audits and proceedings. Notwithstanding the
foregoing, neither the Operating Partnership nor Contributor may settle or otherwise resolve any such claim, suit or proceeding
which could have an adverse tax effect on the other party or its affiliates (other than on Contributor or any of its affiliates
as a partner of the Operating Partnership) without the consent of the other party, such consent not to be unreasonably withheld.
Contributor and the Operating Partnership shall retain all Tax Returns, schedules and work papers with respect to the Contributed
Entities, the Property Entities, their subsidiaries, and the Properties, and all material records and other documents relating
thereto, until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof)
of the taxable years to which such Tax Returns and other documents relate and until the final determination of any tax in respect
of such years.
(f) For
purposes of allocating items of income, gain, loss and deduction with respect to the Property and/or the Contributed Interests
in the manner required by Section 704(c) of the Code, the Operating Partnership shall employ, and shall cause any entity controlled
by the Operating Partnership which holds title to the Property or the Contributed Interests to employ, the “traditional method”
(without curative allocations) as set forth in Treasury Regulations section 1.704-3(b)(1).
4.3
Relationship
to Contributed Entities
. Contributor and the Operating Partnership acknowledge and agree that, from and after the Closing,
Contributor shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Contributed Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the Operating Partnership’s Obligation
. In addition to any other conditions set forth in this Agreement, the Operating
Partnership’s obligation to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions
and requirements set forth in this Section 5.1, all of which shall be conditions precedent to the Operating Partnership’s
obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by Contributor pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the Operating Partnership, Contributor shall have delivered a certificate
to the Operating Partnership to such effect in regard to Contributor’s representations and warranties set forth in this Agreement.
(d)
Performance
.
Contributor shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents of governmental and private parties, including, without limitation, all
ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders of
any Contributed Entity, Property Entity or their subsidiaries, to effect the transactions contemplated by this Agreement, shall
have been obtained.
(g)
Reliance
on Regulation D
. If Contributor has elected to receive OP Units, the Operating Partnership shall, based on the advice
of its counsel and the representations made by Contributor in Contributor’s Investor Questionnaire, be reasonably satisfied
that the issuance of OP Units to Contributor may be made without registration under the Securities Act in reliance on Regulation D
under the Securities Act.
(h)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(i)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Contributed Interests or any material adverse change in any of the assets, business, condition (financial
or otherwise), results of operation or prospects of any Property, Property Entity or Contributed Entity.
(j)
Tenant
and Lender Estoppels
. The Operating Partnership shall have received tenant and lender estoppels in form and substance satisfactory
to the Operating Partnership and its counsel.
5.2
Conditions
to Contributor’s Obligation
. In addition to any other conditions set forth in this Agreement, Contributor’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to Contributor’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the Operating Partnership pursuant to this Agreement shall be true
and correct as of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The Operating Partnership shall have performed and complied in all material respects with all agreements and covenants that it
is required to perform or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing of the transactions contemplated pursuant to this Agreement (the “
Closing
”) shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the Operating Partnership
may designate, promptly following satisfaction of the conditions to the Closing set forth herein (the “
Closing Date
”),
or as otherwise set by agreement of the parties.
6.2
Contributor’s
Deliveries
. At the Closing, Contributor shall deliver the following to the Operating Partnership in addition to all other items
required to be delivered to the Operating Partnership by Contributor:
(a)
Assignment
of Contributed Interests
. An Assignment, in substantially the form of
Exhibit B
attached hereto.
(b)
Execution
of Partnership Agreement
. If Contributor has elected to receive OP Units, signature pages of the Partnership Agreement duly
executed by Contributor, as limited partner.
(c)
FIRPTA
Certificate
. An affidavit from Contributor certifying pursuant to Section 1445 and Section 1446(f) of the Code that Contributor
is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms are defined
in the Code and the Treasury Regulations promulgated thereunder).
(d)
Other
Documents
. Any other document or instrument reasonably requested by the Operating Partnership or required hereby.
6.3
Default
Remedies
. If Contributor defaults in performing any of Contributor’s obligations under this Agreement, the Operating
Partnership shall have all rights and remedies available to it at law or in equity resulting from Contributor’s default,
including without limitation, the right to seek specific performance of this Agreement and Contributor’s obligation to convey
the Contributed Interests to the Operating Partnership hereunder. The parties acknowledge and agree that the failure of a condition
precedent to occur, notwithstanding the good faith and commercially reasonable efforts of the applicable party, shall not be a
default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
Operating Partnership
:
Postal Realty LP
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Contributor
:
Unlimited Postal Holdings, LP
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
Any address or name specified above may
be changed by a notice given by the addressee to the other party. Any notice, demand or other communication shall be deemed given
and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver because of changed
address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication, shall
be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection or
refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitutes the entire
agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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CONTRIBUTOR
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UNLIMITED POSTAL HOLDINGS LP, a Texas limited partnership
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By:
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Name: Andrew Spodek
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Title:
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OPERATING PARTNERSHIP
:
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POSTAL REALTY LP, a Delaware limited partnership
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By:
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Postal Realty Trust, Inc.
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its general partner
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By:
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Name:
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Title:
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REIT
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POSTAL REALTY TRUST, INC., a Maryland corporation
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By:
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Name:
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Title:
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Exhibit 10.13
CONTRIBUTION AGREEMENT
This Contribution Agreement (“
Agreement
”),
effective as of ________ on _________, 2019 (the “
Effective Date
”), is made and entered into by and between
Postal Realty Trust, Inc., a Maryland corporation (the “
Contributor
”), and Postal Realty LP, a Delaware limited
partnership (“
Transferee
”).
RECITALS
WHEREAS, the Contributor is the legal, record
and beneficial owner of (i) equity interests (the “
Property Entity Interests
”) in the entities (the “
Property
Entities
”) described on Schedule A-1 hereto, which Property Entities are the direct or indirect owners of the real properties
described on Schedule A-1 hereto (the “
Indirect Properties
”), and (ii) undivided real property interests (the
“
Direct Property Interests
”) in the real properties described on Schedule A-2 hereto (the “
Direct Properties
”).
The Property Entity Interests, the Direct Property Interests, the Indirect Properties and the Direct Properties collectively are
referred to herein as the “
Contributed Property
”; and
WHEREAS, in consideration for Contributor’s
contribution, assignment and transfer of the Contributed Property to Transferee, Transferee shall assume the existing indebtedness
encumbering the Contributed Property and desires to issue and deliver _____________ common units of limited partnership interests
of Transferee (the “
OP Unit Consideration
”) to the Contributor; and
WHEREAS, the Contributor now desires to
contribute, assign and transfer the Contributed Property to Transferee; and
WHEREAS, Transferee desires to acquire and
assume the Contributed Property from the Contributor, and issue and deliver to the Contributor the OP Unit Consideration, on the
terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
1.
Sale,
Contribution and Assignment of Contributed Property
. The Contributor hereby contributes, assigns and transfers the Contributed
Property to Transferee, and Transferee hereby accepts transfer of and assumes the Contributed Property from the Contributor, pursuant
to the terms and conditions set forth in this Agreement. For the avoidance of doubt, beneficial ownership of the Contributed Property
shall be contributed, assigned and transferred (the “
Contribution
”) on the Effective Date.
2.
Consideration
.
In consideration for Contributor’s contribution, assignment and transfer of the Contributed Property to Transferee, Transferee
hereby issues and delivers to the Contributor, and the Contributor hereby accepts transfer of, the OP Unit Consideration.
3.
Representations
.
Each party hereto hereby represents and warrants that, with respect to itself, each and every one of the following statements is
true, correct and complete in every material respect as of the date of this Agreement:
(a) Such
party is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation or incorporation,
and has full right, power and authority to enter into this Agreement and to assume and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement and the performance by such party of its obligations under this Agreement
require no further action or approval of its members, of its board of managers, its board of directors or of any other individuals,
entities or governing bodies in order to constitute this Agreement as a binding and enforceable obligation of such party.
(b) Neither
the entry into nor the performance of, or compliance with, this Agreement by such party has resulted, or will result, in any violation
of, or default under, or has resulted, or will result, in the acceleration of, any obligation under any existing articles of incorporation,
bylaws, operating agreements, organizational documents, mortgages, indentures, lien agreements, notes, contracts, permits, judgments,
decrees, orders, restrictive covenants, statutes, rules or regulations applicable to such party. With regard to the representations
and warranties of Contributor only, Contributor has clear title to the Contributed Property.
(c) No
authorization, consent, approval, permit or license of, or filing with, any governmental or public body or authority, or any other
person or entity is required to authorize, or is required in connection with, the execution, delivery and performance of this Agreement
or the agreements contemplated hereby on the part of such party.
4.
Entire
Agreement
. This Agreement constitutes the entire agreement among the parties hereto and may not be modified or amended except
by instrument in writing signed by the parties hereto.
5.
Governing
Law
. This Agreement shall be construed and interpreted in accordance with the laws of the State of [Delaware].
6.
Severability
.
If any term, covenant or condition of this Agreement shall to any extent be deemed invalid or unenforceable, then the remainder
of this Agreement, and the application of such term, covenant or condition, shall not be affected thereby, and shall be valid and
enforceable to the fullest extent permitted by law.
7.
Further
Acts and Assurances
. The Contributor and Transferee each covenant that they will take all necessary action to confirm the transactions
contemplated hereby, including securing any necessary records of transfer and executing and delivering (or cause to be executed
and delivered) all such agreements, instruments, certificates and other documents, and shall take (or cause to be taken) and do
(or cause to be done) all things necessary, proper or advisable to consummate and make effective this Agreement.
8.
Tax
Treatment
. The parties to this Agreement intend that, for United States federal income tax purposes, the contribution and
assignment of the Contributed Property shall be treated as a tax-deferred contribution under Internal Revenue Code section
721 by the Contributor to Transferee.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have
entered into this Agreement as of the date first above written.
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POSTAL REALTY TRUST, INC.,
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By:
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Name:
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Title:
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POSTAL REALTY LP,
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By:
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Postal Realty Trust, Inc.
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its general partner
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By:
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Name:
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Title:
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Exhibit
10.14
CONTRIBUTION
AGREEMENT
This CONTRIBUTION AGREEMENT
(this “
Agreement
”) is made as of __________, 2019 by and among Andrew Spodek, IDJ Holdings, LLC and Tayaka Holdings,
LLC (“
Contributor
”), Postal Realty LP, a Delaware limited partnership (the “
Operating Partnership
”),
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”), the sole general partner of the Operating
Partnership.
RECITALS
WHEREAS
, Contributor
is the record and beneficial owner of equity interests in the amount or percentage described on
Exhibit A
hereto (the
“
Contributed Interests
”) in each of the entities described in
Exhibit A
hereto (each, a “
Contributed
Entity
” and collectively, the “
Contributed Entities
”);
WHEREAS
, the
Contributed Entities are the direct or indirect owners of the properties described on
Exhibit A
hereto (each a “
Property
”
and collectively, the “
Properties
”); and
WHEREAS
, Contributor
desires to contribute the Contributed Interests to the Operating Partnership, and the Operating Partnership desires to acquire
the Contributed Interests from Contributor, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE
,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE CONTRIBUTION
1.1
Contribution
of Contributed Interests
. Contributor irrevocably agrees to contribute, transfer and assign at the Closing (as defined herein)
the Contributed Interests, together with any other interests such Contributor may have in any of the Contributed Entities, and
the Operating Partnership agrees to accept transfer of the Contributed Interests and any such other interests pursuant to the terms
and subject to the conditions set forth in this Agreement. Contributor shall transfer the Contributed Interests to the Operating
Partnership free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances,
conditions, restrictions, claims, and any other matters affecting title thereto.
1.2
Consideration
.
(a)
Consideration
Amount
. The total consideration (the “
Consideration
”) for which Contributor agrees to contribute, transfer
and assign the Contributed Interests to the Operating Partnership, and for which the Operating Partnership agrees to pay, issue
or deliver to Contributor, subject to the terms of this Agreement, at Closing shall be the amount set forth on
Exhibit A
as “Total Consideration.” The Consideration may be adjusted, upward or downward, by the amount of any adjustments arising
from the Prorations (as defined herein). Any decrease in the Consideration as a result of the Prorations will be deducted first
from the cash portion of the Consideration, if any, and the balance will be deducted from the OP Units (as defined below). Any
increase in the Consideration as a result of the Prorations will adjust the Consideration payable hereunder in the form of OP Units
pursuant to Section 1.2(a)(3). Contributor shall be credited with Contributor’s share of any cash held by or for the benefit
of any Contributed Entity or in respect of any Contributed Interest as of the Closing Date. Contributor shall be responsible
for all one time tenant improvement costs, tenant allowances, broker’s fees and commissions and all other costs and expenses
associated with existing leases of the Property;
provided, however
, that the Operating Partnership shall be responsible
for all tenant improvement costs, tenant allowances, broker’s fees and commissions and other one-time costs and expenses
associated with new leases of the Property entered into after the date of this Agreement with the consent of the Operating Partnership.
(1) The
Operating Partnership shall take each Contributed Interest and Contributed Entity subject to existing indebtedness, and the Contributor
shall receive a credit against the Consideration in an amount equal to the principal balance of the existing indebtedness, plus
all accrued interest to the Closing Date plus any prepayment premium and any other charges incurred by the Operating Partnership
and required by the lender in connection with the transactions contemplated by this Agreement. In addition, the Operating Partnership
shall be charged with, and the Contributor shall be credited for, the amount of the sums being held in escrow by the lender and
being assigned and transferred to or otherwise acquired by the Operating Partnership.
(2) The
Operating Partnership shall pay Contributor an additional portion of the Total Consideration in the aggregate amount of $_____________
(the “
Cash Consideration
”) representing a portion of the preformation capital expenditures that have been made
with respect to each Property during the two-year period ending on the Contribution Settlement, in cash. The cash amount that is
to be paid pursuant to this Section 1.2(a)(2) shall be decreased but not below zero on account of prorations or other adjustments
pursuant to Article VI.
(3) The
remainder of the Consideration shall be the issuance to Contributor of a number of common units of limited partnership interests
of the Operating Partnership (“
OP Units
”) equal to (a) (x) the amount set forth on
Exhibit A
as “Total
Consideration” less (y) the amount assumed pursuant to Section 1.2(a)(1) less (z) the Cash Consideration, (b) divided by
the IPO Price.
(b)
OP
Units
. Any portion of the Consideration payable hereunder to be in the form of OP Units shall be registered in the name of
Contributor. OP Units will not be delivered to Contributor unless Section 2.2(j) hereof is true and correct as of the Closing Date
(as defined herein). No fractional OP Units will be issued and OP Units will be rounded to the nearest whole number. The Consideration,
whether in cash, in OP Units or a combination thereof, may be reduced by the amount the Operating Partnership reasonably determines
must be withheld for tax purposes. The rights and obligations of holders of OP Units as of the Closing will be as set forth in
the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership (the “
Partnership Agreement
”),
the form of which was filed as Exhibit 10.1 to the REIT’s Registration Statement on Form S-11 (File No. 333- 230684), which
the REIT filed with the U.S. Securities and Exchange Commission (the “
SEC
”) on April 2, 2019. Although initially
the OP Units will not be certificated, certificates, if any, subsequently evidencing the OP Units will bear appropriate legends
(i) indicating that the OP Units have not been registered under the Securities Act of 1933, as amended (the “
Securities
Act
”), (ii) indicating that the Partnership Agreement will restrict the transfer of the OP Units, and (iii) describing
the ownership limitations and transfer restrictions imposed by the charter of the REIT with respect to shares of the REIT’s
capital stock.
1.3
No
Further Interest
. Contributor acknowledges and agrees that effective upon the Closing, and without any further action by Contributor,
the Contributed Interests shall be transferred, assigned and conveyed to the Operating Partnership, or a subsidiary thereof, and
Contributor shall no longer be an equity holder of any of the Contributed Entities, shall no longer be entitled to receive any
distributions from any of the Contributed Entities, and shall have no further right, title or interest in any of the Contributed
Interests, the Contributed Entities or the Property Entities, other than indirectly through the ownership of any OP Units.
1.4
Tax
Consequences to Contributor
. Notwithstanding anything to the contrary contained in this Agreement, including without limitation
the use of words and phrases such as “sell,” “sale,” “purchase,” and “pay,” the
parties hereto acknowledge and agree that (i) all indebtedness to be assumed by the Operating Partnership or any of its affiliates
pursuant to the transactions contemplated by this Agreement (other than the Minnesota loan and the Reynoldsburg loan) be treated
as “qualified liabilities” within the meaning of Treasury Regulation Section 1.707-5(a)(5); (ii) the Cash Consideration
be treated as a reimbursement of preformation capital expenditures incurred by the Contributor pursuant to Treasury Regulation
Section 1.707-4(d); and (iii) therefore, the Contribution be treated as a nontaxable contribution by the Contributor of the Contributed
Interests, Contributed Entity or Property to the Operating Partnership under Section 721(a) of the Code, with no gain required
to be recognized by the Contributor or any partner in the Contributor as a result thereof. The Parties further intend that any
liabilities of the Operating Partnership be allocated to its partners in a manner consistent with the guarantees contemplated by
the Tax Protection Agreement. Except as otherwise provided in the Tax Protection Agreement, no Party shall take any position on
any tax return that is inconsistent with the foregoing treatment except as required by law.
1.5
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“
Contributor’s
Percentage Interest
” means, with respect to each Contributed Entity, the percentage set forth on
Exhibit A
hereto
under the heading “Contributed Interest”, which reflects the Contributor’s percentage ownership interest in each
Contributed Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Contributed
Entity.
“
IPO
”
means the underwritten initial public offering of shares of Class A common stock, par value $0.01 per share, of the REIT.
“
IPO Price
”
means the public offering price set forth on the front cover of the final prospectus for the IPO (the “
Prospectus
”),
to be filed by the REIT with the SEC.
“
Post-Closing
Tax Period
” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“
Pre-Closing
Tax Period
” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the
case of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“
Property
Entity
” means an entity owning a Property, as set forth on
Exhibit A
hereto.
“
Prorations
”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date. Contributor shall be entitled to Contributor’s share of all income and responsible for Contributor’s
share of all expenses of the Contributed Interest, Contributed Entity and the Property for the period of time up to but not including
the Closing Date, and the Operating Partnership shall be entitled to all such income and responsible for all such expenses for
the period of time after and including the Closing Date. Without limiting the generality of the foregoing, the following items
of income and expense shall be prorated on the Closing Date:
(A)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
the Closing;
(B)
Utilities
.
All telephone, electric, sewer, water and other utility bills, trash removal bills, janitorial and maintenance service bills and
all other expenses relating to a Property, if any, that are obligations of the Property Entity and which are allocable to the period
prior to the Closing Date shall be determined and paid, or caused to be paid, by the Property Entity or Contributed Entity before
the Closing, if possible, or if such is not determinable before the Closing, then the Parties shall use their commercially reasonable
efforts to determine and pay such amounts as promptly as possible following the Closing and the Operating Partnership may withhold
from any cash amount of the Consideration payable at the Closing hereunder an amount of cash reasonably estimated to cover any
estimated Proration for the items described in this subsection (B);
(C)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Property and all other income from the Property shall be prorated at
the Closing; and
(D)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at the Closing.
“
Representation,
Warranty and Indemnity Agreement
” means the Representation, Warranty and Indemnity Agreement dated ___________, 2019
by and among the REIT, the Operating Partnership and Andrew Spodek.
“
Straddle
Period
” means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the Operating Partnership
. The Operating Partnership hereby represents and warrants to Contributor that the following statements
are true, correct, and complete as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power
. The Operating Partnership is duly organized, validly existing, and in good standing under the laws of the State
of Delaware, and has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement and the performance by the Operating Partnership of its obligations
hereunder have been duly authorized by all requisite action of the Operating Partnership and require no further action or approval
of the Operating Partnership’s partners or of any other individuals or entities in order to constitute this Agreement as
a binding and enforceable obligation of the Operating Partnership.
(b)
OP
Units Validly Issued
. The OP Units, when issued in accordance with the terms of this Agreement and the Partnership Agreement,
will be duly and validly authorized and issued, free of any preemptive or similar rights, and will be without any obligation to
restore capital, except as required by the Delaware Revised Uniform Limited Partnership Act (the “
Limited Partnership
Act
”).
2.2
Representations
by Contributor
. Contributor hereby represents and warrants to the Operating Partnership that the following statements are true,
correct, and complete as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. Contributor, if an entity or trust, is duly incorporated, formed or organized, validly existing,
and in good standing under the laws of its state of incorporation, formation or organization. Contributor has full right, power,
and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement; and the execution
and delivery of this Agreement and the performance by Contributor of its obligations hereunder have been duly authorized by all
requisite action of Contributor and require no further action or approval of Contributor’s members, partners, stockholders,
managers, board of directors, trustees or of any other individuals or entities, as applicable, in order to constitute this Agreement
as a binding and enforceable obligation of Contributor. This Agreement, and each agreement, document and instrument executed and
delivered by or on behalf of Contributor pursuant to this Agreement, constitutes, or when executed and delivered will constitute,
the legal, valid and binding obligation of Contributor, enforceable against Contributor in accordance with its terms, except as
such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by Contributor has resulted, or will result,
in any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to Contributor or to any Contributed
Interests, any Contributed Entity or any Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting Contributor in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of Contributor, any Contributed Entity,
Property Entity or Property, (3) could adversely affect the ability of Contributor to perform its obligations hereunder, or under
any document to be delivered pursuant hereto, (4) could create a lien on the Contributed Interests, any part thereof, or any interest
therein, or (5) could adversely affect the Contributed Interests, any part thereof, or any interest therein.
(d)
Good
Title
.
Exhibit A
accurately sets forth Contributor’s Percentage Interest. Contributor is the sole record and beneficial
owner of the Contributed Interests and has full power and authority to convey the Contributed Interests pursuant to the terms of
this Agreement. Contributor has good and marketable title to the Contributed Interests. No person has any community property rights,
by virtue of marriage or otherwise, with respect to the Contributed Interests. The Contributed Interests are free and clear of
all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions, restrictions,
claims or any other matters affecting title thereto and at the Closing will be contributed to the Operating Partnership free and
clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, claims or other matters affecting title thereto. No other person or entity has an option to purchase or a right of
first refusal to purchase the Contributed Interests nor are there any agreements or understandings with respect to the voting,
ownership or disposition of the Contributed Interests that could adversely affect Contributor’s ability to perform its obligations
hereunder or the Operating Partnership’s ownership of the Contributed Interests following the Closing.
(e)
Contributed
Interests
. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights relating
to the Contributed Interests or any equity interest in any Contributed Entity, Property Entity or Property that will be in effect
as of the Closing.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by Contributor has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement, contract or agreement of any Contributed Entity, or among the partners, members or stockholders
of any Contributed Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and performance of this
Agreement and the contribution, acquisition and transfer of the Contributed Interests has been obtained or will be obtained on
or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, Contributor shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Contributed Interests or the Operating Partnership’s
ownership thereof, or any material adverse effect on the assets, business, condition (financial or otherwise), results or operation
of any Property or any Contributed Entity or Property Entity after the Closing Date or (2) cause any of the representations and
warranties contained in this Section 2.2 to be untrue as of the Closing Date.
(h)
Governing
Agreements
. Contributor has performed all of its obligations under the partnership agreement, limited liability company agreement,
operating agreement, charter and bylaws, as such may have been amended from time to time, as applicable, of each Contributed Entity
(each, a “
Governing Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Securities
Law Matters
.
(1) In
deciding to engage in the transactions contemplated by this Agreement, including, if applicable, acquiring OP Units, neither Contributor
nor any equity holder thereof is relying upon any representations made to it by the Operating Partnership, or any of its partners,
officers, employees, or agents that are not contained herein. Contributor is aware of the risks involved in investing in the OP
Units and in the securities issuable upon redemption of the OP Units. Contributor is knowledgeable, sophisticated and experienced
in business and financial matters and fully understands the limitations on transfer imposed by the federal securities laws and
as described in this Agreement and related materials, including the Partnership Agreement. Contributor has received the Partnership
Agreement and related materials, including the registration statement filed by the REIT with the Securities and Exchange Commission
in connection with the IPO, has reviewed all documents and has had an opportunity to ask questions of, and to receive answers from,
the Operating Partnership and the REIT or a person or persons authorized to act on their behalf, concerning the terms and conditions
of an investment in the OP Units and the financial condition, affairs, and business of the Operating Partnership and the REIT.
Contributor confirms that all documents, records, and information pertaining to its investment in OP Units that have been requested
by Contributor have been made available or delivered to Contributor prior to the date hereof.
(2) Contributor
and each equity holder thereof understands that the offer and sale of OP Units have not been registered under any state or federal
securities laws and are instead being offered and sold in reliance on an exemption from such registration requirements and that
the Operating Partnership’s reliance on such exemption is predicated in part on the accuracy and completeness of the representations
and warranties of Contributor contained herein. The OP Units issuable to Contributor are being acquired by Contributor solely for
its own account, for investment, and are not being acquired with a view to, or for resale in connection with, any distribution,
subdivision, or fractionalization thereof, in violation of such laws, and Contributor does not have any present intention to enter
into any contract, undertaking, agreement, or arrangement with respect to any such resale.
(3) Contributor
is able to bear the economic risk of holding the OP Units for an indefinite period and is able to afford the complete loss of its
investment in the OP Units.
(4) Contributor
understands that no federal agency (including the SEC) or state agency has made or will make any finding or determination as to
the fairness of an investment in the OP Units (including as to the value of the Consideration payable in OP Units).
(5) Contributor
understands that there is no established public, private or other market for the OP Units to be issued to Contributor hereunder
and it is not anticipated that there will be any public, private or other market for such OP Units in the foreseeable future.
(6) Contributor
understands that Rule 144 promulgated under the Securities Act is not currently available with respect to the sale of OP Units.
(j)
Accredited
Investor
. If Contributor has elected to receive OP Units as some or all of the Consideration as set forth on
Exhibit A
,
Contributor is an “accredited investor,” as that term is defined in Rule 501 of Regulation D under the Securities
Act, and has previously provided the Operating Partnership and the REIT with a duly executed questionnaire confirming Contributor’s
accredited investor status. No event or circumstance has occurred since delivery of such questionnaire to make the statements therein
false or misleading.
(k)
Tax
Matters
. Contributor represents and warrants that it has obtained from its own tax advisors advice regarding the tax consequences
of (i) the transfer of the Contributed Interests to the Operating Partnership and the receipt of OP Units and/or cash or deemed
assumption of debt as the Consideration therefor, (ii) its admission as a limited partner of the Operating Partnership, if
applicable, (iii) any other transaction contemplated by this Agreement and (iv) ownership of OP Units, including the effect
of Section 704(c) of the Code. Neither the Operating Partnership nor the REIT has made any representation to Contributor regarding
the tax treatment of the transactions contemplated by this Agreement, and Contributor further represents and warrants that it has
not relied on the Operating Partnership or the Operating Partnership’s representatives or counsel for any tax advice.
(l)
Bankruptcy
with respect to Contributor
. No Act of Bankruptcy (as defined below) has occurred with respect to Contributor. As used herein,
“
Act of Bankruptcy
” means if Contributor or any equity holder, partner, manager or director thereof shall (A) apply
for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (B) admit in writing its inability to pay its debts as they become due, (C) make
a general assignment for the benefit of its creditors, (D) file a voluntary petition or commence a voluntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), (E) be adjudicated bankrupt or insolvent, (F) file
a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, receivership, dissolution,
winding-up or composition or adjustment of debts, (G) fail to controvert in a timely and appropriate manner, or acquiesce
in writing to, any petition filed against it in an involuntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), or (H) take any entity action for the purpose of effecting any of the foregoing.
(m)
Brokerage
Commission
. Contributor has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions described herein.
(n)
No
Other Ownership
. Except for the Contributed Interests, neither Contributor nor any of its affiliates owns any interest in any
Property other than through the Contributed Interests.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) Subject
to Section 3.5 hereof, all representations and warranties of Contributor contained in this Agreement or in any Schedule, Exhibit,
certificate or affidavit delivered pursuant to this Agreement shall survive the Closing.
(b) Subject
to the limitations set forth in Section 3.4 hereof, following the Closing, Contributor shall be liable under this Agreement for
monetary damages (or otherwise) for breach of any of its representations, warranties, covenants and obligations contained in this
Agreement or in any Schedule, Exhibit, certificate or affidavit delivered by Contributor pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, Contributor shall indemnify, hold harmless and defend the Operating Partnership and the REIT, and their
respective officers, directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified
Party
”), from and against any and all claims, losses, damages, liabilities and expenses, including, without limitation,
interest, penalties, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, judicial or administrative
proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “
Losses
”) asserted
against, imposed upon or incurred by the Indemnified Party, to the extent resulting from any breach of a representation, warranty
or covenant of Contributor contained in this Agreement, or in any Schedule, Exhibit, certificate or affidavit delivered by Contributor
pursuant thereto. In each case, Contributor shall only bear the fees, costs or expenses in connection with the employment of one
counsel and any necessary local counsel (regardless of the number of Indemnified Parties).
(b) Contributor
shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed upon
or incurred by the Indemnified Parties to the extent resulting a third-party claim relating to the Contributed Interests arising
from matters that occurred prior to the Closing.
(c) With
respect to any indemnification claim by an Indemnified Party pursuant to this Section 3.2, to the extent available, the Operating
Partnership agrees to use diligent good faith efforts to pursue and collect any and all available proceeds and benefits of any
right to defense under any insurance policy that covers the matter which is the subject of the indemnification prior to seeking
indemnification from Contributor until all proceeds and benefits, if any, to which the Operating Partnership or the Indemnified
Party is entitled pursuant to such insurance policy have been exhausted; provided, however, that the Operating Partnership may
make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which case, if the Indemnified Party
later receives insurance proceeds with respect to any Losses paid by Contributor for the benefit of any Indemnified Party, then
the Indemnified Party shall reimburse Contributor in an amount equivalent to such proceeds in excess of any deductible amount pursuant
to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by Contributor to the Indemnified Party in connection
with such indemnification (it being understood that all costs and expenses incurred by Contributor with respect to insurance coverage
disputes shall constitute Losses paid by Contributor for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to Contributor, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to Contributor will not relieve
Contributor from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of Contributor by reason of the inability or failure of Contributor (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to Contributor, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit Contributor,
at Contributor’s option and expense, to assume the defense of any such claim by counsel selected by Contributor and reasonably
satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that Contributor shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by Contributor.
If Contributor shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of Contributor and at Contributor’s
sole cost and expense (subject to the limitations in Section 3.4 hereof).
3.4
Limitations
on Indemnification Under Section 3.2(a)
.
(a) Contributor
shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Parties under
Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration (valuing OP Units at the IPO Price) and
then only to the extent of such excess. Contributor’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of Contributor and subject to the limitations
set forth in the following sentence, the Indemnified Parties shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III, (and agree to treat any return of OP Units in satisfaction of indemnification obligations hereunder
as an adjustment to the Consideration delivered to Contributor hereunder). Notwithstanding anything to the contrary in this Agreement,
except in the case of fraud or in the event of Losses relating to a third-party claim, Contributor shall not be liable to the Indemnified
Parties for any indirect, special or consequential damages, loss of profits, taxes relating to tax years beginning on or after
the Closing, loss of value or other similar speculative damages asserted or claimed by the Indemnified Parties.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of Contributor with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between Contributor and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by Contributor in the form of cash or OP Units. To the extent indemnification
is made through delivery by Contributor of OP Units, such OP Units shall be valued at an amount per OP Unit equal to the IPO Price.
Contributor hereby authorizes the REIT, as general partner of the Operating Partnership, to take all such action as may be necessary
to amend the Partnership Agreement, and any exhibits or schedules thereto, to reflect the delivery of any OP Units by Contributor
to the Operating Partnership as an indemnification payment hereunder and to reflect that Contributor has no further right, title
or interest with respect to any such OP Units.
ARTICLE
IV
COVENANTS
4.1
Covenants
of Contributor
.
(a)
Satisfaction
of Conditions
. Contributor hereby covenants that Contributor shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to the Closing set forth herein, and (B) cooperate and assist in the Operating Partnership’s
efforts to satisfy all of the conditions to the Closing set forth herein, and agrees that the Operating Partnership shall not have
any obligation to consummate the Closing hereunder unless and until such conditions have been satisfied or waived by the Operating
Partnership in writing.
(b)
Consent
to Transfers
. Contributor hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to Contributor under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Contributed Entity, Property Entity or Property or
any other company or property being contributed or transferred to the Operating Partnership pursuant to a separate contribution
or other agreement.
(c)
No
Disposition or Encumbrance of Contributed Interests
. From the date hereof through the Closing, except as specifically contemplated
by this Agreement, Contributor shall not, without the prior written consent of the Operating Partnership: (i) sell, transfer (or
agree to sell or transfer) or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing)
all or any portion of the Contributed Interests or all or any portion of its interest in any Property Partnership or Property;
or (ii) mortgage, assign, pledge or otherwise encumber in any manner the Contributed Interests, the Property Entity or the Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, Contributor
shall, to the extent within its control, cause each Contributed Entity and Property Entity to conduct its business in the ordinary
course of business consistent with past practice, and shall, to the extent within its control, not permit any Contributed Entity
or any Property Entity without the prior written consent of the Operating Partnership, to: (i) enter into any material transaction
not in the ordinary course of business; (ii) mortgage, pledge or encumber any assets of the Contributed Entity any Property Entity
or any Property, (iii) cause or permit any change to the existing use of any Property; (iv) cause or take any action that would
render any of the representations or warranties set forth herein untrue; (v) file an entity classification election pursuant to
Treasury Regulations Section 301.7701-3(c) on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the
Contributed Entity as an association taxable as a corporation for federal income tax purposes; (vi) make or change any other tax
elections; (vii) settle or compromise any claim, notice, audit report or assessment in respect of taxes; (viii) change any annual
tax accounting period; (ix) adopt or change any method of tax accounting; (x) file any amended return, report or form (including
an election, declaration, amendment, schedule, information return or attachment thereto) required to be filed with a governmental
authority with respect to taxes (each, a “
Tax Return
”); (xi) enter into any tax allocation agreement, tax sharing
agreement, tax indemnity agreement or closing agreement relating to any tax; (xii) surrender any right to claim a tax refund; (xiii)
consent to any extension or waiver of the statute of limitations period applicable to any tax claim or assessment; or (xiv) make
any distribution to its partners or members, except for cash distributions in the ordinary course of business consistent with past
practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a) Tax
Returns.
(A)
Pre-Closing
Tax Periods
. Contributor shall prepare and timely file all Tax Returns (other than amended Tax Returns) of the Contributed
Entities for any Pre-Closing Tax Periods, and Contributor shall remit or cause to be remitted any Taxes due in respect of such
Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except as otherwise required
by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent with positions
taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions, elections
or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to
periods ending on or before the Closing Date). For the avoidance of doubt, the Operating Partnership will have authority to sign
any Tax Returns relating to the Contributed Entities that are filed after the Closing Date.
(B)
Straddle
Periods and Post-Closing Periods
. The Operating Partnership shall prepare and timely file all Tax Returns of the Contributed
Entities for all taxable periods other than the Pre-Closing Tax Periods, and the Operating Partnership shall remit or cause to
be remitted any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax
Return for a Straddle Period (and before the Operating Partnership files such Tax Return), the Operating Partnership shall furnish
to Contributor a draft of such Tax Return and Contributor shall have the right to review, provide written comments on, and approve
the portion of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which Contributor
is responsible.
(b)
Tax
Matters
. Contributor shall pay and indemnify, without duplication, the Operating Partnership for the following Taxes (and all
related Adverse Consequences, including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(A) all
such Taxes resulting from a breach of any representation in Section 1.14 of the Representations, Warranty and Indemnity Agreement
or a breach of any provision of this
Section 4.2
;
(B) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Contributed Entities; (ii) all
such Taxes of any other Person that the Contributed Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Contributed Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(C) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Contributed Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other person that a Contributed Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Contributor under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(A) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(B) Except
for Taxes for which the Operating Partnership is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
(1) in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
(2) in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause (i), any item determined
on an annual or periodic basis (including amortization and depreciation deductions and the effects of graduated rates) shall be
allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number of days in such portion
of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of Contributor to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that Contributor’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, Contributor’s obligations under this
Section 4.2
shall not expire until sixty (60)
days after the expiration of such Contributor’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of Contributor under this
Section 4.2
shall survive until fully performed.
(e) Contributor
and the Operating Partnership shall provide each other with such cooperation and information relating to any of the Contributed
Interests, the Contributed Entities, their subsidiaries, the Property Entities or the Properties as the parties reasonably may
request in (i) filing any Tax Return, amended Tax Return or claim for tax refund, (ii) determining any liability for taxes or a
right to a tax refund, (iii) conducting or defending any proceeding in respect of taxes, or (iv) performing tax diligence, including
with respect to the impact of this transaction on the REIT’s tax status as a REIT. Such reasonable cooperation shall include
making employees available on a mutually convenient basis to provide additional information and explanation of any material provided
hereunder. The Operating Partnership shall promptly notify Contributor upon receipt by the Operating Partnership or any of its
affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income, properties or operations
of any of the Contributed Entities, their subsidiaries, the Property Entities or their subsidiaries or with respect to any Property
and (ii) any pending or threatened federal, state, local or foreign tax audits or assessments of the Operating Partnership or any
of its affiliates, in each case, which may affect the liabilities for taxes of Contributor with respect to any tax period ending
before or as a result of the Closing. Contributor shall promptly notify the Operating Partnership in writing upon receipt by Contributor
or any of its affiliates of notice of any pending or threatened federal, state, local or foreign tax audits or assessments relating
to the income, properties or operations of any of the Contributed Entities, the Property Entities or their subsidiaries or with
respect to any Property. Each of the Operating Partnership and Contributor may participate at its own expense in the prosecution
of any claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided,
that Contributor shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such
Contributor has acknowledged liability (except as a partner of the Operating Partnership) for the payment of any additional tax
liability, and the Operating Partnership shall have the right to control any other audits and proceedings. Notwithstanding the
foregoing, neither the Operating Partnership nor Contributor may settle or otherwise resolve any such claim, suit or proceeding
which could have an adverse tax effect on the other party or its affiliates (other than on Contributor or any of its affiliates
as a partner of the Operating Partnership) without the consent of the other party, such consent not to be unreasonably withheld.
Contributor and the Operating Partnership shall retain all Tax Returns, schedules and work papers with respect to the Contributed
Entities, the Property Entities, their subsidiaries, and the Properties, and all material records and other documents relating
thereto, until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof)
of the taxable years to which such Tax Returns and other documents relate and until the final determination of any tax in respect
of such years.
(f) For
purposes of allocating items of income, gain, loss and deduction with respect to the Property and/or the Contributed Interests
in the manner required by Section 704(c) of the Code, the Operating Partnership shall employ, and shall cause any entity controlled
by the Operating Partnership which holds title to the Property or the Contributed Interests to employ, the “traditional method”
(without curative allocations) as set forth in Treasury Regulations section 1.704-3(b)(1).
4.3
Relationship
to Contributed Entities
. Contributor and the Operating Partnership acknowledge and agree that, from and after the Closing,
Contributor shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Contributed Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the Operating Partnership’s Obligation
. In addition to any other conditions set forth in this Agreement, the Operating
Partnership’s obligation to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions
and requirements set forth in this Section 5.1, all of which shall be conditions precedent to the Operating Partnership’s
obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by Contributor pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the Operating Partnership, Contributor shall have delivered a certificate
to the Operating Partnership to such effect in regard to Contributor’s representations and warranties set forth in this Agreement.
(d)
Performance
.
Contributor shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents of governmental and private parties, including, without limitation, all
ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders of
any Contributed Entity, Property Entity or their subsidiaries, to effect the transactions contemplated by this Agreement, shall
have been obtained.
(g)
Reliance
on Regulation D
. If Contributor has elected to receive OP Units, the Operating Partnership shall, based on the advice
of its counsel and the representations made by Contributor in Contributor’s Investor Questionnaire, be reasonably satisfied
that the issuance of OP Units to Contributor may be made without registration under the Securities Act in reliance on Regulation D
under the Securities Act.
(h)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(i)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Contributed Interests or any material adverse change in any of the assets, business, condition (financial
or otherwise), results of operation or prospects of any Property, Property Entity or Contributed Entity.
(j)
Tenant
and Lender Estoppels
. The Operating Partnership shall have received tenant and lender estoppels in form and substance satisfactory
to the Operating Partnership and its counsel.
5.2
Conditions
to Contributor’s Obligation
. In addition to any other conditions set forth in this Agreement, Contributor’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to Contributor’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the Operating Partnership pursuant to this Agreement shall be true
and correct as of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The Operating Partnership shall have performed and complied in all material respects with all agreements and covenants that it
is required to perform or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing of the transactions contemplated pursuant to this Agreement (the “
Closing
”) shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the Operating Partnership
may designate, promptly following satisfaction of the conditions to the Closing set forth herein (the “
Closing Date
”),
or as otherwise set by agreement of the parties.
6.2
Contributor’s
Deliveries
. At the Closing, Contributor shall deliver the following to the Operating Partnership in addition to all other items
required to be delivered to the Operating Partnership by Contributor:
(a)
Assignment
of Contributed Interests
. An Assignment, in substantially the form of
Exhibit C
attached hereto.
(b)
Execution
of Partnership Agreement
. If Contributor has elected to receive OP Units, signature pages of the Partnership Agreement duly
executed by Contributor, as limited partner.
(c)
FIRPTA
Certificate
. An affidavit from Contributor certifying pursuant to Section 1445 and Section 1446(f) of the Code that Contributor
is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms are defined
in the Code and the Treasury Regulations promulgated thereunder).
(d)
Other
Documents
. Any other document or instrument reasonably requested by the Operating Partnership or required hereby.
6.3
Default
Remedies
. If Contributor defaults in performing any of Contributor’s obligations under this Agreement, the Operating
Partnership shall have all rights and remedies available to it at law or in equity resulting from Contributor’s default,
including without limitation, the right to seek specific performance of this Agreement and Contributor’s obligation to convey
the Contributed Interests to the Operating Partnership hereunder. The parties acknowledge and agree that the failure of a condition
precedent to occur, notwithstanding the good faith and commercially reasonable efforts of the applicable party, shall not be a
default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
Operating Partnership
:
Postal Realty LP
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Contributor
:
Andrew Spodek
75 Columbia Avenue
Cedarhurst, NY 11516
Any address or name specified above may
be changed by a notice given by the addressee to the other party. Any notice, demand or other communication shall be deemed given
and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver because of changed
address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication, shall
be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection or
refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitutes the entire
agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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CONTRIBUTOR
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TAYAKA HOLDINGS, LLC
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By:
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Name:
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Title:
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IDJ HOLDINGS, LLC
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By:
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Name:
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Title:
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Name: Andrew Spodek
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OPERATING PARTNERSHIP
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POSTAL REALTY LP, a Delaware limited partnership
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By:
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Postal Realty Trust, Inc.
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its general partner
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By:
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Name:
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Title:
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REIT
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POSTAL REALTY TRUST, INC., a Maryland corporation
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By:
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Name:
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Title:
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Exhibit
10.15
CONTRIBUTION
AGREEMENT
This
CONTRIBUTION AGREEMENT (this “
Agreement
”) is made as of __________, 2019 by and among NPM Holdings, Inc.,
a Delaware corporation (“
Contributor
”), Postal Realty LP, a Delaware limited partnership (the
“
Operating Partnership
”), and Postal Realty Trust, Inc., a Maryland corporation (the
“
REIT
”), the sole general partner of the Operating Partnership.
RECITALS
WHEREAS
, Contributor
is the record and beneficial owner of equity interests in the amount or percentage described on
Exhibit A
hereto (the
“
Contributed Interests
”) in each of the entities described in
Exhibit A
hereto (each, a “
Contributed
Entity
” and collectively, the “
Contributed Entities
”);
WHEREAS
, the
Contributed Entities are the direct or indirect owners of the properties described on
Exhibit A
hereto (each a “
Property
”
and collectively, the “
Properties
”); and
WHEREAS
, Contributor
desires to contribute the Contributed Interests to the Operating Partnership, and the Operating Partnership desires to acquire
the Contributed Interests from Contributor, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE
,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE CONTRIBUTION
1.1
Contribution
of Contributed Interests
. Contributor irrevocably agrees to contribute, transfer and assign at the Closing (as defined herein)
the Contributed Interests, together with any other interests such Contributor may have in any of the Contributed Entities, and
the Operating Partnership agrees to accept transfer of the Contributed Interests and any such other interests pursuant to the terms
and subject to the conditions set forth in this Agreement. Contributor shall transfer the Contributed Interests to the Operating
Partnership free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances,
conditions, restrictions, claims, and any other matters affecting title thereto.
1.2
Consideration
.
(a)
Consideration
Amount
. The total consideration (the “
Consideration
”) for which Contributor agrees to
contribute, transfer and assign the Contributed Interests to the Operating Partnership, and for which the Operating
Partnership agrees to pay, issue or deliver to Contributor, subject to the terms of this Agreement, at Closing shall be the
amount set forth on
Exhibit B
as “Total Consideration.” The Consideration may be adjusted, upward or
downward, by the amount of any adjustments arising from the Prorations (as defined herein). Any increase or decrease in the
Consideration as a result of the Prorations will adjust the Consideration payable hereunder in the form of OP Units pursuant
to Section 1.2(a)(2). Contributor shall be credited with Contributor’s share of any cash held by or for the benefit of
any Contributed Entity or in respect of any Contributed Interest as of the date of Closing. Contributor shall be responsible
for all one time tenant improvement costs, tenant allowances, broker’s fees and commissions and all other costs and
expenses associated with existing leases of the Property;
provided, however
, that the Operating Partnership shall be
responsible for all tenant improvement costs, tenant allowances, broker’s fees and commissions and other one-time costs
and expenses associated with new leases of the Property entered into after the date of this Agreement with the consent of the
Operating Partnership.
The
Consideration shall be the issuance to Contributor of a number of common units of limited partnership interests of the Operating
Partnership (“
OP Units
”) equal to (a) the amount set forth on
Exhibit A
as “Total Consideration”, (b) divided by the IPO Price.
(b)
OP
Units
. Any portion of the Consideration payable hereunder to be in the form of OP Units shall be registered in the name of
Contributor. OP Units will not be delivered to Contributor unless Section 2.2(j) hereof is true and correct as of the Closing Date
(as defined herein). No fractional OP Units will be issued and OP Units will be rounded to the nearest whole number. The Consideration,
whether in cash, in OP Units or a combination thereof, may be reduced by the amount the Operating Partnership reasonably determines
must be withheld for tax purposes. The rights and obligations of holders of OP Units as of the Closing will be as set forth in
the First Amended and Restated Agreement of Limited Partnership of the Operating Partnership (the “
Partnership Agreement
”),
the form of which was filed as Exhibit 10.1 to the REIT’s Registration Statement on Form S-11 (File No. 333- 230684), which
the REIT filed with the U.S. Securities and Exchange Commission (the “
SEC
”) on April 2, 2019. Although initially
the OP Units will not be certificated, certificates, if any, subsequently evidencing the OP Units will bear appropriate legends
(i) indicating that the OP Units have not been registered under the Securities Act of 1933, as amended (the “
Securities
Act
”), (ii) indicating that the Partnership Agreement will restrict the transfer of the OP Units, and (iii) describing
the ownership limitations and transfer restrictions imposed by the charter of the REIT with respect to shares of the REIT’s
capital stock.
1.3
No
Further Interest
. Contributor acknowledges and agrees that effective upon the Closing, and without any further action by Contributor,
the Contributed Interests shall be transferred, assigned and conveyed to the Operating Partnership, or a subsidiary thereof, and
Contributor shall no longer be an equity holder of any of the Contributed Entities, shall no longer be entitled to receive any
distributions from any of the Contributed Entities, and shall have no further right, title or interest in any of the Contributed
Interests, the Contributed Entities or the Property Entities, other than indirectly through the ownership of any OP Units.
1.4
Tax
Consequences to Contributor
. Notwithstanding anything to the contrary contained in this Agreement, including without limitation
the use of words and phrases such as “sell,” “sale,” “purchase,” and “pay,” the
parties hereto acknowledge and agree that the Contribution be treated as a nontaxable contribution by the Contributor of the Contributed
Interests, Contributed Entity or Property to the Operating Partnership under Section 721(a) of the Code, with no gain required
to be recognized by the Contributor or any partner in the Contributor as a result thereof. Except as otherwise provided in the Tax Protection Agreement, no Party shall take any position on
any tax return that is inconsistent with the foregoing treatment except as required by law.
1.5
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“
Contributor’s
Percentage Interest
” means, with respect to each Contributed Entity, the percentage set forth on
Exhibit A
hereto
under the heading “Contributed Interest”, which reflects the Contributor’s percentage ownership interest in each
Contributed Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Contributed
Entity.
“
IPO
”
means the underwritten initial public offering of shares of Class A common stock, par value $0.01 per share, of the REIT.
“
IPO Price
”
means the public offering price set forth on the front cover of the final prospectus for the IPO (the “
Prospectus
”),
to be filed by the REIT with the SEC.
“
Post-Closing
Tax Period
” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“
Pre-Closing
Tax Period
” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the
case of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“
Property
Entity
” means an entity owning a Property, as set forth on
Exhibit A
hereto.
“
Prorations
”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date. Contributor shall be entitled to Contributor’s share of all income and responsible for Contributor’s
share of all expenses of the Contributed Interest, Contributed Entity and the Property for the period of time up to but not including
the Closing Date, and the Operating Partnership shall be entitled to all such income and responsible for all such expenses for
the period of time after and including the Closing Date. Without limiting the generality of the foregoing, the following items
of income and expense shall be prorated at Closing:
(A)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
the Closing;
(B)
Utilities
.
All telephone, electric, sewer, water and other utility bills, trash removal bills, janitorial and maintenance service bills and
all other expenses relating to a Property, if any, that are obligations of the Property Entity and which are allocable to the period
prior to the Closing Date shall be determined and paid, or caused to be paid, by the Property Entity or Contributed Entity before
the Closing, if possible, or if such is not determinable before the Closing, then the Parties shall use their commercially reasonable
efforts to determine and pay such amounts as promptly as possible following the Closing and the Operating Partnership may withhold
from any cash amount of the Consideration payable at the Closing hereunder an amount of cash reasonably estimated to cover any
estimated Proration for the items described in this subsection (B);
(C)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Property and all other income from the Property shall be prorated at
the Closing; and
(D)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at the Closing.
“
Representation,
Warranty and Indemnity Agreement
” means the Representation, Warranty and Indemnity Agreement dated ___________, 2019
by and among the REIT, the Operating Partnership and Andrew Spodek.
“
Straddle
Period
” means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the Operating Partnership
. The Operating Partnership hereby represents and warrants to Contributor that the following statements
are true, correct, and complete as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power
. The Operating Partnership is duly organized, validly existing, and in good standing under the laws of the State
of Delaware, and has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement and the performance by the Operating Partnership of its obligations
hereunder have been duly authorized by all requisite action of the Operating Partnership and require no further action or approval
of the Operating Partnership’s partners or of any other individuals or entities in order to constitute this Agreement as
a binding and enforceable obligation of the Operating Partnership.
(b)
OP
Units Validly Issued
. The OP Units, when issued in accordance with the terms of this Agreement and the Partnership Agreement,
will be duly and validly authorized and issued, free of any preemptive or similar rights, and will be without any obligation to
restore capital, except as required by the Delaware Revised Uniform Limited Partnership Act (the “
Limited Partnership
Act
”).
2.2
Representations
by Contributor
. Contributor hereby represents and warrants to the Operating Partnership that the following statements are true,
correct, and complete as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. Contributor, if an entity or trust, is duly incorporated, formed or organized, validly existing,
and in good standing under the laws of its state of incorporation, formation or organization. Contributor has full right, power,
and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement; and the execution
and delivery of this Agreement and the performance by Contributor of its obligations hereunder have been duly authorized by all
requisite action of Contributor and require no further action or approval of Contributor’s members, partners, stockholders,
managers, board of directors, trustees or of any other individuals or entities, as applicable, in order to constitute this Agreement
as a binding and enforceable obligation of Contributor. This Agreement, and each agreement, document and instrument executed and
delivered by or on behalf of Contributor pursuant to this Agreement, constitutes, or when executed and delivered will constitute,
the legal, valid and binding obligation of Contributor, enforceable against Contributor in accordance with its terms, except as
such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by Contributor has resulted, or will result,
in any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to Contributor or to any Contributed
Interests, any Contributed Entity or any Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting Contributor in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of Contributor, any Contributed Entity,
Property Entity or Property, (3) could adversely affect the ability of Contributor to perform its obligations hereunder, or under
any document to be delivered pursuant hereto, (4) could create a lien on the Contributed Interests, any part thereof, or any interest
therein, or (5) could adversely affect the Contributed Interests, any part thereof, or any interest therein.
(d)
Good
Title
.
Exhibit A
accurately sets forth Contributor’s Percentage Interest. Contributor is the sole record and beneficial
owner of the Contributed Interests and has full power and authority to convey the Contributed Interests pursuant to the terms of
this Agreement. Contributor has good and marketable title to the Contributed Interests. No person has any community property rights,
by virtue of marriage or otherwise, with respect to the Contributed Interests. The Contributed Interests are free and clear of
all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions, restrictions,
claims or any other matters affecting title thereto and at the Closing will be contributed to the Operating Partnership free and
clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, claims or other matters affecting title thereto. No other person or entity has an option to purchase or a right of
first refusal to purchase the Contributed Interests nor are there any agreements or understandings with respect to the voting,
ownership or disposition of the Contributed Interests that could adversely affect Contributor’s ability to perform its obligations
hereunder or the Operating Partnership’s ownership of the Contributed Interests following the Closing.
(e)
Contributed
Interests
. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights relating
to the Contributed Interests or any equity interest in any Contributed Entity, Property Entity or Property that will be in effect
as of the Closing.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by Contributor has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement, contract or agreement of any Contributed Entity, or among the partners, members or stockholders
of any Contributed Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and performance of this
Agreement and the contribution, acquisition and transfer of the Contributed Interests has been obtained or will be obtained on
or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, Contributor shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Contributed Interests or the Operating Partnership’s
ownership thereof, or any material adverse effect on the assets, business, condition (financial or otherwise), results or operation
of any Property or any Contributed Entity or Property Entity after the Closing Date or (2) cause any of the representations and
warranties contained in this Section 2.2 to be untrue as of the Closing Date.
(h)
Governing
Agreements
. Contributor has performed all of its obligations under the partnership agreement, limited liability company agreement,
operating agreement, charter and bylaws, as such may have been amended from time to time, as applicable, of each Contributed Entity
(each, a “
Governing Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Securities
Law Matters
.
(1) In
deciding to engage in the transactions contemplated by this Agreement, including, if applicable, acquiring OP Units, neither Contributor
nor any equity holder thereof is relying upon any representations made to it by the Operating Partnership, or any of its partners,
officers, employees, or agents that are not contained herein. Contributor is aware of the risks involved in investing in the OP
Units and in the securities issuable upon redemption of the OP Units. Contributor is knowledgeable, sophisticated and experienced
in business and financial matters and fully understands the limitations on transfer imposed by the federal securities laws and
as described in this Agreement and related materials, including the Partnership Agreement. Contributor has received the Partnership
Agreement and related materials, including the registration statement filed by the REIT with the Securities and Exchange Commission
in connection with the IPO, has reviewed all documents and has had an opportunity to ask questions of, and to receive answers from,
the Operating Partnership and the REIT or a person or persons authorized to act on their behalf, concerning the terms and conditions
of an investment in the OP Units and the financial condition, affairs, and business of the Operating Partnership and the REIT.
Contributor confirms that all documents, records, and information pertaining to its investment in OP Units that have been requested
by Contributor have been made available or delivered to Contributor prior to the date hereof.
(2) Contributor
and each equity holder thereof understands that the offer and sale of OP Units have not been registered under any state or federal
securities laws and are instead being offered and sold in reliance on an exemption from such registration requirements and that
the Operating Partnership’s reliance on such exemption is predicated in part on the accuracy and completeness of the representations
and warranties of Contributor contained herein. The OP Units issuable to Contributor are being acquired by Contributor solely for
its own account, for investment, and are not being acquired with a view to, or for resale in connection with, any distribution,
subdivision, or fractionalization thereof, in violation of such laws, and Contributor does not have any present intention to enter
into any contract, undertaking, agreement, or arrangement with respect to any such resale.
(3) Contributor
is able to bear the economic risk of holding the OP Units for an indefinite period and is able to afford the complete loss of its
investment in the OP Units.
(4) Contributor
understands that no federal agency (including the SEC) or state agency has made or will make any finding or determination as to
the fairness of an investment in the OP Units (including as to the value of the Consideration payable in OP Units).
(5) Contributor
understands that there is no established public, private or other market for the OP Units to be issued to Contributor hereunder
and it is not anticipated that there will be any public, private or other market for such OP Units in the foreseeable future.
(6) Contributor
understands that Rule 144 promulgated under the Securities Act is not currently available with respect to the sale of OP Units.
(j)
Accredited
Investor
. If Contributor has elected to receive OP Units as some or all of the Consideration as set forth on
Exhibit B
,
Contributor is an “accredited investor,” as that term is defined in Rule 501 of Regulation D under the Securities
Act, and has previously provided the Operating Partnership and the REIT with a duly executed questionnaire confirming Contributor’s
accredited investor status. No event or circumstance has occurred since delivery of such questionnaire to make the statements therein
false or misleading.
(k)
Tax
Matters
. Contributor represents and warrants that it has obtained from its own tax advisors advice regarding the tax consequences
of (i) the transfer of the Contributed Interests to the Operating Partnership and the receipt of OP Units and/or cash or deemed
assumption of debt as the Consideration therefor, (ii) its admission as a limited partner of the Operating Partnership, if
applicable, (iii) any other transaction contemplated by this Agreement and (iv) ownership of OP Units, including the effect
of Section 704(c) of the Code. Neither the Operating Partnership nor the REIT has made any representation to Contributor regarding
the tax treatment of the transactions contemplated by this Agreement, and Contributor further represents and warrants that it has
not relied on the Operating Partnership or the Operating Partnership’s representatives or counsel for any tax advice.
(l)
Bankruptcy
with respect to Contributor
. No Act of Bankruptcy (as defined below) has occurred with respect to Contributor. As used herein,
“
Act of Bankruptcy
” means if Contributor or any equity holder, partner, manager or director thereof shall (A) apply
for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or
of all or a substantial part of its property, (B) admit in writing its inability to pay its debts as they become due, (C) make
a general assignment for the benefit of its creditors, (D) file a voluntary petition or commence a voluntary case or proceeding
under the Federal Bankruptcy Code (as now or hereafter in effect), (E) be adjudicated bankrupt or insolvent, (F) file
a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, receivership, dissolution,
winding-up or composition or adjustment of debts, (G) fail to controvert in a timely and appropriate manner, or acquiesce
in writing to, any petition filed against it in an involuntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect), or (H) take any entity action for the purpose of effecting any of the foregoing.
(m)
Brokerage
Commission
. Contributor has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions described herein.
(n)
No
Other Ownership
. Except for the Contributed Interests, neither Contributor nor any of its affiliates owns any interest in any
Property other than through the Contributed Interests.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) Subject
to Section 3.5 hereof, all representations and warranties of Contributor contained in this Agreement or in any Schedule, Exhibit,
certificate or affidavit delivered pursuant to this Agreement shall survive the Closing.
(b) Subject
to the limitations set forth in Section 3.4 hereof, following the Closing, Contributor shall be liable under this Agreement for
monetary damages (or otherwise) for breach of any of its representations, warranties, covenants and obligations contained in this
Agreement or in any Schedule, Exhibit, certificate or affidavit delivered by Contributor pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, Contributor shall indemnify, hold harmless and defend the Operating Partnership and the REIT, and their
respective officers, directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified
Party
”), from and against any and all claims, losses, damages, liabilities and expenses, including, without limitation,
interest, penalties, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, judicial or administrative
proceedings or appeals therefrom and costs of attachment or similar bonds (collectively, “
Losses
”) asserted
against, imposed upon or incurred by the Indemnified Party, to the extent resulting from any breach of a representation, warranty
or covenant of Contributor contained in this Agreement, or in any Schedule, Exhibit, certificate or affidavit delivered by Contributor
pursuant thereto. In each case, Contributor shall only bear the fees, costs or expenses in connection with the employment of one
counsel and any necessary local counsel (regardless of the number of Indemnified Parties).
(b) Contributor
shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed upon
or incurred by the Indemnified Parties to the extent resulting a third-party claim relating to the Contributed Interests arising
from matters that occurred prior to the Closing.
(c) With
respect to any indemnification claim by an Indemnified Party pursuant to this Section 3.2, to the extent available, the Operating
Partnership agrees to use diligent good faith efforts to pursue and collect any and all available proceeds and benefits of any
right to defense under any insurance policy that covers the matter which is the subject of the indemnification prior to seeking
indemnification from Contributor until all proceeds and benefits, if any, to which the Operating Partnership or the Indemnified
Party is entitled pursuant to such insurance policy have been exhausted; provided, however, that the Operating Partnership may
make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which case, if the Indemnified Party
later receives insurance proceeds with respect to any Losses paid by Contributor for the benefit of any Indemnified Party, then
the Indemnified Party shall reimburse Contributor in an amount equivalent to such proceeds in excess of any deductible amount pursuant
to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by Contributor to the Indemnified Party in connection
with such indemnification (it being understood that all costs and expenses incurred by Contributor with respect to insurance coverage
disputes shall constitute Losses paid by Contributor for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to Contributor, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to Contributor will not relieve
Contributor from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of Contributor by reason of the inability or failure of Contributor (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to Contributor, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit Contributor,
at Contributor’s option and expense, to assume the defense of any such claim by counsel selected by Contributor and reasonably
satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that Contributor shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by Contributor.
If Contributor shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of Contributor and at Contributor’s
sole cost and expense (subject to the limitations in Section 3.4 hereof).
3.4
Limitations
on Indemnification Under Section 3.2(a)
.
(a) Contributor
shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Parties under
Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration (valuing OP Units at the IPO Price) and
then only to the extent of such excess. Contributor’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of Contributor and subject to the limitations
set forth in the following sentence, the Indemnified Parties shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III, (and agree to treat any return of OP Units in satisfaction of indemnification obligations hereunder
as an adjustment to the Consideration delivered to Contributor hereunder). Notwithstanding anything to the contrary in this Agreement,
except in the case of fraud or in the event of Losses relating to a third-party claim, Contributor shall not be liable to the Indemnified
Parties for any indirect, special or consequential damages, loss of profits, taxes relating to tax years beginning on or after
the Closing, loss of value or other similar speculative damages asserted or claimed by the Indemnified Parties.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of Contributor with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between Contributor and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by Contributor in the form of cash or OP Units. To the extent indemnification
is made through delivery by Contributor of OP Units, such OP Units shall be valued at an amount per OP Unit equal to the IPO Price.
Contributor hereby authorizes the REIT, as general partner of the Operating Partnership, to take all such action as may be necessary
to amend the Partnership Agreement, and any exhibits or schedules thereto, to reflect the delivery of any OP Units by Contributor
to the Operating Partnership as an indemnification payment hereunder and to reflect that Contributor has no further right, title
or interest with respect to any such OP Units.
ARTICLE
IV
COVENANTS
4.1
Covenants
of Contributor
.
(a)
Satisfaction
of Conditions
. Contributor hereby covenants that Contributor shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to the Closing set forth herein, and (B) cooperate and assist in the Operating Partnership’s
efforts to satisfy all of the conditions to the Closing set forth herein, and agrees that the Operating Partnership shall not have
any obligation to consummate the Closing hereunder unless and until such conditions have been satisfied or waived by the Operating
Partnership in writing.
(b)
Consent
to Transfers
. Contributor hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to Contributor under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Contributed Entity, Property Entity or Property or
any other company or property being contributed or transferred to the Operating Partnership pursuant to a separate contribution
or other agreement.
(c)
No
Disposition or Encumbrance of Contributed Interests
. From the date hereof through the Closing, except as specifically contemplated
by this Agreement, Contributor shall not, without the prior written consent of the Operating Partnership: (i) sell, transfer (or
agree to sell or transfer) or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing)
all or any portion of the Contributed Interests or all or any portion of its interest in any Property Partnership or Property;
or (ii) mortgage, assign, pledge or otherwise encumber in any manner the Contributed Interests, the Property Entity or the Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, Contributor
shall, to the extent within its control, cause each Contributed Entity and Property Entity to conduct its business in the ordinary
course of business consistent with past practice, and shall, to the extent within its control, not permit any Contributed Entity
or any Property Entity without the prior written consent of the Operating Partnership, to: (i) enter into any material transaction
not in the ordinary course of business; (ii) mortgage, pledge or encumber any assets of the Contributed Entity any Property Entity
or any Property, (iii) cause or permit any change to the existing use of any Property; (iv) cause or take any action that would
render any of the representations or warranties set forth herein untrue; (v) file an entity classification election pursuant to
Treasury Regulations Section 301.7701-3(c) on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the
Contributed Entity as an association taxable as a corporation for federal income tax purposes; (vi) make or change any other tax
elections; (vii) settle or compromise any claim, notice, audit report or assessment in respect of taxes; (viii) change any annual
tax accounting period; (ix) adopt or change any method of tax accounting; (x) file any amended return, report or form (including
an election, declaration, amendment, schedule, information return or attachment thereto) required to be filed with a governmental
authority with respect to taxes (each, a “
Tax Return
”); (xi) enter into any tax allocation agreement, tax sharing
agreement, tax indemnity agreement or closing agreement relating to any tax; (xii) surrender any right to claim a tax refund; (xiii)
consent to any extension or waiver of the statute of limitations period applicable to any tax claim or assessment; or (xiv) make
any distribution to its partners or members, except for cash distributions in the ordinary course of business consistent with past
practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a) Tax
Returns.
(A)
Pre-Closing
Tax Periods
. Contributor shall prepare and timely file all Tax Returns (other than amended Tax Returns) of the Contributed
Entities for any Pre-Closing Tax Periods, and Contributor shall remit or cause to be remitted any Taxes due in respect of such
Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except as otherwise required
by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent with positions
taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions, elections
or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions to
periods ending on or before the Closing Date). For the avoidance of doubt, the Operating Partnership will have authority to sign
any Tax Returns relating to the Contributed Entities that are filed after the Closing Date.
(B)
Straddle
Periods and Post-Closing Periods
. The Operating Partnership shall prepare and timely file all Tax Returns of the Contributed
Entities for all taxable periods other than the Pre-Closing Tax Periods, and the Operating Partnership shall remit or cause to
be remitted any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax
Return for a Straddle Period (and before the Operating Partnership files such Tax Return), the Operating Partnership shall furnish
to Contributor a draft of such Tax Return and Contributor shall have the right to review, provide written comments on, and approve
the portion of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which Contributor
is responsible.
(b)
Tax
Matters
. Contributor shall pay and indemnify, without duplication, the Operating Partnership for the following Taxes (and all
related Adverse Consequences, including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(A) all
such Taxes resulting from a breach of any representation in Section 1.14 of the Representations, Warranty and Indemnity Agreement
or a breach of any provision of this
Section 4.2
;
(B) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Contributed Entities; (ii) all
such Taxes of any other Person that the Contributed Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Contributed Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(C) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Contributed Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other person that a Contributed Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Contributor under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(A) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(B) Except
for Taxes for which the Operating Partnership is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
(1) in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
(2) in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause (i), any item determined
on an annual or periodic basis (including amortization and depreciation deductions and the effects of graduated rates) shall be
allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number of days in such portion
of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of Contributor to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that Contributor’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, Contributor’s obligations under this
Section 4.2
shall not expire until sixty (60)
days after the expiration of such Contributor’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of Contributor under this
Section 4.2
shall survive until fully performed.
(e) Contributor
and the Operating Partnership shall provide each other with such cooperation and information relating to any of the Contributed
Interests, the Contributed Entities, their subsidiaries, the Property Entities or the Properties as the parties reasonably may
request in (i) filing any Tax Return, amended Tax Return or claim for tax refund, (ii) determining any liability for taxes or a
right to a tax refund, (iii) conducting or defending any proceeding in respect of taxes, or (iv) performing tax diligence, including
with respect to the impact of this transaction on the REIT’s tax status as a REIT. Such reasonable cooperation shall include
making employees available on a mutually convenient basis to provide additional information and explanation of any material provided
hereunder. The Operating Partnership shall promptly notify Contributor upon receipt by the Operating Partnership or any of its
affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income, properties or operations
of any of the Contributed Entities, their subsidiaries, the Property Entities or their subsidiaries or with respect to any Property
and (ii) any pending or threatened federal, state, local or foreign tax audits or assessments of the Operating Partnership or any
of its affiliates, in each case, which may affect the liabilities for taxes of Contributor with respect to any tax period ending
before or as a result of the Closing. Contributor shall promptly notify the Operating Partnership in writing upon receipt by Contributor
or any of its affiliates of notice of any pending or threatened federal, state, local or foreign tax audits or assessments relating
to the income, properties or operations of any of the Contributed Entities, the Property Entities or their subsidiaries or with
respect to any Property. Each of the Operating Partnership and Contributor may participate at its own expense in the prosecution
of any claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided,
that Contributor shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such
Contributor has acknowledged liability (except as a partner of the Operating Partnership) for the payment of any additional tax
liability, and the Operating Partnership shall have the right to control any other audits and proceedings. Notwithstanding the
foregoing, neither the Operating Partnership nor Contributor may settle or otherwise resolve any such claim, suit or proceeding
which could have an adverse tax effect on the other party or its affiliates (other than on Contributor or any of its affiliates
as a partner of the Operating Partnership) without the consent of the other party, such consent not to be unreasonably withheld.
Contributor and the Operating Partnership shall retain all Tax Returns, schedules and work papers with respect to the Contributed
Entities, the Property Entities, their subsidiaries, and the Properties, and all material records and other documents relating
thereto, until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof)
of the taxable years to which such Tax Returns and other documents relate and until the final determination of any tax in respect
of such years.
(f) For
purposes of allocating items of income, gain, loss and deduction with respect to the Property and/or the Contributed Interests
in the manner required by Section 704(c) of the Code, the Operating Partnership shall employ, and shall cause any entity controlled
by the Operating Partnership which holds title to the Property or the Contributed Interests to employ, the “traditional method”
(without curative allocations) as set forth in Treasury Regulations section 1.704-3(b)(1).
4.3
Relationship
to Contributed Entities
. Contributor and the Operating Partnership acknowledge and agree that, from and after the Closing,
Contributor shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Contributed Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the Operating Partnership’s Obligation
. In addition to any other conditions set forth in this Agreement, the Operating
Partnership’s obligation to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions
and requirements set forth in this Section 5.1, all of which shall be conditions precedent to the Operating Partnership’s
obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by Contributor pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the Operating Partnership, Contributor shall have delivered a certificate
to the Operating Partnership to such effect in regard to Contributor’s representations and warranties set forth in this Agreement.
(d)
Performance
.
Contributor shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents of governmental and private parties, including, without limitation, all
ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders of
any Contributed Entity, Property Entity or their subsidiaries, to effect the transactions contemplated by this Agreement, shall
have been obtained.
(g)
Reliance
on Regulation D
. If Contributor has elected to receive OP Units, the Operating Partnership shall, based on the advice
of its counsel and the representations made by Contributor in Contributor’s Investor Questionnaire, be reasonably satisfied
that the issuance of OP Units to Contributor may be made without registration under the Securities Act in reliance on Regulation D
under the Securities Act.
(h)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(i)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Contributed Interests or any material adverse change in any of the assets, business, condition (financial
or otherwise), results of operation or prospects of any Property, Property Entity or Contributed Entity.
(j)
Tenant
and Lender Estoppels
. The Operating Partnership shall have received tenant and lender estoppels in form and substance satisfactory
to the Operating Partnership and its counsel.
5.2
Conditions
to Contributor’s Obligation
. In addition to any other conditions set forth in this Agreement, Contributor’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to Contributor’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the Operating Partnership pursuant to this Agreement shall be true
and correct as of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The Operating Partnership shall have performed and complied in all material respects with all agreements and covenants that it
is required to perform or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing of the transactions contemplated pursuant to this Agreement (the “
Closing
”) shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the Operating Partnership
may designate, promptly following satisfaction of the conditions to the Closing set forth herein (the “
Closing Date
”),
or as otherwise set by agreement of the parties.
6.2
Contributor’s
Deliveries
. At the Closing, Contributor shall deliver the following to the Operating Partnership in addition to all other items
required to be delivered to the Operating Partnership by Contributor:
(a)
Assignment
of Contributed Interests
. An Assignment, in substantially the form of
Exhibit B
attached hereto.
(b)
Execution
of Partnership Agreement
. If Contributor has elected to receive OP Units, signature pages of the Partnership Agreement duly
executed by Contributor, as limited partner.
(c)
FIRPTA
Certificate
. An affidavit from Contributor certifying pursuant to Section 1445 and Section 1446(f) of the Code that Contributor
is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms are defined
in the Code and the Treasury Regulations promulgated thereunder).
(d)
Other
Documents
. Any other document or instrument reasonably requested by the Operating Partnership or required hereby.
6.3
Default
Remedies
. If Contributor defaults in performing any of Contributor’s obligations under this Agreement, the Operating
Partnership shall have all rights and remedies available to it at law or in equity resulting from Contributor’s default,
including without limitation, the right to seek specific performance of this Agreement and Contributor’s obligation to convey
the Contributed Interests to the Operating Partnership hereunder. The parties acknowledge and agree that the failure of a condition
precedent to occur, notwithstanding the good faith and commercially reasonable efforts of the applicable party, shall not be a
default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
Operating Partnership
:
Postal Realty LP
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Contributor
:
NPM Holdings, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
Any address or name specified above may
be changed by a notice given by the addressee to the other party. Any notice, demand or other communication shall be deemed given
and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver because of changed
address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication, shall
be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection or
refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitutes the entire
agreement and supersedes each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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CONTRIBUTOR
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NPM HOLDINGS, INC., a Delaware corporation
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By:
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Name: Andrew Spodek
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Title: Member
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OPERATING PARTNERSHIP
:
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POSTAL REALTY LP, a Delaware limited partnership
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By:
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Postal Realty Trust, Inc.
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its general partner
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By:
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Name:
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Title:
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REIT
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POSTAL REALTY TRUST, INC., a Maryland corporation
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By:
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Name:
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Title:
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Exhibit 10.16
CONTRIBUTION AGREEMENT
This Contribution Agreement (“
Agreement
”),
effective as of ________ on ________, 2019 (the “
Effective Date
”), is made and entered into by and between Postal
Realty LP, a Delaware limited partnership (the “
Contributor
”), and Postal Realty Management TRS, LLC a Delaware
limited liability company (“
Transferee
”).
RECITALS
WHEREAS, the Contributor is the legal and
beneficial owner of the assets listed on Schedule A attached hereto (the “
Contributed Property
”); and
WHEREAS, the Contributor now desires to
contribute, assign and transfer the Contributed Property to Transferee; and
WHEREAS, Transferee desires to acquire and
assume the Contributed Property from the Contributor, on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
1.
Sale,
Contribution and Assignment of Contributed Property
. The Contributor hereby contributes, assigns and transfers the Contributed
Property to Transferee, and Transferee hereby accepts transfer of and assumes the Contributed Property from the Contributor, pursuant
to the terms and conditions set forth in this Agreement. For the avoidance of doubt, beneficial ownership of the Contributed Property
shall be contributed, assigned and transferred (the “
Contribution
”) on the Effective Date.
2.
Representations
.
Each party hereto hereby represents and warrants that, with respect to itself, each and every one of the following statements is
true, correct and complete in every material respect as of the date of this Agreement:
(a) Such
party is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation or incorporation,
and has full right, power and authority to enter into this Agreement and to assume and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement and the performance by such party of its obligations under this Agreement
require no further action or approval of its members, of its board of managers, its board of directors or of any other individuals,
entities or governing bodies in order to constitute this Agreement as a binding and enforceable obligation of such party.
(b) Neither
the entry into nor the performance of, or compliance with, this Agreement by such party has resulted, or will result, in any violation
of, or default under, or has resulted, or will result, in the acceleration of, any obligation under any existing articles of incorporation,
bylaws, operating agreements, organizational documents, mortgages, indentures, lien agreements, notes, contracts, permits, judgments,
decrees, orders, restrictive covenants, statutes, rules or regulations applicable to such party. With regard to the representations
and warranties of Contributor only, Contributor has clear title to the Contributed Property.
(c) No
authorization, consent, approval, permit or license of, or filing with, any governmental or public body or authority, or any other
person or entity is required to authorize, or is required in connection with, the execution, delivery and performance of this Agreement
or the agreements contemplated hereby on the part of such party.
3.
Entire
Agreement
. This Agreement constitutes the entire agreement among the parties hereto and may not be modified or amended except
by instrument in writing signed by the parties hereto.
4.
Governing
Law
. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware.
5.
Severability
.
If any term, covenant or condition of this Agreement shall to any extent be deemed invalid or unenforceable, then the remainder
of this Agreement, and the application of such term, covenant or condition, shall not be affected thereby, and shall be valid and
enforceable to the fullest extent permitted by law.
6.
Further
Acts and Assurances
. The Contributor and Transferee each covenant that they will take all necessary action to confirm the transactions
contemplated hereby, including securing any necessary records of transfer and executing and delivering (or cause to be executed
and delivered) all such agreements, instruments, certificates and other documents, and shall take (or cause to be taken) and do
(or cause to be done) all things necessary, proper or advisable to consummate and make effective this Agreement.
7.
Tax
Treatment
. The parties to this Agreement intend that, for United States federal income tax purposes, the contribution and
assignment of the Contributed Property shall be treated as a contribution under Internal Revenue Code section 351.
[Signatures on following page]
IN WITNESS WHEREOF, the parties hereto have
entered into this Agreement as of the date first above written.
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POSTAL REALTY LP,
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By:
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Postal Realty Trust, Inc.
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its general partner
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By:
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Name:
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Title:
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POSTAL REALTY MANAGEMENT, TRS, LLC
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By:
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Name:
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Title:
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Exhibit 10.17
AGREEMENT
and plan of merger
BY AND AMONG
Postal Realty
Trust, INC.,
UPH MERGER
sub LLC,
United postal
holding, Inc.
and
andrew spodek
Dated as of May__, 2019
TABLE
OF CONTENTS
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ARTICLE I
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DEFINITIONS
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1
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ARTICLE II
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THE MERGER
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7
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2.1.
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The Merger
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7
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2.2.
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Effective Time
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8
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2.3.
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Time and Place of Closing
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7
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2.4.
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Limited Liability Company Agreement
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7
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2.5.
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Board of Managers
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7
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2.6.
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Merger Consideration
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7
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2.7.
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Effect on Capital Stock and Other Matters
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8
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2.8.
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Prorations
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8
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2.9.
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Tax Consequences
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9
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ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF the Company AND THE COMPANY STOCKHOLDER
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10
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3.1.
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Organization and Authority of the Company
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10
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3.2.
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Capitalization
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10
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3.3.
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Authority Relative to this Agreement; Board and Company Stockholder Approval
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11
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3.4.
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Consents and Approvals; No Violations
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11
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3.5.
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Absence of Certain Events
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12
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3.6.
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Subsidiaries; Minority Investments
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14
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3.7.
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Financial Statements
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14
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3.8.
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Litigation
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14
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3.9.
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Employee Matters
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14
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3.10.
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Tax Matters
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14
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3.11.
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Compliance with Law
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16
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3.12.
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Fees and Expenses of Brokers and Others
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16
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3.13.
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Absence of Undisclosed Liabilities
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16
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3.14.
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Environmental Laws and Regulations
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16
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3.15.
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Insurance
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17
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3.16.
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Material Contracts
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17
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3.17.
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Real Property
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18
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3.18.
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Books and Records
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20
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3.19.
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Accounts Receivable
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20
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3.20.
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Indebtedness
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20
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3.21.
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Full Disclosure
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20
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF THE REIT AND MERGER SUBSIDIARY
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21
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4.1.
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Organization and Authority of the REIT and Merger Subsidiary
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21
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4.2.
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Authority Relative to this Agreement
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21
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4.3.
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Consents and Approvals; No Violations
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22
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4.4.
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REIT Common Stock
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22
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4.5.
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Litigation
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22
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4.6.
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Fees and Expenses of Brokers and Others
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22
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4.7.
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Tax
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22
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ARTICLE V
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COVENANTS RELATING TO CONDUCT OF BUSINESS
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22
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5.1.
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Operation in the Ordinary Course
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22
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5.2.
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Affirmative and Negative Covenants
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23
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ARTICLE VI
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ADDITIONAL AGREEMENTS
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25
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6.1.
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Access to Information
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25
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6.2.
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Reasonable Efforts
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25
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6.3.
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Notification; Updates to Schedules
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25
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6.4.
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Registration
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26
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ARTICLE VII
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CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER
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30
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7.1.
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Conditions Precedent to Obligations of Each Party
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30
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7.2.
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Conditions Precedent to Obligations of the REIT and Merger Subsidiary
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31
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7.3.
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Conditions Precedent to Obligations of the Company
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31
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ARTICLE VIII
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SURVIVAL; INDEMNIFICATION; TAX MATTERS
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32
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8.1.
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Survival of Representations, Warranties and Covenants
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32
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8.2.
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32
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8.3.
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33
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8.4.
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34
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8.5.
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8.6.
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8.7.
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8.8.
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8.9.
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8.10.
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Tax Contests
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34
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ARTICLE IX
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TERMINATION; AMENDMENT; WAIVER
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35
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9.1.
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Termination
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35
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9.2.
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Effect of Termination
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35
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9.3.
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Amendment
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35
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9.4.
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Extension; Waiver
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36
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ARTICLE X
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MISCELLANEOUS
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36
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10.1.
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Entire Agreement; Assignment
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36
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10.2.
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Notices
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36
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10.3.
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Governing Law; Submission to Jurisdiction; Waiver of Jury Trial
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37
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10.4.
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Specific Performance
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38
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10.5.
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Interpretation
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38
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10.6.
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Parties in Interest
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39
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10.7.
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No Recourse
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39
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10.8.
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Execution of this Agreement
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39
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10.9.
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Severability
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40
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agreement
and plan of merger
This AGREEMENT AND
PLAN OF MERGER (this “
Agreement
”), dated as of May __, 2019, by and among Postal Realty Trust, Inc. a Maryland
corporation (the “
REIT
”), UPH Merger Sub LLC, a Delaware limited liability company and a direct, wholly owned
subsidiary of the REIT (“
Merger Subsidiary
”), United Postal Holding, Inc., a Tennessee corporation (the “
Company
”),
and Andrew Spodek, an individual, recites and provides as follows:
RECITALS
WHEREAS, the Board
of Directors of each of the REIT and the Company have approved this Agreement and the merger of the Company with and into Merger
Subsidiary pursuant hereto, with Merger Subsidiary surviving the merger (the “
Merger
”), declared this Agreement
and the Merger advisable and in the best interests of the REIT and the Company, respectively, and recommended the adoption of this
Agreement to their respective stockholders;
WHEREAS, pursuant to
and in connection with the Merger, at the Effective Time, all of the issued and outstanding shares of Company Common Stock will
be converted into the right to receive the Stock Merger Consideration; and
WHEREAS, the REIT,
Merger Subsidiary and the Company desire to make certain representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in
consideration of the premises, which are incorporated into and made part of this Agreement, and of the mutual representations,
warranties, covenants, agreements and conditions set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE
I
DEFINITIONS
“
Action
”
shall mean any claim, action, cause of action, demand, suit, arbitration, mediation, audit, proceeding, litigation, citation, summons,
subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity,
in any forum (including judicial, administrative or arbitral).
“
Adjusted
Merger Consideration
” has the meaning set forth in Section 2.2.
“
Affiliate
”
means, with respect to any specified Person, any other Person that, at the time of determination, directly or indirectly controls,
is controlled by, or is under common control with, such specified Person. For purposes hereof, “control” means the
power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise, and “controlled by” and “under common control with” shall have correlative meanings.
“
Agreement
”
has the meaning set forth in the preamble to this Agreement.
“
Basket
”
has the meaning set forth in
Section 8.3(a)(i)
.
“
Articles
of Incorporation
” means the REIT’s Amended and Restated Articles of Incorporation, in the form in effect upon completion
of the IPO.
“
Certificate
of Merger
” has the meaning set forth in
Section 2.2
.
“
Class A Common
Stock Merger Consideration
” has the meaning set forth in
Section 2.6
.
“
Class B Common
Stock Merger Consideration
” has the meaning set forth in
Section 2.6
.
“
Closing
”
has the meaning set forth in
Section 2.3.
“
Closing Date
”
means the date on which the Closing occurs.
“
Code
”
means the Internal Revenue Code of 1986, as amended.
“
Company Common
Stock
” means the common stock, no par value, of the Company.
“
Company
”
has the meaning set forth in the preamble to this Agreement.
“
Company Financial
Statements
” has the meaning set forth in
Section 3.7(a)
.
“
Company Stockholder
”
means PSPI, LLC, a New York limited liability company wholly-owned by Andrew Spodek and the holder of all the outstanding Company
Common Stock.
“
Contracts
”
means all contracts, agreements, leases (including the Leases), licenses and legally binding commitments or obligations (and all
amendments thereto), whether written or verbal.
“
Conversion
Shares
” has the meaning set forth in
Section 6.4(a)
.
“
DGCL
”
means the General Corporation Law of the State of Delaware.
“
Disclosure
Schedules
” means the disclosure schedules delivered by the Company and the REIT concurrently with the execution and delivery
of this Agreement.
“
Effective
Time
” has the meaning set forth in
Section 2.2
.
“
Environmental
Law
” means any Law concerning protection of the environment or natural resources or human health and safety in respect
of Hazardous Substances, including Laws relating to (i) any discharges, Releases or emissions of Hazardous Substances to the environment
including indoor or ambient air, water (including surface water, ground water and wetlands), soil, sediment or subsurface strata,
(ii) the quality of any environmental medium, (iii) the generation, treatment, recycling, storage, disposal, transportation or
other management of waste, (iv) the manufacture, distribution, disposal, or recycling of chemical substances and mixtures, (v)
contamination, pollution, investigation or remediation of any environmental medium or (vi) responsibility or liability for environmental
conditions, in each case, as amended from time to time.
“
Environmental
Permits
” has the meaning set forth in
Section 3.14(c)
.
“
Estimated
Net Working Capital Amount
” has the meaning set forth in
Section 2.8(a)
.
“
GAAP
”
means generally accepted accounting principles in the United States of America, consistently applied.
“
Governmental
Authority
” means any federal, state, local, municipal, national, international, foreign, supranational or other governmental
department, commission, board, bureau, agency, administrative body or instrumentality, or any court or tribunal.
“
Governmental
Order
” means any order, writ, judgment, injunction, decree, ruling, charge, stipulation, award or other restriction entered
or issued by a Governmental Authority.
“
Hazardous
Substances
” means any substance, material or waste (regardless of physical form or concentration) that is regulated,
restricted, listed or identified under any Environmental Law.
“
Income Tax
”
or “
Income Taxes
” means any and all Taxes imposed upon or measured by net income (which, for purposes of clarity,
shall include interest, penalties and additions imposed with respect to such Taxes).
“
Income Tax
Return
” means any Tax Return relating to Income Taxes.
“
Indebtedness
”
means, without duplication, (i) any indebtedness for borrowed money (including the issuance of any debt security) to any Person,
contingent or otherwise, (ii) all obligations evidenced by mortgages, notes, bonds, debentures or similar instruments, (iii) all
obligations issued or assumed as the deferred purchase price of property or services (other than trade payables and other current
liabilities incurred in the ordinary course of business), including conditional sales or other title retention agreements relating
to property or assets purchase by such Person, (iv) the Indebtedness of any third party secured by a Lien on any of the properties
or assets of the Company, (v) interest rate, currency or other hedging arrangements, (vi) letters of credit, (vii) performance
and surety bonds, (viii) any guarantee of any such Indebtedness or debt securities of any Person, (ix) obligations of such Person
to purchase, redeem, retire, defease or otherwise acquire for value any capital stock of such Person or any warrants, rights or
options to acquire such capital stock, (x) renewals, extensions, refundings, deferrals, restructurings, amendments and modifications
of any such Indebtedness or guarantee and (xi) all premiums, interest, penalties and other amounts due in connection with any of
the foregoing;
provided
,
however
, that Indebtedness shall not include (1) any liabilities or obligations, (2) accounts
payable to trade creditors, accrued expenses and deferred revenues, in each case arising in the ordinary course of business and
(3) the endorsement of negotiable instruments for collection in the ordinary course of business, in each case of clauses (1), (2)
and (3), to the extent that any such amounts are included in Net Working Capital.
“
Indemnification
Claim
” has the meaning set forth in
Section 8.4(a)
.
“
Indemnification
Cap
” has the meaning set forth in
Section 8.3(a)(ii).
“
Indemnified
Person
” and “
Indemnified Persons
” have the meanings set forth in
Section 8.2
.
“
IPO
”
means the underwritten initial public offering of REIT Class A Common Stock.
“
IRS
”
means the Internal Revenue Service.
“
Knowledge
of the Company Stockholder
” means the knowledge of Andrew Spodek, the sole equity owner of the Company Stockholder.
“
Law
”
means any foreign, national, international, supranational, federal, state, local, municipal or other law, statute, rule, regulation,
order, act, ordinance, treaty, code, judgment, decree, common law or other requirement of any Governmental Authority.
“
Leases
”
has the meaning set forth in
Section 3.17
.
“
Lien
”
means any mortgages, liens, pledges, charges, security interests, claims, restrictions on the use of real property, encumbrances,
hypothecation, option, preemptive purchase right, easement, or other adverse claim of any kind in respect of such property or asset.
“
Losses
”
means any and all losses, liabilities, damages, judgments, amounts paid in settlement, costs, expenses, including fines, penalties
and reasonable attorneys’ and accountants’ costs, fees and expenses, and all incidental, special and consequential
damages to the extent reasonably foreseeable;
provided
, however, that Losses shall not include indirect, punitive or exemplary
damages and, in particular, damages calculated by “multiple of profits” or “multiple of cash flow” or similar
valuation methodology (except to the extent any such damages are award to a third party pursuant to a Third Party Indemnification
Claim).
“
Material
Adverse Effect
” means, with respect to any entity or group of entities, any event, fact, circumstance or condition that,
individually or in the aggregate with any other such events, facts, circumstances or conditions, has had or would be reasonably
expected to have, a material adverse effect on (a) the business, properties, assets, financial condition or results of operations
of such entity or group of entities, taken as a whole, or (b) the ability to consummate the Merger or any of the other transactions
contemplated by this Agreement.
“
Material
Contracts
” has the meaning set forth in
Section 3.16(a)
.
“
Merger
”
has the meaning set forth in the recitals to this Agreement.
“
Merger Consideration
”
has the meaning set forth in
Section 2.6
.
“
Merger Subsidiary
”
has the meaning set forth in the preamble to this Agreement.
“
Most Recent
Balance Sheet
” means the most recent combined consolidated balance sheet of Nationwide Postal and Affiliates Predecessor
included in the registration statement on Form S-11 relating to the IPO filed by the REIT with the SEC, as it may amended prior
to the IPO.
“
Permits
”
means all permits, licenses, certificates of occupancy, variances, exemptions, registrations, approvals and authorizations of all
Governmental Authorities.
“
Permitted
Liens
” means each of the following: (a) Liens for taxes, assessments and governmental charges or levies not yet due and
payable or, if due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation
or unemployment laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights
of way and other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable
or materially adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits
to secure trade contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business.
“
Person
”
means any individual, corporation, partnership, limited liability company, association, trust, joint venture, unincorporated entity
or other legal entity or any Governmental Authority.
“
Post-Closing
Tax Period
” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“
Pre-Closing
Tax Period
” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the
case of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“
Real Property
”
has the meaning set forth in
Section 3.17
.
“
Registration
Statement
” has the meaning set forth in
Section 6.4(a)
.
“
REIT
”
has the meaning set forth in the preamble to this Agreement.
“
REIT Class
A Common Stock
” means the Class A common stock, par value $0.01 per share, of the REIT.
“
REIT Class
B Common Stock
” means the Class B common stock, par value $0.01 per share, of the REIT.
“
REIT Common
Stock
” means the REIT Class A Common Stock and the REIT Class B Common Stock.
“
Reimbursement
”
has the meaning set forth in
Section 8.5(b).
“
Release
”
means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing
or migrating into or through the environment of any Hazardous Substance.
“
Resale Shares
”
has the meaning set forth in
Section 6.4(a)
.
“
Rule 144
”
has the meaning set forth in
Section 6.4(a)(ii)
.
“
S-3 Eligible
Date
” has the meaning set forth in
Section 6.4(a)
.
“
SEC
”
means the United States Securities and Exchange Commission.
“
Securities
Act
” has the meaning set forth in
Section 6.4(a)
.
“
Special Representations
”
has the meaning set forth in
Section 8.1
.
“
Straddle
Period
” means a taxable period beginning before and ending after the Closing Date.
“
Survival
Date
” has the meaning set forth in
Section 8.1
.
“
Surviving
Company
” has the meaning set forth in
Section 2.1
.
“
Tax
”
or “
Taxes
” means any federal, state, county, local or foreign taxes of any kind whatsoever, including any interest,
penalties and additions imposed thereon or with respect thereto, including all Income Taxes, payroll and employee withholding taxes,
unemployment insurance, employment taxes, social security taxes, sales and use taxes, ad valorem taxes, escheat and unclaimed property
charges, excise taxes, severance taxes, franchise taxes, margin taxes, profits taxes, gross receipts taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes, registration taxes, environmental taxes, value added taxes, customs
duties, capital stock taxes, transfer taxes, alternative or add-on minimum taxes, workers’ compensation, disability, estimated
and other governmental charges of the same or of a similar nature to any of the foregoing, whether disputed or not.
“
Tax Claim
”
has the meaning set forth in
Section 8.10
.
“
Tax Return
”
means any return, report, declaration return, information return, claim for refund, declarations of estimated tax or other information
required to be supplied to or filed with a taxing authority in connection with any Taxes, including any return of an affiliated
or combined or unitary group and including any schedule or attachment thereto and amendment thereof.
“
Tennessee
Code
” means the Tennessee Business Corporation Act.
“
Third Party
Indemnification Claim
” has the meaning set forth in
Section 8.4(b).
ARTICLE
II
THE MERGER
(a)
The
Merger
. Subject to the terms and conditions of this Agreement, at the Effective Time, the Company shall be merged with and
into Merger Subsidiary in accordance with the provisions of, and with the effects provided in, Section 251 of the DGCL and Section
48-21-107 of the Tennessee Code. Merger Subsidiary shall be the surviving company resulting from the Merger (the “
Surviving
Company
”), and shall succeed to and assume all of the rights and obligations of the Company, and the separate corporate
existence of the Company shall cease.
(b)
Effective
Time
. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date after the Closing occurs, the
REIT will file with the Secretary of State of the State of Delaware and the Secretary of State of the State of Tennessee a Certificate
of Merger or Articles of Merger, as applicable (the “
Certificate of Merger
”), with respect to the Merger, duly
executed and completed in accordance with the relevant provisions of the DGCL and the Tennessee Code, and will make all other filings
or recordings required under the DGCL and the Tennessee Code to effect the Merger. The Merger will become effective at such time
as the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware and the Secretary of State
of the State of Tennessee, or at such subsequent date or time as Merger Subsidiary and the Company may agree and specify in the
Certificate of Merger (the time that is the effective time of the Merger being hereinafter referred to as the “
Effective
Time
”).
(c)
Time
and Place of Closing
. The closing of the Merger and other transactions contemplated by this Agreement (the “
Closing
”)
shall take place at a time and on a date mutually agreed upon by the parties, but is expected to occur immediately following the
closing of the IPO, but subject to the satisfaction or waiver at the Closing of the conditions set forth herein. The Closing shall
take place at the offices of Hunton Andrews Kurth LLP, 200 Park Avenue, New York, New York 10166, or at such other location
mutually agreed upon by the parties.
(d)
Limited
Liability Company Agreement
. The limited liability company agreement of Merger Subsidiary, as in effect immediately prior to
the Effective Time, shall be the limited liability company agreement of the Surviving Company until thereafter amended as provided
therein or by applicable Law.
(e)
Board
of Managers
. The Board of Managers of the Surviving Company as of immediately after the Effective Time shall be the managers
of the Surviving Company and shall serve until their successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the limited liability company agreement of the Surviving Company.
(f)
Merger
Consideration
. At the Effective Time, and without any action on the part of the Company Stockholder, all of the Company Common
Stock issued and outstanding immediately prior to the Effective Time shall automatically be converted into the right to receive
an aggregate of 637,058 shares of REIT Class A Common Stock (the “Class A Common Stock Merger Consideration”) and 27,206
shares of REIT Class B Common Stock (the “Class B Common Stock Merger Consideration”, and together with the Class A
Common Stock Merger Consideration, the “Merger Consideration”)).
(g)
Effect
on Capital Stock and Other Matters
. As of the Effective Time, by virtue of the Merger and without any action on the part of
any holders of Company Common Stock, REIT Common Stock or membership interests in Merger Subsidiary:
(h) All
of the issued and outstanding shares of Company Common Stock shall be converted into the right to receive, upon the surrender of
the certificate(s) formerly representing such shares of Company Common Stock in accordance with
Section 2.8
, the Merger
Consideration.
(i) All
shares of Company Common Stock outstanding immediately prior to the Effective Time, when so converted, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and each holder of Company Common Stock shall cease to
have any ownership or other rights with respect thereto, except the right to receive the Merger Consideration in accordance with
the terms hereof.
(j) Each
membership interest of Merger Subsidiary issued and outstanding immediately prior to the Effective Time shall remain outstanding.
(k) As
of the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Company of shares
of Company Common Stock.
(l) The
REIT shall be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement such amounts
as are required to be deducted and withheld with respect to the making of such payment under the Code, or any provision of federal,
state, local or foreign Tax Law. To the extent that amounts are so withheld, (i) such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the Company Stockholder, and (ii) the REIT shall provide the Company Stockholder
written notice of the amounts so deducted or withheld.
(m) The
Company Stockholder waives any and all dissenter’s rights it may have, under applicable statutory provisions or otherwise,
in connection with the Merger.
2.2.
Prorations
.
(a) The
Merger Consideration may be adjusted, upward or downward, by the amount of any adjustments arising from the Prorations (as defined
herein) (as so adjusted, the “Adjusted Merger Consideration”). Adjustments arising from the prorations will be deducted
or paid, as the case may be, through the reduction or increase, as applicable, in the number of shares of REIT Class A Common Stock
comprising the Class A Common Stock Merger Consideration. For purposes of determining the number of shares of REIT Class A Common
Stock constituting any Prorations adjustment, the value per share of REIT Class A Common Stock shall be the public offering price
set forth on the front cover of the final prospectus for the REIT’s underwritten initial public offering or REIT Class A
Common Stock.
For purposes of this
Agreement, “
Prorations
” means those proration and adjustment amounts that are customarily applied to closings
of commercial real estate transactions in the county in which Real Property is located, which amounts shall be calculated as of
midnight (Eastern time) of the day immediately preceding the Closing Date and shall include:
(i)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Real Property shall be prorated
at the Closing;
(ii)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Real Property and all other income from the Real Property shall be
prorated at the Closing; and
(iii)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the various counties in which the Real Property is located shall be prorated at the Closing.
(b) No
less than three (3) but no more than five (5) business days prior to the Closing Date, the Company shall cause to be prepared and
delivered a certificate signed by an officer of the Company setting forth the Company’s good faith estimate of the Net Working
Capital of the Company as of close of business on the Closing Date (the “
Estimated Net Working Capital Amount
”),
which shall be prepared in accordance with the definitions thereof, and which shall be subject to the Company Stockholder’s
approval (not to be unreasonably withheld). To the extent that the Estimated Net Working Capital Amount is less than the Required
Net Working Capital Amount, then the Merger Consideration payable by the REIT at the Closing shall be decreased by such shortfall.
To the extent that the Estimated Net Working Capital Amount is greater than the Required Net Working Capital Amount, then the Merger
Consideration payable by the REIT at the Closing shall be increased by such surplus.
(c) All
amounts paid by any Person pursuant to this
Section 2.8
shall be considered an adjustment to the Merger Consideration for
Tax purposes.]
(d)
Tax
Consequences
. It is intended that, for U.S. federal income tax purposes, the Merger shall qualify as a reorganization within
the meaning of Section 368(a) of the Code and that this Agreement shall constitute a “plan of reorganization” as that
term is used in Sections 354 and 361 of the Code. This Agreement should be interpreted consistent with this intent.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES OF the Company AND THE COMPANY STOCKHOLDER
The Company and the
Company Stockholder represent and warrant to the REIT and Merger Subsidiary as follows:
3.1.
Organization
and Authority of the Company
. The Company is duly organized, validly existing and in good standing under the Laws of the State
of Tennessee. The Company has full corporate or entity power to carry on its business as it is now being conducted and to own,
operate and hold under lease its assets and properties as, and in the places where, such properties and assets now are owned, operated
or held. The Company is duly qualified as a foreign entity to do business , and is in good standing, in each jurisdiction in which
its ownership or leasing of property or the conduct of its business as now conducted requires it to qualify, except as would not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on the Company. Complete and correct
copies of the organizational documents of the Company have been delivered to the REIT as in effect on the date hereof, and, other
than as expressly contemplated by this Agreement, no amendment or other modification thereto has been filed, recorded or is pending
or contemplated thereto.
3.2.
Capitalization
.
(a) The
Company’s authorized capital stock consists of 1,000 shares of Company Common Stock and no shares of preferred stock. As
of the date hereof, 1,000 shares of Company Common Stock and no shares of preferred stock are issued and outstanding. Such shares
of Company Common Stock constitute all of the issued and outstanding shares of capital stock of the Company as of the date hereof.
All outstanding shares of Company Common Stock are held by the Company Stockholder. All issued and outstanding shares of Company
Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) are not subject to any
preemptive rights, (iii) are not subject to any voting agreements, and (iv) have not been issued in violation of any preemptive
rights, rights of first refusal or offer or applicable Law.
(b) Neither
the Company nor any of its subsidiaries is a party to any (A) option, warrant, put, contract, commitment, agreement or other obligation
pursuant to which the Company or any of its subsidiaries is bound to sell, repurchase or issue any shares of its capital stock
or other equity interest, including securities convertible into, exchangeable or exercisable for shares of capital stock, other
equity interest or other securities of the Company or any of its subsidiaries, (B) stockholder, member, voting or other agreement
affecting or relating to the voting, purchase, redemption, repurchase or transfer of any shares of capital stock or other interest
of the Company or any of its subsidiaries. No securities of the Company or any of its subsidiaries are subject to any pledge agreements,
buy-sell agreements or other contract, agreement, arrangement, commitment, option, proxy, pledge, right of first offer or refusal,
or understanding, including any contract restricting or otherwise relating to the ownership, voting rights, dividend rights, distribution
rights, or disposition thereof.
(c) All
distributions, dividends, repurchases and redemptions of the capital stock (or other equity interests) of the Company were undertaken
in compliance with the charter and bylaws of the Company then in effect, any agreement to which the Company was then a party and
all applicable Law. There are no dividends or other distributions that have accrued or been declared but that are unpaid and the
Company has no current obligation to declare or pay any dividend or distribution to the holders of any preferred stock or the Company
Common Stock.
3.3.
Authority
Relative to this Agreement; Board and Company Stockholder Approval
. The Company has all requisite corporate power and authority
to execute and deliver and to perform its obligations under this Agreement and this Agreement and the Merger have been approved
by the Board of Directors of the Company and by the Company Stockholder as required by the Tennessee Code and the Company’s
charter and bylaws. No other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery
and performance of this Agreement or to consummate the Merger and the other transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by the Company and (assuming the due authorization, execution and delivery hereof
and thereof by the other parties thereto) constitutes the valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, reorganization
or other Laws affecting the enforcement of creditors’ rights generally or by equitable principles.
3.4.
Consents
and Approvals; No Violations
. Except as set forth on
Schedule 3.4
, no consent, authorization or approval of, and no
notification, submission or filing with, any Governmental Authority or other Person (including filings, consents or approvals required
under any material Permits of the Company or any Material Contracts to which the Company is or will be a party) is necessary or
required in connection with the execution and delivery of this Agreement by the Company and the consummation by the Company of
the Merger and other transactions contemplated by this Agreement. Neither the execution or delivery of this Agreement by the Company
nor the performance of this Agreement or the consummation of the transactions contemplated hereby by the Company will (a) conflict
with or result in any breach of any provision of the charter, bylaws or other organizational documents of the Company, (b) result
in a violation of, breach of, or a loss of any benefit to which the Company is entitled, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under,
any of the terms, conditions or provisions of any Material Contract binding upon or providing rights to the Company, (c) violate
any material Permit, Governmental Order or Law applicable to the Company or (d) result in the creation or imposition of any Lien
(other than Permitted Liens) on any asset of the Company.
3.5.
Absence
of Certain Events
.
(a) Since
December 31, 2018, no event, fact, circumstance or condition has occurred that has had a Material Adverse Effect on the Company.
(b) From
December 31, 2018, through the date hereof, (y) the business of the Company has been operated in the ordinary course consistent
with past practice and (z) through the date hereof, the Company has not:
(i) created,
incurred, assumed or permitted to exist any additional Indebtedness or guaranteed any Indebtedness of another Person;
(ii) granted
any Lien other than a Permitted Lien;
(iii) acquired
or agreed to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, any business or
other Person;
(iv) incurred
or committed to incur any capital expenditures or authorization or commitment with respect thereto that in the aggregate exceeds
$100,000;
(v) changed
any Tax election, changed an annual Tax accounting period, adopted or changed any Tax accounting method, filed any amended Tax
Return, entered into any closing agreement, settled any Tax claim or assessment relating to the Company, surrendered any right
to claim a refund of Taxes, consented to any extension or waiver of the limitations period applicable to any Tax claim or assessment
relating to the Companies, or taken any other similar action;
(vi) paid,
discharged, settled or satisfied any claims, liabilities or obligations in excess of $10,000 in the aggregate, other than the payment,
discharge or satisfaction in the ordinary course of business or as required by their terms as in effect on the date hereof of claims,
liabilities or obligations reflected or reserved against in the Most Recent Balance Sheet or incurred in the ordinary course of
business consistent with past practices;
(vii) initiated
any material action, suit, claim or proceeding against any customer or vendor before any arbitrator or Governmental Authority;
(viii) made
any change in the financial or Tax accounting methods or accounting practices followed by the Company, except changes required
by Law or as a result of the Audit;
(ix) made
any loans or advances (except in the ordinary course of business consistent with past practice) to, capital contributions to, or
investments in, any other Person;
(x) materially
amended or extended, or assigned any material rights or claims under, (i) any Material Contract or (ii) any agreement or arrangement
with any Affiliate of the Company;
(xi) (i)
wrote-off as uncollectible any notes or accounts receivable except write-offs in the ordinary course, (ii) wrote-off, wrote-up
or wrote-down any other material asset of the Company or (iii) altered the customary time periods for collection of accounts receivable
or payments of accounts payable;
(xii) entered
into any new line of business outside of its existing lines of business;
(xiii) suffered
any material damage, destruction or other casualty loss (whether or not covered by insurance) affecting the Company or its assets;
or
(xiv) agreed
to do any of the foregoing (except as contemplated by this Agreement).
(c) Except
as set forth on
Schedule 3.5(c)
, from December 31, 2018, through the date hereof, the Company has not:
(i) issued,
sold or granted any shares of capital stock of any class or series, or any other equity interest, including securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or other equity interests,
or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares
of capital stock or other equity interests or any securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe for, any shares of capital stock or other equity interests in respect of, in lieu of, or in substitution for, shares
or other equity interests outstanding on the date hereof;
(ii) (i)
split, combined, subdivided or reclassified any shares of its capital stock or (ii) declared, set aside for payment or paid any
dividend, or made any other distribution, in respect of any of its capital stock, or redeemed or repurchased any of its capital
stock or any outstanding options, warrants or rights of any kind to acquire any shares of, or any outstanding securities that are
convertible into or exchangeable for any shares of, its capital stock;
(iii) adopted
any amendments or modification to its certificate of incorporation or bylaws or effected any recapitalization or similar transaction;
(iv) sold,
leased, licensed, abandoned or otherwise encumbered or subjected to any Lien or otherwise disposed of any of its material properties,
assets or rights or any interest therein;
(v) waived,
canceled, sold, leased, licensed or otherwise disposed of, for less than the face amount thereof, any claim or right it has against
others; or
(vi) agreed
to do any of the foregoing.
3.6.
Subsidiaries;
Minority Investments
. The Company has no subsidiaries and does not, directly or indirectly, own or hold of record and/or beneficially
own or hold capital stock or other equity interests in any other Person.
3.7.
Financial
Statements
.
(a) The
Company has delivered to the REIT true and complete copies of the balance sheet and statement of income of the Company for the
years ended December 31, 2016, 2017 and 2018 (the “
Company Financial Statements
”). The Company Financial Statements
(i) fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated, and (ii) were prepared in accordance with the Company’s accounting principles
applied on a consistent basis, except as otherwise expressly noted therein and subject, in the case of any unaudited interim financial
statements, to normally recurring year-end adjustments (which shall not be material individually or in the aggregate). The Company
Financial Statements were prepared from, and are materially consistent with, the accounting records of the Company and were prepared
in accordance with GAAP.
3.8.
Litigation
.
There are no Actions pending or, to the Knowledge of the Company Stockholder, threatened by or against the Company or any of its
properties or assets, or any of the directors or officers of the Company in such capacity.
3.9.
Employee
Matters
. The Company does not have, and has not within the past five years had, any employees.
3.10.
Tax
Matters
. Except as set forth on
Schedule 3.10
:
(a) the
Company has timely filed or caused to be timely filed all Tax Returns required to have been filed by or for it, and all information
set forth in such Tax Returns is accurate and complete in all material respects;
(b) the
Company has timely paid all amounts of Taxes that are due and payable by it whether or not shown or required to be shown on a Tax
Return;
(c) the
Company has not granted (or is not subject to) any waiver that is currently in effect of the period of limitations for the assessment
of any Tax; no unpaid Tax deficiency has been assessed or asserted against or with respect to the Company by any Governmental Authority;
there are no currently pending administrative or judicial proceedings, or any deficiency or refund litigation, with respect to
Taxes of the Company; and any such assertion, assessment, proceeding or litigation disclosed on
Schedule 3.10
is being
contested in good faith through appropriate measures, and its status is described on
Schedule 3.10
;
(d) the
Company has timely and properly withheld and paid all material amounts of Taxes required to have been withheld and paid, and has
complied in all material respects with all information reporting and backup withholding requirements, including maintenance of
required records with respect thereto, in connection with amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party;
(e) there
are no Liens for Taxes (other than Permitted Liens) upon any of the assets of the Company;
(f) the
Company is not obligated to make any payments, or is a party to any agreement that under certain circumstances could obligate it
to make any payments, that will not be deductible under Code § 280G
;
(g) [Reserved];
(h) the
Company is not a party to any Tax allocation or sharing agreement with any Person that is not an Affiliate of the Company other
than under a lease or other commercial agreement entered into in the ordinary course of business and with respect to each such
agreement, a principal purpose of the agreement is not the allocation or sharing of Taxes;
(i) the
Company (A) has not been a member of an affiliated group filing a consolidated federal Income Tax Return or (B) does not have any
liability for the Taxes of any Person under Treas. Reg. § 1.1502-6 (or any similar provision of state, local or foreign
Law), as a transferee or successor, by contract or otherwise (except for contracts that were entered into in the ordinary course
of business and a principal purpose of such contracts is not the allocation of Taxes);
(j) the
Company has not been, in the past three (3) years, a party to a transaction reported or intended to qualify as a distribution governed
by Code §§ 355, 356 or 361;
(k) the
Company has not engaged in any transaction which is a “listed transaction” within the meaning of Treasury Regulation
§§ 1.6011-4(b)(2) or 301.6111-2(b)(2) (irrespective of the Closing Date);
(l) the
Company is not required to include a material item of income, or exclude a material item of deduction, for any period after the
Closing Date as a result of (i) an installment sale transaction occurring on or before the Closing governed by Code § 453
(or any similar provision of foreign, state, or local Law); (ii) a transaction occurring on or before the Closing reported as an
open transaction for federal Income Tax purposes (or any similar doctrine for foreign, state or local tax purposes); (iii) prepaid
amounts received on or prior to the Closing; (iv) a change in method of accounting or use of an improper method of accounting,
in each case, requested or occurring on or prior to the Closing; (v) an agreement entered into with any taxing authority on or
prior to the Closing; or (vi) an election under Code §108(i);
(m) set
forth on
Schedule 3.10(l)
is a complete and correct list of all jurisdictions in which the Company has filed Tax Returns;
(n) except
as set forth on
Schedule 3.10(n)
, the Company has not, and has never had, a permanent establishment in any foreign country,
as defined in any applicable Tax treaty or convention between the United States and such foreign country, or otherwise has been
subject to Tax in any material respect in a jurisdiction where it does not currently file Tax Returns or pay Taxes;
(o) the
Company is classified, for U.S. federal income Tax purposes, as a C corporation;
(p) the
Company has not received any letter ruling from the Internal Revenue Service (or any comparable ruling from any other taxing authority);
and
(q) the
Company has made available to the REIT (i) true and complete copies of all U.S. federal and state Income Tax Returns and filed
by the Company for the past three years and (ii) true and complete copies of all notices of deficiencies, notices of proposed adjustments,
notices of assessments, revenue agent reports, closing agreements, settlement agreements, information document requests, and other
similar documents, notices, or correspondence that the Company (or any of their representatives) has received from, sent to, or
entered with (a) the IRS for the past three years or (b) a state taxing authority in the past three (3) years if, with respect
to clause (ii), such documents are readily available to the Company.
3.11.
Compliance
with Law
.
(a) The
Company holds all material Permits necessary for the lawful conduct its business. The Company is in compliance in all material
respects with the terms of such material Permits. The Company is (and has been for the prior five (5) years) in compliance in all
material respects with all applicable Laws. To the Knowledge of the Company Stockholder, no investigation or review by any Governmental
Authority with respect to the Company is pending or threatened.
3.12.
Fees
and Expenses of Brokers and Others
. The Company is not directly or indirectly committed to any liability for any brokers’
or finders’ fees or any similar fees in connection with the transactions contemplated by this Agreement or has retained any
broker or other intermediary to act directly or indirectly on its behalf in connection with the transactions contemplated by this
Agreement.
3.13.
Absence
of Undisclosed Liabilities
. Except as set forth on
Schedule 3.13
, the Company does not have any liability or obligation
of any kind, whether absolute, accrued, asserted or unasserted, contingent or otherwise, that is not adequately reflected or reserved
against on the Most Recent Balance Sheet, except liabilities or obligations (i) that were incurred after the date of the Most Recent
Balance Sheet in the ordinary course of business and consistent with past practice, or (ii) that were incurred in connection with
this Agreement.
3.14.
Environmental
Laws and Regulations
. Except as set forth on
Schedule 3.14
:
(a) the
Company is, and has been for the prior five (5) years, in compliance in all material respects with all applicable Environmental
Laws;
(b) there
is no action or proceeding pending or, to the Knowledge of the Company Stockholder, any investigation pending, against the Company,
nor, to Knowledge of the Company Stockholder, is any action, proceeding or investigation threatened against the Company, with respect
to Hazardous Substances or Environmental Laws; and the Company has not received, any actual or proposed order, notice or other
communication (written or oral) from any Governmental Authority or other Person of any actual or potential material violation of,
or actual or potential material liability under, any Environmental Law including any corrective, investigatory or remedial obligations,
or personal injury, property damage or natural resources damages claims arising under any Environmental Law;
(c) the
Company possesses and is in compliance in all material respects with all Permits that are required pursuant to any applicable Environmental
Law (“
Environmental Permits
”) for the operation of the Company’s business and none of the Environmental
Permits requires consent, notification or other action to remain in full force and effect following consummation of the transactions
contemplated herein. All Environmental Permits are in full force and effect and no modification, suspension or cancellation is
pending or, to the Knowledge of the Company Stockholder, threatened; and
(d) the
Company has not assumed, by contract, agreement or operation of law, the liability of any other Person arising under Environmental
Law.
3.15.
Insurance
.
To the Knowledge of the Company Stockholder, all policies of insurance covering the assets, business and operations of the Company
(a) are in full force and effect with all premiums due having been paid in full and (b) are valid, outstanding and enforceable
policies. During the past five (5) years, there has been no lapse in coverage or material reduction in scope of the insurance carried
by the Company in the ordinary course of its business, and the Company has not received any notice of any proposed material increase
in the premiums payable for coverage. None of the insurers of the Company has issued a reservation of rights letter received by
the Company in the defense of claims. The Company has complied in all material respects with the terms and conditions of all of
the insurance policies owned or held by the Company.
3.16.
Material
Contracts
.
(a)
Schedule 3.16
attached hereto sets forth a correct and complete list of the following Contracts (whether or not included on such schedule, the
“
Material Contracts
”):
(i) each
Contract that currently requires payment by, or payment to, the Company of more than $50,000 per year;
(ii) each
note, mortgage, indenture, loan or credit agreement, security agreement, and other agreement and instrument reflecting outstanding
obligations or available commitments for borrowed money or other Indebtedness;
(iii) any
guarantee that may result in an obligation by the Company in excess of $10,000; and
(iv) all
Leases.
(b) Assuming
the due authorization, execution and delivery by the other parties thereto, each of the Material Contracts is valid, binding, in
full force and effect and enforceable by and against the Company in accordance with its terms, except to the extent that its enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or other Laws affecting the enforcement of creditors’
rights generally or by equitable principles.
(c) The
Company is not in breach or default under any Material Contract. To the Knowledge of the Company Stockholder, no material breach
or material default under any Material Contract by any other party thereto has occurred. There is no event or condition which has
occurred or exists which constitutes or which, with or without notice, the happening of any event and/or the passage of time, would
constitute a material default or material breach under any Material Contract by the Company or, to the Knowledge of the Company
Stockholder, any other party thereto, or would cause the acceleration of any obligation or loss of any material rights of any party
thereto or give rise to any right of termination or cancellation thereof. The Company has delivered to the REIT true and complete
copies of each written Material Contract and written summaries of the payment terms and other material terms of any oral Material
Contracts.
(d) The
Company has not received any notice (a) alleging breach of any Material Contract, (b) terminating or threatening to terminate any
Material Contract or (c) of intent not to renew a Material Contract and, to the Knowledge of the Company Stockholder, no counterparty
to a Material Contract has any intent to terminate or not renew such Material Contract.
(e) Except
as would not, individually or in the aggregate, have a Material Adverse Effect, and solely with respect to Contracts of the Company
other than the Material Contracts: (i) each such Contract is valid, binding, in full force and effect and enforceable by and against
the Company in accordance with its terms, except to the extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other Laws affecting the enforcement of creditors’ rights generally or by equitable principles;
(ii) the Company is not in breach or default under any such Contract, and to the Knowledge of the Company Stockholder, no breach
or default under any such Contract by any party thereto other than the Company has occurred; and (iii) there is no event or condition
which has occurred or exists which constitutes or which, with or without notice, the happening of any event or the passage of time,
would constitute a material default or breach under any such Contract by the Company or, to the Knowledge of the Company Stockholder,
any other party thereto, or would cause the acceleration of any obligation or loss of any material rights of any party thereto
or give rise to any right of termination or cancellation thereof.
3.17.
Real
Property
.
(a) The
real property described on
Schedule 3.17
constitutes all the real property owned by the Company (the “
Real Property
”).
Other than the Real Property, the Company does not own, lease, sublease, license, occupy or use any real property. The Real Property
constitutes all the real property necessary to conduct the Company’s business as currently conducted and as currently proposed
by the Company to be conducted. The Company has provided the REIT with true and complete copies of all of the leases and subleases
(including any exhibits, addendums, amendments or modifications related thereto) relating to the Real Property (collectively, the
“
Leases
”).
(b) With
respect to the Real Property:
(i) all
rents and other amounts due under the Leases have been paid in full on or before the date when due and payable, and no security
deposit has been applied in connection with a breach or default that has not been replaced in full;
(ii) no
claim has been asserted against the Company adverse to its rights in the Real Property;
(iii) there
are no Liens encumbering the Real Property other than Permitted Liens;
(iv) all
facilities, buildings, improvements and fixtures on the Real Property are in good condition and repair, subject to normal wear
and tear, and are suitable for the continued operation of the Company’s business as currently conducted;
(v) to
the Knowledge of the Company Stockholder, there are no pending or threatened condemnation proceedings, lawsuits or administrative
actions relating to the Real Property or other matters affecting adversely the current use or occupancy thereof;
(vi) to
the Knowledge of the Company Stockholder, the Real Property (A) is in compliance in all material respects with all applicable Laws
relating to occupancy and operation thereof and there are no violations of Law related to the Real Property, (B) has received all
material approvals of Governmental Authorities (including Permits) required in connection with the occupancy and operation thereof
and (C) has been operated and maintained in all material respects in accordance with applicable Law;
(vii) all
facilities located on the Real Property are supplied with utilities and other services necessary for the operation of such facilities
by the tenant, including gas, electricity, water, telephone, sanitary sewer and storm sewer, all of which services are reasonably
adequate in quality and quantity for the operation of the tenant’s business as currently conducted;
(viii) except
as set forth on
Schedule 3.17,
the Company has not granted a mortgage or security interest in the Real Property and/or the
Leases; and
(ix) the
Company does not owe, and will not owe in connection with the transactions contemplated under this Agreement, any broker’s
fees and/or commissions in connection with the Real Property and/or the Leases.
3.18.
Books
and Records
.
(a) The
minute books of the Company have been delivered to the REIT. The books of account and stock record books of the Company are located
at the Company’s offices, are complete and correct in all material respects, represent actual, bona fide transactions and
have been maintained in accordance with applicable legal and accounting requirements.
(b) The
Company has established and maintains a system of internal accounting controls reasonably adequate for the size, operations and
business of the Company to ensure that (i) all transactions related to the Company are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit the preparation of financial statements
and to maintain proper accountability for assets and (iii) payments or actions prohibited by anti-bribery, corruption and
similar Laws are detected. The Company has not identified or been made aware of any fraud that involves the Company, its Affiliates,
or their management, or other current employees or any claim or allegation regarding any of the foregoing, and the Company has
not received any written notice from its independent accountants regarding any of the foregoing.
3.19.
Accounts
Receivable
. All of the accounts receivable of the Company are (a) valid and enforceable claims, not subject to any valid defenses,
set offs or counterclaims (net of reserves reflected in the Most Recent Balance Sheet), (b) determined in accordance with the Company’s
historical accounting principles, consistently applied, (c) arose out of bona fide transactions in the ordinary course of business,
(d) represent sales actually made or services actually performed or to be performed in the ordinary course of business in bona
fide, arms-length transactions completed in accordance with the terms and provisions contained in any documents relating thereto
and in compliance with Laws and (e) as of the date hereof have not been outstanding for more than 90 days from the date of
invoice. As of the Closing Date, any reserves for collection losses related to the accounts receivable that are included in the
Most Recent Balance Sheet will be reasonably adequate. The Company has not factored or discounted, or agreed to factor or discount,
any accounts receivable.
3.20.
Indebtedness
.
The Company’s Indebtedness as of the date hereof is set forth on
Schedule 3.19
.
3.21.
Full
Disclosure
. The representations and warranties of the Company contained in this Agreement do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading. The Company has not made any representations or statements that
were misleading or inaccurate in any material respect or has withheld from or failed to disclose to the REIT any data, documents,
or other information that could reasonably be expected to affect its ability to perform its obligations under this Agreement, or
to conduct its business in the ordinary course.
ARTICLE
IV
REPRESENTATIONS AND WARRANTIES OF THE REIT AND MERGER SUBSIDIARY
The REIT and Merger
Subsidiary hereby represent and warrant to the Company Stockholder as follows:
4.1.
Organization
and Authority of the REIT and Merger Subsidiary
. Each of the REIT and Merger Subsidiary is duly organized, validly existing
and in good standing under the Laws of the State of Maryland and Delaware, respectively. Each of the REIT and Merger Subsidiary
has full corporate or limited liability company- power to execute and deliver and to perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The REIT owns one hundred percent (100%) of the outstanding equity interests
in Merger Subsidiary. Merger Subsidiary was formed for the purpose of effecting the transactions contemplated herein, holds no
assets and has no liabilities, and has not engaged in any other business activities or conducted any operations (other than entering
into this Agreement).
4.2.
Authority
Relative to this Agreement
. The execution, delivery and performance of this Agreement by the REIT and Merger Subsidiary, as
applicable, are within the corporate or limited liability company power and authority of such party. The execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the applicable
governing body of each of the REIT and Merger Subsidiary and no other corporate proceedings on the part of the REIT or Merger Subsidiary
are necessary to authorize the execution, delivery and performance of this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been or will be duly and validly executed and delivered by the REIT and Merger Subsidiary, and assuming
the due authorization by the other parties thereto and the authorization, execution and delivery hereof and thereof by such other
parties constitute or will constitute valid and binding agreements of the REIT and Merger Subsidiary, as applicable, enforceable
against such party in accordance with its terms, except to the extent that their enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other Laws affecting the enforcement of creditors’ rights generally or by equitable principles.
4.3.
Consents
and Approvals; No Violations
. No consent or approval of, and no notification, submission, or filing with any Governmental Authority
is necessary or required in connection with the execution and delivery of this Agreement by the REIT or Merger Subsidiary or for
the consummation of the transactions contemplated hereby. Except as set forth on
Schedule 4.3
attached hereto, neither
the execution or delivery of this Agreement by the REIT or Merger Subsidiary, nor the performance of this Agreement nor the consummation
of the transactions contemplated hereby by the REIT or Merger Subsidiary will (a) conflict with or result in any breach of any
provision of the respective organizational documents of the REIT or Merger Subsidiary (b) result in a material violation or material
breach of, or constitute (with or without due notice or lapse of time or both) a material default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, Contract or other instrument or obligation to which the REIT or Merger Subsidiary is a party or by which any
of the properties or assets of the REIT or Merger Subsidiary may be bound or (c) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the REIT or Merger Subsidiary or any of the properties or assets of the REIT or Merger Subsidiary.
4.4.
REIT
Common Stock.
The issuance of the REIT Class A Common Stock and the REIT Class B Common Stock pursuant to the Merger has been
duly authorized by all requisite corporate action of the REIT and upon issuance at Closing in accordance with the terms of this
Agreement such stock will be validly issued, fully paid and non-assessable.
4.5.
Litigation
.
As of the date hereof, there is no action, suit, proceeding or investigation pending or, to the knowledge of the REIT, threatened
against or relating to the REIT or Merger Subsidiary before any Governmental Authority that seeks restraint, prohibition, damages
or other relief in connection with this Agreement or the consummation of the transactions contemplated hereby.
4.6.
Fees
and Expenses of Brokers and Others
. Neither the REIT nor Merger Subsidiary is committed to any liability for any brokers’
or finders’ fees or any similar fees in connection with the transactions contemplated by this Agreement or has retained any
broker or other similar intermediary to act directly or indirectly on its behalf in connection with the transactions contemplated
by this Agreement.
4.7.
Tax
.
The REIT intends to qualify as a real estate investment trust under the Code and Merger Subsidiary intends to be classified as
disregarded as an entity separate from its owner under Treasury Regulations § 301.7701-3.
ARTICLE
V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1.
Operation
in the Ordinary Course
. During the period from the date of this Agreement to the Effective Time, unless the REIT shall otherwise
consent in writing and except as otherwise expressly required by this Agreement or required by Law, the Company shall (a) operate
its business in the ordinary course, consistent with past practice; (b) use its reasonable efforts to preserve intact its assets
(including its goodwill) and current business organizations, to keep and to maintain current relationships with its tenants, suppliers
and others having business relationships with the Company; (c) pay its Indebtedness and trade and other accounts payable punctually
when and as the same will become due and payable and perform and observe, in all material respects, its duties and obligations
under all contracts; (d) pay all Taxes as they become due and payable and use reasonable efforts to maintain in full force and
effect all insurance policies.
5.2.
Affirmative
and Negative Covenants
. During the period from the date of this Agreement to the Effective Time, unless the REIT shall otherwise
consent in writing (and except as otherwise expressly required by this Agreement or required by Law), the Company shall not, directly
or indirectly:
(a) issue,
sell or grant any shares of capital stock of any class or series, or any other equity interest, including securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or other equity interests,
or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares
of capital stock or other equity interests or any securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe for, any shares of capital stock or other equity interests in respect of, in lieu of, or in substitution for, shares
or other equity interests outstanding on the date hereof;
(b) (i)
split, combine, subdivide or reclassify any shares of its capital stock or (ii) declare, set aside for payment or pay any dividend,
or make any other distribution, in respect of any of its capital stock, or (iii) redeem or repurchase any of its capital stock
or any outstanding options, warrants or rights of any kind to acquire any shares of, or any outstanding securities that are convertible
into or exchangeable for any shares of, its capital stock;
(c) amend
or modify its certificate of incorporation or bylaws or effect or become a party to any recapitalization or similar transaction;
(d) other
than borrowings by the Company in the ordinary course of business consistent with past practice, create, incur, assume or permit
to exist any additional Indebtedness or guarantee any Indebtedness of another Person;
(e) grant
any Lien other than a Permitted Lien;
(f) acquire
or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, any business or
other Person;
(g) sell,
lease, license, abandon or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties, assets or rights
or any interest therein;
(h) make
or agree to make any capital expenditures that, when added to all other capital expenditures made by or on behalf of the Company
since the date hereof, exceed $100,000;
(i) make
or change any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended
Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to
claim a refund of Taxes, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment
relating to the Companies, or take any other similar action, if such election, adoption, change, amendment, agreement, settlement,
surrender, consent or other action would have the effect of materially increasing the Tax liability of the Company for any period
ending after the Closing Date or materially decreasing any Tax attribute of the Company existing on the Closing Date without, in
any such case, having the effect of providing a substantially equivalent reduction in Tax liability for any period ending after
the Closing Date or increase in one or more Tax attributes existing on or after the Closing Date;
(j) pay,
discharge, settle or satisfy any claims, liabilities or obligations, other than (i) repayment of any Indebtedness, or (ii) the
payment, discharge or satisfaction of claims (A) in the ordinary course of business consistent with past practice or (B) as required
by their terms as in effect on the date hereof;
(k) initiate
any material action, suit, claim or proceeding against any tenant or vendor before any arbitrator or Governmental Authority except
to the extent necessary to preserve any rights or claims;
(l) make
any change in the financial or Tax accounting methods or accounting practices followed by the Company, except changes required
by Law or by GAAP;
(m) make
any loans or advances (except in the ordinary course of business consistent with past practice) to, capital contributions to, or
investments in, any other Person;
(n) enter
into or materially amend, extend or terminate (other than upon expiration of such Contract), or waive, release or assign any rights
or claims under, any Material Contract or any agreement or arrangement with any Company Affiliate;
(o) enter
into any Contract that places any limitation on the method of conducting or scope of any business of the Company or any of its
Affiliates;
(p) enter
into any new line of business;
(q) cause
any material damage, destruction, or other casualty loss (whether or not covered by insurance) affecting the Company or its assets;
(r) waive,
cancel, sell, lease, license or otherwise dispose of, for less than the face amount thereof, any claim or right it has against
others;
(s) create
any subsidiary of the Company;
(t) enter
into any joint venture, partnership, strategic alliance or similar arrangement with any Person;
(u) take
any other action which could reasonably be expected to cause (i) a breach or inaccuracy of any representation or warranty in
Article
III
or (ii) a condition set forth in
Article VII
not to be satisfied;
(v) take
any action with the intent to cause a representation or warranty to become untrue or incorrect; or
(w) agree
to do any of the foregoing.
ARTICLE
VI
ADDITIONAL AGREEMENTS
6.1.
Access
to Information
. Upon reasonable notice, the Company shall afford to the officers, employees, accountants, counsel and other
representatives of the REIT, reasonable access during normal business hours during the period from the date hereof to the Effective
Time, to all of the facilities and properties of the Company and the accountants, properties, books and records, Permits and Contracts
of the Company and during such period, the Company shall furnish to the REIT all information concerning its business, financial
condition, properties and personnel as the REIT may reasonably request.
6.2.
Reasonable
Efforts
. Subject to the terms and conditions set forth in this Agreement, each of the Company and the REIT agrees to use reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable,
the Merger and the other transactions contemplated by this Agreement.
6.3.
Notification;
Updates to Schedules
.
(a) Prior
to the Closing, each of the Company and the REIT shall notify the other party in writing if such party obtains knowledge of any
material breaches or inaccuracies of any of the representations and warranties contained herein or any material breach of any covenant
or other agreement hereunder by such party; provided that any such notification shall not cure any breach or inaccuracy or affect
the other party’s rights and remedies under this Agreement.
(b) The
Company shall deliver to the REIT prior to the Closing Date a true and complete schedule of changes (the “
Updated Schedules
”)
to any of the information contained in the Disclosure Schedules (including changes to any other representations or warranties in
Article III
hereof as to which no Schedule has been created as of the date hereof but as to which a Schedule would
have been required if such changes had existed on the date hereof), but only if such changes are required as a result of events
or circumstances occurring after the date hereof and not as a result of any breach or failure to perform any covenant or agreement
contained herein, and would render any representation or warranty inaccurate or incomplete at any time. The Updated Schedules shall
be dated as of the Closing Date.
6.4.
Registration
.
(a)
Shelf
Registration of the REIT Class A Common Stock
. Following the date on which the REIT becomes eligible to use a registration
statement on Form S-3 for the registration of securities (the “
S-3 Eligible Date
”), under the Securities Act
of 1933, as amended (the “
Securities Act
”), the REIT shall use commercially reasonable efforts to file with
the SEC a shelf registration statement under Rule 415 of the Securities Act (the “
Registration Statement
”),
or any similar rule that may be adopted by the SEC, covering (i) the issuance of REIT Class A Common Stock issuable upon conversion
of the Class B Common Stock Merger Consideration (the “
Conversion Shares
”) and/or (ii) the resale by the holder
of the Conversion Shares and the Class A Common Stock Merger Consideration (together with the Conversion Shares, the “
Resale
Shares
”). In connection therewith, the REIT will:
(i) use
commercially reasonable efforts to have such Registration Statement declared effective;
(ii) to
use our commercially reasonable efforts to keep the registration statement continuously effective (including the preparation an
filing of any amendments and supplements necessary for that purpose) until the earlier of (i) the date that is two (2) years after
the date of the effectiveness of the registration statement, (ii) the date on which all the Resale Shares registered on the registration
statement are eligible for sale without registration pursuant to Rule 144 under the Securities Act, or any successor rule thereto
(“
Rule 144
”) under the Securities Act without volume limitations or other restrictions on transfer thereunder,
or (iii) the date on which all the Resale Shares registered by the registration statement are sold;
(iii) use
commercially reasonable efforts to register or qualify the Resale Shares covered by the Registration Statement under the securities
or blue sky laws of such jurisdictions within the United States as required by law, and do such other reasonable acts and things
as may be required of it to enable such holders to consummate the sale or other disposition in such jurisdictions of the Resale
Shares; provided, however, that the REIT shall not be required to (i) qualify as a foreign corporation or consent to a general
or unlimited service or process in any jurisdictions in which it would not otherwise be required to be qualified or so consent
or (ii) qualify as a dealer in securities; and
(iv) otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC in connection with the Registration
Statement.
The REIT further agrees to use commercially
reasonable efforts to supplement or make amendments to the Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form utilized by the REIT or by the Securities Act or rules and regulations thereunder for the Registration
Statement. The Company Stockholder agrees to furnish to the REIT, upon request, such information as may be required to complete
and file the Registration Statement and to have the Registration Statement declared effective by the SEC.
In connection with and
as a condition to the REIT’s obligations with respect to the filing of the Registration Statement pursuant to this Section
6.4(a), the Company Stockholder agrees with the REIT that:
(i) he
will provide in a timely manner to the REIT such information as reasonably required to complete the Registration Statement or as
otherwise required to comply with applicable securities laws and regulations;
(ii) he
will not offer or sell his Resale Shares until (A) such Resale Shares have been included in the Registration Statement and (B)
it has received notice that the Registration Statement covering such Resale Shares, or any post-effective amendment thereto, has
been declared effective by the SEC, such notice to have been satisfied by the posting by the SEC on www.sec.gov of a notice of
effectiveness;
(iii) if
the REIT determines in its good faith judgment, after consultation with counsel, that the use of the Registration Statement, including
any pre- or post-effective amendment thereto, or the use of any prospectus contained in such Registration Statement would require
the disclosure of important information that the REIT has a bona fide business purpose for preserving as confidential or the disclosure
of which, in the judgment of the REIT, would impede the REIT’s ability to consummate a significant transaction, upon written
notice of such determination by the REIT (which notice shall be deemed sufficient if given through the issuance of a press release
or filing with the SEC and, if such notice is not publicly distributed, Andrew Spodek agrees to keep the subject information confidential
and acknowledges that such information may constitute material non-public information subject to the applicable restrictions under
securities laws), the Company Stockholder’s right to offer, sell or distribute his Resale Shares pursuant to such Registration
Statement or prospectus or to require the REIT to take action with respect to the registration or sale of any Resale Shares pursuant
to a Registration Statement (including any action contemplated by this Section 6.4(a)) will be suspended until the date upon which
the REIT notifies the Company Stockholder in writing (which notice shall be deemed sufficient if given through the issuance of
a press release or filing with the SEC and, if such notice is not publicly distributed, the Company Stockholder agrees to keep
the subject information confidential and acknowledges that such information may constitute material non-public information subject
to the applicable restrictions under securities laws) that suspension of such rights for the grounds set forth in this paragraph
is no longer necessary; provided, however, that the REIT may not suspend such rights for an aggregate period of more than 180 days
in any 12-month period; and
(iv) in
the case of the registration of any underwritten equity offering proposed by the REIT (other than any registration by the REIT
on Form S-8, or a successor or substantially similar form, of an employee stock option, stock purchase or compensation plan or
of securities issued or issuable pursuant to any such plan), the Company Stockholder will agree, if requested in writing by the
managing underwriter or underwriters administering such offering, not to effect any offer, sale or distribution of any REIT Common
Stock or Resale Shares (or any option or right to acquire REIT Common Stock or Resale Shares) during the period commencing on the
tenth day prior to the expected effective date (which date shall be stated in such notice) of the registration statement covering
such underwritten primary equity offering or, if such offering shall be a “take-down” from an effective shelf registration
statement, the tenth day prior to the expected commencement date (which date shall be stated in such notice) of such offering,
and ending on the date specified by such managing underwriter in such written request to the Company Stockholder; provided, however,
that the Company Stockholder shall not be required to agree not to effect any offer, sale or distribution of his Resale Shares
for a period of time that is longer than the greater of 90 days or the period of time for which any senior executive of the REIT
is required so to agree in connection with such offering.
(b)
Listing
on Securities Exchange
. If the REIT lists or maintains the listing of REIT Common Stock on any securities exchange or national
market system, it shall, at its expense and as necessary to permit the registration and sale of the Resale Shares hereunder, list
thereon, maintain and, when necessary, increase such listing to include such Resale Shares.
(c)
Registration
Not Required
. Notwithstanding the foregoing, the REIT shall not be required to file or maintain the effectiveness of a registration
statement relating to Resale Shares after the first date upon which, in the opinion of counsel to the REIT, all of the Resale Shares
covered thereby could be sold by the holders thereof either (i) pursuant to Rule 144 without limitation as to amount or manner
of sale or (ii) pursuant to Rule 144 in one transaction in accordance with the volume limitations contained in Rule 144(e) under
the Securities Act.
(d)
Allocation
of Expenses
. The REIT shall pay all expenses in connection with the Registration Statement, including without limitation (i)
all expenses incident to filing with the Financial Industry Regulatory Authority, Inc., (ii) registration fees, (iii) printing
expenses, (iv) accounting and legal fees and expenses, except to the extent holders of Resale Shares elect to engage accountants
or attorneys in addition to the accountants and attorneys engaged by the REIT, which fees and expenses for such accountants or
attorneys shall be for the account of the holders of the Resale Shares, (v) accounting expenses incident to or required by any
such registration or qualification and (vi) expenses of complying with the securities or blue sky laws of any jurisdictions in
connection with such registration or qualification; provided, however, the REIT shall not be liable for, or pay (A) any discounts
or commissions to any underwriter or broker attributable to the sale of Resale Shares, or (B) any fees or expenses incurred by
holders of Resale Shares in connection with such registration that, according to the written instructions of any regulatory authority,
the REIT is not permitted to pay.
(e)
Indemnification
.
(i) In
connection with the Registration Statement, the REIT agrees to indemnify each holder of Resale Shares and each Person who controls
any such holder of Resale Shares within the meaning of Section 15 of the Securities Act, against all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) caused by any untrue, or alleged untrue, statement of a material fact
contained in the Registration Statement, preliminary prospectus or prospectus (as amended or supplemented if the REIT shall have
furnished any amendments or supplements thereto) or caused by any omission or alleged omission, to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any untrue statement, alleged untrue statement, omission, or alleged omission based
upon information furnished to the REIT by the Company Stockholder or the holder for use therein. The REIT and each officer, director
and controlling person of the REIT shall be indemnified by the Company Stockholder or holder of Resale Shares covered by the Registration
Statement for all such losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) caused by
any untrue, or alleged untrue, statement or any omission, or alleged omission, based upon information furnished to the REIT by
the Company Stockholder or the holder for use therein.
(ii) Promptly
upon receipt by a party indemnified under this Section 6.4(e) of notice of the commencement of any action against such indemnified
party in respect of which indemnity or reimbursement may be sought against any indemnifying party under this Section 6.4(e), such
indemnified party shall notify the indemnifying party in writing of the commencement of such action, but the failure to so notify
the indemnifying party shall not relieve it of any liability that it may have to any indemnified party otherwise than under this
Section 6.4(e) unless such failure shall materially adversely affect the defense of such action. In case notice of commencement
of any such action shall be given to the indemnifying party as above provided, the indemnifying party shall be entitled to participate
in and, to the extent it may wish, jointly with any other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be paid by the indemnified party unless (i) the indemnifying party agrees to pay the same, (ii) the indemnifying
party fails to assume the defense of such action with counsel reasonably satisfactory to the indemnified party or (iii) the named
parties to any such action (including any impleaded parties) have been advised by such counsel that representation of such indemnified
party and the indemnifying party by the same counsel would be inappropriate under applicable standards of professional conduct
(in which case the indemnified party shall have the right to separate counsel and the indemnifying party shall pay the reasonable
fees and expenses of such separate counsel, provided that, the indemnifying party shall not be liable for more than one separate
counsel). No indemnifying party shall be liable for any settlement of any proceeding entered into without its consent.
(f)
Contribution
.
(i) If
for any reason the indemnification provisions contemplated by Section 6.4(e) hereof are either unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages or liabilities referred to therein, then the party that
would otherwise be required to provide indemnification or the indemnifying party (in either case, for purposes of this Section
6.4(f), the “
Indemnifying Party
”) in respect of such losses, claims, damages or liabilities, shall contribute
to the amount paid or payable by the party that would otherwise be entitled to indemnification or the indemnified party (in either
case, for purposes of this Section 6.4(f), the “
Indemnified Party
”) as a result of such losses, claims, damages,
liabilities or expense, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified
Party, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and Indemnified Party
shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact related to information supplied by the Indemnifying Party or Indemnified Party, and
the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by such party.
(ii) The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6.4(f) were determined by
pro rata allocation (even if the holders were treated as one entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person or entity determined
to have committed a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.
(iii) The
contribution provided for in this Section 6.4(f) shall survive the termination of this Agreement and shall remain in full force
and effect regardless of any investigation made by or on behalf of any Indemnified Party.
ARTICLE
VII
CONDITIONS PRECEDENT TO CONSUMMATION OF THE MERGER
7.1.
Conditions
Precedent to Obligations of Each Party
. The obligations of each party to consummate the Merger and the other transactions contemplated
by this Agreement are subject to the satisfaction or waiver by such party at or prior to the Effective Time of the following conditions
precedent:
(a) The
pricing of the IPO shall have occurred.
(b) There
shall be no pending administrative or judicial proceeding initiated by any Governmental Authority that seeks to prevent consummation
of the Merger or other transactions contemplated by this Agreement and no temporary restraining order, preliminary or permanent
injunction or other Governmental Order preventing the consummation of the Merger or other transactions contemplated by this Agreement
shall have been issued by any court of competent jurisdiction or any other Governmental Authority and shall remain in effect, and
there shall not be any Law enacted or deemed applicable to the Merger or other transactions contemplated by this Agreement that
makes consummation of the Merger or such other transactions illegal or otherwise prohibits or interferes with the consummation
of the Merger or such other transactions.
7.2.
Conditions
Precedent to Obligations of the REIT and Merger Subsidiary
. The obligations of the REIT and Merger Subsidiary to consummate
the Merger and the other transactions contemplated by this Agreement are subject to the satisfaction or waiver by the REIT at or
prior to the Effective Time of the following conditions precedent:
(a) Each
of the representations and warranties of the Company contained in this Agreement shall have been true and correct as of the date
of this Agreement, and shall be true and correct as of the Closing Date as if made on such date (other than any representations
and warranties made as of another date, which representations and warranties shall be true and correct as of such other date) in
all material respects (if not qualified by materiality or by Material Adverse Effect) or in all respects (if qualified by materiality
or by Material Adverse Effect).
(b) Each
of the covenants and agreements of the Company to be performed at or before the Closing pursuant to the terms of this Agreement
shall have been duly performed in all material respects.
(c) The
REIT shall have received a certificate dated as of the Closing Date and executed by the Company Stockholder certifying as to the
matters set forth in
Sections 7.2(a)
and
7.2(b)
.
(d) The
REIT shall have received an affidavit from the Company Stockholder certifying pursuant to Section 1445 and Section 1446(f) of the
Code that the Company Stockholder is not a foreign corporation, foreign partnership, foreign trust, foreign estate, or foreign
person (as those terms are defined in the Code and Treasury Regulations promulgated thereunder.
(e) No
change, event, fact, occurrence, circumstance or condition shall have occurred or arisen since the date of this Agreement that,
individually or when considered together with all other matters, has had or would reasonably be expected to have a Material Adverse
Effect on the Company.
7.3.
Conditions
Precedent to Obligations of the Company
. The obligations of the Company to consummate the Merger and other transactions contemplated
by this Agreement are subject to the satisfaction or waiver by the Company at or prior to the Effective Time of the following conditions
precedent:
(a) Each
of the representations and warranties of the REIT and Merger Subsidiary contained in
Article IV
shall have been true
and correct as of the date of this Agreement, and shall be true and correct as of the Closing Date as if made on such date (other
than any representations and warranties made as of another date, which representations and warranties shall be true and correct
as of such other date) in all material respects (if not qualified by materiality or by Material Adverse Effect) or in all respects
(if qualified by materiality or by Material Adverse Effect).
(b) Each
of the covenants and agreements of the REIT and Merger Subsidiary to be performed at or before the Closing pursuant to the terms
of this Agreement shall have been duly performed in all material respects.
ARTICLE
VIII
SURVIVAL; INDEMNIFICATION; TAX MATTERS
8.1.
Survival
of Representations, Warranties and Covenants
. The representations and warranties of the Company and the REIT contained in
this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, and all un-waived covenants or
agreements required to be performed at or prior to the Closing, shall terminate on the date that is twelve (12) months after the
Closing Date (or, if such date is not a business day, the immediately following business day), except that (i) any covenants or
agreements that, by their express terms, survive beyond the Survival Date set forth in the preceding sentence shall survive until
the end of such other period expressly set forth herein, (ii) the representations and warranties set forth in
Section 3.10
(Tax Matters) (collectively, the “
Special Representations
”) and the covenants concerning Taxes set forth
in
Section 8.9
shall survive until ninety (90) days after the expiration of the statute of limitations applicable to the
underlying claim (the “
Survival Date
”), As of the applicable Survival Date, the applicable representations,
warranties, covenants and agreements (or in any instrument delivered pursuant hereto) shall automatically terminate and be of
no further force or effect, and except as provided in
Section 8.6
, no claims of any type whatsoever arising out of,
based upon or relating in any way to any such representations, warranties, covenants and agreements may be brought by any party
after such Survival Date.
8.2.
Indemnification
.
(a)
Tax
Treatment of Payments
. All indemnification payments made under this Agreement shall be deemed to be an adjustment to the Merger
Consideration to the extent permitted by applicable Law.
(b)
Preparation
and Filing of Tax Returns
.
(c)
The Company Stockholder shall be responsible for preparing and filing all Tax Returns required to be filed by the Company for any
period. All Tax Returns filed after the Closing Date for any Pre-Closing Tax Period shall be prepared in a manner that is consistent
with the prior practice of the Company, except as otherwise required by applicable Law or agreed by the REIT. Except as expressly
provided in this Agreement, the Company Stockholder shall not amend or cause or permit the Company to amend any Tax Return of or
relating to the Company for any Pre-Closing Tax Period, unless such amendment is required under applicable law.
(d)
The Company Stockholder shall submit to the REIT for its review and approval a draft of any Income Tax Return for any Pre-Closing
Tax Period (including any Income Tax Return for a Straddle Period) at least forty-five (45) days prior to the due date (taking
into account any extensions thereof) or, if the due date is within forty-five (45)) days after the Closing Date, as soon as practical
prior to such due date. The REIT shall each have thirty (30) days after receipt of such draft Income Tax Return to notify the Company
Stockholder of any disagreement with such draft Tax Return. If the REIT notifies the Company Stockholder of any disagreement with
such draft Tax Return, the Company Stockholder shall revise such draft Tax Return for such change and notify the REIT of such change.
If the REIT fails to notify the Company Stockholder of any disagreement after having timely received a draft Income Tax Return,
then such draft Income Tax Return shall become final and binding on the parties. If the REIT and the Company Stockholder do not
resolve such disagreement by the due date (including extensions) for the filing of such Income Tax Return, the Company Stockholder
shall file the Income Tax Return in the form prepared by the Company Stockholder with such changes thereto as the REIT and the
Company Stockholder may agree, such agreement not to be unreasonably withheld, and the REIT and the Company Stockholder shall select
a nationally-recognized accounting firm mutually acceptable to them to resolve any remaining objections. The accounting firm shall
be engaged to provide its determination within forty (40) days of the evidence necessary to resolve such dispute first being submitted
to it. If an Income Tax Return prepared in accordance with the accounting firm’s determination reflects a change in the amount
of Income Tax due or overpayment or refund due to the Company from that reflected in the Income Tax Return as filed, the Company
Stockholder shall file an amended Income Tax Return consistent with such determination. The REIT and the Company Stockholder shall
pay the fees and expenses of the accounting firm based on the degree to which the accounting firm accepts the respective positions
of the parties.
(e) If
any Tax Return for any Pre-Closing Tax Period requires the payment of any Taxes in excess of the amount of accrued Taxes (but only
the actual amount of Taxes accrued and not any deferred Tax items) included in the Most Recent Balance Sheet and in the Final Net
Working Capital Amount, the REIT shall be entitled to recover such amount from the Company Stockholder as an indemnification in
accordance with
Section 8.9(a)
.
(f) The
Company Stockholder and the REIT agree to cooperate with each other to the extent necessary in connection with the filing of any
Income Tax Returns of the Company and any investigations or disputes with respect to prior Income Tax Returns.
8.3.
Tax
Indemnification
.
(a) Subject
to the terms of
Sections 8.1
,
8.2
and this
Section 8.3
, from and after the Closing, the Company
Stockholder shall indemnify the Indemnified Persons against (i) all liability for Taxes of the Company for any Pre-Closing Tax
Period in excess of the amount of accrued Taxes (but only the actual amount of Taxes accrued and not any deferred Tax items) included
in the Most Recent Balance Sheet and in the Final Net Working Capital Amount; (ii) all liability of the Company for Taxes
of all Persons (other than Company or the REIT Indemnified Persons) arising (A) under Treasury Regulations §1.1502-6 (or
any similar provision of state or local Law) for federal, state and local Income Taxes of any other corporation which is or has
been affiliated with the Company for any Pre-Closing Tax Period or (B) by reason of contract, successor liability or otherwise
by operation of law; (iii); all Taxes of the Company Stockholder; and (iv) all Losses resulting from a breach or inaccuracy of
the representations and warranties set forth in
Section 3.10
of this Agreement. For the avoidance of doubt, the indemnification
obligations of the Company Stockholder under this
Section 8.3(a)
shall not be subject to the amount limitations set
forth in
Section 8.3(a)(i)
In the case of any Straddle Period, the amount of any Taxes for the Pre-Closing Tax Period shall:
(i) in the case of Taxes based on sales, receipts, gross income or net income, be determined based on an interim closing of the
books as of the close of business on the Closing Date (and for such purpose, the taxable period of any partnership or other pass-through
entity in which Company or any of its subsidiaries holds a beneficial interest shall be deemed to terminate at such time) and
(ii) in the case of all other Taxes, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction
the numerator of which is the number of days in the period ending on the Closing Date and the denominator of which is the number
of days in such Straddle Period.
(b) Except
as expressly provided herein, the Company Stockholder shall be entitled to receive any Income Tax refunds of Income Taxes previously
paid by the Company or any of its subsidiaries with respect to a Pre-Closing Tax Period that are received after the Closing Date.
Notwithstanding the prior sentence, the Company Stockholder shall not be entitled to receive any Tax refund of the Company resulting
from the carryback of a net operating, capital loss or other tax attribute incurred with respect to a Post-Closing Tax Period and
any such Tax refund shall be the property of and shall be retained by the Surviving Company or the REIT.
(c) All
claims for indemnification under this
Section 8.3
shall be subject to, and handled in accordance with the provisions of
Article VIII .
(d) Notwithstanding
any other provisions of this Agreement, an Indemnified Person shall have the right to be indemnified, held harmless from, defended
or reimbursed under this
Section 8.3
only if such right is asserted on or before one hundred eighty (180) days after the
expiration of the statute of limitations (including extensions thereof) applicable to the Tax in issue.
8.4.
Tax
Contests
. The REIT agrees to give written notice to the Company Stockholder of the receipt of any written notice by the REIT
or the Surviving Company which involves the assertion of any claim, or the commencement of any proceeding, in respect of which
an indemnity may be sought by any Indemnified Person under
Section 8.3(a)
(a “Tax Claim”); provided, that failure
or delay to comply with this provision shall not reduce such Indemnified Person’s right to indemnification hereunder except
to the extent that the Company Stockholder is actually prejudiced by such failure or delay on the part of the REIT. If such Tax
Claim results in the assessment or assertion of a Tax for which the Company Stockholder may be solely liable under
Section 8.3(a)
and could not reasonably result in an increase in the Tax liability of the Company with respect to a Post-Closing Tax Period, then
the Company Stockholder may choose to control the contest or resolution of such Tax Claim (at the Company Stockholder’s expense)
and if so shall provide written notice to the REIT of such intent; all other Tax Claims will be controlled by the REIT. The REIT
or the Company Stockholder, as the case may be, will be entitled to participate fully in the defense of any Tax Claim in which
a taxing authority could assert or assess any liability for Taxes that is otherwise controlled by the other party and to employ
counsel of its choice for such purpose, the fees and expenses of which separate counsel of each of the REIT or the Company Stockholder
will be borne by the REIT and the Company Stockholder, respectively. In addition, with respect to a contest or resolution controlled
by the Company Stockholder, the Company Stockholder must employ counsel that is acceptable to the REIT. Neither the REIT nor the
Company Stockholder, as the case may be, may settle any claim or cease to defend such Tax Claim without the prior written consent
of the non-controlling party, which consent shall not be unreasonably withheld, conditioned or delayed, provided, however, that
if a Tax Claim is controlled by the Company Stockholder, then the REIT may withhold consent with respect to such Tax Claim if such
settlement could reasonably be expected to increase the Tax liability for any Post-Closing Tax Period. For the avoidance of doubt,
where the provisions of this
Section 8.4
are in conflict with any other provision in this document, this
Section 8.4
shall govern.
ARTICLE
IX
TERMINATION; AMENDMENT; WAIVER
9.1.
Termination
.
This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any time prior to the Effective Time, notwithstanding
approval of this Agreement, the Merger and the other transactions contemplated hereby by the Company Stockholder:
(a) by
mutual written consent of the REIT, Merger Subsidiary and the Company;
(b) by
either the REIT or the Company (upon delivery of written notice to the other):
(i) if
any court of competent jurisdiction or any Governmental Authority shall have issued an order, decree or ruling or taken any other
action that shall have become final and non-appealable permanently enjoining, restraining or otherwise prohibiting the Merger;
or
(ii) if
the Merger shall not have been consummated on or before December 31, 2019;
9.2.
Effect
of Termination
. If this Agreement is so terminated and the Merger is not consummated, this Agreement shall forthwith become
void and shall have no further force or effect other than the confidentiality provisions of
Section 6.1
and the provisions
of
Sections 6.2
and
9.2
and
Article X
; provided that nothing contained in this
Section 9.2
shall relieve any party from liability for fraud, intentional misrepresentation or any willful breach of any representation, warranty,
covenant or agreement contained in this Agreement.
9.3.
Amendment
.
This Agreement may be amended by action taken by the REIT, Merger Subsidiary and the Company; provided, however, that no amendment
shall be made that under applicable Law requires the approval of the Company’s stockholders without the approval of the Company
Stockholder. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
9.4.
Extension;
Waiver
. At any time prior to the Effective Time, the Company (on the one hand) and the REIT and the Merger Subsidiary (on the
other hand) may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts
of such other party hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto by such other party hereto or (iii) waive compliance with any of the agreements
or conditions contained herein by such other party hereto. Any agreement on the part of any such party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party hereto
to assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE
X
MISCELLANEOUS
10.1.
Entire
Agreement; Assignment
. This Agreement and the schedules attached hereto (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all other prior agreements and understandings, both written and oral, between
the parties or any of them with respect to the subject matter hereof and thereof, and (b) shall not be assigned by operation of
Law or otherwise; provided, however, that the REIT may assign all or any portion of its rights hereunder to any Affiliate without
the prior written consent of the Company. Any purported assignment in violation of this
Section 10.1
shall be null and void.
10.2.
Notices
.
All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed
to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent
by a nationally recognized overnight courier (receipt requested); or (c) on the third business day after the date mailed, by certified
or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the
following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this
Section
10.2
):
if to the Company:
Attention: Andrew Spodek
75 Columbia Avenue
Cedarhurst, NY 11516
with a copy (which shall
not constitute notice) to:
if to the REIT or Merger
Subsidiary:
Postal Realty Trust,
Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
with a copy (which shall
not constitute notice) to:
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
Attention: James V. Davidson
or to such other address as the person
to whom notice is given may have previously furnished to the others in writing in the manner set forth above.
10.3.
Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial
.
(a) This
Agreement and the transactions contemplated herein, and all disputes between the parties under or related to this Agreement or
the facts and circumstances leading to its execution or performance, whether in contract, tort or otherwise, shall be governed
by and construed in accordance with the laws of the State of Delaware, without reference to the conflict of laws principles thereof.
(b) Each
of the parties (i) irrevocably submits itself to the personal jurisdiction of all state and federal courts sitting in the State
of New York including to the jurisdiction of all courts to which an appeal may be taken from such courts, in any action, suit or
proceeding arising out of or relating to this Agreement, any of the transactions contemplated by this Agreement or any facts and
circumstances leading to its execution or performance, (ii) agrees that all claims in respect of any such action, suit or
proceeding must be brought, heard and determined exclusively in the Court of Chancery of the State of Delaware (
provided
that, in the event that subject matter jurisdiction is declined by or unavailable in the Court of Chancery, then such action, suit
or proceeding shall be heard and determined exclusively in any other state or federal court sitting in the State of Delaware),
(iii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such
courts, (iv) agrees not to bring any action, suit or proceeding against the other party or its Affiliates arising out of or
relating to this Agreement, any of the transactions contemplated by this Agreement or any facts and circumstances leading to its
execution or performance in any other courts and (v) waives any defense of inconvenient forum to the maintenance of any action,
suit or proceeding so brought. Each of the parties agrees to waive any bond, surety or other security that might be required of
any other party with respect to any such action, suit or proceeding, including any appeal thereof.
(c) Each
of the parties agrees that service of any process, summons, notice or document in accordance with
Section 10.2
shall be
effective service of process for any action, suit or proceeding brought against it by the other party in connection with
Section 10.3(b)
,
provided
that nothing contained herein shall affect the right of any party to serve legal process in any other manner permitted
by applicable Law.
(d) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS AGREEMENT
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS
OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.3(d)
.
10.4.
Specific
Performance
. The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate
remedy, would occur in the event that any of the parties hereto do not perform the provisions of this Agreement (including failing
to take such actions as are required of it hereunder to consummate this Agreement) in accordance with its specified terms or otherwise
breach such provisions. The parties acknowledge and agree that the parties shall be entitled to seek an injunction, specific performance
and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in equity. Any party seeking an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required
to provide any bond or other security in connection with any such order or injunction. The remedies available to the parties pursuant
to this
Section 10.4
shall be in addition to any other remedy to which they are entitled at law or in equity, and the
election to pursue an injunction or specific performance shall not restrict, impair or otherwise limit the parties from, in the
alternative, seeking to terminate this Agreement and seeking monetary damages.
10.5.
Interpretation
.
(a) The
table of contents, headings and captions used in this Agreement are for convenience only and are not to be given effect in the
construction or interpretation of this Agreement.
(b) Whenever
the term “include,” “includes” or “including” is used in this Agreement in connection with
a listing of items, that listing is illustrative only and is not a limitation on the general scope of the classification, or as
an exclusive listing of the items within the general scope.
(c) The
terms “hereof,” “herein” and “hereunder” and terms of similar import will refer to this Agreement
as a whole and not to any particular provision of this Agreement.
(d) Article,
section, clause, subsection, exhibit and schedule references contained in this Agreement are references to articles, sections,
clauses, subsections, exhibits and schedules of or to this Agreement, unless otherwise specified.
(e) Each
defined term used in this Agreement has a comparable meaning when used in its plural or singular form. Each gender-specific term
used in this Agreement has a comparable meaning whether used in a masculine, feminine or gender-neutral form.
(f) Any
amount stated in this Agreement in “Dollars” or by reference to the “$” symbol means United States dollars.
(g) Any
reference to any party to this Agreement shall include such party’s successors and permitted assigns.
(h) Except
as expressly stated otherwise herein, the specificity of any representation or warranty contained herein shall not be deemed to
limit the generality of any other representation or warranty contained herein.
(i) Each
party has been represented and advised by independent counsel of its choice in connection with the execution of this Agreement
and has cooperated in the drafting and preparation of this Agreement and the documents delivered in connection herewith. Accordingly,
any Law that would require interpretation of this Agreement or any document delivered in connection herewith, including any ambiguous,
vague or conflicting term herein or therein, against the drafter should not apply and is expressly waived.
10.6.
Parties
in Interest
. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective
successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other
person (other than the Indemnified Persons) any rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
10.7.
No
Recourse
. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out
of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, may only be made against the entities
that are expressly identified as parties hereto and no past, present or future, direct or indirect, equity holder, controlling
person, Affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative
of any party hereto shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim
based on, in respect of, or by reason of, the transactions contemplated hereby.
10.8.
Execution
of this Agreement
. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by
facsimile or other electronic transmission shall constitute effective execution and delivery of this Agreement as to the parties
and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or other
electronic transmission shall be deemed to be their original signatures for all purposes.
10.9.
Severability
.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced as a result of any rule of
Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated hereby is not affected by the absence of such provision
in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner to the end that the transactions contemplated hereby are fulfilled
if practicable.
[Signature page follows.]
IN WITNESS WHEREOF,
each of the parties has caused this Agreement to be duly executed on its behalf, all as of the day and year first above written.
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POSTAL REALTY TRUST, INC.
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By:
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Name:
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Title:
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UPH MERGER SUB LLC
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By:
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Name:
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Title:
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UNITED POSTAL HOLDING, INC.
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By:
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Name:
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Andrew Spodek
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Agreement
and plan of Merger
Exhibit 10.18
RIGHT OF FIRST OFFER AGREEMENT
THIS RIGHT OF FIRST OFFER AGREEMENT
(this
“Agreement”), dated this ____ day of _______________, 2019 (the “Effective Date”), by and between Rosalind
Spodek (the “Grantor”) and POSTAL REALTY TRUST, INC. a Maryland corporation (the “Grantee”), recites and
provides:
RECITALS
Grantor is the owner of certain real property
defined as the “Property,” such property being located in [●] and more particularly identified on
Exhibit
A
.
Grantor has agreed to grant to Grantee a right
of first offer (the “Right of First Offer”) to purchase the Property in accordance with the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual
covenants and promises herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, Grantor
and Grantee hereby agree as follows:
A.
Notice
of Intent to Sell
. Grantor agrees that prior to marketing the Property for sale, Grantor shall offer to sell the Property to
Grantee at a stated sales price by written notice to Grantee containing the basic terms of such proposed sale (the “Offer
Notice”).
B.
Offer
to Purchase
. Grantee shall have 20 days after receipt of the Offer Notice to give written notice to Grantor of its desire to
purchase the Property as outlined in the Offer Notice (the “Offer’). Such Offer will include a purchase and sale agreement
executed by Grantee, containing all of the terms and conditions pursuant to which Grantee would agree to purchase the Property
(the “Offer Purchase Agreement”). Failure by Grantee to give such Offer on a timely basis shall be deemed a waiver
of the Right of First Offer and thereafter the Right of First Offer shall be of no further force or effect.
C.
Acceptance
or Rejection of Offer
. Within 10 days after the date of receipt of the Offer (the “Response Period”), Grantor shall
either accept the Offer by delivering an executed Offer Purchase Agreement to Grantee, or reject the Offer by delivering written
notice to Grantee and stating the reasons for such rejection (the “Rejection Notice”). The failure of Grantor to either
execute such Offer Purchase Agreement or deliver the Rejection Notice within the Response Period shall be deemed a rejection of
the Offer.
(i) If
Grantor accepts the Offer, Grantee will have an additional 30 days to conduct due diligence. During said 30-day diligence period,
if Grantee determines, in its sole discretion, that the Property is unsuitable for its needs, Grantee may elect to terminate the
Offer Purchase Agreement by delivering written notice to Grantor. Should Grantee elect to terminate the Offer Purchase Agreement
its Right of First Offer shall be forfeited, subject to the terms of Subsection D below. If Grantee determines that the Property
is suitable for its needs, then the sale transaction shall be consummated in accordance with the terms of the Offer Purchase Agreement.
If Grantee defaults in its obligation to close the transaction on the terms contained in the Offer Purchase Agreement, then the
Right of First Offer shall be deemed forfeited and of no further force or effect.
(ii) If
Grantor rejects, or is deemed to have rejected the Offer for failure to respond on a timely basis, then Grantor and Grantee will
negotiate in good faith for a period of not more than 15 days after expiration of the Response Period, and attempt to agree upon
terms of a sale and purchase mutually acceptable to both Grantor and Grantee. In the event that Grantor and Grantee, after negotiating
in good faith, are unable to achieve terms of a sale and purchase and execute a mutually acceptable Offer Purchase Agreement within
such 15-day period, Grantee’s Right of First Offer shall be deemed waived and of no further force or effect. If Grantee defaults
in its obligation to close such transaction on the agreed-upon terms of a sale and purchase, then the Right of First Offer shall
be deemed forfeited and of no further force or effect.
D.
Further
Restrictions
. If Grantor and Grantee are unable to reach an agreement within the time period set forth in Paragraph C.(ii)
above, Grantor shall be free to consummate a sale or transfer to any party for any consideration and upon any terms, so long as
the consideration is not less than 90% of the sales price stated in the Offer and all other “Basic Terms” of the sale
or transfer are not materially more favorable to such buyer than the terms of the Offer. “Basic Terms” means (i) the
terms of any conditions to closing, (ii) closing costs and expenses and (iii) timing of due diligence review and closing. Should
Grantor desire to sell the Property to any other party below 90% of the sales price stated in the Offer or on Basic Terms materially
more favorable to such buyer than the terms of the Offer, the Right of First Offer contained herein shall be reinstated and Grantor
must first offer to sell the Property to Grantee at the reduced price and under the more favorable Basic Terms, all on the same
terms and conditions as set forth in this Section I.
E.
Two
Year Limitation
. If Grantor shall not have conveyed title to the entire Property as contemplated in Paragraph C.(ii) above
on or before two years after the expiration of the Response Period, then the Right of First Offer contained herein shall be reinstated,
and Grantor shall be required to reoffer to sell the Property to Grantee in accordance with the terms and conditions of this Section
I prior to undertaking any further marketing or sale of the Property.
F.
Termination
.
If Grantor wishes to convey title to a third party free and clear of the restrictions set forth in this Agreement in accordance
with Subsection D above, Grantor shall deliver to Grantee a written certificate describing the Basic Terms of its proposed conveyance
to such third party and certifying to Grantee that the consideration is not less than 90% of the sales price stated in the Offer
and that the Basic Terms are not more favorable to the buyer than the terms of the Offer. Upon receipt of such certificate from
Grantor, Grantee will execute and deliver a mutual termination of this Agreement and the Memorandum hereof within ten (10) days
after receipt of such mutual termination documentation from Grantor.
II. PERMITTED
TRANSFERS
. Notwithstanding anything in the foregoing to the contrary, Grantee shall not have such Right of First Offer in the
event that: (i) Grantor proposes to sell, transfer or convey all or any portion of the Property to an affiliate of Grantor; (ii)
Grantor proposes to sell, transfer or convey all or any portion of the Property in connection with a corporate reorganization of
Grantor; (iii) Grantor proposes to sell, transfer or convey all or any portion of the Property in connection with the sale, transfer
and conveyance of its operating assets or any portion thereof other than a stand-alone sale of the Property; or (iv) Grantor sells,
transfers or conveys all or any portion of its assets in a merger or consolidation in which Grantor will not be the surviving entity
or in which it undergoes a change of control as a result of such sale of its assets, merger or consolidation.
Notices
. Any notice, request or demand
required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed sufficiently given if addressed
to the parties set forth below or as they may hereafter specify by written notice delivered in accordance herewith, and if (a)
personally delivered by messenger, (b) sent prepaid by Federal Express (or a comparable guaranteed overnight delivery service),
or (c) deposited in the United States first class mail (certified, postage prepaid), as follows:
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If to Grantee:
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75 Columbia Avenue
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Cedarhurst, NY 11516
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Attention: Jeremy Garber
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With a copy to:
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Goldberg Weprin Finkel Goldstein LLP
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1501 Broadway, 22
nd
Floor
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New York, NY 10036
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Attention: Andrew Albstein
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If to Grantor:
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75 Columbia Avenue
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Cedarhurst, NY 11516
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Attention: Rosalind Spodek
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With a copy to:
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Shanholt Glassman Klein Kramer & Co.
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575 Lexington Avenue, 19th Floor
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New York, NY 10022
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Attention: Sandy Klein
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The address(es) may be changed by any party by giving written notice
thereof to the other party in accordance with the requirements of this Section. Such notices shall be deemed to have been given
three (3) days after having been deposited in the United States first class mail (certified, postage prepaid); upon receipt when
delivered by messenger; or the next day when sent guaranteed overnight delivery by Federal Express or another comparable overnight
delivery service.
A.
Assignment
.
Grantee may freely assign this Agreement or any rights under this Agreement, or delegate any duties under this Agreement to any
person or entity in which Grantee has an equity and/or controlling interest, without Grantor’s consent upon written notice
to Grantor of the same (a “
Permitted Transfer
”). Any assignment of this Agreement or any rights under this Agreement,
or any delegation of any duties under this Agreement that does not constitute a Permitted Transfer shall be subject to Grantor’s
prior written consent.
B.
Time
is of the essence of each and every agreement, covenant and condition of this Agreement.
C.
Successors
and Assigns
. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their heirs, successors,
and assigns as the case may be.
D.
Prevailing
Party
. In the event any claim is asserted by or against either of the parties hereto with respect to this Agreement or the
subject matter hereof, the party or parties prevailing in any litigation resulting from such claim shall be entitled to receive
reasonable attorneys’ fees and expenses incurred by the prevailing party or parties in such litigation from the party or
parties that do not prevail.
E.
No
Brokers
. Grantee represents and warrants to Grantor that Grantee has not incurred any obligation or liability, contingent or
otherwise, for brokerage or finder’s fees or agent’s commissions or other like payment in connection with this Agreement
and the transactions contemplated hereby for which Grantor, its affiliates or the Property could be bound or liable, and Grantee
agrees to hold Grantor harmless against and in respect to any obligation or liability (including, without limitation, reasonable
attorneys’ fees) based in any way upon agreements, arrangements or understandings made or claimed to have been made by Grantee
with any third person. Grantor represents and warrants to Grantee that Grantor has not incurred any obligation or liability, contingent
or otherwise, for brokerage or finder’s fees or agent’s commissions or other like payment in connection with this Agreement
and the transactions contemplated hereby for which Grantee, its affiliates or the Property could be bound or liable and Grantor
agrees to hold Grantee harmless against and in respect to any obligation or liability (including, without limitation, reasonable
attorneys’ fees) based in any way upon agreements, arrangements or understandings made or claimed to have been made by Grantor
with any third person.
F.
Recording
.
At the request of Grantee, Grantor agrees to execute, acknowledge and deliver to Grantee a memorandum of this Agreement (the “Memorandum”).
Grantee, at its expense, may submit the Memorandum for recordation to [●].
G.
Entire
Agreement
. This Agreement constitutes the entire agreement between Grantor and Grantee with respect to the subject matter hereof,
and this Agreement may only be amended by an agreement in writing signed by Grantor and Grantee.
H.
Governing
Law
. This Agreement shall be governed by and construed in accordance with the laws of the state in which the Property is located
without giving effect to the choice of law principles thereof.
I.
Counterparts
.
This Agreement may be executed in two or more counterparts, all of which shall constitute but one and the same document. Documents
obtained via electronic imaging sent by email or via facsimile machine shall also be considered as originals.
J.
Severability
of Terms
. 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.
[SIGNATURE PAGE ATTACHED]
WITNESS
the following duly authorized
signatures:
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GRANTOR
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Rosalind Spodek
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By:
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Name:
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Title:
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Date:
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GRANTEE
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Postal Realty Trust, Inc.
, a Maryland corporation
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By:
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Name:
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Title:
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Date:
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Exhibit A
Legal Description
Exhibit 10.19
Agreement of PURCHASE AND SAle
This AGREEMENT OF PURCHASE
AND SALE (this “
Agreement
”) is made as of ____, 2019 by and between Rosalind Spodek (the “
Seller
”)
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”).
RECITALS
WHEREAS
, the
Seller is the record and beneficial owner of (i) equity interests (the “
Property Entity Interests
”) in the entities
(the “
Property Entities
”) described on
Exhibit A-1
hereto, which Property Entities are the direct
or indirect owners of the real properties described on
Exhibit A-1
hereto (the “
Indirect Properties
”),
and (ii) undivided real property interests (the “
Direct Property Interests
”) in the real properties described
on
Exhibit A-2
hereto (the “
Direct Properties
”). The Property Entity Interests and the Direct Property
Interests collectively are referred to herein as the “
Interests
” and the Indirect Properties and the Direct
Properties collectively are referred to herein as the “
Properties
.”
WHEREAS,
the
transactions contemplated by this Agreement are related to the proposed initial underwritten public offering of shares of Class
A common stock of the REIT (the “
IPO
”); and
WHEREAS,
the
Seller desires to sell, assign and convey the Interests to the REIT, and the REIT desires to acquire the Interests from the Seller,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE PURCHASE
1.1
Sale
of Interests
. The Seller hereby irrevocably agrees to sell, transfer and assign to the REIT at Closing (as defined herein)
all of his right, title and interests in the Interests, together with any other interests the Seller may have in any of the Properties
and the REIT agrees to purchase the Interests from Seller on the terms and conditions set forth in this Agreement. The Seller shall
transfer the Interests to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior
assignments or conveyances, conditions, restrictions, claims, and any other matters affecting title thereto, other than Permitted
Liens.
1.2
Consideration
.
The total consideration (the “
Consideration
”) for which the Seller agrees to sell, transfer and assign the Interests
to the REIT, and which the REIT agrees to pay to the Seller, subject to the terms of this Agreement, at Closing (as defined herein)
is not known as of the date of this Agreement, but shall consist of the Fixed Consideration (as defined below) and the Preliminary
Consideration (as defined below) and shall be calculated as follows:
1.3 The
consideration for the Property Entities on Exhibit A-1(B) shall be $________ (the “
Fixed Consideration
”). The
“
Preliminary Consideration
” for the Property Entities on
Exhibit A-1(A)
and the Direct Property Interests
on
Exhibit A-2
shall be $____________. If the IPO Price (as defined herein) is equal to the midpoint of the
price range for the shares of the REIT’s Class A common stock in the IPO (the “
IPO Price Range
”) as set
forth on the front cover of the REIT’s preliminary prospectus for the IPO filed with the U.S. Securities and Exchange Commission
(the “
SEC
”), the Consideration shall equal the (i) Fixed Consideration and (ii) Preliminary Consideration, subject
to any Prorations for the Properties. To the extent that the IPO Price (as defined herein) is greater than or less than the mid-point
of the IPO Price Range, the Preliminary Consideration shall be increased or decreased, respectively and proportionately, in order
to determine the Preliminary Consideration; provided, however, that in no event shall the Preliminary Consideration be greater
than $_____________; provided further
,
that in no event shall the Preliminary Consideration be less than $_____________.
In any event, the Consideration shall be adjusted to give effect to Prorations, if any, for the Properties.
1.4
No
Further Interest
. The Seller acknowledges and agrees that effective upon the Closing, and without any further action by the
Seller, the Interests shall be transferred, assigned and conveyed to the REIT and the Seller shall no longer be an equity holder
of any Property Entity, shall no longer be entitled to receive any distributions from any Property Entity, and shall have no further
right, title or interest in any of the Properties or the Property Entities.
1.5
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“Adverse Consequences”
means all liabilities, demands, claims, actions, causes of action, costs, expenses, damages (including incidental, special, but
excluding consequential and punitive damages and lost profits), Taxes, losses, penalties, fines, judgments or amounts paid in settlement,
including reasonable attorneys’ and accountants’ fees, including, without limitation, all Adverse Consequences incurred
by the REIT. The term Adverse Consequences expressly includes any consequences arising from the REIT’s sending, or failure
to send, any filings relating to transfer taxes due, or otherwise, in connection with the transactions contemplated by this Agreement,
including any interest, penalties or reassessment of the value of any Interest for purposes of ad valorem taxes, and the REIT’s
failure to pay any transfer taxes due in connection with the transactions contemplated by this Agreement.
“IPO Price”
means the public offering price per share of the REIT’s Class A common stock set forth on the front cover of the final prospectus
for the IPO (the “
Prospectus
”), to be filed by the REIT with the SEC.
“Permitted Liens”
means such of the following: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or, if
due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation or unemployment
laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially
adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits to secure trade
contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
“Post-Closing
Tax Period” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the case
of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“Prorations”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date and shall include:
(a)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
Closing;
(b)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Properties and all other income from the Properties shall be prorated
at Closing; and
(c)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at Closing.
“Representation,
Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement dated _________, 2019 by and
among the REIT, the Operating Partnership and Andrew Spodek.
“Seller’s
Percentage Interest” means, with respect to each Property Entity, the percentage set forth on
Exhibit A-1
hereto under
the heading “Seller’s Percentage Interest”, which reflects the Seller’s percentage ownership interest in
each Property Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Property
Entity.
“Straddle Period”
means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS
AND Warranties
2.1
Representations
by the REIT
. The REIT hereby represents and warrants to the Seller that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct and complete as of the Closing Date (as defined herein):
(a)
Organization
and Power
. The REIT is duly organized, validly existing, and in good standing under the laws of the State of Maryland, and
has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement.
(b) The
execution and delivery of this Agreement and the performance by the REIT of its obligations hereunder have been duly authorized
by all requisite action of the REIT and require no further action or approval of the REIT’s shareholders or of any other
individuals or entities in order for this Agreement to constitute a binding and enforceable obligation of the REIT.
2.2
Representations
by the Seller
. The Seller hereby represents and warrants to the REIT that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. The Seller has full right, power, and authority to enter into this Agreement and to assume and
perform all of its obligations under this Agreement; and the execution and delivery of this Agreement and the performance by the
Seller of his obligations hereunder and require no further action or approval of any other individuals or entities in order for
this Agreement to constitute a binding and enforceable obligation of the Seller. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Seller pursuant to this Agreement constitutes, or when executed and delivered,
constitute, will constitute, the legal, valid and binding obligation of the Seller, each enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by the Seller has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Seller or to any Property,
Interests or Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting the Seller in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of the Seller or any Property Entity,
Interests or Property, (3) could adversely affect the ability of the Seller to perform his obligations hereunder, or under any
document to be delivered pursuant hereto, (4) could create a lien on the any of the Interests or any Property, any part thereof,
or any interest therein, or (5) could adversely affect the any of the Interests or any Property, any part thereof, or any interest
therein.
(d)
Good
Title
.
Exhibit A-1
accurately sets forth the Seller’s Percentage Interest in each Property Entity and
Exhibit
A-2
accurately sets forth the Seller’s ownership interest in each Direct Property. The Seller is the sole record and
beneficial owner of the Interests as set forth on
Exhibit A-1
and
Exhibit A-2
and has full power and authority to
convey the Interests pursuant to the terms of this Agreement. No person has any community property rights, by virtue of marriage
or otherwise, with respect to the Interests. The Seller has good and marketable title to the Interests. The Interests are free
and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, leaseholds by any party other than the current lessee, claims or any other matters affecting title thereto and at
the Closing will be sold to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims or other matters affecting title thereto, in each case other
than Permitted Liens. No other person or entity has an option to purchase or a right of first refusal to purchase any of the Interests
nor are there any agreements or understandings with respect to the voting, ownership or disposition of the Interests that could
adversely affect the Seller’s ability to perform his obligations hereunder or the REIT’s ownership of the Interests
following the Closing. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights
relating to the Interests or any equity interest in any Property Entity that will be in effect as of the Closing.
(e)
Indebtedness
.
There is no indebtedness of any Property Entity or with respect to any Property, other than as set forth on
Exhibit A-1
and
Exhibit A-2
hereto.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by the Seller has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement (as defined herein), contract or agreement of any Property Entity, or among the partners,
members or stockholders of any Property Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and
performance of this Agreement and the contribution, acquisition and transfer of the Interests has been obtained or will be obtained
on or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, the Seller shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Interests or the REIT’s ownership thereof, or any
material adverse effect on the assets, business, condition (financial or otherwise), results or operation of any Property or any
Property Entity after the Closing Date or (2) cause any of the representations and warranties contained in this Section 2.2
to be untrue as of the Closing Date.
(h)
Governing
Documents
. The Seller has performed all of its obligations under the limited liability company agreement or operating agreement,
as such may have been amended from time to time, as applicable, of each Property Entity in which it owns an interest, (each a “
Governing
Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Tax
Treatment
. The Seller represents and warrants that it has obtained from its own counsel advice regarding the tax consequences
of the transfer of the Interests to the REIT pursuant to the terms of this Agreement. The REIT has not made any representation
to the Seller regarding the tax treatment of the transactions contemplated by this Agreement, and further represents and warrants
that it has not relied on the REIT or the REIT’s representatives or counsel for any tax advice.
(j)
Bankruptcy
with respect to the Seller
. No Act of Bankruptcy has occurred with respect to the Seller or any Property Entity. As used herein,
“
Act of Bankruptcy
” means if the Seller (A) applies for or consents to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator, of himself or of all or a substantial part of his property, (B) admits
in writing his inability to pay his debts as they become due, (C) makes a general assignment for the benefit of his creditors,
(D) files a voluntary petition or commences a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter
in effect), (E) is adjudicated bankrupt or insolvent, (F) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts,
(G) fails to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against him in
an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (H) take any action
for the purpose of effecting any of the foregoing.
(k)
Brokerage
Commission
. The Seller has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions contemplated by this Agreement.
(l)
Foreign
Persons
. The Seller is not a “foreign person” within the meaning of Section 1445(f) or Section 1446(f) of the Code.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) All
representations and warranties of the Seller contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit
delivered pursuant to this Agreement shall survive the Closing.
(b) Following
the Closing, the Seller shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of his representations,
warranties, covenants and obligations contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit delivered
by the Seller pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, the Seller shall indemnify, hold harmless and defend the REIT and the REIT’s respective officers,
directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified Party
”
and collectively, the “
Indemnified Parties
”), from and against any and all claims, losses, damages, liabilities
and expenses, including, without limitation, interest, penalties, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
“
Losses
”) asserted against, imposed upon or incurred by the Indemnified Party, to the extent resulting from
any breach of a representation, warranty or covenant of the Seller contained in this Agreement, or in any Schedule, Exhibit, certificate
or affidavit delivered by the Seller pursuant thereto. In each case, the Seller shall only bear the fees, costs or expenses in
connection with the employment of one counsel (regardless of the number of Indemnified Parties), and any necessary local counsel.
(b) The
Seller shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed
upon or incurred by the Indemnified Parties to the extent resulting from an unrelated third-party claim relating to the Interests
arising from matters that occurred prior to Closing.
(c) With
respect to any claim of an Indemnified Party pursuant to this Section 3.2, to the extent available, the REIT agrees to use diligent
good faith efforts to pursue and collect any and all available proceeds and benefits of any right to defense under any insurance
policy that covers the matter which is the subject of the indemnification prior to seeking indemnification from the Seller until
all proceeds and benefits, if any, to which the Indemnified Party is entitled pursuant to such insurance policy have been exhausted;
provided, however, that the REIT may make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which
case, if the Indemnified Party later receives insurance proceeds with respect to any Losses paid by either the Seller for the benefit
of any Indemnified Party, then the Indemnified Party shall reimburse the Seller in an amount equivalent to such proceeds in excess
of any deductible amount pursuant to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by the Seller to the
Indemnified Party in connection with such indemnification (it being understood that all costs and expenses incurred by the Seller
with respect to insurance coverage disputes shall constitute Losses paid by the Seller for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to the Seller, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to the Seller will not relieve
the Seller from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of the Seller by reason of the inability or failure of the Seller (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to the Seller, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit the
Seller, at such Seller’s option and expense, to assume the defense of any such claim by counsel selected by the Seller and
reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that the Seller shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by the Seller.
If the Seller shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Seller and at such Seller’s
sole cost and expense.
3.4
Limitations
on Indemnification under Section 3.2(a)
.
(a) The
Seller shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Party
under Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration and then only to the extent of such
excess. The Seller’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of the Seller and subject to the limitations
set forth in the following sentence, the Indemnified Party shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III. Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or in the
event of Losses relating to a third-party claim, the Seller shall not be liable to the Indemnified Party for any indirect, special
or consequential damages, loss of profits, taxes relating to tax years beginning on or after the Closing, loss of value or other
similar speculative damages asserted or claimed by the Indemnified Party.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of the Seller with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between the Seller and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by the Seller in cash.
ARTICLE
IV
COVENANTS
4.1
Covenants
of the Seller
.
(a)
Satisfaction
of Conditions
. The Seller hereby covenants that the Seller shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to Closing set forth herein, and (B) cooperate and assist in the REIT’s efforts to
satisfy all of the conditions to Closing set forth herein, and agrees that the REIT shall not have any obligation to consummate
the Closing hereunder unless and until such conditions have been satisfied or waived by the REIT in writing.
(b)
Consent
to Transfers
. The Seller hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to the Seller under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Property Entity or Property or any other company or
property being sold or transferred to the REIT by the Seller.
(c)
No
Disposition or Encumbrance of Interests
. From the date hereof through the Closing, except as specifically contemplated by this
Agreement, the Seller shall not without the prior written consent of the REIT: (i) sell, transfer (or agree to sell or transfer)
or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion
of the Interests or any interest in any Property; or (ii) mortgage, assign, pledge or otherwise encumber in any manner any of the
Interests or any Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, the
Seller shall, to the extent within his control, cause each Property Entity to conduct its business in the ordinary course consistent
with past practice, and shall, to the extent within the Seller’s control, not permit any Property Entity or Property without
the prior written consent of the REIT and the REIT, to: (i) enter into any material transaction not in the ordinary course
of business; (ii) mortgage, pledge or encumber the Interests, any assets of the Property Entity or any Property, (iii) cause or
permit any change to the existing use of any Property; (iv) cause or take any action that would render any of the representations
or warranties set forth herein untrue; (v) file an entity classification election pursuant to Treasury Regulations Section 301.7701-3(c)
on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Property Entity as an association taxable as
a corporation for federal income tax purposes; (vi) make or change any other tax elections; (vii) settle or compromise any claim,
notice, audit report or assessment in respect of taxes; (viii) change any annual tax accounting period; (ix) adopt or change any
method of tax accounting; (x) file any amended return, report or form (including an election, declaration, amendment, schedule,
information return or attachment thereto) required to be filed with a governmental authority with respect to taxes (each, a “
Tax
Return
”); (xi) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement
relating to any tax; (xii) surrender any right to claim a tax refund; (xiii) consent to any extension or waiver of the statute
of limitations period applicable to any tax claim or assessment; or (xiv) make any distribution to its partners or members, except
for cash distributions in the ordinary course of business consistent with past practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a)
Tax
Returns
.
(1)
Pre-Closing
Tax Periods
. The Seller shall cause each Property Entity to prepare and timely file all Tax Returns (other than amended Tax
Returns) of each such Property Entity for any Pre-Closing Tax Periods, and the Seller shall remit or cause to be remitted any Taxes
due in respect of such Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except
as otherwise required by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent
with positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions,
elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions
to periods ending on or before the Closing Date). For the avoidance of doubt, the REIT or its assignee will have authority to sign
any Tax Returns relating to the Property Entities that are filed after the Closing Date.
(2)
Straddle
Periods and Post-Closing Periods
. The REIT or its assignee shall prepare and timely file all Tax Returns of the Property Entities
for all taxable periods other than the Pre-Closing Tax Periods, and the REIT or is assignee shall remit or cause to be remitted
any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax Return for a
Straddle Period (and before the REIT or its assignee files such Tax Return), the REIT or its assignee shall furnish to the Seller
a draft of such Tax Return and the Seller shall have the right to review, provide written comments on, and approve the portion
of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which the Seller is responsible.
(b)
Tax
Matters
. The Seller shall pay and indemnify, without duplication, the REIT or its assignee for the following Taxes (and all
related Adverse Consequences including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(1) all
Taxes of Seller (including all income Taxes of Seller);
(2) all
such Taxes resulting from a breach of any representation under
Section 2.2(l)
or a breach of any provision of this
Section 4.2
;
(3) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Property Entities; (ii) all
such Taxes of any other Person that the Property Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Property Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(4) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Property Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other Person that a Property Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Sellers under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(1) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(2) Except
for Taxes for which the REIT is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
i. in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
ii. in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause
(i), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of
graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number
of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of the Seller to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that the Seller’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, the Seller’s obligations under this
Section 4.2
shall not expire until sixty (60) days
after the expiration of such the Seller’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of the Seller under this
Section 4.2
shall survive until fully performed.
(e) The
Seller and the REIT shall provide each other with such cooperation and information relating to any of the Interests, the Property
Entities or the Properties as the parties reasonably may request in (i) filing any Tax Return, amended Tax Return or claim for
tax refund, (ii) determining any liability for taxes or a right to a tax refund, (iii) conducting or defending any proceeding in
respect of taxes, or (iv) performing tax diligence, including with respect to the impact of this transaction on the REIT’s
tax status as a REIT. Such reasonable cooperation shall include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The REIT shall promptly notify the Seller upon receipt
by the REIT or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income,
properties or operations of any of the Property Entities or with respect to any Property and (ii) any pending or threatened federal,
state, local or foreign tax audits or assessments of the REIT or any of its affiliates, in each case, which may affect the liabilities
for taxes of the Seller with respect to any tax period ending before or as a result of the Closing. The Seller shall promptly notify
the REIT in writing upon receipt by the Seller, or any of the Seller’s affiliates, of notice of any pending or threatened
federal, state, local or foreign tax audits or assessments relating to the income, properties or operations of any of the Property
Entities or with respect to any Property. The REIT and the Seller may participate at its own expense in the prosecution of any
claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided, that the
Seller shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such Seller has
acknowledged liability for the payment of any additional tax liability, and the REIT shall have the right to control any other
audits and proceedings. Notwithstanding the foregoing, neither the REIT nor the Seller may settle or otherwise resolve any such
claim, suit or proceeding which could have an adverse tax effect on the other party or its affiliates without the consent of the
other party, such consent not to be unreasonably withheld. The Seller and the REIT shall retain all Tax Returns, schedules and
work papers with respect to the Sold Entities and the Properties, and all material records and other documents relating thereto,
until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable
years to which such Tax Returns and other documents relate and until the final determination of any tax in respect of such years.
4.3
Relationship
to Property Entities
. The parties to this Agreement acknowledge and agree that, from and after the Closing (as defined herein),
the Seller shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Property Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS
PRECEDENT TO THE CLOSING
5.1
Conditions
to the REIT’s Obligations
. In addition to any other conditions set forth in this Agreement, the REIT’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.1, all of which shall be conditions precedent to the REIT’s obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by the Seller pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the REIT, the Seller shall have delivered a certificate to the REIT
to such effect in regard to the Seller’s representations and warranties set forth in this Agreement.
(d)
Performance
.
The Seller shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents, if any, of governmental and private parties, including, without limitation,
all ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders
of any Property Entity, if any, to effect the transactions contemplated by this Agreement, shall have been obtained.
(g)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(h)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Property Entities, the Interests or any Property or any material adverse change in any of the assets,
business, condition (financial or otherwise), results of operation or prospects of any Property Entity or any Property.
(i)
Tenant
and Lender Estoppels
. The REIT shall have received tenant and lender estoppels in form and substance satisfactory to the REIT
and its counsel.
5.2
Conditions
to the Seller’s Obligation
. In addition to any other conditions set forth in this Agreement, the Seller’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to the Seller’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the REIT pursuant to this Agreement shall be true and correct as
of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The REIT shall have performed and complied in all material respects with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING
AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing (the “
Closing
”) of the transactions contemplated pursuant to this Agreement shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the REIT may designate,
promptly following satisfaction of the conditions to Closing set forth herein (the “
Closing Date
”), or as otherwise
set by agreement of the parties.
6.2
Seller’s
Deliveries
. At the Closing, the Seller shall deliver the following to the REIT in addition to all other items required to be
delivered to the REIT by Sellers:
(a)
Assignment
of Interests in each Property Entity
. An Assignment, in substantially the form of
Exhibit B
attached hereto with
respect to the Property Entity Interests.
(b)
Certificate
.
A certificate from the Seller certifying to the REIT the accuracy of the representations and warranties made by the Seller hereunder.
(c)
FIRPTA
Certificate
. An affidavit from the Seller certifying pursuant to Section 1445 and Section 1446(f) of the Internal Revenue Code
that the Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Code and the Treasury Regulations promulgated thereunder).
(d)
Deed
.
A special or limited warranty deed (or its local equivalent), executed by the Seller conveying all of the Seller’s right,
title and interest to each Direct Property to the REIT.
(e)
Property
Documents
. Copies of all existing title policies/commitments, surveys, plans and specifications, permits and approvals and
other similar documents which pertain to each Property which may be in the Seller's possession or under its control.
(f)
Other
Documents
. Any other document or instrument reasonably requested by the REIT or required hereby.
6.3
Default
Remedies
. If the Seller defaults in performing any of the Seller’s obligations under this Agreement, the REIT shall have
all rights and remedies available to it at law or in equity resulting from the Seller’s default, including without limitation,
the right to seek specific performance of this Agreement and the Seller’s obligation to convey the Interests to the REIT
hereunder. The parties acknowledge and agree that the failure of a condition precedent to occur, notwithstanding the good faith
and commercially reasonable efforts of the applicable party, shall not be a default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
REIT
:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Seller
:
______________________
______________________
______________________
______________________
Any address or name
specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication
shall be deemed given and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver
because of changed address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication,
shall be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection
or refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
7.10
Trial
by Jury
. The parties to this Agreement hereby irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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SELLER
:
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By:
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Name: Rosalind Spodek
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REIT
:
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Postal Realty Trust, Inc., a Maryland corporation
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By:
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Name:
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Title:
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[
Signature Page to the Rosalind Spodek
Purchase and Sale Agreement
]
Exhibit 10.20
Agreement of PURCHASE AND SAle
This AGREEMENT OF PURCHASE
AND SALE (this “
Agreement
”) is made as of ____, 2019 by and between Sara Nathanson (the “
Seller
”)
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”).
RECITALS
WHEREAS
, the
Seller is the record and beneficial owner of (i) equity interests (the “
Property Entity Interests
”) in the entities
(the “
Property Entities
”) described on
Exhibit A-1
hereto, which Property Entities are the direct
or indirect owners of the real properties described on
Exhibit A-1
hereto (the “
Indirect Properties
”),
and (ii) undivided real property interests (the “
Direct Property Interests
”) in the real properties described
on
Exhibit A-2
hereto (the “
Direct Properties
”). The Property Entity Interests and the Direct Property
Interests collectively are referred to herein as the “
Interests
” and the Indirect Properties and the Direct
Properties collectively are referred to herein as the “
Properties
.”
WHEREAS,
the
transactions contemplated by this Agreement are related to the proposed initial underwritten public offering of shares of Class
A common stock of the REIT (the “
IPO
”); and
WHEREAS,
the
Seller desires to sell, assign and convey the Interests to the REIT, and the REIT desires to acquire the Interests from the Seller,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE PURCHASE
1.1
Sale
of Interests
. The Seller hereby irrevocably agrees to sell, transfer and assign to the REIT at Closing (as defined herein)
all of his right, title and interests in the Interests, together with any other interests the Seller may have in any of the Properties
and the REIT agrees to purchase the Interests from Seller on the terms and conditions set forth in this Agreement. The Seller shall
transfer the Interests to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior
assignments or conveyances, conditions, restrictions, claims, and any other matters affecting title thereto, other than Permitted
Liens.
1.2
Consideration
.
The total consideration (the “
Consideration
”) for which the Seller agrees to sell, transfer and assign the Interests
to the REIT, and which the REIT agrees to pay to the Seller, subject to the terms of this Agreement, at Closing (as defined herein)
is not known as of the date of this Agreement, but shall consist of the Fixed Consideration (as defined below) and the Preliminary
Consideration (as defined below) and shall be calculated as follows:
The consideration for
the Property Entities on Exhibit A-1(B) shall be $________ (the “
Fixed Consideration
”). The “
Preliminary
Consideration
” for the Property Entities on
Exhibit A-1(A)
and the Direct Property Interests on
Exhibit A-2
shall be $____________. If the IPO Price (as defined herein) is equal to the midpoint of the price range for the shares
of the REIT’s Class A common stock in the IPO (the “
IPO Price Range
”) as set forth on the front cover
of the REIT’s preliminary prospectus for the IPO filed with the U.S. Securities and Exchange Commission (the “
SEC
”),
the Consideration shall equal the (i) Fixed Consideration and (ii) Preliminary Consideration, subject to any Prorations for the
Properties. To the extent that the IPO Price (as defined herein) is greater than or less than the mid-point of the IPO Price Range,
the Preliminary Consideration shall be increased or decreased, respectively and proportionately, in order to determine the Preliminary
Consideration; provided, however, that in no event shall the Preliminary Consideration be greater than $_____________; provided
further
,
that in no event shall the Preliminary Consideration be less than $_____________. In any event, the Consideration
shall be adjusted to give effect to Prorations, if any, for the Properties.
1.3
No
Further Interest
. The Seller acknowledges and agrees that effective upon the Closing, and without any further action by the
Seller, the Interests shall be transferred, assigned and conveyed to the REIT and the Seller shall no longer be an equity holder
of any Property Entity, shall no longer be entitled to receive any distributions from any Property Entity, and shall have no further
right, title or interest in any of the Properties or the Property Entities.
1.4
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“Adverse Consequences”
means all liabilities, demands, claims, actions, causes of action, costs, expenses, damages (including incidental, special, but
excluding consequential and punitive damages and lost profits), Taxes, losses, penalties, fines, judgments or amounts paid in settlement,
including reasonable attorneys’ and accountants’ fees, including, without limitation, all Adverse Consequences incurred
by the REIT. The term Adverse Consequences expressly includes any consequences arising from the REIT’s sending, or failure
to send, any filings relating to transfer taxes due, or otherwise, in connection with the transactions contemplated by this Agreement,
including any interest, penalties or reassessment of the value of any Interest for purposes of ad valorem taxes, and the REIT’s
failure to pay any transfer taxes due in connection with the transactions contemplated by this Agreement.
“IPO Price”
means the public offering price per share of the REIT’s Class A common stock set forth on the front cover of the final prospectus
for the IPO (the “
Prospectus
”), to be filed by the REIT with the SEC.
“Permitted Liens”
means such of the following: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or, if
due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation or unemployment
laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially
adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits to secure trade
contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
“Post-Closing
Tax Period” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the case
of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“Prorations”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date and shall include:
(a)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
Closing;
(b)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Properties and all other income from the Properties shall be prorated
at Closing; and
(c)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at Closing.
“Representation,
Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement dated __________, 2019 by and
among the REIT, the Operating Partnership and Andrew Spodek.
“Seller’s
Percentage Interest” means, with respect to each Property Entity, the percentage set forth on
Exhibit A-1
hereto under
the heading “Seller’s Percentage Interest”, which reflects the Seller’s percentage ownership interest in
each Property Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Property
Entity.
“Straddle Period”
means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the REIT
. The REIT hereby represents and warrants to the Seller that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct and complete as of the Closing Date (as defined herein):
(a)
Organization
and Power
. The REIT is duly organized, validly existing, and in good standing under the laws of the State of Maryland, and
has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement.
(b) The
execution and delivery of this Agreement and the performance by the REIT of its obligations hereunder have been duly authorized
by all requisite action of the REIT and require no further action or approval of the REIT’s shareholders or of any other
individuals or entities in order for this Agreement to constitute a binding and enforceable obligation of the REIT.
2.2
Representations
by the Seller
. The Seller hereby represents and warrants to the REIT that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. The Seller has full right, power, and authority to enter into this Agreement and to assume and
perform all of its obligations under this Agreement; and the execution and delivery of this Agreement and the performance by the
Seller of his obligations hereunder and require no further action or approval of any other individuals or entities in order for
this Agreement to constitute a binding and enforceable obligation of the Seller. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Seller pursuant to this Agreement constitutes, or when executed and delivered,
constitute, will constitute, the legal, valid and binding obligation of the Seller, each enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by the Seller has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Seller or to any Property,
Interests or Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting the Seller in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of the Seller or any Property Entity,
Interests or Property, (3) could adversely affect the ability of the Seller to perform his obligations hereunder, or under any
document to be delivered pursuant hereto, (4) could create a lien on the any of the Interests or any Property, any part thereof,
or any interest therein, or (5) could adversely affect the any of the Interests or any Property, any part thereof, or any interest
therein.
(d)
Good
Title
.
Exhibit A-1
accurately sets forth the Seller’s Percentage Interest in each Property Entity and
Exhibit
A-2
accurately sets forth the Seller’s ownership interest in each Direct Property. The Seller is the sole record and
beneficial owner of the Interests as set forth on
Exhibit A-1
and
Exhibit A-2
and has full power and authority to
convey the Interests pursuant to the terms of this Agreement. No person has any community property rights, by virtue of marriage
or otherwise, with respect to the Interests. The Seller has good and marketable title to the Interests. The Interests are free
and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, leaseholds by any party other than the current lessee, claims or any other matters affecting title thereto and at
the Closing will be sold to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims or other matters affecting title thereto, in each case other
than Permitted Liens. No other person or entity has an option to purchase or a right of first refusal to purchase any of the Interests
nor are there any agreements or understandings with respect to the voting, ownership or disposition of the Interests that could
adversely affect the Seller’s ability to perform his obligations hereunder or the REIT’s ownership of the Interests
following the Closing. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights
relating to the Interests or any equity interest in any Property Entity that will be in effect as of the Closing.
(e)
Indebtedness
.
There is no indebtedness of any Property Entity or with respect to any Property, other than as set forth on
Exhibit A-1
and
Exhibit A-2
hereto.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by the Seller has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement (as defined herein), contract or agreement of any Property Entity, or among the partners,
members or stockholders of any Property Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and
performance of this Agreement and the contribution, acquisition and transfer of the Interests has been obtained or will be obtained
on or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, the Seller shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Interests or the REIT’s ownership thereof, or any
material adverse effect on the assets, business, condition (financial or otherwise), results or operation of any Property or any
Property Entity after the Closing Date or (2) cause any of the representations and warranties contained in this Section 2.2
to be untrue as of the Closing Date.
(h)
Governing
Documents
. The Seller has performed all of its obligations under the limited liability company agreement or operating agreement,
as such may have been amended from time to time, as applicable, of each Property Entity in which it owns an interest, (each a “
Governing
Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Tax
Treatment
. The Seller represents and warrants that it has obtained from its own counsel advice regarding the tax consequences
of the transfer of the Interests to the REIT pursuant to the terms of this Agreement. The REIT has not made any representation
to the Seller regarding the tax treatment of the transactions contemplated by this Agreement, and further represents and warrants
that it has not relied on the REIT or the REIT’s representatives or counsel for any tax advice.
(j)
Bankruptcy
with respect to the Seller
. No Act of Bankruptcy has occurred with respect to the Seller or any Property Entity. As used herein,
“
Act of Bankruptcy
” means if the Seller (A) applies for or consents to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator, of himself or of all or a substantial part of his property, (B) admits
in writing his inability to pay his debts as they become due, (C) makes a general assignment for the benefit of his creditors,
(D) files a voluntary petition or commences a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter
in effect), (E) is adjudicated bankrupt or insolvent, (F) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts,
(G) fails to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against him in
an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (H) take any action
for the purpose of effecting any of the foregoing.
(k)
Brokerage
Commission
. The Seller has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions contemplated by this Agreement.
(l)
Foreign
Persons
. The Seller is not a “foreign person” within the meaning of Section 1445(f) or Section 1446(f) of the Code.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) All
representations and warranties of the Seller contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit
delivered pursuant to this Agreement shall survive the Closing.
(b) Following
the Closing, the Seller shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of his representations,
warranties, covenants and obligations contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit delivered
by the Seller pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, the Seller shall indemnify, hold harmless and defend the REIT and the REIT’s respective officers,
directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified Party
”
and collectively, the “
Indemnified Parties
”), from and against any and all claims, losses, damages, liabilities
and expenses, including, without limitation, interest, penalties, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
“
Losses
”) asserted against, imposed upon or incurred by the Indemnified Party, to the extent resulting from
any breach of a representation, warranty or covenant of the Seller contained in this Agreement, or in any Schedule, Exhibit, certificate
or affidavit delivered by the Seller pursuant thereto. In each case, the Seller shall only bear the fees, costs or expenses in
connection with the employment of one counsel (regardless of the number of Indemnified Parties), and any necessary local counsel.
(b) The
Seller shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed
upon or incurred by the Indemnified Parties to the extent resulting from an unrelated third-party claim relating to the Interests
arising from matters that occurred prior to Closing.
(c) With
respect to any claim of an Indemnified Party pursuant to this Section 3.2, to the extent available, the REIT agrees to use diligent
good faith efforts to pursue and collect any and all available proceeds and benefits of any right to defense under any insurance
policy that covers the matter which is the subject of the indemnification prior to seeking indemnification from the Seller until
all proceeds and benefits, if any, to which the Indemnified Party is entitled pursuant to such insurance policy have been exhausted;
provided, however, that the REIT may make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which
case, if the Indemnified Party later receives insurance proceeds with respect to any Losses paid by either the Seller for the benefit
of any Indemnified Party, then the Indemnified Party shall reimburse the Seller in an amount equivalent to such proceeds in excess
of any deductible amount pursuant to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by the Seller to the
Indemnified Party in connection with such indemnification (it being understood that all costs and expenses incurred by the Seller
with respect to insurance coverage disputes shall constitute Losses paid by the Seller for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to the Seller, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to the Seller will not relieve
the Seller from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of the Seller by reason of the inability or failure of the Seller (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to the Seller, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit the
Seller, at such Seller’s option and expense, to assume the defense of any such claim by counsel selected by the Seller and
reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that the Seller shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by the Seller.
If the Seller shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Seller and at such Seller’s
sole cost and expense.
3.4
Limitations
on Indemnification under Section 3.2(a)
.
(a) The
Seller shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Party
under Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration and then only to the extent of such
excess. The Seller’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of the Seller and subject to the limitations
set forth in the following sentence, the Indemnified Party shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III. Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or in the
event of Losses relating to a third-party claim, the Seller shall not be liable to the Indemnified Party for any indirect, special
or consequential damages, loss of profits, taxes relating to tax years beginning on or after the Closing, loss of value or other
similar speculative damages asserted or claimed by the Indemnified Party.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of the Seller with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between the Seller and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by the Seller in cash.
ARTICLE
IV
COVENANTS
4.1
Covenants
of the Seller
.
(a)
Satisfaction
of Conditions
. The Seller hereby covenants that the Seller shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to Closing set forth herein, and (B) cooperate and assist in the REIT’s efforts to
satisfy all of the conditions to Closing set forth herein, and agrees that the REIT shall not have any obligation to consummate
the Closing hereunder unless and until such conditions have been satisfied or waived by the REIT in writing.
(b)
Consent
to Transfers
. The Seller hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to the Seller under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Property Entity or Property or any other company or
property being sold or transferred to the REIT by the Seller.
(c)
No
Disposition or Encumbrance of Interests
. From the date hereof through the Closing, except as specifically contemplated by this
Agreement, the Seller shall not without the prior written consent of the REIT: (i) sell, transfer (or agree to sell or transfer)
or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion
of the Interests or any interest in any Property; or (ii) mortgage, assign, pledge or otherwise encumber in any manner any of the
Interests or any Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, the
Seller shall, to the extent within his control, cause each Property Entity to conduct its business in the ordinary course consistent
with past practice, and shall, to the extent within the Seller’s control, not permit any Property Entity or Property without
the prior written consent of the REIT and the REIT, to: (i) enter into any material transaction not in the ordinary course
of business; (ii) mortgage, pledge or encumber the Interests, any assets of the Property Entity or any Property, (iii) cause or
permit any change to the existing use of any Property; (iv) cause or take any action that would render any of the representations
or warranties set forth herein untrue; (v) file an entity classification election pursuant to Treasury Regulations Section 301.7701-3(c)
on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Property Entity as an association taxable as
a corporation for federal income tax purposes; (vi) make or change any other tax elections; (vii) settle or compromise any claim,
notice, audit report or assessment in respect of taxes; (viii) change any annual tax accounting period; (ix) adopt or change any
method of tax accounting; (x) file any amended return, report or form (including an election, declaration, amendment, schedule,
information return or attachment thereto) required to be filed with a governmental authority with respect to taxes (each, a “
Tax
Return
”); (xi) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement
relating to any tax; (xii) surrender any right to claim a tax refund; (xiii) consent to any extension or waiver of the statute
of limitations period applicable to any tax claim or assessment; or (xiv) make any distribution to its partners or members, except
for cash distributions in the ordinary course of business consistent with past practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a)
Tax
Returns
.
(1)
Pre-Closing
Tax Periods
. The Seller shall cause each Property Entity to prepare and timely file all Tax Returns (other than amended Tax
Returns) of each such Property Entity for any Pre-Closing Tax Periods, and the Seller shall remit or cause to be remitted any Taxes
due in respect of such Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except
as otherwise required by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent
with positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions,
elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions
to periods ending on or before the Closing Date). For the avoidance of doubt, the REIT or its assignee will have authority to sign
any Tax Returns relating to the Property Entities that are filed after the Closing Date.
(2)
Straddle
Periods and Post-Closing Periods
. The REIT or its assignee shall prepare and timely file all Tax Returns of the Property Entities
for all taxable periods other than the Pre-Closing Tax Periods, and the REIT or is assignee shall remit or cause to be remitted
any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax Return for a
Straddle Period (and before the REIT or its assignee files such Tax Return), the REIT or its assignee shall furnish to the Seller
a draft of such Tax Return and the Seller shall have the right to review, provide written comments on, and approve the portion
of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which the Seller is responsible.
(b)
Tax
Matters
. The Seller shall pay and indemnify, without duplication, the REIT or its assignee for the following Taxes (and all
related Adverse Consequences including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(1) all
Taxes of Seller (including all income Taxes of Seller);
(2) all
such Taxes resulting from a breach of any representation under
Section 2.2(l)
or a breach of any provision of this
Section 4.2
;
(3) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Property Entities; (ii) all
such Taxes of any other Person that the Property Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Property Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(4) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Property Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other Person that a Property Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Sellers under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(1) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(2) Except
for Taxes for which the REIT is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
i. in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
ii. in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause
(i), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of
graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number
of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of the Seller to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that the Seller’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, the Seller’s obligations under this
Section 4.2
shall not expire until sixty (60) days
after the expiration of such the Seller’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of the Seller under this
Section 4.2
shall survive until fully performed.
(e) The
Seller and the REIT shall provide each other with such cooperation and information relating to any of the Interests, the Property
Entities or the Properties as the parties reasonably may request in (i) filing any Tax Return, amended Tax Return or claim for
tax refund, (ii) determining any liability for taxes or a right to a tax refund, (iii) conducting or defending any proceeding in
respect of taxes, or (iv) performing tax diligence, including with respect to the impact of this transaction on the REIT’s
tax status as a REIT. Such reasonable cooperation shall include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The REIT shall promptly notify the Seller upon receipt
by the REIT or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income,
properties or operations of any of the Property Entities or with respect to any Property and (ii) any pending or threatened federal,
state, local or foreign tax audits or assessments of the REIT or any of its affiliates, in each case, which may affect the liabilities
for taxes of the Seller with respect to any tax period ending before or as a result of the Closing. The Seller shall promptly notify
the REIT in writing upon receipt by the Seller, or any of the Seller’s affiliates, of notice of any pending or threatened
federal, state, local or foreign tax audits or assessments relating to the income, properties or operations of any of the Property
Entities or with respect to any Property. The REIT and the Seller may participate at its own expense in the prosecution of any
claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided, that the
Seller shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such Seller has
acknowledged liability for the payment of any additional tax liability, and the REIT shall have the right to control any other
audits and proceedings. Notwithstanding the foregoing, neither the REIT nor the Seller may settle or otherwise resolve any such
claim, suit or proceeding which could have an adverse tax effect on the other party or its affiliates without the consent of the
other party, such consent not to be unreasonably withheld. The Seller and the REIT shall retain all Tax Returns, schedules and
work papers with respect to the Sold Entities and the Properties, and all material records and other documents relating thereto,
until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable
years to which such Tax Returns and other documents relate and until the final determination of any tax in respect of such years.
4.3
Relationship
to Property Entities
. The parties to this Agreement acknowledge and agree that, from and after the Closing (as defined herein),
the Seller shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Property Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the REIT’s Obligations
. In addition to any other conditions set forth in this Agreement, the REIT’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.1, all of which shall be conditions precedent to the REIT’s obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by the Seller pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the REIT, the Seller shall have delivered a certificate to the REIT
to such effect in regard to the Seller’s representations and warranties set forth in this Agreement.
(d)
Performance
.
The Seller shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents, if any, of governmental and private parties, including, without limitation,
all ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders
of any Property Entity, if any, to effect the transactions contemplated by this Agreement, shall have been obtained.
(g)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(h)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Property Entities, the Interests or any Property or any material adverse change in any of the assets,
business, condition (financial or otherwise), results of operation or prospects of any Property Entity or any Property.
(i)
Tenant
and Lender Estoppels
. The REIT shall have received tenant and lender estoppels in form and substance satisfactory to the REIT
and its counsel.
5.2
Conditions
to the Seller’s Obligation
. In addition to any other conditions set forth in this Agreement, the Seller’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to the Seller’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the REIT pursuant to this Agreement shall be true and correct as
of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The REIT shall have performed and complied in all material respects with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing (the “
Closing
”) of the transactions contemplated pursuant to this Agreement shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the REIT may designate,
promptly following satisfaction of the conditions to Closing set forth herein (the “
Closing Date
”), or as otherwise
set by agreement of the parties.
6.2
Seller’s
Deliveries
. At the Closing, the Seller shall deliver the following to the REIT in addition to all other items required to be
delivered to the REIT by Sellers:
(a)
Assignment
of Interests in each Property Entity
. An Assignment, in substantially the form of
Exhibit B
attached hereto with
respect to the Property Entity Interests.
(b)
Certificate
.
A certificate from the Seller certifying to the REIT the accuracy of the representations and warranties made by the Seller hereunder.
(c)
FIRPTA
Certificate
. An affidavit from the Seller certifying pursuant to Section 1445 and Section 1446(f) of the Internal Revenue Code
that the Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Code and the Treasury Regulations promulgated thereunder).
(d)
Deed
.
A special or limited warranty deed (or its local equivalent), executed by the Seller conveying all of the Seller’s right,
title and interest to each Direct Property to the REIT.
(e)
Property
Documents
. Copies of all existing title policies/commitments, surveys, plans and specifications, permits and approvals and
other similar documents which pertain to each Property which may be in the Seller's possession or under its control.
(f)
Other
Documents
. Any other document or instrument reasonably requested by the REIT or required hereby.
6.3
Default
Remedies
. If the Seller defaults in performing any of the Seller’s obligations under this Agreement, the REIT shall have
all rights and remedies available to it at law or in equity resulting from the Seller’s default, including without limitation,
the right to seek specific performance of this Agreement and the Seller’s obligation to convey the Interests to the REIT
hereunder. The parties acknowledge and agree that the failure of a condition precedent to occur, notwithstanding the good faith
and commercially reasonable efforts of the applicable party, shall not be a default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
REIT
:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Seller
:
______________________
______________________
______________________
______________________
Any address or name
specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication
shall be deemed given and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver
because of changed address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication,
shall be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection
or refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
7.10
Trial
by Jury
. The parties to this Agreement hereby irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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SELLER
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By:
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Name: Sara Nathanson
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REIT
:
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Postal Realty Trust, Inc., a Maryland corporation
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By:
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Name:
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Title:
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[
Signature Page the Sara Nathanson Purchase
and Sale Agreement
]
Exhibit 10.21
Agreement of PURCHASE AND SAle
This AGREEMENT OF PURCHASE
AND SALE (this “
Agreement
”) is made as of ____, 2019 by and between Joseph Nathanson (the “
Seller
”)
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”).
RECITALS
WHEREAS
, the
Seller is the record and beneficial owner of (i) equity interests (the “
Property Entity Interests
”) in the entities
(the “
Property Entities
”) described on
Exhibit A-1
hereto, which Property Entities are the direct
or indirect owners of the real properties described on
Exhibit A-1
hereto (the “
Indirect Properties
”),
and (ii) undivided real property interests (the “
Direct Property Interests
”) in the real properties described
on
Exhibit A-2
hereto (the “
Direct Properties
”). The Property Entity Interests and the Direct Property
Interests collectively are referred to herein as the “
Interests
” and the Indirect Properties and the Direct
Properties collectively are referred to herein as the “
Properties
.”
WHEREAS,
the
transactions contemplated by this Agreement are related to the proposed initial underwritten public offering of shares of Class
A common stock of the REIT (the “
IPO
”); and
WHEREAS,
the
Seller desires to sell, assign and convey the Interests to the REIT, and the REIT desires to acquire the Interests from the Seller,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE PURCHASE
1.1
Sale
of Interests
. The Seller hereby irrevocably agrees to sell, transfer and assign to the REIT at Closing (as defined herein)
all of his right, title and interests in the Interests, together with any other interests the Seller may have in any of the Properties
and the REIT agrees to purchase the Interests from Seller on the terms and conditions set forth in this Agreement. Seller shall
transfer the Interests to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior
assignments or conveyances, conditions, restrictions, claims, and any other matters affecting title thereto, other than Permitted
Liens.
1.2
Consideration
.
The total consideration (the “
Consideration
”) for which the Seller agrees to sell, transfer and assign the Interests
to the REIT, and which the REIT agrees to pay to the Seller, subject to the terms of this Agreement, at Closing (as defined herein)
is not known as of the date of this Agreement, but shall consist of the Fixed Consideration (as defined below) and the Preliminary
Consideration (as defined below) and shall be calculated as follows:
The consideration for
the Property Entities on Exhibit A-1(B) shall be $________ (the “
Fixed Consideration
”). The “
Preliminary
Consideration
” for the Property Entities on
Exhibit A-1(A)
and the Direct Property Interests on
Exhibit A-2
shall be $____________. If the IPO Price (as defined herein) is equal to the midpoint of the price range for the shares
of the REIT’s Class A common stock in the IPO (the “
IPO Price Range
”) as set forth on the front cover
of the REIT’s preliminary prospectus for the IPO filed with the U.S. Securities and Exchange Commission (the “
SEC
”),
the Consideration shall equal the (i) Fixed Consideration and (ii) Preliminary Consideration, subject to any Prorations for the
Properties. To the extent that the IPO Price (as defined herein) is greater than or less than the mid-point of the IPO Price Range,
the Preliminary Consideration shall be increased or decreased, respectively and proportionately, in order to determine the Preliminary
Consideration; provided, however, that in no event shall the Preliminary Consideration be greater than $_____________; provided
further
,
that in no event shall the Preliminary Consideration be less than $_____________. In any event, the Consideration
shall be adjusted to give effect to Prorations, if any, for the Properties.
1.3
No
Further Interest
. The Seller acknowledges and agrees that effective upon the Closing, and without any further action by the
Seller, the Interests shall be transferred, assigned and conveyed to the REIT and the Seller shall no longer be an equity holder
of any Property Entity, shall no longer be entitled to receive any distributions from any Property Entity, and shall have no further
right, title or interest in any of the Properties or the Property Entities.
1.4
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“Adverse Consequences”
means all liabilities, demands, claims, actions, causes of action, costs, expenses, damages (including incidental, special, but
excluding consequential and punitive damages and lost profits), Taxes, losses, penalties, fines, judgments or amounts paid in settlement,
including reasonable attorneys’ and accountants’ fees, including, without limitation, all Adverse Consequences incurred
by the REIT. The term Adverse Consequences expressly includes any consequences arising from the REIT’s sending, or failure
to send, any filings relating to transfer taxes due, or otherwise, in connection with the transactions contemplated by this Agreement,
including any interest, penalties or reassessment of the value of any Interest for purposes of ad valorem taxes, and the REIT’s
failure to pay any transfer taxes due in connection with the transactions contemplated by this Agreement.
“IPO Price”
means the public offering price per share of the REIT’s Class A common stock set forth on the front cover of the final prospectus
for the IPO (the “
Prospectus
”), to be filed by the REIT with the SEC.
“Permitted Liens”
means such of the following: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or, if
due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation or unemployment
laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially
adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits to secure trade
contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
“Post-Closing
Tax Period” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the case
of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“Prorations”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date and shall include:
(a)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
Closing;
(b)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Properties and all other income from the Properties shall be prorated
at Closing; and
(c)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at Closing.
“Representation,
Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement dated __________, 2019 by and
among the REIT, the Operating Partnership and Andrew Spodek.
“Seller’s
Percentage Interest” means, with respect to each Property Entity, the percentage set forth on
Exhibit A-1
hereto under
the heading “Seller’s Percentage Interest”, which reflects the Seller’s percentage ownership interest in
each Property Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Property
Entity.
“Straddle Period”
means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the REIT
. The REIT hereby represents and warrants to the Seller that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct and complete as of the Closing Date (as defined herein):
(a)
Organization
and Power
. The REIT is duly organized, validly existing, and in good standing under the laws of the State of Maryland, and
has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement.
(b) The
execution and delivery of this Agreement and the performance by the REIT of its obligations hereunder have been duly authorized
by all requisite action of the REIT and require no further action or approval of the REIT’s shareholders or of any other
individuals or entities in order for this Agreement to constitute a binding and enforceable obligation of the REIT.
2.2
Representations
by the Seller
. The Seller hereby represents and warrants to the REIT that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. The Seller has full right, power, and authority to enter into this Agreement and to assume and
perform all of its obligations under this Agreement; and the execution and delivery of this Agreement and the performance by the
Seller of his obligations hereunder and require no further action or approval of any other individuals or entities in order for
this Agreement to constitute a binding and enforceable obligation of the Seller. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Seller pursuant to this Agreement constitutes, or when executed and delivered,
constitute, will constitute, the legal, valid and binding obligation of the Seller, each enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by the Seller has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Seller or to any Property,
Interests or Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting the Seller in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of the Seller or any Property Entity,
Interests or Property, (3) could adversely affect the ability of the Seller to perform his obligations hereunder, or under any
document to be delivered pursuant hereto, (4) could create a lien on the any of the Interests or any Property, any part thereof,
or any interest therein, or (5) could adversely affect the any of the Interests or any Property, any part thereof, or any interest
therein.
(d)
Good
Title
.
Exhibit A-1
accurately sets forth the Seller’s Percentage Interest in each Property Entity and
Exhibit
A-2
accurately sets forth the Seller’s ownership interest in each Direct Property. The Seller is the sole record and
beneficial owner of the Interests as set forth on
Exhibit A-1
and
Exhibit A-2
and has full power and authority to
convey the Interests pursuant to the terms of this Agreement. No person has any community property rights, by virtue of marriage
or otherwise, with respect to the Interests. The Seller has good and marketable title to the Interests. The Interests are free
and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, leaseholds by any party other than the current lessee, claims or any other matters affecting title thereto and at
the Closing will be sold to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims or other matters affecting title thereto, in each case other
than Permitted Liens. No other person or entity has an option to purchase or a right of first refusal to purchase any of the Interests
nor are there any agreements or understandings with respect to the voting, ownership or disposition of the Interests that could
adversely affect the Seller’s ability to perform his obligations hereunder or the REIT’s ownership of the Interests
following the Closing. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights
relating to the Interests or any equity interest in any Property Entity that will be in effect as of the Closing.
(e)
Indebtedness
.
There is no indebtedness of any Property Entity or with respect to any Property, other than as set forth on
Exhibit A-1
and
Exhibit A-2
hereto.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by the Seller has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement (as defined herein), contract or agreement of any Property Entity, or among the partners,
members or stockholders of any Property Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and
performance of this Agreement and the contribution, acquisition and transfer of the Interests has been obtained or will be obtained
on or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, the Seller shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Interests or the REIT’s ownership thereof, or any
material adverse effect on the assets, business, condition (financial or otherwise), results or operation of any Property or any
Property Entity after the Closing Date or (2) cause any of the representations and warranties contained in this Section 2.2
to be untrue as of the Closing Date.
(h)
Governing
Documents
. The Seller has performed all of its obligations under the limited liability company agreement or operating agreement,
as such may have been amended from time to time, as applicable, of each Property Entity in which it owns an interest, (each a “
Governing
Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Tax
Treatment
. The Seller represents and warrants that it has obtained from its own counsel advice regarding the tax consequences
of the transfer of the Interests to the REIT pursuant to the terms of this Agreement. The REIT has not made any representation
to the Seller regarding the tax treatment of the transactions contemplated by this Agreement, and further represents and warrants
that it has not relied on the REIT or the REIT’s representatives or counsel for any tax advice.
(j)
Bankruptcy
with respect to the Seller
. No Act of Bankruptcy has occurred with respect to the Seller or any Property Entity. As used herein,
“
Act of Bankruptcy
” means if the Seller (A) applies for or consents to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator, of himself or of all or a substantial part of his property, (B) admits
in writing his inability to pay his debts as they become due, (C) makes a general assignment for the benefit of his creditors,
(D) files a voluntary petition or commences a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter
in effect), (E) is adjudicated bankrupt or insolvent, (F) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts,
(G) fails to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against him in
an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (H) take any action
for the purpose of effecting any of the foregoing.
(k)
Brokerage
Commission
. The Seller has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions contemplated by this Agreement.
(l)
Foreign
Persons
. The Seller is not a “foreign person” within the meaning of Section 1445(f) or Section 1446(f) of the Code.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) All
representations and warranties of the Seller contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit
delivered pursuant to this Agreement shall survive the Closing.
(b) Following
the Closing, the Seller shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of his representations,
warranties, covenants and obligations contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit delivered
by the Seller pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, the Seller shall indemnify, hold harmless and defend the REIT and the REIT’s respective officers,
directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified Party
”
and collectively, the “
Indemnified Parties
”), from and against any and all claims, losses, damages, liabilities
and expenses, including, without limitation, interest, penalties, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
“
Losses
”) asserted against, imposed upon or incurred by the Indemnified Party, to the extent resulting from
any breach of a representation, warranty or covenant of the Seller contained in this Agreement, or in any Schedule, Exhibit, certificate
or affidavit delivered by the Seller pursuant thereto. In each case, the Seller shall only bear the fees, costs or expenses in
connection with the employment of one counsel (regardless of the number of Indemnified Parties), and any necessary local counsel.
(b) The
Seller shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed
upon or incurred by the Indemnified Parties to the extent resulting from an unrelated third-party claim relating to the Interests
arising from matters that occurred prior to Closing.
(c) With
respect to any claim of an Indemnified Party pursuant to this Section 3.2, to the extent available, the REIT agrees to use diligent
good faith efforts to pursue and collect any and all available proceeds and benefits of any right to defense under any insurance
policy that covers the matter which is the subject of the indemnification prior to seeking indemnification from the Seller until
all proceeds and benefits, if any, to which the Indemnified Party is entitled pursuant to such insurance policy have been exhausted;
provided, however, that the REIT may make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which
case, if the Indemnified Party later receives insurance proceeds with respect to any Losses paid by either the Seller for the benefit
of any Indemnified Party, then the Indemnified Party shall reimburse the Seller in an amount equivalent to such proceeds in excess
of any deductible amount pursuant to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by the Seller to the
Indemnified Party in connection with such indemnification (it being understood that all costs and expenses incurred by the Seller
with respect to insurance coverage disputes shall constitute Losses paid by the Seller for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to the Seller, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to the Seller will not relieve
the Seller from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of the Seller by reason of the inability or failure of the Seller (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to the Seller, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit the
Seller, at such Seller’s option and expense, to assume the defense of any such claim by counsel selected by the Seller and
reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that the Seller shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by the Seller.
If the Seller shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Seller and at such Seller’s
sole cost and expense.
3.4
Limitations
on Indemnification under Section 3.2(a)
.
(a) The
Seller shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Party
under Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration and then only to the extent of such
excess. The Seller’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of the Seller and subject to the limitations
set forth in the following sentence, the Indemnified Party shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III. Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or in the
event of Losses relating to a third-party claim, the Seller shall not be liable to the Indemnified Party for any indirect, special
or consequential damages, loss of profits, taxes relating to tax years beginning on or after the Closing, loss of value or other
similar speculative damages asserted or claimed by the Indemnified Party.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of the Seller with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between the Seller and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by the Seller in cash.
ARTICLE
IV
COVENANTS
4.1
Covenants
of the Seller
.
(a)
Satisfaction
of Conditions
. The Seller hereby covenants that the Seller shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to Closing set forth herein, and (B) cooperate and assist in the REIT’s efforts to
satisfy all of the conditions to Closing set forth herein, and agrees that the REIT shall not have any obligation to consummate
the Closing hereunder unless and until such conditions have been satisfied or waived by the REIT in writing.
(b)
Consent
to Transfers
. The Seller hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to the Seller under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Property Entity or Property or any other company or
property being sold or transferred to the REIT by the Seller.
(c)
No
Disposition or Encumbrance of Interests
. From the date hereof through the Closing, except as specifically contemplated by this
Agreement, the Seller shall not without the prior written consent of the REIT: (i) sell, transfer (or agree to sell or transfer)
or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion
of the Interests or any interest in any Property; or (ii) mortgage, assign, pledge or otherwise encumber in any manner any of the
Interests or any Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, the
Seller shall, to the extent within his control, cause each Property Entity to conduct its business in the ordinary course consistent
with past practice, and shall, to the extent within the Seller’s control, not permit any Property Entity or Property without
the prior written consent of the REIT and the REIT, to: (i) enter into any material transaction not in the ordinary course
of business; (ii) mortgage, pledge or encumber the Interests, any assets of the Property Entity or any Property, (iii) cause or
permit any change to the existing use of any Property; (iv) cause or take any action that would render any of the representations
or warranties set forth herein untrue; (v) file an entity classification election pursuant to Treasury Regulations Section 301.7701-3(c)
on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Property Entity as an association taxable as
a corporation for federal income tax purposes; (vi) make or change any other tax elections; (vii) settle or compromise any claim,
notice, audit report or assessment in respect of taxes; (viii) change any annual tax accounting period; (ix) adopt or change any
method of tax accounting; (x) file any amended return, report or form (including an election, declaration, amendment, schedule,
information return or attachment thereto) required to be filed with a governmental authority with respect to taxes (each, a “
Tax
Return
”); (xi) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement
relating to any tax; (xii) surrender any right to claim a tax refund; (xiii) consent to any extension or waiver of the statute
of limitations period applicable to any tax claim or assessment; or (xiv) make any distribution to its partners or members, except
for cash distributions in the ordinary course of business consistent with past practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a)
Tax
Returns
.
(1)
Pre-Closing
Tax Periods
. The Seller shall cause each Property Entity to prepare and timely file all Tax Returns (other than amended Tax
Returns) of each such Property Entity for any Pre-Closing Tax Periods, and the Seller shall remit or cause to be remitted any Taxes
due in respect of such Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except
as otherwise required by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent
with positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions,
elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions
to periods ending on or before the Closing Date). For the avoidance of doubt, the REIT or its assignee will have authority to sign
any Tax Returns relating to the Property Entities that are filed after the Closing Date.
(2)
Straddle
Periods and Post-Closing Periods
. The REIT or its assignee shall prepare and timely file all Tax Returns of the Property Entities
for all taxable periods other than the Pre-Closing Tax Periods, and the REIT or is assignee shall remit or cause to be remitted
any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax Return for a
Straddle Period (and before the REIT or its assignee files such Tax Return), the REIT or its assignee shall furnish to the Seller
a draft of such Tax Return and the Seller shall have the right to review, provide written comments on, and approve the portion
of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which the Seller is responsible.
(b)
Tax
Matters
. The Seller shall pay and indemnify, without duplication, the REIT or its assignee for the following Taxes (and all
related Adverse Consequences including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(1) all
Taxes of Seller (including all income Taxes of Seller);
(2) all
such Taxes resulting from a breach of any representation under
Section 2.2(l)
or a breach of any provision of this
Section 4.2
;
(3) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Property Entities; (ii) all
such Taxes of any other Person that the Property Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Property Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(4) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Property Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other Person that a Property Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Sellers under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(1) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(2) Except
for Taxes for which the REIT is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
i. in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
ii. in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause
(i), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of
graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number
of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of the Seller to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that the Seller’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, the Seller’s obligations under this
Section 4.2
shall not expire until sixty (60) days
after the expiration of such the Seller’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of the Seller under this
Section 4.2
shall survive until fully performed.
(e) The
Seller and the REIT shall provide each other with such cooperation and information relating to any of the Interests, the Property
Entities or the Properties as the parties reasonably may request in (i) filing any Tax Return, amended Tax Return or claim for
tax refund, (ii) determining any liability for taxes or a right to a tax refund, (iii) conducting or defending any proceeding in
respect of taxes, or (iv) performing tax diligence, including with respect to the impact of this transaction on the REIT’s
tax status as a REIT. Such reasonable cooperation shall include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The REIT shall promptly notify the Seller upon receipt
by the REIT or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income,
properties or operations of any of the Property Entities or with respect to any Property and (ii) any pending or threatened federal,
state, local or foreign tax audits or assessments of the REIT or any of its affiliates, in each case, which may affect the liabilities
for taxes of the Seller with respect to any tax period ending before or as a result of the Closing. The Seller shall promptly notify
the REIT in writing upon receipt by the Seller, or any of the Seller’s affiliates, of notice of any pending or threatened
federal, state, local or foreign tax audits or assessments relating to the income, properties or operations of any of the Property
Entities or with respect to any Property. The REIT and the Seller may participate at its own expense in the prosecution of any
claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided, that the
Seller shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such Seller has
acknowledged liability for the payment of any additional tax liability, and the REIT shall have the right to control any other
audits and proceedings. Notwithstanding the foregoing, neither the REIT nor the Seller may settle or otherwise resolve any such
claim, suit or proceeding which could have an adverse tax effect on the other party or its affiliates without the consent of the
other party, such consent not to be unreasonably withheld. The Seller and the REIT shall retain all Tax Returns, schedules and
work papers with respect to the Sold Entities and the Properties, and all material records and other documents relating thereto,
until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable
years to which such Tax Returns and other documents relate and until the final determination of any tax in respect of such years.
4.3
Relationship
to Property Entities
. The parties to this Agreement acknowledge and agree that, from and after the Closing (as defined herein),
the Seller shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Property Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the REIT’s Obligations
. In addition to any other conditions set forth in this Agreement, the REIT’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.1, all of which shall be conditions precedent to the REIT’s obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by the Seller pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the REIT, the Seller shall have delivered a certificate to the REIT
to such effect in regard to the Seller’s representations and warranties set forth in this Agreement.
(d)
Performance
.
The Seller shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents, if any, of governmental and private parties, including, without limitation,
all ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders
of any Property Entity, if any, to effect the transactions contemplated by this Agreement, shall have been obtained.
(g)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(h)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Property Entities, the Interests or any Property or any material adverse change in any of the assets,
business, condition (financial or otherwise), results of operation or prospects of any Property Entity or any Property.
(i)
Tenant
and Lender Estoppels
. The REIT shall have received tenant and lender estoppels in form and substance satisfactory to the REIT
and its counsel.
5.2
Conditions
to the Seller’s Obligation
. In addition to any other conditions set forth in this Agreement, the Seller’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to the Seller’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the REIT pursuant to this Agreement shall be true and correct as
of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The REIT shall have performed and complied in all material respects with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing (the “
Closing
”) of the transactions contemplated pursuant to this Agreement shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the REIT may designate,
promptly following satisfaction of the conditions to Closing set forth herein (the “
Closing Date
”), or as otherwise
set by agreement of the parties.
6.2
Seller’s
Deliveries
. At the Closing, the Seller shall deliver the following to the REIT in addition to all other items required to be
delivered to the REIT by Sellers:
(a)
Assignment
of Interests in each Property Entity
. An Assignment, in substantially the form of
Exhibit B
attached hereto with
respect to the Property Entity Interests.
(b)
Certificate
.
A certificate from the Seller certifying to the REIT the accuracy of the representations and warranties made by the Seller hereunder.
(c)
FIRPTA
Certificate
. An affidavit from the Seller certifying pursuant to Section 1445 and Section 1446(f) of the Internal Revenue Code
that the Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Code and the Treasury Regulations promulgated thereunder).
(d)
Deed
.
A special or limited warranty deed (or its local equivalent), executed by the Seller conveying all of the Seller’s right,
title and interest to each Direct Property to the REIT.
(e)
Property
Documents
. Copies of all existing title policies/commitments, surveys, plans and specifications, permits and approvals and
other similar documents which pertain to each Property which may be in the Seller's possession or under its control.
(f)
Other
Documents
. Any other document or instrument reasonably requested by the REIT or required hereby.
6.3
Default
Remedies
. If the Seller defaults in performing any of the Seller’s obligations under this Agreement, the REIT shall have
all rights and remedies available to it at law or in equity resulting from the Seller’s default, including without limitation,
the right to seek specific performance of this Agreement and the Seller’s obligation to convey the Interests to the REIT
hereunder. The parties acknowledge and agree that the failure of a condition precedent to occur, notwithstanding the good faith
and commercially reasonable efforts of the applicable party, shall not be a default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
REIT
:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Seller
:
______________________
______________________
______________________
______________________
Any address or name
specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication
shall be deemed given and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver
because of changed address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication,
shall be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection
or refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
7.10
Trial
by Jury
. The parties to this Agreement hereby irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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SELLER
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By:
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Name: Joseph Nathanson
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REIT
:
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Postal Realty Trust, Inc., a Maryland corporation
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By:
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Name:
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Title:
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[
Signature Page the Joseph Nathanson Purchase and Sale Agreement
]
Exhibit 10.22
Agreement of PURCHASE AND SAle
This AGREEMENT OF PURCHASE
AND SALE (this “
Agreement
”) is made as of ____, 2019 by and between Bessi Marmer (the “
Seller
”)
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”).
RECITALS
WHEREAS
, the
Seller is the record and beneficial owner of equity interests (the “
Interests
”) in the entity (the “
Property
Entity
”) described on
Exhibit A-1
hereto, which Property Entity is the direct or indirect owners of the real
property described on
Exhibit A-1
hereto (the “
Property
”).
WHEREAS,
the
transactions contemplated by this Agreement are related to the proposed initial underwritten public offering of shares of Class
A common stock of the REIT (the “
IPO
”); and
WHEREAS,
the
Seller desires to sell, assign and convey the Interests to the REIT, and the REIT desires to acquire the Interests from the Seller,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE PURCHASE
1.1
Sale
of Interests
. The Seller hereby irrevocably agrees to sell, transfer and assign to the REIT at Closing (as defined herein)
all of his right, title and interests in the Interests, together with any other interests the Seller may have in the Property and
the REIT agrees to purchase the Interests from Seller on the terms and conditions set forth in this Agreement. The Sellers shall
transfer the Interest to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior
assignments or conveyances, conditions, restrictions, claims, and any other matters affecting title thereto, other than Permitted
Liens.
1.2
Consideration
.
The total consideration (the “
Consideration
”) for which the Seller agrees to sell, transfer and assign the Interests
to the REIT, and which the REIT agrees to pay to the Seller, subject to the terms of this Agreement, at Closing (as defined herein)
is not known as of the date of this Agreement, but shall be calculated as follows:
The “
Preliminary
Consideration
” for the Property Entity on Exhibit A-1 shall be $________. If the IPO Price (as defined herein)
is equal to the midpoint of the price range for the shares of the REIT’s Class A common stock in the IPO (the “
IPO
Price Range
”) as set forth on the front cover of the REIT’s preliminary prospectus for the IPO filed with the U.S.
Securities and Exchange Commission (the “
SEC
”), the Consideration shall equal the Preliminary Consideration,
subject to any Prorations for the Property. To the extent that the IPO Price (as defined herein) is greater than or less than the
mid-point of the IPO Price Range, the Preliminary Consideration shall be increased or decreased, respectively and proportionately,
in order to determine the Consideration; provided, however, that in no event shall the Consideration be greater than $_______;
provided further
,
that in no event shall the Consideration be less than $________. In any event, the Consideration shall
be adjusted to give effect to Prorations, if any, for the Property.
1.3
No
Further Interest
. The Seller acknowledges and agrees that effective upon the Closing, and without any further action by the
Seller, the Interests shall be transferred, assigned and conveyed to the REIT and the Seller shall no longer be an equity holder
of any Property Entity, shall no longer be entitled to receive any distributions from any Property Entity, and shall have no further
right, title or interest in the Property or the Property Entity.
1.4
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“Adverse Consequences”
means all liabilities, demands, claims, actions, causes of action, costs, expenses, damages (including incidental, special, but
excluding consequential and punitive damages and lost profits), Taxes, losses, penalties, fines, judgments or amounts paid in settlement,
including reasonable attorneys’ and accountants’ fees, including, without limitation, all Adverse Consequences incurred
by the REIT. The term Adverse Consequences expressly includes any consequences arising from the REIT’s sending, or failure
to send, any filings relating to transfer taxes due, or otherwise, in connection with the transactions contemplated by this Agreement,
including any interest, penalties or reassessment of the value of any Interest for purposes of ad valorem taxes, and the REIT’s
failure to pay any transfer taxes due in connection with the transactions contemplated by this Agreement.
“IPO Price”
means the public offering price per share of the REIT’s Class A common stock set forth on the front cover of the final prospectus
for the IPO (the “
Prospectus
”), to be filed by the REIT with the SEC.
“Permitted Liens”
means such of the following: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or, if
due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation or unemployment
laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially
adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits to secure trade
contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
“Post-Closing
Tax Period” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the case
of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“Prorations”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date and shall include:
(a)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
Closing;
(b)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Property and all other income from the Property shall be prorated at
Closing; and
(c)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at Closing.
“Representation,
Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement dated __________, 2019 by and
among the REIT, the Operating Partnership and Andrew Spodek.
“Seller’s
Percentage Interest” means, with respect to each Property Entity, the percentage set forth on
Exhibit A-1
hereto under
the heading “Seller’s Percentage Interest”, which reflects the Seller’s percentage ownership interest in
each Property Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Property
Entity.
“Straddle Period”
means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the REIT
. The REIT hereby represents and warrants to the Seller that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct and complete as of the Closing Date (as defined herein):
(a)
Organization
and Power
. The REIT is duly organized, validly existing, and in good standing under the laws of the State of Maryland, and
has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement.
(b) The
execution and delivery of this Agreement and the performance by the REIT of its obligations hereunder have been duly authorized
by all requisite action of the REIT and require no further action or approval of the REIT’s shareholders or of any other
individuals or entities in order for this Agreement to constitute a binding and enforceable obligation of the REIT.
2.2
Representations
by the Seller
. The Seller hereby represents and warrants to the REIT that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. The Seller has full right, power, and authority to enter into this Agreement and to assume and
perform all of its obligations under this Agreement; and the execution and delivery of this Agreement and the performance by the
Seller of his obligations hereunder and require no further action or approval of any other individuals or entities in order for
this Agreement to constitute a binding and enforceable obligation of the Seller. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Seller pursuant to this Agreement constitutes, or when executed and delivered,
constitute, will constitute, the legal, valid and binding obligation of the Seller, each enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by the Seller has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Seller or to any Property,
Interests or Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting the Seller in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of the Seller or any Property Entity,
Interests or Property, (3) could adversely affect the ability of the Seller to perform his obligations hereunder, or under any
document to be delivered pursuant hereto, (4) could create a lien on the any of the Interests or any Property, any part thereof,
or any interest therein, or (5) could adversely affect the any of the Interests or any Property, any part thereof, or any interest
therein.
(d)
Good
Title
.
Exhibit A-1
accurately sets forth the Seller’s Percentage Interest in each Property Entity and
Exhibit
A-2
accurately sets forth the Seller’s ownership interest in each Direct Property. The Seller is the sole record and
beneficial owner of the Interests as set forth on
Exhibit A-1
and
Exhibit A-2
and has full power and authority to
convey the Interests pursuant to the terms of this Agreement. No person has any community property rights, by virtue of marriage
or otherwise, with respect to the Interests. The Seller has good and marketable title to the Interests. The Interests are free
and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, leaseholds by any party other than the current lessee, claims or any other matters affecting title thereto and at
the Closing will be sold to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims or other matters affecting title thereto, in each case other
than Permitted Liens. No other person or entity has an option to purchase or a right of first refusal to purchase any of the Interests
nor are there any agreements or understandings with respect to the voting, ownership or disposition of the Interests that could
adversely affect the Seller’s ability to perform his obligations hereunder or the REIT’s ownership of the Interests
following the Closing. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights
relating to the Interests or any equity interest in any Property Entity that will be in effect as of the Closing.
(e)
Indebtedness
.
There is no indebtedness of any Property Entity or with respect to any Property, other than as set forth on
Exhibit A-1
and
Exhibit A-2
hereto.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by the Seller has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement (as defined herein), contract or agreement of any Property Entity, or among the partners,
members or stockholders of any Property Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and
performance of this Agreement and the contribution, acquisition and transfer of the Interests has been obtained or will be obtained
on or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, the Seller shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Interests or the REIT’s ownership thereof, or any
material adverse effect on the assets, business, condition (financial or otherwise), results or operation of any Property or any
Property Entity after the Closing Date or (2) cause any of the representations and warranties contained in this Section 2.2
to be untrue as of the Closing Date.
(h)
Governing
Documents
. The Seller has performed all of its obligations under the limited liability company agreement or operating agreement,
as such may have been amended from time to time, as applicable, of each Property Entity in which it owns an interest, (each a “
Governing
Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Tax
Treatment
. The Seller represents and warrants that it has obtained from its own counsel advice regarding the tax consequences
of the transfer of the Interests to the REIT pursuant to the terms of this Agreement. The REIT has not made any representation
to the Seller regarding the tax treatment of the transactions contemplated by this Agreement, and further represents and warrants
that it has not relied on the REIT or the REIT’s representatives or counsel for any tax advice.
(j)
Bankruptcy
with respect to the Seller
. No Act of Bankruptcy has occurred with respect to the Seller or any Property Entity. As used herein,
“
Act of Bankruptcy
” means if the Seller (A) applies for or consents to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator, of himself or of all or a substantial part of his property, (B) admits
in writing his inability to pay his debts as they become due, (C) makes a general assignment for the benefit of his creditors,
(D) files a voluntary petition or commences a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter
in effect), (E) is adjudicated bankrupt or insolvent, (F) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts,
(G) fails to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against him in
an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (H) take any action
for the purpose of effecting any of the foregoing.
(k)
Brokerage
Commission
. The Seller has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions contemplated by this Agreement.
(l)
Foreign
Persons
. The Seller is not a “foreign person” within the meaning of Section 1445(f) or Section 1446(f) of the Code.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) All
representations and warranties of the Seller contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit
delivered pursuant to this Agreement shall survive the Closing.
(b) Following
the Closing, the Seller shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of his representations,
warranties, covenants and obligations contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit delivered
by the Seller pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, the Seller shall indemnify, hold harmless and defend the REIT and the REIT’s respective officers,
directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified Party
”
and collectively, the “
Indemnified Parties
”), from and against any and all claims, losses, damages, liabilities
and expenses, including, without limitation, interest, penalties, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
“
Losses
”) asserted against, imposed upon or incurred by the Indemnified Party, to the extent resulting from
any breach of a representation, warranty or covenant of the Seller contained in this Agreement, or in any Schedule, Exhibit, certificate
or affidavit delivered by the Seller pursuant thereto. In each case, the Seller shall only bear the fees, costs or expenses in
connection with the employment of one counsel (regardless of the number of Indemnified Parties), and any necessary local counsel.
(b) The
Seller shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed
upon or incurred by the Indemnified Parties to the extent resulting from an unrelated third-party claim relating to the Interests
arising from matters that occurred prior to Closing.
(c) With
respect to any claim of an Indemnified Party pursuant to this Section 3.2, to the extent available, the REIT agrees to use diligent
good faith efforts to pursue and collect any and all available proceeds and benefits of any right to defense under any insurance
policy that covers the matter which is the subject of the indemnification prior to seeking indemnification from the Seller until
all proceeds and benefits, if any, to which the Indemnified Party is entitled pursuant to such insurance policy have been exhausted;
provided, however, that the REIT may make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which
case, if the Indemnified Party later receives insurance proceeds with respect to any Losses paid by either the Seller for the benefit
of any Indemnified Party, then the Indemnified Party shall reimburse the Seller in an amount equivalent to such proceeds in excess
of any deductible amount pursuant to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by the Seller to the
Indemnified Party in connection with such indemnification (it being understood that all costs and expenses incurred by the Seller
with respect to insurance coverage disputes shall constitute Losses paid by the Seller for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to the Seller, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to the Seller will not relieve
the Seller from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of the Seller by reason of the inability or failure of the Seller (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to the Seller, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit the
Seller, at such Seller’s option and expense, to assume the defense of any such claim by counsel selected by the Seller and
reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that the Seller shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by the Seller.
If the Seller shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Seller and at such Seller’s
sole cost and expense.
3.4
Limitations
on Indemnification under Section 3.2(a)
.
(a) The
Seller shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Party
under Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration and then only to the extent of such
excess. The Seller’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of the Seller and subject to the limitations
set forth in the following sentence, the Indemnified Party shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III. Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or in the
event of Losses relating to a third-party claim, the Seller shall not be liable to the Indemnified Party for any indirect, special
or consequential damages, loss of profits, taxes relating to tax years beginning on or after the Closing, loss of value or other
similar speculative damages asserted or claimed by the Indemnified Party.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of the Seller with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between the Seller and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by the Seller in cash.
ARTICLE
IV
COVENANTS
4.1
Covenants
of the Seller
.
(a)
Satisfaction
of Conditions
. The Seller hereby covenants that the Seller shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to Closing set forth herein, and (B) cooperate and assist in the REIT’s efforts to
satisfy all of the conditions to Closing set forth herein, and agrees that the REIT shall not have any obligation to consummate
the Closing hereunder unless and until such conditions have been satisfied or waived by the REIT in writing.
(b)
Consent
to Transfers
. The Seller hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to the Seller under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Property Entity or Property or any other company or
property being sold or transferred to the REIT by the Seller.
(c)
No
Disposition or Encumbrance of Interests
. From the date hereof through the Closing, except as specifically contemplated by this
Agreement, the Seller shall not without the prior written consent of the REIT: (i) sell, transfer (or agree to sell or transfer)
or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion
of the Interests or any interest in any Property; or (ii) mortgage, assign, pledge or otherwise encumber in any manner any of the
Interests or any Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, the
Seller shall, to the extent within his control, cause each Property Entity to conduct its business in the ordinary course consistent
with past practice, and shall, to the extent within the Seller’s control, not permit any Property Entity or Property without
the prior written consent of the REIT and the REIT, to: (i) enter into any material transaction not in the ordinary course
of business; (ii) mortgage, pledge or encumber the Interests, any assets of the Property Entity or any Property, (iii) cause or
permit any change to the existing use of any Property; (iv) cause or take any action that would render any of the representations
or warranties set forth herein untrue; (v) file an entity classification election pursuant to Treasury Regulations Section 301.7701-3(c)
on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Property Entity as an association taxable as
a corporation for federal income tax purposes; (vi) make or change any other tax elections; (vii) settle or compromise any claim,
notice, audit report or assessment in respect of taxes; (viii) change any annual tax accounting period; (ix) adopt or change any
method of tax accounting; (x) file any amended return, report or form (including an election, declaration, amendment, schedule,
information return or attachment thereto) required to be filed with a governmental authority with respect to taxes (each, a “
Tax
Return
”); (xi) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement
relating to any tax; (xii) surrender any right to claim a tax refund; (xiii) consent to any extension or waiver of the statute
of limitations period applicable to any tax claim or assessment; or (xiv) make any distribution to its partners or members, except
for cash distributions in the ordinary course of business consistent with past practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a)
Tax
Returns
.
(1)
Pre-Closing
Tax Periods
. The Seller shall cause each Property Entity to prepare and timely file all Tax Returns (other than amended Tax
Returns) of each such Property Entity for any Pre-Closing Tax Periods, and the Seller shall remit or cause to be remitted any Taxes
due in respect of such Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except
as otherwise required by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent
with positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions,
elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions
to periods ending on or before the Closing Date). For the avoidance of doubt, the REIT or its assignee will have authority to sign
any Tax Returns relating to the Property Entity that are filed after the Closing Date.
(2)
Straddle
Periods and Post-Closing Periods
. The REIT or its assignee shall prepare and timely file all Tax Returns of the Property Entity
for all taxable periods other than the Pre-Closing Tax Periods, and the REIT or is assignee shall remit or cause to be remitted
any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax Return for a
Straddle Period (and before the REIT or its assignee files such Tax Return), the REIT or its assignee shall furnish to the Seller
a draft of such Tax Return and the Seller shall have the right to review, provide written comments on, and approve the portion
of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which the Seller is responsible.
(b)
Tax
Matters
. The Seller shall pay and indemnify, without duplication, the REIT or its assignee for the following Taxes (and all
related Adverse Consequences including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(1) all
Taxes of Seller (including all income Taxes of Seller);
(2) all
such Taxes resulting from a breach of any representation under
Section 2.2(l)
or a breach of any provision of this
Section 4.2
;
(3) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Property Entity; (ii) all
such Taxes of any other Person that the Property Entity is liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Property Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(4) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Property Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other Person that a Property Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the
indemnification obligations of the Sellers under this
Section 4.2
shall not be subject to the amount limitations set forth
in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(1) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(2) Except
for Taxes for which the REIT is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
i. in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
ii. in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause
(i), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of
graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number
of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of the Seller to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that the Seller’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, the Seller’s obligations under this
Section 4.2
shall not expire until sixty (60) days
after the expiration of such the Seller’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of the Seller under this
Section 4.2
shall survive until fully performed.
(e) The
Seller and the REIT shall provide each other with such cooperation and information relating to any of the Interests, the Property
Entity or the Property as the parties reasonably may request in (i) filing any Tax Return, amended Tax Return or claim for tax
refund, (ii) determining any liability for taxes or a right to a tax refund, (iii) conducting or defending any proceeding in respect
of taxes, or (iv) performing tax diligence, including with respect to the impact of this transaction on the REIT’s tax status
as a REIT. Such reasonable cooperation shall include making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. The REIT shall promptly notify the Seller upon receipt by the REIT
or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income, properties
or operations of the Property Entity or with respect to any Property and (ii) any pending or threatened federal, state, local or
foreign tax audits or assessments of the REIT or any of its affiliates, in each case, which may affect the liabilities for taxes
of the Seller with respect to any tax period ending before or as a result of the Closing. The Seller shall promptly notify the
REIT in writing upon receipt by the Seller, or any of the Seller’s affiliates, of notice of any pending or threatened federal,
state, local or foreign tax audits or assessments relating to the income, properties or operations of the Property Entity or with
respect to any Property. The REIT and the Seller may participate at its own expense in the prosecution of any claim or audit with
respect to taxes attributable to any taxable period ending on or before the Closing Date; provided, that the Seller shall have
the right to control the conduct of any such audit or proceeding or portion thereof for which such Seller has acknowledged liability
for the payment of any additional tax liability, and the REIT shall have the right to control any other audits and proceedings.
Notwithstanding the foregoing, neither the REIT nor the Seller may settle or otherwise resolve any such claim, suit or proceeding
which could have an adverse tax effect on the other party or its affiliates without the consent of the other party, such consent
not to be unreasonably withheld. The Seller and the REIT shall retain all Tax Returns, schedules and work papers with respect to
the Sold Entities and the Property, and all material records and other documents relating thereto, until the expiration of the
statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable years to which such Tax
Returns and other documents relate and until the final determination of any tax in respect of such years.
4.3
Relationship
to Property Entity
. The parties to this Agreement acknowledge and agree that, from and after the Closing (as defined herein),
the Seller shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of the Property Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the REIT’s Obligations
. In addition to any other conditions set forth in this Agreement, the REIT’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.1, all of which shall be conditions precedent to the REIT’s obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by the Seller pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the REIT, the Seller shall have delivered a certificate to the REIT
to such effect in regard to the Seller’s representations and warranties set forth in this Agreement.
(d)
Performance
.
The Seller shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents, if any, of governmental and private parties, including, without limitation,
all ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders
of any Property Entity, if any, to effect the transactions contemplated by this Agreement, shall have been obtained.
(g)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(h)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to the Property Entity the Interests or any Property or any material adverse change in any of the assets, business,
condition (financial or otherwise), results of operation or prospects of any Property Entity or any Property.
(i)
Tenant
and Lender Estoppels
. The REIT shall have received tenant and lender estoppels in form and substance satisfactory to the REIT
and its counsel.
5.2
Conditions
to the Seller’s Obligation
. In addition to any other conditions set forth in this Agreement, the Seller’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to the Seller’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the REIT pursuant to this Agreement shall be true and correct as
of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The REIT shall have performed and complied in all material respects with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing (the “
Closing
”) of the transactions contemplated pursuant to this Agreement shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the REIT may designate,
promptly following satisfaction of the conditions to Closing set forth herein (the “
Closing Date
”), or as otherwise
set by agreement of the parties.
6.2
Seller’s
Deliveries
. At the Closing, the Seller shall deliver the following to the REIT in addition to all other items required to be
delivered to the REIT by Sellers:
(a)
Assignment
of Interests in each Property Entity
. An Assignment, in substantially the form of
Exhibit B
attached hereto with
respect to the Interests.
(b)
Certificate
.
A certificate from the Seller certifying to the REIT the accuracy of the representations and warranties made by the Seller hereunder.
(c)
FIRPTA
Certificate
. An affidavit from the Seller certifying pursuant to Section 1445 and Section 1446(f) of the Internal Revenue Code
that the Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Code and the Treasury Regulations promulgated thereunder).
(d)
Deed
.
A special or limited warranty deed (or its local equivalent), executed by the Seller conveying all of the Seller’s right,
title and interest to each Direct Property to the REIT.
(e)
Property
Documents
. Copies of all existing title policies/commitments, surveys, plans and specifications, permits and approvals and
other similar documents which pertain to each Property which may be in the Seller's possession or under its control.
(f)
Other
Documents
. Any other document or instrument reasonably requested by the REIT or required hereby.
6.3
Default
Remedies
. If the Seller defaults in performing any of the Seller’s obligations under this Agreement, the REIT shall have
all rights and remedies available to it at law or in equity resulting from the Seller’s default, including without limitation,
the right to seek specific performance of this Agreement and the Seller’s obligation to convey the Interests to the REIT
hereunder. The parties acknowledge and agree that the failure of a condition precedent to occur, notwithstanding the good faith
and commercially reasonable efforts of the applicable party, shall not be a default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
REIT
:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Seller
:
______________________
______________________
______________________
______________________
Any address or name
specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication
shall be deemed given and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver
because of changed address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication,
shall be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection
or refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
7.10
Trial
by Jury
. The parties to this Agreement hereby irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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SELLER
:
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By:
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Name: Bessi Marmer
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REIT
:
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Postal Realty Trust, Inc., a Maryland corporation
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By:
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Name:
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Title:
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[
Signature Page to the Marmer Purchase and Sale Agreement
]
Exhibit
10.23
Agreement
of PURCHASE AND SAle
This AGREEMENT OF PURCHASE
AND SALE (this “
Agreement
”) is made as of ____, 2019 by and between IDJ Holdings, LLC (the “
Seller
”)
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”).
RECITALS
WHEREAS
, the
Seller is the record and beneficial owner of equity interests (the “
Interests
”) in the entities (the “
Property
Entities
”) described on
Exhibit A-1
hereto, which Property Entities are the direct or indirect owners of
the real properties described on
Exhibit A-1
hereto (the “
Properties
”).
WHEREAS,
the
transactions contemplated by this Agreement are related to the proposed initial underwritten public offering of shares of Class
A common stock of the REIT (the “
IPO
”); and
WHEREAS,
the
Seller desires to sell, assign and convey the Interests to the REIT, and the REIT desires to acquire the Interests from the Seller,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE PURCHASE
1.1
Sale
of Interests
. The Seller hereby irrevocably agrees to sell, transfer and assign to the REIT at Closing (as defined herein)
all of his right, title and interests in the Interests, together with any other interests the Seller may have in any of the Properties
and the REIT agrees to purchase the Interests from Seller on the terms and conditions set forth in this Agreement. The Sellers
shall transfer the Interests to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims, and any other matters affecting title thereto, other than Permitted
Liens.
1.2
Consideration
.
The total consideration (the “Consideration”) for which the Seller agrees to sell, transfer and assign the Interests
to the REIT, and which the REIT agrees to pay to the Seller, subject to the terms of this Agreement, at Closing (as defined herein)
is not known as of the date of this Agreement, but shall consist of the Fixed Consideration (as defined below) and the Preliminary
Consideration (as defined below) and shall be calculated as follows:
The consideration for
the Property Entities on Exhibit A-1(B) shall be $________ (the “
Fixed Consideration
”). The “
Preliminary
Consideration
” for the Properties on Exhibit A-1(A) shall be $____________. If the IPO Price (as defined herein)
is equal to the midpoint of the price range for the shares of the REIT’s Class A common stock in the IPO (the “
IPO
Price Range
”) as set forth on the front cover of the REIT’s preliminary prospectus for the IPO filed with the U.S.
Securities and Exchange Commission (the “
SEC
”), the Consideration shall equal the (i) Fixed Consideration and
(ii) Preliminary Consideration, subject to any Prorations for the Properties. To the extent that the IPO Price (as defined herein)
is greater than or less than the mid-point of the IPO Price Range, the Preliminary Consideration shall be increased or decreased,
respectively and proportionately, in order to determine the Preliminary Consideration; provided, however, that in no event shall
the Preliminary Consideration be greater than $_____________; provided further
,
that in no event shall the Preliminary Consideration
be less than $_____________. In any event, the Consideration shall be adjusted to give effect to Prorations, if any, for the Properties.
1.3
No
Further Interest
. The Seller acknowledges and agrees that effective upon the Closing, and without any further action by the
Seller, the Interests shall be transferred, assigned and conveyed to the REIT and the Seller shall no longer be an equity holder
of any Property Entity, shall no longer be entitled to receive any distributions from any Property Entity, and shall have no further
right, title or interest in any of the Properties or the Property Entities.
1.4
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“Adverse Consequences”
means all liabilities, demands, claims, actions, causes of action, costs, expenses, damages (including incidental, special, but
excluding consequential and punitive damages and lost profits), Taxes, losses, penalties, fines, judgments or amounts paid in settlement,
including reasonable attorneys’ and accountants’ fees, including, without limitation, all Adverse Consequences incurred
by the REIT. The term Adverse Consequences expressly includes any consequences arising from the REIT’s sending, or failure
to send, any filings relating to transfer taxes due, or otherwise, in connection with the transactions contemplated by this Agreement,
including any interest, penalties or reassessment of the value of any Interest for purposes of ad valorem taxes, and the REIT’s
failure to pay any transfer taxes due in connection with the transactions contemplated by this Agreement.
“IPO Price”
means the public offering price per share of the REIT’s Class A common stock set forth on the front cover of the final prospectus
for the IPO (the “
Prospectus
”), to be filed by the REIT with the SEC.
“Permitted Liens”
means such of the following: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or, if
due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation or unemployment
laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially
adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits to secure trade
contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
“Post-Closing
Tax Period” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the case
of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“Prorations”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date and shall include:
(a)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
Closing;
(b)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Properties and all other income from the Properties shall be prorated
at Closing; and
(c)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at Closing.
“Representation,
Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement dated __________, 2019 by and
among the REIT, the Operating Partnership and Andrew Spodek.
“Seller’s
Percentage Interest” means, with respect to each Property Entity, the percentage set forth on
Exhibit A-1
hereto under
the heading “Seller’s Percentage Interest”, which reflects the Seller’s percentage ownership interest in
each Property Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Property
Entity.
“Straddle Period”
means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the REIT
. The REIT hereby represents and warrants to the Seller that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct and complete as of the Closing Date (as defined herein):
(a)
Organization
and Power
. The REIT is duly organized, validly existing, and in good standing under the laws of the State of Maryland, and
has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement.
(b) The
execution and delivery of this Agreement and the performance by the REIT of its obligations hereunder have been duly authorized
by all requisite action of the REIT and require no further action or approval of the REIT’s shareholders or of any other
individuals or entities in order for this Agreement to constitute a binding and enforceable obligation of the REIT.
2.2
Representations
by the Seller
. The Seller hereby represents and warrants to the REIT that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. The Seller has full right, power, and authority to enter into this Agreement and to assume and
perform all of its obligations under this Agreement; and the execution and delivery of this Agreement and the performance by the
Seller of his obligations hereunder and require no further action or approval of any other individuals or entities in order for
this Agreement to constitute a binding and enforceable obligation of the Seller. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Seller pursuant to this Agreement constitutes, or when executed and delivered,
constitute, will constitute, the legal, valid and binding obligation of the Seller, each enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by the Seller has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Seller or to any Property,
Interests or Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting the Seller in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of the Seller or any Property Entity,
Interests or Property, (3) could adversely affect the ability of the Seller to perform his obligations hereunder, or under any
document to be delivered pursuant hereto, (4) could create a lien on the any of the Interests or any Property, any part thereof,
or any interest therein, or (5) could adversely affect the any of the Interests or any Property, any part thereof, or any interest
therein.
(d)
Good
Title
.
Exhibit A-1
accurately sets forth the Seller’s Percentage Interest in each Property Entity and
Exhibit
A-2
accurately sets forth the Seller’s ownership interest in each Direct Property. The Seller is the sole record and
beneficial owner of the Interests as set forth on
Exhibit A-1
and
Exhibit A-2
and has full power and authority to
convey the Interests pursuant to the terms of this Agreement. No person has any community property rights, by virtue of marriage
or otherwise, with respect to the Interests. The Seller has good and marketable title to the Interests. The Interests are free
and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, leaseholds by any party other than the current lessee, claims or any other matters affecting title thereto and at
the Closing will be sold to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims or other matters affecting title thereto, in each case other
than Permitted Liens. No other person or entity has an option to purchase or a right of first refusal to purchase any of the Interests
nor are there any agreements or understandings with respect to the voting, ownership or disposition of the Interests that could
adversely affect the Seller’s ability to perform his obligations hereunder or the REIT’s ownership of the Interests
following the Closing. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights
relating to the Interests or any equity interest in any Property Entity that will be in effect as of the Closing.
(e)
Indebtedness
.
There is no indebtedness of any Property Entity or with respect to any Property, other than as set forth on
Exhibit A-1
and
Exhibit A-2
hereto.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by the Seller has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement (as defined herein), contract or agreement of any Property Entity, or among the partners,
members or stockholders of any Property Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and
performance of this Agreement and the contribution, acquisition and transfer of the Interests has been obtained or will be obtained
on or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, the Seller shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Interests or the REIT’s ownership thereof, or any
material adverse effect on the assets, business, condition (financial or otherwise), results or operation of any Property or any
Property Entity after the Closing Date or (2) cause any of the representations and warranties contained in this Section 2.2
to be untrue as of the Closing Date.
(h)
Governing
Documents
. The Seller has performed all of its obligations under the limited liability company agreement or operating agreement,
as such may have been amended from time to time, as applicable, of each Property Entity in which it owns an interest, (each a “
Governing
Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Tax
Treatment
. The Seller represents and warrants that it has obtained from its own counsel advice regarding the tax consequences
of the transfer of the Interests to the REIT pursuant to the terms of this Agreement. The REIT has not made any representation
to the Seller regarding the tax treatment of the transactions contemplated by this Agreement, and further represents and warrants
that it has not relied on the REIT or the REIT’s representatives or counsel for any tax advice.
(j)
Bankruptcy
with respect to the Seller
. No Act of Bankruptcy has occurred with respect to the Seller or any Property Entity. As used herein,
“
Act of Bankruptcy
” means if the Seller (A) applies for or consents to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator, of himself or of all or a substantial part of his property, (B) admits
in writing his inability to pay his debts as they become due, (C) makes a general assignment for the benefit of his creditors,
(D) files a voluntary petition or commences a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter
in effect), (E) is adjudicated bankrupt or insolvent, (F) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts,
(G) fails to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against him in
an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (H) take any action
for the purpose of effecting any of the foregoing.
(k)
Brokerage
Commission
. The Seller has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions contemplated by this Agreement.
(l)
Foreign
Persons
. The Seller is not a “foreign person” within the meaning of Section 1445(f) or Section 1446(f) of the Code.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) All
representations and warranties of the Seller contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit
delivered pursuant to this Agreement shall survive the Closing.
(b) Following
the Closing, the Seller shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of his representations,
warranties, covenants and obligations contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit delivered
by the Seller pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, the Seller shall indemnify, hold harmless and defend the REIT and the REIT’s respective officers,
directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified Party
”
and collectively, the “
Indemnified Parties
”), from and against any and all claims, losses, damages, liabilities
and expenses, including, without limitation, interest, penalties, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
“
Losses
”) asserted against, imposed upon or incurred by the Indemnified Party, to the extent resulting from
any breach of a representation, warranty or covenant of the Seller contained in this Agreement, or in any Schedule, Exhibit, certificate
or affidavit delivered by the Seller pursuant thereto. In each case, the Seller shall only bear the fees, costs or expenses in
connection with the employment of one counsel (regardless of the number of Indemnified Parties), and any necessary local counsel.
(b) The
Seller shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed
upon or incurred by the Indemnified Parties to the extent resulting from an unrelated third-party claim relating to the Interests
arising from matters that occurred prior to Closing.
(c) With
respect to any claim of an Indemnified Party pursuant to this Section 3.2, to the extent available, the REIT agrees to use diligent
good faith efforts to pursue and collect any and all available proceeds and benefits of any right to defense under any insurance
policy that covers the matter which is the subject of the indemnification prior to seeking indemnification from the Seller until
all proceeds and benefits, if any, to which the Indemnified Party is entitled pursuant to such insurance policy have been exhausted;
provided, however, that the REIT may make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which
case, if the Indemnified Party later receives insurance proceeds with respect to any Losses paid by either the Seller for the benefit
of any Indemnified Party, then the Indemnified Party shall reimburse the Seller in an amount equivalent to such proceeds in excess
of any deductible amount pursuant to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by the Seller to the
Indemnified Party in connection with such indemnification (it being understood that all costs and expenses incurred by the Seller
with respect to insurance coverage disputes shall constitute Losses paid by the Seller for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to the Seller, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to the Seller will not relieve
the Seller from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of the Seller by reason of the inability or failure of the Seller (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to the Seller, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit the
Seller, at such Seller’s option and expense, to assume the defense of any such claim by counsel selected by the Seller and
reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that the Seller shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by the Seller.
If the Seller shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Seller and at such Seller’s
sole cost and expense.
3.4
Limitations
on Indemnification under Section 3.2(a)
.
(a) The
Seller shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Party
under Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration and then only to the extent of such
excess. The Seller’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of the Seller and subject to the limitations
set forth in the following sentence, the Indemnified Party shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III. Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or in the
event of Losses relating to a third-party claim, the Seller shall not be liable to the Indemnified Party for any indirect, special
or consequential damages, loss of profits, taxes relating to tax years beginning on or after the Closing, loss of value or other
similar speculative damages asserted or claimed by the Indemnified Party.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of the Seller with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between the Seller and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by the Seller in cash.
ARTICLE
IV
COVENANTS
4.1
Covenants
of the Seller
.
(a)
Satisfaction
of Conditions
. The Seller hereby covenants that the Seller shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to Closing set forth herein, and (B) cooperate and assist in the REIT’s efforts to
satisfy all of the conditions to Closing set forth herein, and agrees that the REIT shall not have any obligation to consummate
the Closing hereunder unless and until such conditions have been satisfied or waived by the REIT in writing.
(b)
Consent
to Transfers
. The Seller hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to the Seller under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Property Entity or Property or any other company or
property being sold or transferred to the REIT by the Seller.
(c)
No
Disposition or Encumbrance of Interests
. From the date hereof through the Closing, except as specifically contemplated by this
Agreement, the Seller shall not without the prior written consent of the REIT: (i) sell, transfer (or agree to sell or transfer)
or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion
of the Interests or any interest in any Property; or (ii) mortgage, assign, pledge or otherwise encumber in any manner any of the
Interests or any Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, the
Seller shall, to the extent within his control, cause each Property Entity to conduct its business in the ordinary course consistent
with past practice, and shall, to the extent within the Seller’s control, not permit any Property Entity or Property without
the prior written consent of the REIT and the REIT, to: (i) enter into any material transaction not in the ordinary course
of business; (ii) mortgage, pledge or encumber the Interests, any assets of the Property Entity or any Property, (iii) cause or
permit any change to the existing use of any Property; (iv) cause or take any action that would render any of the representations
or warranties set forth herein untrue; (v) file an entity classification election pursuant to Treasury Regulations Section 301.7701-3(c)
on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Property Entity as an association taxable as
a corporation for federal income tax purposes; (vi) make or change any other tax elections; (vii) settle or compromise any claim,
notice, audit report or assessment in respect of taxes; (viii) change any annual tax accounting period; (ix) adopt or change any
method of tax accounting; (x) file any amended return, report or form (including an election, declaration, amendment, schedule,
information return or attachment thereto) required to be filed with a governmental authority with respect to taxes (each, a “
Tax
Return
”); (xi) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement
relating to any tax; (xii) surrender any right to claim a tax refund; (xiii) consent to any extension or waiver of the statute
of limitations period applicable to any tax claim or assessment; or (xiv) make any distribution to its partners or members, except
for cash distributions in the ordinary course of business consistent with past practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a)
Tax
Returns
.
(1)
Pre-Closing
Tax Periods
. The Seller shall cause each Property Entity to prepare and timely file all Tax Returns (other than amended Tax
Returns) of each such Property Entity for any Pre-Closing Tax Periods, and the Seller shall remit or cause to be remitted any Taxes
due in respect of such Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except
as otherwise required by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent
with positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions,
elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions
to periods ending on or before the Closing Date). For the avoidance of doubt, the REIT or its assignee will have authority to sign
any Tax Returns relating to the Property Entities that are filed after the Closing Date.
(2)
Straddle
Periods and Post-Closing Periods
. The REIT or its assignee shall prepare and timely file all Tax Returns of the Property Entities
for all taxable periods other than the Pre-Closing Tax Periods, and the REIT or is assignee shall remit or cause to be remitted
any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax Return for a
Straddle Period (and before the REIT or its assignee files such Tax Return), the REIT or its assignee shall furnish to the Seller
a draft of such Tax Return and the Seller shall have the right to review, provide written comments on, and approve the portion
of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which the Seller is responsible.
(b)
Tax
Matters
. The Seller shall pay and indemnify, without duplication, the REIT or its assignee for the following Taxes (and all
related Adverse Consequences including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(1) all
Taxes of Seller (including all income Taxes of Seller);
(2) all
such Taxes resulting from a breach of any representation under
Section 2.2(l)
or a breach of any provision of this
Section 4.2
;
(3) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Property Entities; (ii) all
such Taxes of any other Person that the Property Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Property Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(4) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Property Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other Person that a Property Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Sellers under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(1) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(2) Except
for Taxes for which the REIT is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
i. in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
ii. in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause
(i), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of
graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number
of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of the Seller to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that the Seller’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, the Seller’s obligations under this
Section 4.2
shall not expire until sixty (60) days
after the expiration of such the Seller’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of the Seller under this
Section 4.2
shall survive until fully performed.
(e) The
Seller and the REIT shall provide each other with such cooperation and information relating to any of the Interests, the Property
Entities or the Properties as the parties reasonably may request in (i) filing any Tax Return, amended Tax Return or claim for
tax refund, (ii) determining any liability for taxes or a right to a tax refund, (iii) conducting or defending any proceeding in
respect of taxes, or (iv) performing tax diligence, including with respect to the impact of this transaction on the REIT’s
tax status as a REIT. Such reasonable cooperation shall include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The REIT shall promptly notify the Seller upon receipt
by the REIT or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income,
properties or operations of any of the Property Entities or with respect to any Property and (ii) any pending or threatened federal,
state, local or foreign tax audits or assessments of the REIT or any of its affiliates, in each case, which may affect the liabilities
for taxes of the Seller with respect to any tax period ending before or as a result of the Closing. The Seller shall promptly notify
the REIT in writing upon receipt by the Seller, or any of the Seller’s affiliates, of notice of any pending or threatened
federal, state, local or foreign tax audits or assessments relating to the income, properties or operations of any of the Property
Entities or with respect to any Property. The REIT and the Seller may participate at its own expense in the prosecution of any
claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided, that the
Seller shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such Seller has
acknowledged liability for the payment of any additional tax liability, and the REIT shall have the right to control any other
audits and proceedings. Notwithstanding the foregoing, neither the REIT nor the Seller may settle or otherwise resolve any such
claim, suit or proceeding which could have an adverse tax effect on the other party or its affiliates without the consent of the
other party, such consent not to be unreasonably withheld. The Seller and the REIT shall retain all Tax Returns, schedules and
work papers with respect to the Sold Entities and the Properties, and all material records and other documents relating thereto,
until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable
years to which such Tax Returns and other documents relate and until the final determination of any tax in respect of such years.
4.3
Relationship
to Property Entities
. The parties to this Agreement acknowledge and agree that, from and after the Closing (as defined herein),
the Seller shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Property Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the REIT’s Obligations
. In addition to any other conditions set forth in this Agreement, the REIT’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.1, all of which shall be conditions precedent to the REIT’s obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by the Seller pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the REIT, the Seller shall have delivered a certificate to the REIT
to such effect in regard to the Seller’s representations and warranties set forth in this Agreement.
(d)
Performance
.
The Seller shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents, if any, of governmental and private parties, including, without limitation,
all ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders
of any Property Entity, if any, to effect the transactions contemplated by this Agreement, shall have been obtained.
(g)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(h)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Property Entities, the Interests or any Property or any material adverse change in any of the assets,
business, condition (financial or otherwise), results of operation or prospects of any Property Entity or any Property.
(i)
Tenant
and Lender Estoppels
. The REIT shall have received tenant and lender estoppels in form and substance satisfactory to the REIT
and its counsel.
5.2
Conditions
to the Seller’s Obligation
. In addition to any other conditions set forth in this Agreement, the Seller’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to the Seller’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the REIT pursuant to this Agreement shall be true and correct as
of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The REIT shall have performed and complied in all material respects with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing (the “
Closing
”) of the transactions contemplated pursuant to this Agreement shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the REIT may designate,
promptly following satisfaction of the conditions to Closing set forth herein (the “
Closing Date
”), or as otherwise
set by agreement of the parties.
6.2
Seller’s
Deliveries
. At the Closing, the Seller shall deliver the following to the REIT in addition to all other items required to be
delivered to the REIT by Sellers:
(a)
Assignment
of Interests in each Property Entity
. An Assignment, in substantially the form of
Exhibit B
attached hereto with
respect to the Interests.
(b)
Certificate
.
A certificate from the Seller certifying to the REIT the accuracy of the representations and warranties made by the Seller hereunder.
(c)
FIRPTA
Certificate
. An affidavit from the Seller certifying pursuant to Section 1445 and Section 1446(f) of the Internal Revenue Code
that the Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Code and the Treasury Regulations promulgated thereunder).
(d)
Deed
.
A special or limited warranty deed (or its local equivalent), executed by the Seller conveying all of the Seller’s right,
title and interest to each Direct Property to the REIT.
(e)
Property
Documents
. Copies of all existing title policies/commitments, surveys, plans and specifications, permits and approvals and
other similar documents which pertain to each Property which may be in the Seller's possession or under its control.
(f)
Other
Documents
. Any other document or instrument reasonably requested by the REIT or required hereby.
6.3
Default
Remedies
. If the Seller defaults in performing any of the Seller’s obligations under this Agreement, the REIT shall have
all rights and remedies available to it at law or in equity resulting from the Seller’s default, including without limitation,
the right to seek specific performance of this Agreement and the Seller’s obligation to convey the Interests to the REIT
hereunder. The parties acknowledge and agree that the failure of a condition precedent to occur, notwithstanding the good faith
and commercially reasonable efforts of the applicable party, shall not be a default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
REIT
:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Seller
:
______________________
______________________
______________________
______________________
Any address or name
specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication
shall be deemed given and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver
because of changed address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication,
shall be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection
or refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
7.10
Trial
by Jury
. The parties to this Agreement hereby irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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SELLER
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IDJ HOLDINGS, LLC
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By:
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Name:
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Andrew Spodek
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Title:
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Member
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REIT
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Postal Realty Trust, Inc., a Maryland corporation
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By:
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Name:
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Title:
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[
Signature Page to the IDJ Holdings,
LLC Purchase and Sale Agreement
]
Exhibit
10.24
AGREEMENT OF PURCHASE AND SALE
This AGREEMENT OF PURCHASE
AND SALE (this “
Agreement
”) is made as of ____, 2019 by and between Asset 90047 LLC (the “
Seller
”)
and Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”).
RECITALS
WHEREAS
, the
Seller is the record and beneficial owner of undivided real property interests (the “
Interests
”) in the real
properties (the “
Properties
”) described on
Exhibit A-1
hereto.
WHEREAS,
the
transactions contemplated by this Agreement are related to the proposed initial underwritten public offering of shares of Class
A common stock of the REIT (the “
IPO
”); and
WHEREAS,
the
Seller desires to sell, assign and convey the Interests to the REIT, and the REIT desires to acquire the Interests from the Seller,
on the terms and conditions hereinafter set forth.
NOW, THEREFORE,
for and in consideration of the foregoing, and the representations, warranties and other terms contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE
I
THE PURCHASE
1.1
Sale
of Interests
. The Seller hereby irrevocably agrees to sell, transfer and assign to the REIT at Closing (as defined herein)
all of his right, title and interests in the Interests, together with any other interests the Seller may have in any of the Properties
and the REIT agrees to purchase the Interests from Seller on the terms and conditions set forth in this Agreement. The Seller shall
transfer the Interests to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior
assignments or conveyances, conditions, restrictions, claims, and any other matters affecting title thereto, other than Permitted
Liens.
1.2
Consideration
.
The total consideration (the “
Consideration
”) for which the Seller agrees to sell, transfer and assign the Interests
to the REIT, and which the REIT agrees to pay to the Seller, subject to the terms of this Agreement, at Closing (as defined herein)
is not known as of the date of this Agreement, but shall be calculated as follows:
The “
Preliminary
Consideration
” for the Interests on Exhibit A-1 shall be $____________. If the IPO Price (as defined herein)
is equal to the midpoint of the price range for the shares of the REIT’s Class A common stock in the IPO (the “
IPO
Price Range
”) as set forth on the front cover of the REIT’s preliminary prospectus for the IPO filed with the U.S.
Securities and Exchange Commission (the “
SEC
”), the Consideration shall equal the Preliminary Consideration,
subject to any Prorations for the Properties. To the extent that the IPO Price (as defined herein) is greater than or less than
the mid-point of the IPO Price Range, the Preliminary Consideration shall be increased or decreased, respectively and proportionately,
in order to determine the Consideration; provided, however, that in no event shall the Consideration be greater than $_____________;
provided further
,
that in no event shall the Consideration be less than $_____________. In any event, the Consideration
shall be adjusted to give effect to Prorations, if any, for the Properties.
1.3
No
Further Interest
. The Seller acknowledges and agrees that effective upon the Closing, and without any further action by the
Seller, the Interests shall be transferred, assigned and conveyed to the REIT and the Seller shall no longer be an equity holder
of any Property Entity, shall no longer be entitled to receive any distributions from any Property Entity, and shall have no further
right, title or interest in any of the Properties or the Property Entities.
1.4
Definitions
.
As used in this Agreement, the following terms have the following meanings:
“Adverse Consequences”
means all liabilities, demands, claims, actions, causes of action, costs, expenses, damages (including incidental, special, but
excluding consequential and punitive damages and lost profits), Taxes, losses, penalties, fines, judgments or amounts paid in settlement,
including reasonable attorneys’ and accountants’ fees, including, without limitation, all Adverse Consequences incurred
by the REIT. The term Adverse Consequences expressly includes any consequences arising from the REIT’s sending, or failure
to send, any filings relating to transfer taxes due, or otherwise, in connection with the transactions contemplated by this Agreement,
including any interest, penalties or reassessment of the value of any Interest for purposes of ad valorem taxes, and the REIT’s
failure to pay any transfer taxes due in connection with the transactions contemplated by this Agreement.
“IPO Price”
means the public offering price per share of the REIT’s Class A common stock set forth on the front cover of the final prospectus
for the IPO (the “
Prospectus
”), to be filed by the REIT with the SEC.
“Permitted Liens”
means such of the following: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable or, if
due and payable, not yet delinquent; (b) pledges or deposits to secure obligations under workers’ compensation or unemployment
laws or similar legislation or to secure public or statutory obligations; (c) easements, zoning restrictions, rights of way and
other encumbrances on title to real property that do not render title to the property encumbered thereby unmarketable or materially
adversely affect the use or value of such property for its present purposes; (d) tenancy leases; and (e) deposits to secure trade
contracts (other than for debt), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
“Post-Closing
Tax Period” means any taxable period that begins after the Closing Date and, in the case of a Straddle Period, the portion
of the Straddle Period beginning after the Closing Date.
“Pre-Closing
Tax Period” means any taxable period (or portion thereof) ending on or before the end of the Closing Date and, in the case
of a Straddle Period, the portion of the Straddle Period ending on the Closing Date.
“Prorations”
means those proration and adjustment amounts that are customarily applied to closings of commercial real estate transactions in
the county in which the Property is located, which amounts shall be calculated as of midnight (Eastern time) of the day immediately
preceding the Closing Date and shall include:
(a)
Taxes
.
All real estate and personal property taxes and special assessments, if any, with respect to each Property shall be prorated at
Closing;
(b)
Rents
.
All rents, including, without limitation, base rents, operating expense payments or common area maintenance charges and all other
forms of additional rents, payable under the leases for the Properties and all other income from the Properties shall be prorated
at Closing; and
(c)
Other
Items
. Any other items of revenue, operating expenses or other items which are customarily prorated between a transferor and
transferee of real estate in the county in which the Property is located shall be prorated at Closing.
“Representation,
Warranty and Indemnity Agreement” means the Representation, Warranty and Indemnity Agreement dated __________, 2019 by and
among the REIT, the Operating Partnership and Andrew Spodek.
“Seller’s
Percentage Interest” means, with respect to each Property Entity, the percentage set forth on
Exhibit A-1
hereto under
the heading “Seller’s Percentage Interest”, which reflects the Seller’s percentage ownership interest in
each Property Entity pursuant to and in accordance with the applicable Governing Agreement (as defined herein) of the Property
Entity.
“Straddle Period”
means a taxable period beginning before and ending after the Closing Date.
ARTICLE
II
REPRESENTATIONS AND Warranties
2.1
Representations
by the REIT
. The REIT hereby represents and warrants to the Seller that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct and complete as of the Closing Date (as defined herein):
(a)
Organization
and Power
. The REIT is duly organized, validly existing, and in good standing under the laws of the State of Maryland, and
has full right, power, and authority to enter into this Agreement and to assume and perform all of its obligations under this Agreement.
(b) The
execution and delivery of this Agreement and the performance by the REIT of its obligations hereunder have been duly authorized
by all requisite action of the REIT and require no further action or approval of the REIT’s shareholders or of any other
individuals or entities in order for this Agreement to constitute a binding and enforceable obligation of the REIT.
2.2
Representations
by the Seller
. The Seller hereby represents and warrants to the REIT that the following statements are true, correct, and complete
as of the date of this Agreement and will be true, correct, and complete as of the Closing Date:
(a)
Organization
and Power; Due Authorization
. The Seller has full right, power, and authority to enter into this Agreement and to assume and
perform all of its obligations under this Agreement; and the execution and delivery of this Agreement and the performance by the
Seller of his obligations hereunder and require no further action or approval of any other individuals or entities in order for
this Agreement to constitute a binding and enforceable obligation of the Seller. This Agreement and each agreement, document and
instrument executed and delivered by or on behalf of the Seller pursuant to this Agreement constitutes, or when executed and delivered,
constitute, will constitute, the legal, valid and binding obligation of the Seller, each enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by bankruptcy or the application of equitable principles.
(b)
Noncontravention
.
Neither the entry into nor the performance of, or compliance with, this Agreement by the Seller has resulted, or will result, in
any violation of, or default under, or result in the acceleration of, any obligation under any charter, bylaws, limited liability
company agreement, partnership agreement, declaration of trust, mortgage indenture, lien agreement, note, contract, agreement,
permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Seller or to any Property,
Interests or Property Entity.
(c)
Litigation
.
There is no action, suit, or proceeding, pending or known to be threatened, against or affecting the Seller in any court or before
any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or
instrumentality which (1) in any manner raises any question affecting the validity or enforceability of this Agreement, (2) could
materially and adversely affect the business, financial position, or results of operations of the Seller or any Property Entity,
Interests or Property, (3) could adversely affect the ability of the Seller to perform his obligations hereunder, or under any
document to be delivered pursuant hereto, (4) could create a lien on the any of the Interests or any Property, any part thereof,
or any interest therein, or (5) could adversely affect the any of the Interests or any Property, any part thereof, or any interest
therein.
(d)
Good
Title
.
Exhibit A-1
accurately sets forth the Seller’s Percentage Interest in each Property Entity and
Exhibit
A-2
accurately sets forth the Seller’s ownership interest in each Direct Property. The Seller is the sole record and
beneficial owner of the Interests as set forth on
Exhibit A-1
and
Exhibit A-2
and has full power and authority to
convey the Interests pursuant to the terms of this Agreement. No person has any community property rights, by virtue of marriage
or otherwise, with respect to the Interests. The Seller has good and marketable title to the Interests. The Interests are free
and clear of all liens, encumbrances, security interests, pledges, voting agreements, prior assignments or conveyances, conditions,
restrictions, leaseholds by any party other than the current lessee, claims or any other matters affecting title thereto and at
the Closing will be sold to the REIT free and clear of all liens, encumbrances, security interests, pledges, voting agreements,
prior assignments or conveyances, conditions, restrictions, claims or other matters affecting title thereto, in each case other
than Permitted Liens. No other person or entity has an option to purchase or a right of first refusal to purchase any of the Interests
nor are there any agreements or understandings with respect to the voting, ownership or disposition of the Interests that could
adversely affect the Seller’s ability to perform his obligations hereunder or the REIT’s ownership of the Interests
following the Closing. There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights
relating to the Interests or any equity interest in any Property Entity that will be in effect as of the Closing.
(e)
Indebtedness
.
There is no indebtedness of any Property Entity or with respect to any Property, other than as set forth on
Exhibit A-1
and
Exhibit A-2
hereto.
(f)
No
Consents
. Each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing
by or with any governmental agency or body necessary for the execution, delivery and performance of this Agreement or the transactions
contemplated hereby by the Seller has been obtained or will be obtained on or before the Closing Date. Each consent or approval
required under any Governing Agreement (as defined herein), contract or agreement of any Property Entity, or among the partners,
members or stockholders of any Property Entity, relating to indebtedness or otherwise, necessary for the execution, delivery and
performance of this Agreement and the contribution, acquisition and transfer of the Interests has been obtained or will be obtained
on or before the Closing Date.
(g)
Actions
Prior to Closing
. From the date hereof until the Closing Date, the Seller shall not take any action or fail to take any action
the result of which would (1) have a material adverse effect on the Interests or the REIT’s ownership thereof, or any
material adverse effect on the assets, business, condition (financial or otherwise), results or operation of any Property or any
Property Entity after the Closing Date or (2) cause any of the representations and warranties contained in this Section 2.2
to be untrue as of the Closing Date.
(h)
Governing
Documents
. The Seller has performed all of its obligations under the limited liability company agreement or operating agreement,
as such may have been amended from time to time, as applicable, of each Property Entity in which it owns an interest, (each a “
Governing
Agreement
” and collectively, the “
Governing Agreements
”).
(i)
Tax
Treatment
. The Seller represents and warrants that it has obtained from its own counsel advice regarding the tax consequences
of the transfer of the Interests to the REIT pursuant to the terms of this Agreement. The REIT has not made any representation
to the Seller regarding the tax treatment of the transactions contemplated by this Agreement, and further represents and warrants
that it has not relied on the REIT or the REIT’s representatives or counsel for any tax advice.
(j)
Bankruptcy
with respect to the Seller
. No Act of Bankruptcy has occurred with respect to the Seller or any Property Entity. As used herein,
“
Act of Bankruptcy
” means if the Seller (A) applies for or consents to the appointment of, or the taking
of possession by, a receiver, custodian, trustee or liquidator, of himself or of all or a substantial part of his property, (B) admits
in writing his inability to pay his debts as they become due, (C) makes a general assignment for the benefit of his creditors,
(D) files a voluntary petition or commences a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter
in effect), (E) is adjudicated bankrupt or insolvent, (F) files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts,
(G) fails to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against him in
an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (H) take any action
for the purpose of effecting any of the foregoing.
(k)
Brokerage
Commission
. The Seller has not engaged the services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder’s fee, commission or other amount with respect to the transactions contemplated by this Agreement.
(l)
Foreign
Persons
. The Seller is not a “foreign person” within the meaning of Section 1445(f) or Section 1446(f) of the Code.
ARTICLE
III
INDEMNIFICATION
3.1
Survival
of Representations and Warranties; Remedy for Breach
.
(a) All
representations and warranties of the Seller contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit
delivered pursuant to this Agreement shall survive the Closing.
(b) Following
the Closing, the Seller shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of his representations,
warranties, covenants and obligations contained in this Agreement or in any Schedule, Exhibit, certificate or affidavit delivered
by the Seller pursuant thereto.
3.2
General
Indemnification
.
(a) From
and after the Closing Date, the Seller shall indemnify, hold harmless and defend the REIT and the REIT’s respective officers,
directors, employees, stockholders, partners, agents and affiliates (each of which is an “
Indemnified Party
”
and collectively, the “
Indemnified Parties
”), from and against any and all claims, losses, damages, liabilities
and expenses, including, without limitation, interest, penalties, amounts paid in settlement, reasonable attorneys’ fees,
costs of investigation, judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds (collectively,
“
Losses
”) asserted against, imposed upon or incurred by the Indemnified Party, to the extent resulting from
any breach of a representation, warranty or covenant of the Seller contained in this Agreement, or in any Schedule, Exhibit, certificate
or affidavit delivered by the Seller pursuant thereto. In each case, the Seller shall only bear the fees, costs or expenses in
connection with the employment of one counsel (regardless of the number of Indemnified Parties), and any necessary local counsel.
(b) The
Seller shall also indemnify and hold harmless the Indemnified Parties from and against any and all Losses asserted against, imposed
upon or incurred by the Indemnified Parties to the extent resulting from an unrelated third-party claim relating to the Interests
arising from matters that occurred prior to Closing.
(c) With
respect to any claim of an Indemnified Party pursuant to this Section 3.2, to the extent available, the REIT agrees to use diligent
good faith efforts to pursue and collect any and all available proceeds and benefits of any right to defense under any insurance
policy that covers the matter which is the subject of the indemnification prior to seeking indemnification from the Seller until
all proceeds and benefits, if any, to which the Indemnified Party is entitled pursuant to such insurance policy have been exhausted;
provided, however, that the REIT may make a claim under this Section 3.2 even if an insurance coverage dispute is pending, in which
case, if the Indemnified Party later receives insurance proceeds with respect to any Losses paid by either the Seller for the benefit
of any Indemnified Party, then the Indemnified Party shall reimburse the Seller in an amount equivalent to such proceeds in excess
of any deductible amount pursuant to Section 3.2(a) hereof up to the amount actually paid (or deemed paid) by the Seller to the
Indemnified Party in connection with such indemnification (it being understood that all costs and expenses incurred by the Seller
with respect to insurance coverage disputes shall constitute Losses paid by the Seller for purposes of Section 3.2(a) hereof).
3.3
Notice
and Defense of Claims
. As soon as reasonably practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject to indemnification under this Article III,
the Indemnified Party shall give notice thereof to the Seller, including liabilities or claims to be applied against the indemnification
deductible established pursuant to Section 3.4 hereof; provided that failure to give notice to the Seller will not relieve
the Seller from any liability that it may have to any Indemnified Party, unless, and only to the extent that, such failure (a)
shall have caused prejudice to the defense of such claim or (b) shall have materially increased the costs or potential liability
of the Seller by reason of the inability or failure of the Seller (due to such lack of prompt notice) to be involved in any investigations
or negotiations regarding any such claim. Such notice shall describe in reasonable detail the facts known to such Indemnified Party
giving rise to such claim, and the amount or good faith estimate of the amount of Losses arising therefrom. Unless prohibited by
law, such Indemnified Party shall deliver to the Seller, promptly after such Indemnified Party’s receipt thereof, copies
of all notices and documents received by such Indemnified Party relating to such claim. The Indemnified Party shall permit the
Seller, at such Seller’s option and expense, to assume the defense of any such claim by counsel selected by the Seller and
reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, however, that the Indemnified
Party may at all times participate in such defense at its sole expense; and provided further, however, that the Seller shall not,
in defense of any such claim, except with the prior written consent of the Indemnified Party in its sole and absolute discretion,
consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff in question to all Indemnified Parties a full and complete release of all liabilities in respect of
such claims, or that does not result only in the payment of money damages which are paid (or deemed paid) in full by the Seller.
If the Seller shall not have undertaken such defense within 20 days after such notice, or within such shorter time as may be reasonable
under the circumstances to the extent required by applicable law, then the Indemnified Party shall have the right to undertake
the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Seller and at such Seller’s
sole cost and expense.
3.4
Limitations
on Indemnification under Section 3.2(a)
.
(a) The
Seller shall not be liable under Section 3.2(a) hereof unless and until the total amount recoverable by the Indemnified Party
under Section 3.2(a) exceeds one percent (1%) of the value of the aggregate Consideration and then only to the extent of such
excess. The Seller’s total liability for indemnification shall not exceed the Consideration.
(b) Notwithstanding
anything contained herein to the contrary, before taking recourse against any assets of the Seller and subject to the limitations
set forth in the following sentence, the Indemnified Party shall look, first to available insurance proceeds (including without
limitation any title insurance proceeds, if applicable) in accordance with Section 3.2(c) above, and then to indemnification
under this Article III. Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or in the
event of Losses relating to a third-party claim, the Seller shall not be liable to the Indemnified Party for any indirect, special
or consequential damages, loss of profits, taxes relating to tax years beginning on or after the Closing, loss of value or other
similar speculative damages asserted or claimed by the Indemnified Party.
(c) The
limitations in this Section 3.4 shall not apply to any obligations of the Seller with respect to Prorations under this Agreement.
3.5
Limitation
Period
.
(a) Any
claim for indemnification under Section 3.2 hereof must be asserted in writing by the Indemnified Party, stating the nature
of the Losses and the basis for indemnification therefor on or prior to the fifth anniversary of the Closing.
(b) If
asserted in writing on or prior to the date specified in Section 3.5(a) hereof for the applicable claim, any claims for indemnification
pursuant to Section 3.2 hereof shall survive until resolved by mutual agreement between the Seller and the Indemnified Party
or by arbitration or court proceeding.
3.6
Delivery
of Indemnity Amounts
. Indemnity payments may be made by the Seller in cash.
ARTICLE
IV
COVENANTS
4.1
Covenants
of the Seller
.
(a)
Satisfaction
of Conditions
. The Seller hereby covenants that the Seller shall: (A) use commercially reasonable efforts and diligence in
order to satisfy all of the conditions to Closing set forth herein, and (B) cooperate and assist in the REIT’s efforts to
satisfy all of the conditions to Closing set forth herein, and agrees that the REIT shall not have any obligation to consummate
the Closing hereunder unless and until such conditions have been satisfied or waived by the REIT in writing.
(b)
Consent
to Transfers
. The Seller hereby consents to the transfer of, and waives any rights of first refusal, right of first offer,
buy-sell agreements, put, option or similar parallel or dissenter rights or similar rights afforded to the Seller under the Governing
Agreements or otherwise with respect to any equity ownership interest in any Property Entity or Property or any other company or
property being sold or transferred to the REIT by the Seller.
(c)
No
Disposition or Encumbrance of Interests
. From the date hereof through the Closing, except as specifically contemplated by this
Agreement, the Seller shall not without the prior written consent of the REIT: (i) sell, transfer (or agree to sell or transfer)
or otherwise dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion
of the Interests or any interest in any Property; or (ii) mortgage, assign, pledge or otherwise encumber in any manner any of the
Interests or any Property.
(d)
Ordinary
Course of Business
. From the date hereof through the Closing, and except as specifically contemplated by this Agreement, the
Seller shall, to the extent within his control, cause each Property Entity to conduct its business in the ordinary course consistent
with past practice, and shall, to the extent within the Seller’s control, not permit any Property Entity or Property without
the prior written consent of the REIT and the REIT, to: (i) enter into any material transaction not in the ordinary course
of business; (ii) mortgage, pledge or encumber the Interests, any assets of the Property Entity or any Property, (iii) cause or
permit any change to the existing use of any Property; (iv) cause or take any action that would render any of the representations
or warranties set forth herein untrue; (v) file an entity classification election pursuant to Treasury Regulations Section 301.7701-3(c)
on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Property Entity as an association taxable as
a corporation for federal income tax purposes; (vi) make or change any other tax elections; (vii) settle or compromise any claim,
notice, audit report or assessment in respect of taxes; (viii) change any annual tax accounting period; (ix) adopt or change any
method of tax accounting; (x) file any amended return, report or form (including an election, declaration, amendment, schedule,
information return or attachment thereto) required to be filed with a governmental authority with respect to taxes (each, a “
Tax
Return
”); (xi) enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement
relating to any tax; (xii) surrender any right to claim a tax refund; (xiii) consent to any extension or waiver of the statute
of limitations period applicable to any tax claim or assessment; or (xiv) make any distribution to its partners or members, except
for cash distributions in the ordinary course of business consistent with past practices or as permitted by this Agreement.
4.2
Tax
Matters
.
(a)
Tax
Returns
.
(1)
Pre-Closing
Tax Periods
. The Seller shall cause each Property Entity to prepare and timely file all Tax Returns (other than amended Tax
Returns) of each such Property Entity for any Pre-Closing Tax Periods, and the Seller shall remit or cause to be remitted any Taxes
due in respect of such Pre-Closing Tax Periods. Such Tax Returns shall be prepared in a manner consistent with past practice, except
as otherwise required by law, and on such Tax Returns, no position shall be taken, election made or method adopted that is inconsistent
with positions taken, elections made or methods used in preparing and filing similar Tax Returns in prior periods (including positions,
elections or methods that would have the effect of deferring income to periods ending after the Closing Date or accelerating deductions
to periods ending on or before the Closing Date). For the avoidance of doubt, the REIT or its assignee will have authority to sign
any Tax Returns relating to the Property Entities that are filed after the Closing Date.
(2)
Straddle
Periods and Post-Closing Periods
. The REIT or its assignee shall prepare and timely file all Tax Returns of the Property Entities
for all taxable periods other than the Pre-Closing Tax Periods, and the REIT or is assignee shall remit or cause to be remitted
any Taxes due in respect of such taxable periods. At least 45 days prior to the deadline for the filing of any Tax Return for a
Straddle Period (and before the REIT or its assignee files such Tax Return), the REIT or its assignee shall furnish to the Seller
a draft of such Tax Return and the Seller shall have the right to review, provide written comments on, and approve the portion
of such draft Tax Return that relates to Taxes allocable to the portion of the Straddle Period for which the Seller is responsible.
(b)
Tax
Matters
. The Seller shall pay and indemnify, without duplication, the REIT or its assignee for the following Taxes (and all
related Adverse Consequences including all out-of-pocket expenses incurred in defending an audit or other claim relating to such
Taxes):
(1) all
Taxes of Seller (including all income Taxes of Seller);
(2) all
such Taxes resulting from a breach of any representation under
Section 2.2(l)
or a breach of any provision of this
Section 4.2
;
(3) with
respect to such Taxes attributable to any Pre-Closing Tax Period: (i) all such Taxes of the Property Entities; (ii) all
such Taxes of any other Person that the Property Entities are liable for as a result of transferee liability, successor liability,
or a contractual obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred in such
Pre-Closing Tax Period; and (iii) all Taxes resulting from a Property Entity being a member of, or leaving, during a Pre-Closing
Tax Period, an affiliated group of corporations that files a consolidated, combined or unitary Tax Return for federal, state, local
or foreign Tax purposes; and
(4) with
respect to such Taxes attributable to any Straddle Period: (i) the Taxes of a Property Entity attributable to the portion
of such Straddle Period that ends on the Closing Date, as determined under
Section 4.2(c)
; and (ii) the Taxes
of any other Person that a Property Entity is liable for as a result of transferee liability, successor liability, or a contractual
obligation, in each case, that is attributable to, or arose as a result of actions or breaches, incurred on or before the Closing
Date, as determined under
Section 4.2(c)
.
For the avoidance of doubt, the indemnification obligations
of the Sellers under this
Section 4.2
shall not be subject to the amount limitations set forth in
Article III
.
(c)
Allocation
of Taxes
. For purposes of determining the amount of Taxes that relate to Pre-Closing Tax Periods and Straddle Periods for purposes
of any obligation to indemnify for Taxes under
Section 4.2(b)
the parties agree to use the following conventions:
(1) Taxes
in the form of interest, penalties, additions to tax or other additional amounts that are actually incurred, accrued, assessed
or similarly charged on or after the Closing Date but that relate to Taxes that accrued on or before the Closing Date shall be
treated as occurring prior to the Closing Date;
(2) Except
for Taxes for which the REIT is responsible hereunder and for real estate taxes (apportioned pursuant to
Section 1.5
),
for all Taxes that are payable with respect to any Straddle Period, the portion of such Tax that is attributable to the portion
of the Straddle Period ending on the Closing Date shall be allocated between the portion of the period ending on the Closing Date
and the portion of the period beginning after the Closing Date using the following conventions:
i. in
the case of such Taxes resulting from, or imposed on, net or gross income, Taxes resulting from, or imposed on, any sale, receipt,
use, transfer or assignments of property or other asset, or Taxes resulting from, or imposed on, any payment or accrual of any
amounts (including, without limitation, dividends, interest, or wages), the amount allocated to the portion of the period ending
on the Closing Date shall be the amount of Tax that would be payable for such portion of the Straddle Period if such Person filed
a separate Tax Return with respect to such Taxes or Taxes solely for the portion of the Straddle Period ending on the Closing Date
using a “closing of the books” methodology for allocating items of such Tax Return; and
ii. in
the case of all other such Taxes, the amount allocated to the portion of the period ending on the Closing Date shall equal to the
amount of Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in
the portion of the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire
Straddle Period.
For purposes of clause
(i), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of
graduated rates) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the relative number
of days in such portion of the Straddle Period as compared to the number of days in the entire Straddle Period.
(d)
Survival
.
The obligations of the Seller to pay or indemnify for a Tax under this
Section 4.2
shall expire upon the expiration
of the applicable statute of limitations (after taking into account any waiver, extension, tolling, or mitigation thereof) of the
underlying Tax; provided, however, to the extent that the Seller’s obligation to pay a Tax arises under a contract or other
agreement or arrangement, the Seller’s obligations under this
Section 4.2
shall not expire until sixty (60) days
after the expiration of such the Seller’s obligation to pay such Tax under the contract or other agreement or arrangement.
All other obligations of the Seller under this
Section 4.2
shall survive until fully performed.
(e) The
Seller and the REIT shall provide each other with such cooperation and information relating to any of the Interests, the Property
Entities or the Properties as the parties reasonably may request in (i) filing any Tax Return, amended Tax Return or claim for
tax refund, (ii) determining any liability for taxes or a right to a tax refund, (iii) conducting or defending any proceeding in
respect of taxes, or (iv) performing tax diligence, including with respect to the impact of this transaction on the REIT’s
tax status as a REIT. Such reasonable cooperation shall include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The REIT shall promptly notify the Seller upon receipt
by the REIT or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments with respect to the income,
properties or operations of any of the Property Entities or with respect to any Property and (ii) any pending or threatened federal,
state, local or foreign tax audits or assessments of the REIT or any of its affiliates, in each case, which may affect the liabilities
for taxes of the Seller with respect to any tax period ending before or as a result of the Closing. The Seller shall promptly notify
the REIT in writing upon receipt by the Seller, or any of the Seller’s affiliates, of notice of any pending or threatened
federal, state, local or foreign tax audits or assessments relating to the income, properties or operations of any of the Property
Entities or with respect to any Property. The REIT and the Seller may participate at its own expense in the prosecution of any
claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date; provided, that the
Seller shall have the right to control the conduct of any such audit or proceeding or portion thereof for which such Seller has
acknowledged liability for the payment of any additional tax liability, and the REIT shall have the right to control any other
audits and proceedings. Notwithstanding the foregoing, neither the REIT nor the Seller may settle or otherwise resolve any such
claim, suit or proceeding which could have an adverse tax effect on the other party or its affiliates without the consent of the
other party, such consent not to be unreasonably withheld. The Seller and the REIT shall retain all Tax Returns, schedules and
work papers with respect to the Sold Entities and the Properties, and all material records and other documents relating thereto,
until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable
years to which such Tax Returns and other documents relate and until the final determination of any tax in respect of such years.
4.3
Relationship
to Property Entities
. The parties to this Agreement acknowledge and agree that, from and after the Closing (as defined herein),
the Seller shall no longer be a member, partner, stockholder or equity owner, or, if applicable, managing member or general partner,
of any Property Entity and shall have no rights or benefits under any Governing Agreement.
ARTICLE
V
CONDITIONS PRECEDENT TO THE CLOSING
5.1
Conditions
to the REIT’s Obligations
. In addition to any other conditions set forth in this Agreement, the REIT’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.1, all of which shall be conditions precedent to the REIT’s obligations under this Agreement.
(a)
IPO
.
The IPO, in such form and substance as the REIT, in its sole and absolute discretion, shall have determined to be acceptable, shall
have been completed (or be completed simultaneously with the Closing).
(b)
Formation
Transactions
. The formation transactions described in the Prospectus shall have occurred or be scheduled to occur contemporaneously
with the Closing hereunder.
(c)
Representations
and Warranties
. The representations and warranties made by the Seller pursuant to this Agreement, as well as those contained
in the Representation, Warranty and Indemnity Agreement, shall be true and correct as of the Closing as though such representations
and warranties were made at the Closing and, if requested by the REIT, the Seller shall have delivered a certificate to the REIT
to such effect in regard to the Seller’s representations and warranties set forth in this Agreement.
(d)
Performance
.
The Seller shall have performed and complied with all agreements and covenants that it is required to perform or comply with pursuant
to this Agreement prior to the Closing, including having delivered each of the items set forth in Section 6.2 hereof.
(e)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that restrains, prohibits
or otherwise invalidates the consummation of the transactions contemplated by this Agreement, and no litigation or governmental
proceeding seeking such an order shall be pending or threatened.
(f)
Consents
and Approvals
. All necessary approvals and consents, if any, of governmental and private parties, including, without limitation,
all ground lessors, tenants, other parties to service contracts, lenders and ratings agencies, partners, members or stockholders
of any Property Entity, if any, to effect the transactions contemplated by this Agreement, shall have been obtained.
(g)
Representation,
Warranty and Indemnity Agreement
. Each of the parties thereto shall have entered into the Representation, Warranty and Indemnity
Agreement.
(h)
No
Material Adverse Change
. There shall have not occurred between the date hereof and the Closing Date any material adverse change
with respect to any of the Property Entities, the Interests or any Property or any material adverse change in any of the assets,
business, condition (financial or otherwise), results of operation or prospects of any Property Entity or any Property.
(i)
Tenant
and Lender Estoppels
. The REIT shall have received tenant and lender estoppels in form and substance satisfactory to the REIT
and its counsel.
5.2
Conditions
to the Seller’s Obligation
. In addition to any other conditions set forth in this Agreement, the Seller’s obligation
to consummate the Closing is subject to the timely satisfaction of each and every one of the conditions and requirements set forth
in this Section 5.2, all of which shall be conditions precedent to the Seller’s obligations under this Agreement.
(a)
Representations
and Warranties
. The representations and warranties made by the REIT pursuant to this Agreement shall be true and correct as
of the Closing as though such representations and warranties were made at the Closing.
(b)
Performance
.
The REIT shall have performed and complied in all material respects with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.
(c)
Legal
Proceedings
. No order, statute, rule, regulation, executive order, injunction, stay, decree, or restraining order shall have
been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental entity that prohibits the
consummation of the transactions contemplated by this Agreement, and no litigation or governmental proceeding seeking such an order
shall be pending or threatened.
ARTICLE
VI
CLOSING AND CLOSING DOCUMENTS
6.1
Closing
.
The consummation and closing (the “
Closing
”) of the transactions contemplated pursuant to this Agreement shall
take place at the offices of Hunton Andrews Kurth LLP in New York, New York, or such other place as the REIT may designate,
promptly following satisfaction of the conditions to Closing set forth herein (the “
Closing Date
”), or as otherwise
set by agreement of the parties.
6.2
Seller’s
Deliveries
. At the Closing, the Seller shall deliver the following to the REIT in addition to all other items required to be
delivered to the REIT by Sellers:
(a) [Reserved]
(b)
Certificate
.
A certificate from the Seller certifying to the REIT the accuracy of the representations and warranties made by the Seller hereunder.
(c)
FIRPTA
Certificate
. An affidavit from the Seller certifying pursuant to Section 1445 and Section 1446(f) of the Internal Revenue Code
that the Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms
are defined in the Code and the Treasury Regulations promulgated thereunder).
(d)
Deed
.
A special or limited warranty deed (or its local equivalent), executed by the Seller conveying all of the Seller’s right,
title and interest to each Direct Property to the REIT.
(e)
Property
Documents
. Copies of all existing title policies/commitments, surveys, plans and specifications, permits and approvals and
other similar documents which pertain to each Property which may be in the Seller's possession or under its control.
(f)
Other
Documents
. Any other document or instrument reasonably requested by the REIT or required hereby.
6.3
Default
Remedies
. If the Seller defaults in performing any of the Seller’s obligations under this Agreement, the REIT shall have
all rights and remedies available to it at law or in equity resulting from the Seller’s default, including without limitation,
the right to seek specific performance of this Agreement and the Seller’s obligation to convey the Interests to the REIT
hereunder. The parties acknowledge and agree that the failure of a condition precedent to occur, notwithstanding the good faith
and commercially reasonable efforts of the applicable party, shall not be a default hereunder.
ARTICLE
VII
MISCELLANEOUS
7.1
Notices
.
Any notice provided for by this Agreement and any other notice, demand, or communication required hereunder shall be in writing
and either delivered in person (including by confirmed facsimile transmission) or sent by hand delivered against receipt or sent
by recognized overnight delivery service or by certified or registered mail, postage prepaid, with return receipt requested. All
notices shall be addressed as follows:
REIT
:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
with a copy to (which shall not constitute notice):
Hunton Andrews Kurth LLP
Riverfront Plaza, East Tower
951 E. Byrd Street
Richmond, Virginia 23219
Attention: James V. Davidson
Fax No.: 804-787-8035
Seller
:
______________________
______________________
______________________
______________________
Any address or name
specified above may be changed by a notice given by the addressee to the other party. Any notice, demand or other communication
shall be deemed given and effective as of the date of delivery in person or set forth on the return receipt. The inability to deliver
because of changed address of which no notice was given, or rejection or other refusal to accept any notice, demand or other communication,
shall be deemed to be receipt of the notice, demand or other communication as of the date of such attempt to deliver or rejection
or refusal to accept.
7.2
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
7.3
Amendment
.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
7.4
Governing
Law
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
7.5
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
upon the facsimile or electronic pdf email signature of any other party as if such signature were an original signature.
7.6
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
7.7
Incorporation
.
All Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if
fully set forth herein.
7.8
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.9
Waiver
of Conditions
. The conditions to each party’s obligations hereunder are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable law.
7.10
Trial
by Jury
. The parties to this Agreement hereby irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
[
Signature Page Follows.
]
IN WITNESS WHEREOF
,
this Agreement has been entered into effective as of the date first written above.
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SELLER
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ASSET 90047 LLC
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By:
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Name:
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Rosalind Spodek
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Title:
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Member
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REIT
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Postal Realty Trust, Inc., a Maryland corporation
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By:
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Name:
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[
Signature Page to the Asset 90047 LLC
Purchase and Sale Agreement
]
Exhibit 10.25
REPRESENTATION,
WARRANTY AND INDEMNITY AGREEMENT
This REPRESENTATION,
WARRANTY AND INDEMNITY AGREEMENT (this “
Agreement
”) is made and entered into as of May ___, 2019, and is effective
as of the Closing Date (as defined herein), by and among Postal Realty Trust, Inc., a Maryland corporation (the “
REIT
”),
Postal Realty LP, a Delaware limited partnership and subsidiary of the REIT (the “
Operating Partnership
”, and
together with the REIT, the “
Acquirer
”), and Andrew Spodek (the “
Principal
”). Certain capitalized
terms used herein are defined in Section 4.2 hereof.
RECITALS
WHEREAS,
the
Principal owns, directly or indirectly, record and beneficial ownership interests in each of the entities described on
Schedule I
attached hereto and incorporated by this reference (the “
Tier 1 Contributed Entities
”), which Contributed Entities
are the direct or indirect owners of the respective properties described on
Schedule I
(each, a “
Tier 1 Contributed
Property
,” and collectively, the “
Tier 1 Contributed Properties
”);
WHEREAS,
the
Principal is the sole shareholder and Chief Executive Officer of Nationwide Postal Management, Inc., a New York corporation that
provides property management services to each of the Tier 1 Properties and each of the respective properties described on
Schedule
II
(each a “
Tier 2 Property
,” and together with the Tier 1 Properties, the “
Properties
”),
and as such, Principal is familiar with the condition, history and operations of each of the Properties;
WHEREAS,
the
REIT intends to enter into agreements to acquire directly and, through the Operating Partnership or one or more other subsidiaries
of the REIT or the Operating Partnership, ownership of the Properties through the acquisition of the Contributed Entities and through
direct acquisition of certain of the Properties;
WHEREAS,
concurrently
with the execution of this Agreement, the Operating Partnership is entering into separate contribution agreements with the Principal
and contribution agreements and purchase and sale agreements with the other owners of record and beneficial ownership interests
of the Contributed Entities (the “
Contributed Interests
”) (the Principal and such other owners, each, a “
Contributor
”
and collectively, the “
Contributors
,” and such agreements, each, a “
Contribution Agreement
”
and collectively, the “
Contribution Agreements
”), pursuant to which each Contributor shall contribute to the
Operating Partnership, or a wholly-owned subsidiary of the Operating Partnership, all of the Contributor’s right, title and
interest in the applicable Contributed Entities, and the Operating Partnership, or such subsidiary, as applicable, shall acquire
from each Contributor all of each Contributor’s right, title and interest as a holder of interests in the Contributed Entities
and in certain instances shall acquire from Contributors fee simple title to Properties owned other than through Contributed Interests
;
WHEREAS,
capitalized
terms used but not elsewhere defined in this Agreement shall have the meaning ascribed to such terms in
Section 4.2
hereof;
WHEREAS,
the
Formation Transactions (as defined herein) relate to the proposed underwritten initial public offering (the “
IPO
”)
of shares of Class A common stock, par value $0.01 per share of the REIT (the “
REIT Shares
”), following which
the REIT will operate as a self-administered and self-managed real estate investment trust within the meaning of Section 856
of the Code;
WHEREAS,
the
Principal, through his direct and indirect ownership of the Contributed Interests, will materially benefit from the Formation Transactions;
and
WHEREAS,
in
order to induce the Acquirer to enter into the Formation Transaction Documentation, the Principal has agreed to provide certain
representations, warranties and indemnities as set forth herein.
NOW, THEREFORE,
for and in consideration of the foregoing and the representations, warranties, covenants and other terms contained in this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE
I
REPRESENTATION AND WARRANTIES
Except as disclosed
in the Prospectus or in the schedules referenced in this
Article I
and attached hereto, the Principal represents and
warrants to the each of the REIT and the OP as follows, as of the date hereof and as of the Closing Date:
1.1
Organization;
Authority
. (a) Each of the Tier 1 Contributed Entities and each Subsidiary has been duly organized and is validly existing
and in good standing under the Laws of its jurisdiction of organization and has all requisite power and authority to carry out
the transactions contemplated by the Formation Transaction Documentation (as defined herein), and to own, lease and/or operate
each Property owned, leased and/or operated by it and to carry on its business as presently conducted. Each Tier 1 Contributed
Entity and each Subsidiary, to the extent required under applicable Laws, is qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the character of its Properties make such qualification necessary, other
than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The partnership agreement, limited liability company agreement, operating agreement, Articles of Incorporation,
Charter or Bylaws, as applicable, of each Tier 1 Contributed Entity and each subsidiary, as may have been amended from time to
time, (each a “
Governing Agreement
” and collectively, the “
Governing Agreements
”) a complete
and accurate copy of which has been delivered to the Operating Partnership and its counsel, is in force and effect as of the date
hereof, and has not been further modified or amended.
(b)
Schedule
1.1(b)
sets forth as of the date hereof with respect to each Tier 1 Contributed Entity (i) the owners of all the ownership
interests of the Tier 1 Contributed Entity and its Subsidiaries, (ii) the ownership interest of each Tier 1 Contributed Entity
in each Subsidiary, if any, and, if not wholly owned by a Tier 1 Contributed Entity, the identity and ownership interest of
each of the other owners of such Subsidiary, and (iii) each Property owned by each Tier 1 Contributed Entity or its Subsidiaries.
There are no rights to purchase, subscriptions, warrants, options, conversion rights or preemptive rights relating to the Contributed
Interests or any equity interest in the Tier 1 Contributed Entities, or any other security convertible into or exchangeable for
such equity interests.
1.2
Due
Authorization
. Each agreement, document and instrument included in or contemplated by the Formation Transaction Documentation
and executed and delivered by or on behalf of any Tier 1 Contributed Entity constitutes, or when executed and delivered will constitute,
the legal, valid and binding obligation of such Tier 1 Contributed Entity, each enforceable against such Tier 1 Contributed Entity
in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’
rights and general principles of equity.
1.3
Consents
and Approvals
. Except as shall have been obtained or satisfied on or prior to the Closing Date, no consent, waiver, approval,
authorization, order, license, permit or registration of, qualification, designation, declaration or filing with, any Person or
Governmental Authority or under any applicable Laws is required to be obtained by any Tier 1 Contributed Entity or Subsidiary in
connection with the execution, delivery and performance of any of the agreements or documents included in or contemplated by the
Formation Transaction Documentation and the transactions contemplated hereby and thereby.
1.4
No
Violation
. None of the execution, delivery or performance of any agreement or document included in or contemplated by the Formation
Transaction Documentation nor the transactions contemplated hereby and thereby does or will, with or without the giving of notice,
lapse of time, or both, violate, conflict with, result in a breach of, or constitute a default under or give to others any right
of termination, acceleration, cancellation or other right under, (A) the Governing Agreements of any Tier 1 Contributed Entity
or Subsidiary, (B) any agreement, document or instrument to which such Tier 1 Contributed Entity or Subsidiary or any of their
respective assets or properties (including the Properties) is bound or (C) any term or provision of any judgment, order, writ,
injunction, or decree binding on such Tier 1 Contributed Entity or any Subsidiary.
1.5
Capitalization
.
All of the issued and outstanding equity interests of each Tier 1 Contributed Entity and Subsidiary are duly authorized, validly
issued and fully paid and are not subject to preemptive rights or appraisal, dissenters’ or other similar rights under the
Governing Agreements of or any contract to which any Tier 1 Contributed Entity or its Subsidiaries is a party or otherwise bound.
1.6
Licenses
and Permits
. All notices, licenses, permits, certificates and authorizations required for the continued use, occupancy, management,
leasing and operation of the Properties have been obtained, are in full force and effect, are in good standing and (to the extent
required in connection with the transactions contemplated by the Formation Transaction Documentation) are assignable to the Operating
Partnership. No Tier 1 Contributed Entity, or Subsidiary or, to the Principal’s knowledge, any Contributor or third party
has taken any action that (or failed to take any action the omission of which) would result in the revocation of any such notice,
license, permit, certificate or authorization where such revocation or revocations would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, nor has any of them received any written notice of violation from any Governmental
Authority or written notice of the intention of any entity to revoke any of such notice, license, permit, certificate or authorization,
that in each case has not been cured or otherwise resolved to the satisfaction of such Governmental Authority except as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
1.7
Litigation
.
Except for actions, suits or proceedings fully covered by policies of insurance, there is no action, suit or proceeding pending
or, to the Principal’s knowledge, threatened against any Tier 1 Contributed Entity or any Contributor, Subsidiary or Property,
which, if adversely determined, would, individually or together with all such other actions, reasonably be expected to have a Material
Adverse Effect. There is no action, suit or proceeding pending or, to the Principal’s knowledge, threatened against any Contributed
Entity, Subsidiary or any Contributor which challenges or impairs the ability of any Contributed Entity, Subsidiary or any Contributor
to execute or deliver, or perform its obligations under any of the Formation Transaction Documentation or to consummate the transactions
contemplated hereby and thereby. There is no judgment, decree, injunction, or order of a Governmental Authority outstanding against
any Tier 1 Contributed Entity or Subsidiary or, to the Principal’s knowledge, any officer, director, principal, managing
member, or general partner of any of the foregoing in their capacity as such, or, to the Principal’s knowledge, any Contributor
which would reasonably be expected to have a Material Adverse Effect. No Contributed Entity or Subsidiary has received any written
notice of any pending or threatened proceedings for the rezoning (i.e., as opposed to the current zoning) of any Property or any
portion thereof which would substantially and materially impair the current or proposed use thereof.
1.8
Compliance
With Laws
. Each Contributed Entity and its Subsidiaries has conducted its business and maintained its Property in compliance
with all applicable Laws, except for such failures that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. None of the Contributed Entities or Subsidiaries nor, to the Principal’s knowledge, any Contributor
or third party has been informed in writing of any continuing violation of any such Laws or that any investigation has been commenced
and is continuing or is contemplated respecting any such possible violation, except in each case for violations that would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
1.9
Properties
.
(a) Each
Property is the subject of a policy of title insurance reflecting the respective Contributor as the owner of such Property, and,
to the Principal’s knowledge, such owner is the owner of, directly or indirectly, by fee simple estate or otherwise, of such
Property, in each case free and clear of all Liens, except for Permitted Liens (as defined herein).
(b) Except
for matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (1) no
Contributed Entity, nor Subsidiary, nor any other party to any material agreement affecting any Property (other than a Lease (as
such term is hereinafter defined) for space within such Property, but including any agreement that constitutes a Permitted Lien),
is in breach or default of any such agreement, (2) to the Principal’s knowledge, no event has occurred or has been threatened
in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all
such other events, constitute a default under any such agreement, or would, individually or together with all such other events,
reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon
any asset of any Contributed Entity or Subsidiary, except for Permitted Liens, or otherwise reasonably be expected to have a Material
Adverse Effect and (3) all agreements affecting any Property required for the continued use, occupancy, management, leasing
and operation of such Property (exclusive of space Leases) are valid and binding and in full force and effect, subject to applicable
bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity.
(c) To
the Principal’s knowledge, as presently conducted, none of the operation of the buildings, fixtures and other improvements
comprising a part of any Property is in violation of any applicable building code, zoning ordinance or other “land use”
Law.
(d) Each
Contributed Entity holds the lessor’s interest under a lease with the United States Postal Service (collectively, for all
of the Properties, the “
Leases
”) as described in the Registration Statement on Form S-11 filed by the REIT with
the Securities and Exchange Commission in connection with the IPO. . Except for matters that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (1) no Contributed Entity, nor any Subsidiary, nor, to
the Principal’s Knowledge, any other party to any Lease, is in breach or default of any such Lease, (2) to the Principal’s
knowledge, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of
notice, or both, would, individually or together with all such other events, constitute a default under any Lease, or would permit
termination, modification or acceleration under the Lease, and (3) to the Principal’s knowledge, each of the Leases
is valid and binding and in full force and effect, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws
relating to creditors’ rights and general principles of equity. To the Principal’s Knowledge, no lessee under any of
such Leases is presently the subject of any voluntary or involuntary bankruptcy or insolvency proceedings.
1.10
Existing
Loans
.
Schedule 1.10
lists, as of the date hereof, all (i) secured loans encumbering the Properties or any direct
or indirect interest in the applicable Property Entity or Contributed Entity and (ii) any other indebtedness of any Contributed
Entity or Subsidiary (collectively, the “
Disclosed Loans
”) and the outstanding aggregate principal balance as
of the date set forth on
Schedule 1.10
. To the Principal’s knowledge, no monetary default (beyond applicable notice
and cure periods) by any party exists under any of the Disclosed Loans and the documents entered into in connection therewith (collectively,
the “
Disclosed Loan Documents
”) and no non-monetary default (beyond applicable notice and cure periods) by any
party exists under any of the Disclosed Loan Documents.
1.11
Insurance
.
Each Property Entity or Contributed Entity or its Subsidiaries has in place the public liability, casualty and other insurance
coverage with respect to each Property owned, leased and/or managed by it as the Principal reasonably deems necessary and in all
cases including such coverage as is required under the terms of any loan or Lease. Each of the insurance policies with respect
to each Property is in full force and effect in all material respects and all premiums due and payable thereunder have been fully
paid when due. To the Principal’s knowledge, no Property Entity or Contributed Entity nor any of the Contributors has received
from any insurance company any notices of cancellation or intent to cancel any insurance.
1.12
Environmental
Matters
. Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect, (A) each Property Entity, Contributed Entity and its Subsidiaries is in compliance with all applicable Environmental
Laws, (B) no Property Entity, Contributed Entity nor, to the Principal’s knowledge, any of the Contributors has received
any written notice from any Governmental Authority or third party alleging that such Property Entity, Contributed Entity, Subsidiary
or any Property is not in compliance with applicable Environmental Laws, and (C) there has not been a release of a hazardous
substance on any Property that would require investigation or remediation under applicable Environmental Laws.
1.13
Eminent
Domain
. There is no existing, or to the Principal’s knowledge, proposed or threatened condemnation, eminent domain or
similar proceeding, or private purchase in lieu of such a proceeding which would affect any of the Properties.
1.14
Taxes
.
Except as set forth in
Schedule 1.14
:
(a) Each
Contributed Entity and Subsidiary has timely and properly filed all Tax returns and reports required to be filed by it (after giving
effect to any filing extension properly granted by a Governmental Authority having authority to do so), and all such returns and
reports are accurate and complete in all material respects, and has timely paid (or had timely paid on its behalf) all Taxes as
required to be paid by it.
(b) No
deficiencies for any Taxes have been proposed, asserted, assessed or, to the Principal’s knowledge, threatened against any
Contributed Entity or Subsidiary, and no requests for waivers of the time to assess any such Taxes are pending.
(c) No
Contributed Entity or Subsidiary holds any asset the disposition of which would be subject to rules similar to Section 1374 of
the Code; and no Property Entity, Contributed Entity or Subsidiary has requested or received any ruling from the IRS or comparable
rulings from other taxing authorities or has entered into any “closing agreement” as described in Section 7121 of the
Code or similar arrangement. There are no liens or encumbrances for Taxes on any Property, other than liens or encumbrances for
Taxes not yet due and payable, and no action, proceeding or investigation has been instituted against any Property, Contributed
Entity or Subsidiary or, to the Principal’s knowledge, any Contributor that would give rise to any such liens or encumbrances.
Each Contributed Entity and Subsidiary has withheld and paid all Taxes required to have been withheld and paid in connection with
any amounts paid or owing to any employee, independent contractor, creditor, member or other third party, and all Forms W-2 and
1099 required with respect thereto have been properly completed and timely filed.
(d) There
are no pending or, to the Principal’s knowledge, threatened audits, assessments or other actions for or relating to any liability
in respect of income or material non-income Taxes of any Property Entity, Contributed Entity or Subsidiary, there are no matters
under discussion with any Tax authority with respect to income or material non-income Taxes that are likely to result in an additional
liability for Taxes with respect to any Property Entity, Contributed Entity or Subsidiary and no Property Entity, Contributed Entity
or Subsidiary is, or has ever been, a party to or bound by any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement
or similar contract.
(e) At
all times since its formation, each S Corp (including any “predecessor corporation” (within the meaning of Treasury
Regulations Section 1.1374-1(e)) to such S Corp) has continuously qualified as an “S corporation” within
the meaning of Section 1361(a)(1) of the Code and all applicable corresponding provisions of state and local law, and no Tax authority
has claimed in writing that such S Corp does not qualify as an S corporation.
(f) No
C Corp has any current or accumulated earnings and profits.
(g) Since
its formation, for U.S. federal income tax purposes, each Property Entity, Contributed Entity and Subsidiary, other than any
S Corp or C Corp, has been treated as a partnership or a disregarded entity and not as a corporation or an association
taxable as a corporation.
Schedule 1.14(h)(i)
sets forth each Property Entity, Contributed Entity and Subsidiary that
is treated as a partnership for U.S. federal income Tax purposes, and except as set forth in
Schedule 1.14(h)(i)
,
each such entity has always been treated as a partnership for U.S. federal and applicable state and local income Tax
purposes.
Schedule 1.14(h)(ii)
sets forth each Property Entity, Contributed Entity and Subsidiary that is treated as
an entity disregarded from its owner for U.S. federal income Tax purposes, and except as set forth in
Schedule
1.14(h)(ii)
, each such entity has always been treated as an entity disregarded from its owner for U.S. federal and
applicable state and local income Tax purposes.
(h) The
amount of Cash Consideration does not exceed the amount of “preformation expenditures” that may be reimbursed with
respect to such properties under Section 1.707-4(d) of the Treasury Regulations without causing such amounts to fall within Section
1.707-3(a) of the Treasury Regulations.
(i) Any
and all indebtedness to be assumed by the Operating Partnership or any of its affiliates (other than the Minnesota loan and the
Reynoldsburg loan) are “qualified liabilities” within the meaning of Treasury Regulation Section 1.707-5(a)(5).
No inference is intended regarding the treatment of the Minnesota loan or the Reynoldsburg loan.
1.15
Non-Foreign
Status
. None of the Contributors or Contributed Entities is a foreign person (as defined in Section 1445(f) or Section 1446(f)
of the Code).
1.16
Bankruptcy
.
No bankruptcy or similar insolvency proceeding has been filed, or is currently contemplated or, to the Principal’s knowledge,
threatened, with respect to any Contributed Entity, Subsidiary or any lessee under any of the Leases.
1.17
Employees
.
No Contributed Entity nor Subsidiary has or has ever had any employees. No Contributed Entity nor Subsidiary is delinquent in payments
to any employees, consultants or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation
for any service performed or amounts required to be reimbursed to employees, consultants or independent contractors. Each Contributed
Entity and Subsidiary has, to the extent applicable:
(a) complied
in all material respects with all applicable laws related to employment;
(b) withheld
and paid to the appropriate governmental entity or is holding for payment not yet due to such governmental entity all amounts required
to be withheld from employees; and
(c) no
policy, practice, plan or program of paying severance or pay or any form of severance compensation in connection with the termination
of employment service and no agreement pursuant to which it would be required to pay severance to any director, officer, employee
or consultant.
1.18
Contracts
and Commitments
. Except as set forth in the Governing Agreements of each Contributed Entity, no Contributed Entity nor Subsidiary
is a party to any agreements for the sale of its assets, for the grant to any Person of any preferential right to purchase any
such assets or the acquisition of any operating business, assets or capital stock of any other corporation, entity or business,
other than in the ordinary course of business.
ARTICLE
II
NATURE
OF REPRESENTATIONS AND WARRANTIES
2.1
Survival
of Representations and Warranties
. All representations and warranties contained in this Agreement shall survive after the effective
time of the contributions and other Formation Transactions contemplated in the Formation Transaction Documentation until the first
anniversary of the Closing Date (the “
Expiration Date
”). If written notice of a claim in accordance with
Section 3.2
has been given prior to the Expiration Date, then the relevant representation or warranty shall survive, but only with respect
to such specific claim, until such claim has been finally resolved. Any claim for indemnification not so asserted in writing by
the Expiration Date may not thereafter be asserted and shall forever be waived. Notwithstanding the foregoing, claims for indemnification
resulting from breaches of the representations in
Section 1.14
may be asserted until the expiration of the applicable
statute of limitations.
ARTICLE
III
INDEMNIFICATION
3.1
Indemnification
of Acquirer
. The Principal agree to indemnify and hold harmless the REIT, the Operating Partnership and each of their directors,
officers, employees, partners, agents and representatives (each, an “
Indemnified Party
” and collectively, the
“
Indemnified Parties
”), under the terms and conditions of this Agreement, from and against any and all Losses
arising out of or relating to, asserted against, imposed upon or incurred by the Indemnified Parties in connection with or as a
result of any breach of a representation or warranty contained in
Article I
of this Agreement (subject to any indemnification
claim being made prior to the Expiration Date and the survival limitations set forth in
Section 2.1
hereof) (collectively,
the “
Indemnified Losses
”); provided, the Indemnified Parties shall only be entitled to indemnification for breaches
of representations and warranties made pursuant to
Article I
of this Agreement to the extent that the Indemnified Losses
with respect to such breaches exceed, in the aggregate, one percent (1.0%) of the aggregate consideration paid by the Acquirer
for the Contributed Interests (for purposes of such calculation, units of limited partnership interest in the Operating Partnership,
REIT Shares and shares of Class B Common Stock of the REIT (“Class B Stock”) shall have a value per share or unit equal
to the IPO Price)(the “
Deductible
”). The Principal shall only be liable for Indemnified Losses (after giving
effect to, and only for amounts in excess of, the Deductible) up to the Maximum Indemnity Amount.
3.2
Claims
.
(a) At
the time when either the REIT or the Operating Partnership learns of any potential claim for Indemnified Losses under this Agreement
(a “
Claim
”), it will promptly give written notice (a “
Claim Notice
”) to the Principal; provided
that the failure to so notify the Principal shall not prevent recovery under this Agreement, except to the extent that the Principal
shall have been materially prejudiced by such failure. Each Claim Notice shall describe in reasonable detail the facts known to
the Indemnified Party giving rise to such Claim. The Indemnified Party shall deliver to the Principal, promptly after the Indemnified
Party’s receipt thereof, copies of all notices and documents (including court papers) received by such Indemnified Party
relating to a Third Party Claim (as defined below); provided that failure to do so shall not prevent recovery under this Agreement,
except to the extent that the Principal shall have been materially prejudiced by such failure. Any Indemnified Party may at its
option demand indemnity under this
Article III
as soon as a Claim has been threatened by a third party, regardless
of whether an actual Loss has been suffered, so long as the Indemnified Party shall in good faith determine that such claim is
not frivolous and that the Indemnified Party may be liable for, or otherwise incur, a Loss as a result thereof.
(b) The
Principal shall be entitled, at his own expense, to elect to assume and control the defense of any Claim based on claims asserted
by third parties (“
Third Party Claims
”), through counsel chosen by the Principal and reasonably acceptable to
the Indemnified Parties, if the Principal gives written notice of his intention to do so to the REIT within twenty (20) days following
the receipt of the applicable Claim Notice; provided, however, that the Indemnified Parties may at all times participate in such
defense at their own expense. Without limiting the foregoing, in the event that the Principal exercises the right to undertake
any such defense against a Third Party Claim, the Indemnified Party shall cooperate with the Principal in such defense and make
available to the Principal, at the Principal’s expense, all witnesses, pertinent records, materials and information in the
Indemnified Party’s possession or under such Indemnified Party’s control relating thereto as is reasonably required
by the Principal. No compromise or settlement of such Third Party Claim may be effected by either the Indemnified Party, on the
one hand, or the Principal, on the other hand, without the other party’s consent (which shall not be unreasonably withheld
or delayed) unless (i) there is no finding or admission of any violation of Law and no effect on any other claims that may
be made against such other party, (ii) each Indemnified Party that is party to such claim is released from all liability with
respect to such claim, and (iii) there is no equitable order, judgment or term that in any manner affects, restrains or interferes
with the business of the Indemnified Party that is party to such claim or any of its Affiliates. Notwithstanding the foregoing,
if the compromise or settlement of such Third Party Claim could reasonably be expected to adversely affect the status of the REIT
as a real investment trust within the meaning of Section 856 of the Code, then the REIT shall make such decision to compromise
or settle the Third Party Claim without the need to obtain the Principal’s consent.
3.3
Delivery
of Indemnity Amounts
. Upon resolution of any disputed Claim or portion of a Claim as evidenced by (x) a written agreement between
the Acquirer and the Principal or (y) a final award of an arbitral tribunal in accordance with this Agreement, the Principal
shall deliver the amount of the indemnification to the Indemnified Party. Indemnity payments may be made by the Principal in the
form of cash, REIT Shares, Class B Stock or OP Units. To the extent indemnification is made through delivery by the Principal of
REIT Shares, Class B Stock or OP Units, such REIT Shares, Class B Stock or OP Units shall be valued at an amount per REIT Share,
share of Class B Stock or OP Unit equal to the IPO Price. The Principal hereby authorizes the REIT, as general partner of the Operating
Partnership, to take all such action as may be necessary to amend the stock ownership records of the REIT and the partnership agreement
of the Operating Partnership, and any exhibits or schedules thereto, and to reflect the delivery of any REIT Shares, Class B Stock
or OP Units by the Principal as an indemnification payment hereunder and to reflect that the Principal has no further right, title
or interest with respect to any such REIT Shares or OP Units.
3.4
Exclusive
Remedy
. The sole and exclusive remedy for Indemnified Parties with respect to any and all claims relating to a breach of this
Agreement (other than breaches arising out of or in connection with fraud) shall be indemnification in accordance with the terms
of this Agreement. The Principal shall not be liable or obligated to make payments under this Agreement in excess of the Maximum
Indemnity Amount (as defined herein).
3.5
Characterization
of Payments
. Any indemnity payments shall constitute an adjustment of the contribution consideration received by the Principal
pursuant to his Contribution Agreement for Tax purposes and shall be treated as such by all parties on their tax returns to the
extent permitted by Law.
ARTICLE
IV
GENERAL PROVISIONS
4.1
Notices
.
All notices and other communications under this Agreement shall be in writing and shall be deemed given (i) when delivered
personally, (ii) five (5) Business Days after being mailed by certified mail, return receipt requested and postage prepaid,
(iii) one (1) Business Day after being sent by a nationally recognized overnight courier or (iv) transmitted by facsimile
if confirmed within twenty four (24) hours thereafter by a signed original sent in the manner provided in clause (i), (ii)
or (iii) to the parties at the following addresses (or at such other address for a party as shall be specified by notice from such
party): If to the REIT or the Operating Partnership, to: Postal Realty LP, 75 Columbia Avenue, Cedarhurst, NY 11516, Attention:
Jeremy Garber; if to the Principal, to: 75 Columbia Avenue, Cedarhurst, NY 11516], Attention: Andrew Spodek.
4.2
Definitions
.
For purposes of this Agreement, the following terms shall have the following meanings:
(a) “
Affiliate
”
means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with the specified Person. For the purposes of this definition, “control” (including,
with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect
to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
(b) “
Business
Day
” means any day that is not a Saturday, Sunday or legal holiday in the State of New York.
(c) “
C
Corp
” means the entities listed on Schedule 4.2(c).
(d) “
Closing
Date
” means the closing date of the transactions contemplated by the Formation Transaction Documents.
(e) “
Code
”
means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.
(f) “
Environmental
Laws
” means all federal, state and local Laws governing pollution or the protection of human health or the environment.
(g) “
Formation
Transaction Documentation
” means all of the Contribution Agreements, this Agreement and related documents and agreements
pursuant to which all of the Contributed Entities and/or the equity interests in the Contributed Entities and the Property Entities,
and the Properties are to be acquired by the REIT or the Operating Partnership, directly or indirectly, as part of the Formation
Transactions.
(h) “
Formation
Transactions
” means the transactions contemplated by this Agreement and the other Formation Transaction Documentation.
(i) “
GAAP
”
means generally accepted accounting principles, as in effect in the United States of America as of the date of determination.
(j) “
Governmental
Authority
” means any government or agency, bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.
(k) “
IPO
Price
” means the public offering price set forth on the cover of the final prospectus for the IPO.
(l)
“
Laws
” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees
and policies of any Governmental Authority, including, without limitation, zoning, land use or other similar rules or ordinances.
(m) “
Liens
”
means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases,
licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.
(n) “
Losses
”
means charges, complaints, claims, actions, causes of action, losses, damages, Taxes, liabilities and expenses of any nature whatsoever,
including without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation, costs of investigative
judicial or administrative proceedings or appeals therefrom and costs of attachment or similar bonds, as well as all collection
costs and enforcement expenses incurred in retaking, holding, preparing for sale, selling or otherwise disposing of or realizing
on collateral or otherwise exercising or enforcing any rights or remedies under pledge and security or other collateral documents.
(o) “
Material Adverse Effect
” means with respect to each Contributed Entity, Property Equity, Subsidiary or Property,
any material adverse change in any of the assets, business, condition (financial or otherwise), results of operation or prospects
of such Contributed Entity, Property Entity, Subsidiary or Property.
(p) “
Maximum
Indemnity Amount
” means ten percent (10%) of the aggregate value of the consideration paid by the Acquirer for the Contributed
Interests (for purposes of such calculation, units of limited partnership interest in the Operating Partnership, REIT Shares and
shares of Class B Stock shall have a value per share or unit equal to the IPO Price)
(q) “
Permitted
Liens
” means (i) Liens, or deposits made to secure the release of such Liens, securing Taxes, the payment of which
is not delinquent or the payment of which (including, without limitation, the amount or validity thereof) is being contested in
good faith by appropriate proceedings for which adequate reserves have been made in accordance with GAAP; (ii) zoning, entitlement,
building and other land use Laws imposed by governmental agencies having jurisdiction over any Property; (iii) covenants,
conditions, restrictions, easements for public utilities, encroachments, rights of access or other non-monetary matters that do
not materially impair the use of any Property for the purposes for it is currently being used or proposed to be used in connection
with the relevant Person’s business; (iv) Liens securing Disclosed Loans; (v) Liens arising under leases disclosed
in full to the Acquirer and in effect as of the Closing Date; (vi) any exceptions contained in the title policies relating
to the Properties as of the Closing Date, copies of which title policies were provided to the Acquirer and their counsel, none
of which substantially and materially impair the use of any Property for the purposes for which it is currently being used; and
(vii) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the ordinary
course of business that are not yet due and payable and which are not, in the aggregate, material to the business, operations and
financial condition of any Property so encumbered.
(r) “
Person
”
means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization
or other entity.
(s) “
Prospectus
”
means the preliminary prospectus filed by the REIT with the U.S. Securities and Exchange Commission and used in the marketing of
the IPO.
(t) “
Properties
”
shall have the meaning given in the Recitals and “Property” shall have the correlative meaning.
(u) “
S
Corp
” means the entities listed on Schedule 4.2(u).
(v) “
Subsidiary
”
means any corporation, partnership, limited liability company, joint venture, trust or other legal entity in which a Contributed
Entity owns (either directly or through or together with another Subsidiary) either (i) a general partner, managing member
or other similar interest, or (ii) outstanding capital stock or other equity interests of such corporation, partnership, limited
liability company, joint venture or other legal entity. As used herein, “
Subsidiary
” or “
Subsidiaries
”
refers to the Subsidiaries of the Contributed Entities, as set forth on
Schedule 4.2(v)
, unless the context otherwise
requires.
(w) “
Tax
”
means all federal, state, local and foreign income, withholding, gross receipts, license, property, sales, franchise, employment,
payroll, goods and services, stamp, environmental, customs duties, capital stock, social security, transfer, alternative minimum,
excise and other taxes, tariffs or governmental charges of any nature whatsoever, including estimated taxes, together with penalties,
interest or additions to Tax with respect thereto, whether or not disputed.
4.3
Counterparts
.
This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Each party may rely
on a facsimile or electronic pdf email signature of the other party as if it were an original signature.
4.4
Entire
Agreement; Third-Party Beneficiaries
. This Agreement, including, without limitation, the exhibits hereto, constitute the entire
agreement and supersede each prior agreement and understanding, whether written or oral, among the parties regarding the subject
matter of this Agreement. This Agreement is not intended to confer any rights or remedies on any Person other than the parties
hereto.
4.5
Governing
Law and Jurisdiction
.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts
of law rules thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers,
shareholders, partners, members, employees or agents) shall be, except to the extent otherwise required by applicable law, commenced
exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any provision of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is improper or is an inconvenient venue for such proceeding.
(b) Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.
(c) If
one or more parties shall commence an action, suit or proceeding to enforce any provision of this Agreement, the prevailing party
or parties in such action, suit or proceeding shall be reimbursed by the other party or parties to such action, suit or proceeding
for the reasonable attorneys’ fees and other costs and expenses incurred by the prevailing party or parties with the investigation,
preparation and prosecution of such action, suit or proceeding.
4.6
Assignment
.
This Agreement shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and their respective
heirs, legal representatives, successors and assigns; provided, however, that this Agreement may not be assigned (except by operation
of law) by any party without the prior written consent of the other parties, and any attempted assignment without such consent
shall be null and void and of no force and effect, except that the REIT and the Operating Partnership may assign its rights and
obligations hereunder to an Affiliate.
4.7
Severability
.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
4.8
Rules
of Construction
.
(a) The
parties hereto agree that they have been represented by counsel during the negotiation, preparation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party drafting such agreement or document.
(b) The
words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement
unless otherwise specified. Whenever the words “include,” “includes” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without limitation.” All terms defined in this
Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as
the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms, unless otherwise
defined herein. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including (in the
case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes
and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and
assigns.
4.9
Equitable
Remedies
. The parties agree that irreparable damage would occur to the Acquirer in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed
that the Acquirer shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by the Principal and
to enforce specifically the terms and provisions hereof in any federal or state court located in the City of New York, Borough
of Manhattan, this being in addition to any other remedy to which the Acquirer is entitled under this Agreement or otherwise at
law or in equity.
4.10
Time
of the Essence
. Time is of the essence with respect to all obligations under this Agreement.
4.11
Headings
.
Headings of the Articles and Sections of this Agreement are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
[
Signature
Page Follows.
]
IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be signed by their respective duly authorized officers, all as of the date first
written above.
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ACQUIRER
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POSTAL REALTY TRUST, INC., a Maryland corporation
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By:
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Name:
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Title:
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POSTAL REALTY LP, a Delaware limited partnership
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By:
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Postal Realty Trust, Inc.
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a Maryland corporation, its General Partner
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By:
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Name:
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Title:
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PRINCIPAL
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Andrew Spodek
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By:
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Andrew Spodek
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Schedule I
[
See following page
]
Schedule II
[
See following page
]
Exhibit 10.26
TAX INDEMNIFICATION AGREEMENT
TAX INDEMNIFICATION AGREEMENT, dated as
of May [∙], 2019 (the “Agreement”), between Postal Realty Trust, Inc. (the “Company”), United Properties
Holding, Inc. (“UPH”), United Post Office Investments, Inc. (“UPOI”), and Andrew Spodek (the “Stockholder”).
WHEREAS, UPH owns 100% of the stock of UPOI;
WHEREAS, UPH intends to merge into the Company,
with the Company surviving (the “Merger”), and as a result, the Company will succeed to any tax liabilities of UPH;
WHEREAS, the parties hereto desire to address
certain matters between themselves in respect of the allocation of taxable income and liability for taxes in connection with the
Public Offering (as defined below); and
WHEREAS, the parties hereto wish to provide
for the termination of this Agreement such that it has no effect should the Merger not close.
NOW, THEREFORE, in consideration of the
foregoing premises and the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS.
The following terms as used herein have
the following meanings:
“Adjustment Amount” means the
net increase in taxable income or decrease in any net operating loss carryforward or net capital loss carryforward of UPH or UPOI
for any period ending on or prior to the Closing Date based on a Final Determination and that gives rise to a payment pursuant
to Section 2.1 hereof.
“Closing Date” means the date
on which the Merger closes.
“Code” means the Internal Revenue
Code of 1986, as amended.
“Final Determination” means
the final resolution of any income or franchise tax liability (including all related interest and penalties) for a taxable period.
A Final Determination shall result from the first to occur of:
(i) the
expiration of 30 days after acceptance by the Internal Revenue Service of a Waiver of Restrictions on Assessment and Collection
of Deficiency in Tax and Acceptance of Overassessment (the “Waiver”) on Federal Revenue Form 870 or 870-AD (or any
successor comparable form or the expiration of a comparable period with respect to any comparable agreement or form under the laws
of any other jurisdiction), unless, within such period, the applicable taxpayer gives notice of that taxpayer’s intention
to attempt to recover all or part of any amount paid pursuant to the Waiver by filing a timely claim for refund;
(ii) a
decision, judgment, decree or other order by a court of competent jurisdiction that is not subject to further judicial review (by
appeal or otherwise) and has become final;
(iii) the
execution of a closing agreement under section 7121 of the Code or the acceptance by the Internal Revenue Service or its counsel
of an offer in compromise under section 7122 of the Code or the execution of a comparable agreement under the laws of any other
jurisdiction;
(iv) the
expiration of the time for filing a claim for refund or for instituting suit in respect of a claim for refund disallowed in whole
or part by the Internal Revenue Service or any other relevant taxing authority;
(v) any
other final disposition of the tax liability for such period by reason of the expiration of the applicable statute of limitations;
or
(vi) any
other event that the parties hereto agree is a final and irrevocable determination of the liability at issue.
“Merger” has the meaning given
such term in the Recitals.
“Taxable Year” means any taxable
year (or portion thereof) of UPH or UPOI ending on or prior to the Closing Date.
“Tax Detriment” means any amount
by which the tax liability of UPH, UPOI, or the Company in any taxable year is actually increased by reason of an Adjustment Amount
on a tax return for such year.
“Taxing Authority” means the
Internal Revenue Service or any comparable state taxing authority.
ARTICLE II
OBLIGATIONS
2.1. STOCKHOLDER’S
INDEMNIFICATION OF THE COMPANY FOR TAX LIABILITIES.
(a) In
the event of an adjustment of one or more tax returns of UPH or UPOI for a Taxable Year ending on or before the Closing Date based
on a Final Determination which results in a net increase in taxable income of UPH or UPOI for a Taxable Year or a decrease in any
net operating loss carryforward or net capital loss carryforward, the Stockholder agrees to pay to the Company an amount equal
to the Company’s Tax Detriment.
(b) The
Stockholder shall pay to the Company any amounts calculated in accordance with this Section 2.1 within 30 business days after the
first to occur of delivery of a notice from the Company of such Final Determination.
ARTICLE III
CONTESTS/COOPERATION
3.1. CONTESTS.
Whenever the Stockholder or the Company
becomes aware of an issue that they or it believe could result in a Final Determination which could give rise to a payment or indemnification
obligation under Article II, the Stockholder or the Company (as the case may be) shall promptly give notice of the issue to the
other parties hereto. The Stockholder and his representatives, at his expense, shall be entitled to participate in all conferences
and meetings with or proceedings before the Internal Revenue Service or any other Taxing Authority with respect to the issue. The
parties shall consult and cooperate with each other in the negotiation and settlement or litigation of any adjustment that may
give rise to any payment or indemnification obligation under Article II. All decisions with respect to such negotiation and settlement
or litigation shall be made by the parties after full, good faith consultation or pursuant to the dispute resolution provisions
of Section 3.2.
3.2. DISPUTE
RESOLUTION.
(a) If
the parties hereto are, after negotiation in good faith, unable to agree upon the appropriate application of the provisions of
this Agreement, the controversy shall be settled by a “Big 4” (or equivalent) accounting firm, other than the independent
public accountants for the Company, chosen by the Company. The decision of the Accounting Firm with respect thereto shall be final,
and the Stockholder and the Company, as applicable, shall immediately pay any amounts due under this Agreement pursuant to such
decision. The applicable expenses of the Accounting Firm shall be borne one-half by the Company and one-half by the Stockholder
unless the Accounting Firm specifies otherwise.
(b) In
the event that either the Stockholder or the Company receives notice, whether verbally or in writing, of any federal, state, local
or foreign tax examination, claim, settlement, proposed adjustment or related matter that may affect in any way the liability of
a Stockholder under this Agreement, the Stockholder or the Company, as applicable, shall within ten (10) days notify the other
parties hereto in writing thereof; provided, however, that any failure to give such notice shall not reduce a party’s right
to indemnification under this Agreement except to the extent of actual damage incurred by the other parties as a result of such
failure. The party or parties who would be required to indemnify (the “Indemnifying Party”) the other party or parties
(the “Indemnified Party”) shall be entitled in their reasonable discretion and at their sole expense to handle, control
and compromise or settle the defense of any matter that may give rise to a liability under this Agreement; provided, however, that
such Indemnifying Party from time to time provides assurances reasonably satisfactory to the Indemnified Party that (i) the Indemnifying
Party is financially capable of pursuing such defense to its conclusion, and (ii) such defense is actually being pursued in a reasonable
manner.
3.3. COOPERATION.
The parties shall make available to each
other, as reasonably requested, and to any Taxing Authority all information, records or documents relating to any liability for
taxes covered by this Agreement and shall preserve such information, records and documents until the expiration of any applicable
statute of limitations or extensions thereof. The party requesting such information shall reimburse the other party for all reasonable
out-of-pocket costs incurred in producing such information.
3.4. COSTS.
Except to the extent otherwise provided
herein, each party shall bear its own costs in connection with this Agreement.
ARTICLE IV
MISCELLANEOUS
4.1. COUNTERPARTS
AND FACSIMILES.
This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which counterparts collectively shall constitute a single
instrument representing the agreement among the parties hereto. Transmission of facsimile copies of an executed counterpart of
a signature page of this Agreement will have the same effect as delivery of the manually executed counterpart of this Agreement.
4.2. CONSTRUCTION
OF TERMS.
Nothing herein expressed or implied is intended,
or shall be construed, to confer upon or give any person, firm or corporation, other than the parties hereto and their respective
successors and permitted assigns, any rights or remedies under or by reason of this Agreement.
4.3. GOVERNING
LAW.
This Agreement and the rights and duties
of the parties hereunder shall be governed by, and construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.
4.4. AMENDMENT
AND MODIFICATION.
This Agreement may be amended, modified
or supplemented only by a writing executed by all the parties hereto.
4.5. ASSIGNMENT.
Except by operation of law or in connection
with the sale of all or substantially all the assets of a party, this Agreement shall not be assignable, in whole or in part, directly
or indirectly, by the Stockholder without the written consent of the Company or by the Company without the written consent of the
Stockholder. Any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void. The
provisions of this Agreement shall be binding upon and inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns.
4.6. INTERPRETATION.
The title, article and section headings
contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties, and shall not
in any way affect the meaning or interpretation of this Agreement.
4.7. SEVERABILITY.
In the event that any one or more of the
provisions of this Agreement shall be held to be illegal, invalid or unenforceable in any respect, the same shall not in any respect
affect the validity, legality or enforceability of the remainder of this Agreement, and the parties shall use their best efforts
to replace such illegal, invalid or unenforceable provision with an enforceable provision approximating, to the extent possible,
the original intent of the parties.
4.8. ENTIRE
AGREEMENT.
This Agreement embodies the entire agreement
and understanding of the parties hereto in respect to the subject matter contained herein. There are no representations, promises,
warranties, covenants or undertakings other than those expressly set forth herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
4.9. FURTHER
ASSURANCES.
Subject to the provisions of this Agreement,
the parties shall acknowledge such other instruments and documents and take all other actions that may be reasonably required in
order to effectuate the purposes of this Agreement.
4.10. WAIVERS,
ETC.
No failure or delay on the part of any party
in exercising any power or right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right or power or any abandonment or discontinuance of steps to enforce such right or power preclude any other or further
exercise thereof or the exercise of any other right or power. No waiver of any provision of this Agreement nor consent to any departure
by the parties therefrom shall in any event be effective unless it shall be in writing, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was given.
4.11. SET-OFF.
All payments to be made by the Stockholder
under this Agreement shall be made without set-off, counterclaim or withholding, all of which are expressly waived.
4.12. CHANGE OF LAW.
If, due to any change in applicable law
or regulations or the interpretation thereof by any court or other governing body having jurisdiction subsequent to the date of
this Agreement, performance of any provision of this Agreement shall be impracticable or impossible, the parties shall use their
best efforts to find an alternative means to achieve the same or substantially the same results as are contemplated by such provision.
4.13. NOTICES.
All notices under this Agreement shall be
validly given if in writing and delivered personally or sent by registered mail, postage prepaid at the respective addresses set
forth below:
If to the Company, at:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: [∙]
If to UPH, at:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: UPH - [∙]
If to UPOI, at:
Postal Realty Trust, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: UPOI - [∙]
If to the Stockholder, at:
Nationwide Postal Properties, Inc.
75 Columbia Avenue
Cedarhurst, NY 11516
Attention: Andrew Spodek
or at such other address as any party may, from time to time,
designate in a written notice given in a like manner. Notice given by mail shall be deemed delivered five calendar days after the
date mailed.
4.14. TERMINATION
OF AGREEMENT.
This Agreement shall terminate and be void,
as if it never had been executed, if the Closing Date does not occur on or before [∙], 20[∙].
IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written above.
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POSTAL REALTY TRUST, INC.
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By
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Name:
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Title:
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United Properties Holding, INC.
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By
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Name:
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Title:
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United Post Office Investments, INC.
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By
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Name:
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Title:
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STOCKHOLDER
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Andrew Spodek
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Exhibit 21.1
Subsidiaries
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Subsidiary
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Jurisdiction
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A&J Assets LLC
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Delaware
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Alabama Postal Holdings, LLC
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Delaware
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Asset 20024, LLC
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New York
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Illinois Postal Holdings, LLC
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Illinois
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Iowa Postal Holdings, LLC
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Iowa
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Harbor Station, LLC
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Wisconsin
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Hiler Buffalo LLC
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Florida
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Gary Glen Park Realty, LLC
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Indiana
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Mass Postal Holdings, LLC
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Massachusetts
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Michigan Postal Holding LLC
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Michigan
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Missouri & Minnesota Postal Holdings, LLC
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Minnesota
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NPM Postal, LLC
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New York
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Ohio Postal Holdings, LLC
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Ohio
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Pennsylvania Postal Holdings, LLC
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Pennsylvania
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Postal Holdings LLC
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Delaware
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PPP Assets, LLC
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Florida
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Tennessee Postal Holdings, LLC
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Tennessee
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Postal Realty LP
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Delaware
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Postal Realty Management TRS, LLC
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Delaware
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UPH Merger Sub LLC
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Delaware
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Wisconsin Postal Holdings, LLC
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Wisconsin
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