Document:

Exhibit 10.1

 

$360,000,000

 

COMMUNITY HEALTHCARE TRUST INCORPORATED

 

COMMON STOCK

PAR VALUE $0.01 PER SHARE

 

AMENDED AND RESTATED SALES AGENCY AGREEMENT

 

November 5, 2019

 

Sandler O’Neill & Partners, L.P.

1251 Avenue of the Americas, 6th Floor

New York, New York 10020

 

Evercore Group L.L.C.

55 East 52nd Street, 36th Floor

New York, NY 10055

 

SunTrust Robinson Humphrey, Inc.

3333 Peachtree Road NE, 11th Floor

Atlanta, GA 30326

Attention: Equity Capital Markets

 

BB&T Capital Markets, a division of BB&T Securities, LLC

Capital Markets Syndicate Desk

901 East Byrd Street, Suite 300

Richmond, VA 23219

 

Fifth Third Securities, Inc.

424 Church Street

Maildrop: UTFC6B

Nashville, TN 37219

 

Janney Montgomery Scott LLC

1717 Arch Street, 22nd Floor

Philadelphia, PA 19103

 

Ladies and Gentlemen:

 

Community Healthcare Trust Incorporated, a Maryland corporation (the “Company”), confirms its agreement (this “Agreement”) with Sandler O’Neill & Partners, L.P., Evercore Group L.L.C., SunTrust Robinson Humphrey, Inc., BB&T Capital Markets, a division of BB&T Securities, LLC, Fifth Third Securities, Inc. and Janney Montgomery Scott LLC (collectively, the “Agents” or “you”) originally set forth in a Sales Agency Agreement, dated August 7, 2018 (the “Original Agreement”), which Original Agreement is hereby amended and restated as follows:

 

1. The Company proposes, subject to the terms and conditions stated herein, to issue and sell from time to time on or after the date of this Agreement, to or through the Agents, shares (the “Shares”) of the common stock, par value $0.01 per share (“Common Stock”), of the Company, having an aggregate gross sales price of up to $360,000,000 (the “Maximum Amount”), on the terms set forth in this Agreement. The Company agrees that whenever it determines to sell the Shares directly to the Agents, as principal or otherwise other than as set forth in Section 3 hereof, it will enter into a separate agreement, which will include customary terms and conditions consistent with the representations, warranties and provisions in this Agreement and which will be agreed upon by the parties thereto (each, a “Terms Agreement”).

 

The Company prepared and filed, in accordance with the provisions of the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations thereunder (the “1933 Act Regulations”), with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement” (as defined in Rule 405 under the 1933 Act) on Form S-3 (File No. 

 

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333-234523) relating to the public offering and sale of certain securities of the Company, including the Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the rules and regulations thereunder (the “1934 Act Regulations”). The base prospectus filed as part of the Registration Statement (as defined below), as amended in the form in which it has been filed most recently with the Commission, including the documents incorporated or deemed incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, is referred to herein as the “Base Prospectus.” The Company has prepared a prospectus supplement (the “Prospectus Supplement”) to the Base Prospectus included as part of the Registration Statement, which Prospectus Supplement specifically relates to the sale of the Shares pursuant to an “at the market” offering as defined in Rule 415 of the 1933 Act. The Company will furnish to the Agents, for use by the Agents, copies of the Base Prospectus included as part of the Registration Statement, as supplemented by the Prospectus Supplement. Except where the context otherwise requires, the Registration Statement, as amended when it became effective, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the 1933 Act or deemed to be a part of such registration statement pursuant to Rule 430B of the 1933 Act, is herein referred to as the “Registration Statement.” The Base Prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the 1933 Act is herein referred to as the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission via the Commission’s Electronic Data Gathering, Analysis and Retrieval system (or any successor system) (“EDGAR”).

 

As used in this Agreement:

 

“Applicable Time” means each time of sale of Shares pursuant to this Agreement or any relevant Terms Agreement, or such other time as agreed by the Company and the Agents.

 

“General Disclosure Package” means any Issuer General Use Free Writing Prospectuses and the Prospectus.

 

“Issuer Free Writing Prospectus” means as such term is defined in Rule 433 of the 1933 Act Regulations, including, without limitation, any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations) relating to the Shares that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering thereof that does not reflect the final terms, in each case 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).

 

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus approved by the Agents for general distribution to investors, as evidenced by communications between the Company and the Agents.

 

“Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

 

2. The Company represents and warrants to the Agents as of the date hereof, each Representation Date (as defined in Section 6(n) below), each Applicable Time (as defined in Section 1 above) referred to herein, and each Delivery Date (as defined in Section 3(i) below) and agrees with the Agents that:

 

(a) Registration Statement and Prospectuses. The Company meets all conditions and requirements for the use of Form S-3 to register the offer and sale of the Shares in accordance with General Instruction I.B.1 of Form S-3. Each of the Registration Statement and any post-effective amendment thereto have been prepared by the Company in conformity with the requirements of the 1933 Act and the 1933 Act Regulations. On the date the Registration Statement was filed and as of the date hereof, the Company was and is a “well-known seasoned issuer” as defined in Rule 405 of the 1933 Act. The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405 of the 1933 Act, and the Shares,  since their registration on the Registration Statement, have been and remain eligible for registration by the Company on a Rule 405

 

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“automatic shelf registration statement.” The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the 1933 Act objecting to the use of the automatic shelf registration statement form. The Company has paid or will pay the required Commission filing fees relating to the Shares within the time required by Rule 456(b)(1)(i) of the 1933 Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act (including, if applicable, by updating the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) of the 1933 Act either in a post-effective amendment to the Registration Statement or on the cover page of the Prospectus). No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any prospectus supplement or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the actual knowledge of the Company after due inquiry, contemplated. The Company has complied with each request, if any, from the Commission for additional information.

 

Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective and at each deemed effective date with respect to the Agents pursuant to Rule 430B(f)(2) under the 1933 Act Regulations, complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. The Prospectus and each amendment or supplement thereto, as of their respective issue dates, complied and will comply, in all material respects with the 1933 Act and the 1933 Act Regulations. The Prospectus and any amendments or supplements thereto delivered to the Agents for use in connection with the offering of the Shares 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. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations.

 

(b) Accurate Disclosure. Neither the Registration Statement nor any post-effective amendment thereto, at the respective time it became effective, at each Applicable Time and at each Delivery Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At each Applicable Time and at each Delivery Date, neither (A) the General Disclosure Package or (B) any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, 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 the light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at each Applicable Time and at each Delivery 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 the light of the circumstances under which they were made, not misleading.

 

The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Prospectus and the General Disclosure Package, when they were filed with the Commission, conformed in all material respects to the requirements of the 1934 Act and the 1934 Act Regulations, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the General Disclosure Package, when such documents are filed with the Commission, will conform in all material respects to the requirements of the 1934 Act and the 1934 Act Regulations and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company filed the Registration Statement with the Commission before using any free writing prospectus and each free writing prospectus was preceded or accompanied by the Prospectus satisfying the requirements of Section 10 under the 1933 Act.

 

The representations and warranties in this Section 2(b) shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with the Agent Information (as defined in Section 9(a) below).

 

(c) Issuer Free Writing Prospectuses. Unless the Company has notified or notifies the Agents otherwise in accordance with Section 6(c) below, no Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated or deemed incorporated by reference therein, or any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified. Each Issuer Free Writing Prospectus has conformed or will conform in all material respects to the requirements of the 1933 Act and the 1933 Act Regulations on the date of first use, and the Company has complied with any filing requirements applicable to an

 

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Issuer Free Writing Prospectus pursuant to the 1933 Act Regulations. The Company has not made any offer relating to the Shares that would constitute an Issuer Free Writing Prospectus without the prior written consent of the Agents; provided, that such consent is deemed to have been given with respect to each Permitted Free Writing Prospectus (as defined in Section 6(c) below). The Company has retained in accordance with the 1933 Act Regulations all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the 1933 Act Regulations. The first sentence of this Section 2(c) shall not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with the Agent Information.

 

(d) Company Not Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

 

(e) [Reserved].

 

(f) Independent Accountants. BDO USA, LLP, who certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus are independent public accountants with respect to the Company as required by the 1933 Act, the 1933 Act Regulations and the Public Company Accounting Oversight Board (United States).

 

(g) Financial Statements; Non-GAAP Financial Measures. The historical consolidated financial statements of the Company included or incorporated by reference 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 condition of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, owners’ equity and cash flows of the Company and its consolidated subsidiaries for the periods specified, and such financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods presented. The supporting schedules, if any, relating to the Company and its consolidated subsidiaries present fairly in accordance with GAAP the information required to be stated therein. Except as included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, no historical or pro forma financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the General Disclosure Package or the Prospectus under the 1933 Act or the 1933 Act Regulations. All disclosures contained or incorporated by reference 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 of the Commission) comply in all material respects with Regulation G under the 1934 Act, and Item 10 of Regulation S-K under the 1933 Act, in each case to the extent applicable.

 

(h) No Material Adverse Change in Business. Except as otherwise disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, (A) there has been no material adverse change in or affecting any of the properties or assets described in the Registration Statement, the Disclosure Package or the Prospectus as owned or leased by the Company and its subsidiaries (collectively, the “Properties”), considered as a whole, or in the condition, financial or otherwise, or in the earnings or business of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise, (C) there has been no liability or obligation, direct or contingent (including off-balance sheet obligations), which is material to the Company and its subsidiaries considered as one enterprise, incurred by the Company or any of its subsidiaries, except obligations incurred in the ordinary course of business, and (D) there has been no distribution of any kind declared, paid or made by the Company on any class of its shares of Common Stock or other form of ownership interests.

 

(i) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing with the State Department of Assessments and Taxation of Maryland and has all the requisite corporate power and authority to own, lease and operate its Properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus and enter into and perform its obligations under this Agreement, and is duly qualified as a foreign corporation to transact business and is in good standing in each other  jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, singly or in the aggregate, result in a Material Adverse Effect.

 

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(j) [Reserved].

 

(k) Significant Subsidiaries. The subsidiaries listed on Schedule 2(k)(i) are the only subsidiaries of the Company that meet the definition of “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X). The only subsidiaries of the Company are the subsidiaries listed on Schedule 2(k)(ii) or on Exhibit 21 to the Company’s Annual Report on Form 10-K filed with the Commission on February 26, 2019. Each of the significant subsidiaries of the Company listed on Schedule 2(k)(i) (the “Significant Subsidiaries”) has been duly organized and is validly existing and in good standing under the laws of its respective state of organization and has all the requisite power and authority to own, lease and operate its Properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus, and is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not, singly or in the aggregate, result in a Material Adverse Effect; all of the issued equity securities of each Significant Subsidiary, in the case of a corporation, have been duly authorized and validly issued and are fully paid and non-assessable, and, in the case of a limited liability company, are validly issued and purchasers of such equity securities will have no obligation to make payments to the Significant Subsidiary or its creditors (other than the purchase price for the equity securities) or contributions to the Significant Subsidiary or its creditors solely by reason of the purchasers’ ownership of such equity securities, and, in each case, are owned, directly or through other subsidiaries of the Company, by the Company, free and clear of any pledge, lien, encumbrance or claim.

 

(l) Capitalization. The authorized, issued and outstanding shares of capital stock of the Company is as set forth under the headings “Description of Common Stock” and “Description of Preferred Stock” in the Registration Statement, as modified by the description of the number of shares of Common Stock outstanding set forth under the caption “The Offering” in the General Disclosure Package and the Prospectus (except for subsequent issuances, if any, pursuant to this Agreement or pursuant to reservations, agreements or employee benefit plans referred to in the Registration Statement, the General Disclosure Package and the Prospectus). Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, (i) no shares of Common Stock are reserved for any purpose, (ii) there are no outstanding securities convertible into or exchangeable for any shares of Common Stock of the Company and (iii) there are no outstanding options, rights (preemptive or otherwise) or warrants to purchase or subscribe for shares of Common Stock or any other securities of the Company. The outstanding shares of Common Stock of the Company have been duly authorized and are validly issued, fully paid and non-assessable. None of the outstanding shares of Common Stock of the Company were issued in violation of the preemptive or other similar rights of any security holder of the Company.

 

(m) No Equity Awards. Except for as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has no outstanding stock options or other equity-based awards of or to purchase shares of Common Stock pursuant to an equity-based compensation plan or otherwise.

 

(n) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by all necessary corporate action on the part of the Company.

 

(o) Authorization and Description of Shares. The Shares have been duly authorized for issuance and sale to the Agents pursuant to this Agreement and, when the Shares have been issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, the Shares will be validly issued and fully paid and non-assessable; and the issuance of the Shares is not subject to the preemptive, resale rights, rights of first refusal or other similar rights of any security holder of the Company. The Common Stock conforms in all material respects to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same. No holder of any of the Shares will be subject to personal liability solely by reason of being such a holder. The certificates, if any, to be used to evidence the Shares will, at each Applicable Time, be in substantially the form filed as an exhibit to the Registration Statement and will comply in all material respects with all applicable legal requirements, the requirements of the charter and bylaws of the Company and the requirements of the New York Stock Exchange (the “NYSE”).

 

(p) Registration Rights. There are no persons with registration rights or other similar rights to have any  securities registered for sale pursuant to the Registration Statement or otherwise registered for sale by the Company under the 1933 Act.

 

(q) Absence of Violations, Defaults and Conflicts. Neither the Company nor any of its subsidiaries is (A) in

 

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violation of its respective charter, bylaws, certificate of limited partnership, agreement of limited partnership or other organizational document, (B) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the Properties or any other properties or assets of the Company or any of its subsidiaries is subject (collectively, “Agreements and Instruments”), except for such defaults that would not, singly or in the aggregate, result in a Material Adverse Effect, or (C) 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 the Company or any of its subsidiaries or the Properties or any of its other properties, assets or operations (each, a “Governmental Entity”), except for such violations that would not, singly or in the aggregate, result in a Material Adverse Effect. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein and therein and in the Registration Statement, the General Disclosure Package and the Prospectus (including the issuance and sale of the Shares and the use of the net proceeds from the sale of the Shares as described therein under the caption “Use of Proceeds” in the Prospectus Supplement) and compliance by the Company with its obligations hereunder and (to the extent a party thereto) thereunder have been duly authorized by all necessary corporate or limited partnership action, as applicable, and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or to the actual knowledge of the Company result in the creation or imposition of any lien, charge or encumbrance upon the Properties or any other properties or assets of the Company or any of its subsidiaries pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances as are described in or contemplated by the Registration Statement, the General Disclosure Package or the Prospectus that would not, singly or in the aggregate, result in a Material Adverse Effect), nor will such action result in any violation of (i) the provisions of the charter, bylaws, certificate of limited partnership, agreement of limited partnership or other organizational document, as applicable, of the Company or any of its subsidiaries or (ii) to the actual knowledge of the Company after due inquiry, any applicable law, statute, rule, regulation, judgment, order, writ or decree of any Governmental Entity, except in the case of clause (ii) only, for any such violation that would not, singly or in the aggregate, result in a Material Adverse Effect. As used herein, a “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 the Company or any of its subsidiaries.

 

(r) Absence of Labor Dispute. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the actual knowledge of the Company after due inquiry, is imminent, which, in any such case, would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(s) Absence of Proceedings. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no action, suit, proceeding, inquiry or investigation pending, or, to the actual knowledge of the Company after due inquiry, threatened, against or affecting the Company or any of its subsidiaries, which is required to be disclosed in the Registration Statement or the Prospectus (other than as disclosed therein), or which would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect, or which would materially and adversely affect the consummation of the transactions contemplated in this Agreement, or the performance by the Company of its obligations hereunder. The aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of the Properties or their respective other properties or assets is the subject which are not described in the Registration Statement, the General Disclosure Package and the Prospectus, including ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.

 

(t) Accuracy of Exhibits. There are no contracts or documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that have not been so described or filed as required.

 

(u) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any Governmental Entity is necessary or required for the performance by the Company of its obligations hereunder or in connection with the offering, issuance or sale of the Shares hereunder or the consummation of the transactions contemplated by this Agreement, except such as have been already obtained or as may be  required under the 1933 Act, the 1933 Act Regulations, the rules of the NYSE, the securities laws, real estate syndication laws of any U.S. state or non-U.S. jurisdiction or the rules and bylaws of the Financial Industry Regulatory Authority, Inc. (“FINRA”).

 

(v) Possession of Licenses and Permits. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, to the actual knowledge of the Company after due inquiry, the Company and its

 

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subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Entities necessary to conduct the business now operated by them, except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. To the actual knowledge of the Company after due inquiry, the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect. To the actual knowledge of the Company after due inquiry, all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

 

(w) Title to Property. (A) Each of the Company, any of its subsidiaries or any joint venture in which the Company or any of its subsidiaries owns an interest (each such joint venture being referred to as a “Related Entity”), as the case may be, has good and marketable fee or leasehold title to the Properties, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind (excluding taxes, assessments and fees not yet due and payable), other than those that (1) are described in the Registration Statement, the General Disclosure Package and the Prospectus or (2) to the actual knowledge of the Company after due inquiry, would not, singly or in the aggregate, materially affect the value of any of the Properties and do not materially interfere with the use made and proposed to be made of any of the Properties by the Company, any of its subsidiaries or any Related Entity; (B) none of the Company, any of its subsidiaries or any Related Entity owns any real property other than the Properties; (C) to the actual knowledge of the Company after due inquiry, each of the ground leases, subleases and sub-subleases relating to a Property, if any, material to the business of the Company and its subsidiaries, considered as one enterprise, are in full force and effect, with such exceptions as do not materially interfere with the use made or proposed to be made of such Properties (taken as a whole) by the Company, any of its subsidiaries or any Related Entity, and (1) to the actual knowledge of the Company after due inquiry, no default or event of default has occurred under any such ground lease, sublease or sub-sublease with respect to any of the Properties and none of the Company, any of its subsidiaries or any Related Entity has received any notice of any event which, whether with or without the passage of time or the giving of notice, or both, would constitute a default under such ground lease, sublease or sub-sublease and (2) none of the Company, any of its subsidiaries or any Related Entity has received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company, any of its subsidiaries or any Related Entity under any of the material ground leases, subleases or sub-subleases mentioned above, or affecting or questioning the rights of the Company, any of its subsidiaries or any Related Entity to the continued possession of the leased, subleased or sub-subleased premises under any such ground lease, sublease or sub-sublease; (D) all liens, charges, encumbrances, claims or restrictions on any of the Properties and the assets of the Company, any of its subsidiaries or any Related Entity that are required to be disclosed in the Registration Statement or the Prospectus are disclosed therein; (E) to the actual knowledge of the Company after due inquiry, no tenant under any of the leases at the Properties or any other party has a right of first refusal, right of first offer or an option to purchase any of the Properties, except for such rights or options that have been expressly waived in writing by such parties, which written waivers have been provided to the Representatives; (F) to the actual knowledge of the Company after due inquiry, none of the Properties fails to comply with all applicable codes, laws and regulations (including, without limitation, building and zoning codes, laws and regulations and laws relating to access to the Properties), except if and to the extent disclosed in the Registration Statement, the General Disclosure Package or the Prospectus and except for such failures to comply that would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect; (G) the mortgages and deeds of trust, if any, that encumber any of the Properties are not convertible into equity securities of the entity owning such Property and said mortgages and deeds of trust are not cross-defaulted or cross-collateralized with any property other than certain other Properties; and (H) none of the Company, any of its subsidiaries or any Related Entity or, to the actual knowledge of the Company after due inquiry, any lessee of any of the Properties is in default under any of the leases governing the Properties and there is no event which, whether with or without the passage of time or the giving of notice, or both, would constitute a default under any of such leases, except such defaults that would not, singly or in the aggregate, result in a Material Adverse Effect.

 

(x) Possession of Intellectual Property. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, 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 (collectively, “Intellectual Property”) reasonably necessary to conduct the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or

 

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circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

 

(y) Environmental Laws. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus and except as would not, singly or in the aggregate, result in a Material Adverse Effect, (A) none of the Company, any of its subsidiaries, any Related Entity nor, to the actual knowledge of the Company after due inquiry, any of the Properties is in violation of any Environmental Laws (as defined below), (B) the Company, its subsidiaries, the Related Entities and, to the actual knowledge of the Company after due inquiry, the Properties have all permits, authorizations and approvals required under any applicable Environmental Laws and none of the Company, its subsidiaries or the Related Entities have received any notice that any of them or any of the Properties is not in compliance with their requirements, (C) none of the Company, its subsidiaries or any Related Entity have received notice of any pending or 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 or Hazardous Material (as defined below) against the Company, any of its subsidiaries or any Related Entity or, to the actual knowledge of the Company after due inquiry, otherwise with regard to the Properties, (D) to the actual knowledge of the Company after due inquiry, 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 the Properties, the Company, any of its subsidiaries or any Related Entity relating to Hazardous Materials or any Environmental Laws, and (E) to the actual knowledge of the Company after due inquiry, none of the Properties is included or proposed for inclusion on the National Priorities List issued pursuant to CERCLA (as defined below) by the United States Environmental Protection Agency or on any similar list or inventory issued by any other federal, state or local governmental authority pursuant to Environmental Laws. As used herein, “Hazardous Material” shall mean any flammable explosives, radioactive materials, chemicals, pollutants, contaminants, wastes, hazardous wastes, toxic substances, mold and any hazardous material as defined by or regulated under any Environmental Law, including, without limitation, petroleum or petroleum products, and asbestos-containing materials. As used herein, “Environmental Law” shall mean any applicable foreign, federal, state or local law (including statute or common law), ordinance, rule, regulation or judicial or administrative order, consent decree or judgment relating to the protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Secs. 9601-9675 (“CERCLA”), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Secs. 5101-5127, the Solid Waste Disposal Act, as amended, 42 U.S.C. Secs. 6901-6992k, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Secs. 11001-11050, the Toxic Substances Control Act, 15 U.S.C. Secs. 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Secs. 136-136y, the Clean Air Act, 42 U.S.C. Secs. 7401-7671q, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. Secs. 1251-1387, and the Safe Drinking Water Act, 42 U.S.C. Secs. 300f-300j-26, as any of the above statutes may be amended from time to time, and the regulations promulgated pursuant to any of the foregoing.

 

(z) Utilities and Access. To the actual knowledge of the Company after due inquiry, water, stormwater, sanitary sewer, electricity and telephone service are all available at the property lines of each Property over duly dedicated streets or perpetual easements of record benefiting the applicable Property. To the actual knowledge of the Company after due inquiry, each of the Properties has legal access to public roads and all other roads necessary for the use of each of the Properties.

 

(aa) No Condemnation. The Company has no actual knowledge after due inquiry of any pending or threatened condemnation proceedings or zoning change or other proceeding or action that, if determined adversely, would reasonably be expected to result, singly or in the aggregate, in a Material Adverse Effect.

 

(bb) Accounting Controls and Disclosure Controls. The Company maintains effective internal control over financial reporting (as defined under Rule 13a-15 and 15d-15 of the 1934 Act Regulations) and a system of internal  accounting controls 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 GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, since the Company’s inception, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) 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. The Company maintains effective “disclosure controls and

 

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procedures” (as defined under Rule 13a-15(e) of the 1934 Act Regulations) to the extent required by such rule.

 

(cc) Compliance with the Sarbanes-Oxley Act. The Company and the Company’s officers or directors, in their capacities as such, are in material compliance with any applicable provisions of the Sarbanes-Oxley Act of 2002 and any applicable rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”), including, without limitation, Sections 402, 302 and 906 thereof.

 

(dd) Payment of Taxes. All income and other material tax returns of the Company and its subsidiaries required by law to be filed have been filed, and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. The Company and its subsidiaries have filed all other tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law except insofar as the failure to file such returns would not, singly or in the aggregate, result in a Material Adverse Effect, and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of the Company and its subsidiaries in respect of any tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional tax for any years not finally determined, except to the extent of any inadequacy that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(ee) ERISA. The Company is in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”). No “reportable event” (as defined in Section 4043 of ERISA) has occurred with respect to any “pension plan” (as defined in Section 3(2) of ERISA) for which the Company would have any liability. The Company has not incurred nor expects to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or “multi-employer plan” (as defined in Section 3(37) of ERISA), or (ii) Sections 412, 403, 431, 432 or 4971 of the Internal Revenue Code of 1986, as amended (the “Code”). Each “pension plan” for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred thereunder, whether by action or by failure to act, which would cause the loss of such qualification, except where the failure to be so qualified would not, singly or in the aggregate, result in a Material Adverse Effect.

 

(ff) Business Insurance. The Company and its subsidiaries carry or are entitled to the benefits of insurance, by recognized and reputable insurers, in such amounts and covering such risks as are commercially reasonable in the business in which the Company is engaged, and all such insurance is in full force and effect. The Company has no reason to believe that it or any of its subsidiaries will not be able to (A) renew, if desired, its existing insurance coverage as and when such policies expire or (B) obtain similar coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect. There are no claims by the Company nor any of its subsidiaries under any insurance policy as to which any insurance company has denied liability or insurance coverage, except where such denial would not simply or in the aggregate, result in a Material Adverse Effect.

 

(gg) Title Insurance. The Company and each of its subsidiaries and each Related Entity, as applicable, carries or is entitled to the benefits of title insurance on the fee interests and/or leasehold interests (in the case of a ground lease interest) with respect to each Property with recognized and reputable insurers, in an amount not less than such entity’s cost for the real property comprising such Property, insuring that such party is vested with good and insurable fee or leasehold title, as the case may be, to each such Property.

 

(hh) Investment Company Act. The Company is not required, or upon the issuance and sale of the Shares as  contemplated herein and the application of the net proceeds therefrom as described in the Registration Statement, the General Disclosure Package and the Prospectus will be required, to register as an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

(ii) Absence of Manipulation. Neither the Company nor any of its subsidiaries or other affiliates has taken nor will take, directly or indirectly, any action which is designed, or would reasonably be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

 

(jj) Foreign Corrupt Practices Act. None of the Company, any of its subsidiaries or, to the actual knowledge

 

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of the Company after due inquiry, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA. Each of the Company and its subsidiaries and, to the actual knowledge of each of the Company after due inquiry, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(kk) Money Laundering Laws. The operations of each of the Company and its subsidiaries are and have been conducted at all times in compliance with 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 Governmental Entity (collectively, the “Money Laundering Laws”). No action, suit or proceeding or, to the actual knowledge of the Company after due inquiry, inquiry or investigation by or before any Governmental Entity involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending and, to the actual knowledge of the Company after due inquiry, no such action, suit, proceeding, inquiry or investigation is threatened.

 

(ll) OFAC. None of the Company, any of its subsidiaries nor, to the actual knowledge of the Company after due inquiry, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”). The Company will not directly or indirectly use the proceeds of the sale of the Shares, or lend, contribute or otherwise make available such proceeds to any of its subsidiaries, joint venture partners or other persons, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

(mm) Statistical and Market-Related Data. Any statistical and market-related data included in the Registration Statement, the General Disclosure Package or the Prospectus are based on or derived from sources that the Company reasonably and in good faith believes to be reliable and accurate in all material respects.

 

(nn) Real Estate Investment Trust; Operating Partnership. Commencing with its taxable year ended December 31, 2015, the Company was organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust (“REIT”) under the Code, and the Company’s current and proposed method of operation will enable the Company to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2018 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 accurate and fair summaries of the legal or tax matters described therein in all material respects. The Operating Partnership has been and will be treated either as a “partnership” within the meaning of Sections 7701(a)(2) and 761(a) of the Code or an entity disregarded from the Company for federal and applicable state income tax purposes, and not as a “publicly traded partnership” taxable as a corporation under Section 7704 of the Code.

 

(oo) Prior Sales of Common Stock or OP Units. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not issued, sold or distributed any shares of Common Stock and the Operating Partnership has not issued, sold or distributed any OP Units.

 

(pp) Approval of Listing. The Shares have been approved for listing on the NYSE, subject to official notice of issuance.

 

(qq) Distributions. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus and, for the avoidance of doubt, except in connection with certain restrictive covenants contained in the Second Amended and Restated Credit Agreement, dated as of March 29, 2017, among the Company, the Operating Partnership, SunTrust Bank, as administrative agent and the other lenders party thereto, (A) the Company is not currently prohibited, directly or indirectly, from making any distributions to its stockholders and (B) neither the Operating Partnership nor any subsidiary thereof is prohibited, directly or indirectly, from making any distributions to the Company or any other subsidiary of the Operating Partnership, from making any other distribution on any of its equity interests or from repaying any loans or

 

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advances made by the Company, the Operating Partnership or any other subsidiary of the Operating Partnership.

 

(rr) Finder’s Fees. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not incurred any liability for any finder’s fees or similar payments in connection with the offering and sale of the Shares contemplated in this Agreement, except as may otherwise exist with respect to the Agents pursuant to this Agreement.

 

(ss) Certain Relationships. No relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors, officers, stockholders, partners, customers or suppliers of the Company, on the other hand, which is required to be described in the Registration Statement, the General Disclosure Package or the Prospectus which is not so described.

 

(tt) No Ratings. No securities issued by or loans to the Company or any of its subsidiaries are rated by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the 1933 Act).

 

(uu) Forward-Looking Statements. The information contained in the Registration Statement, the General Disclosure Package, the Prospectus and any Issuer Free Writing Prospectus that constitutes “forward looking” information within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act were made by the Company on a reasonable basis and reflect the Company’s good faith belief or estimate of the matters described therein.

 

(vv) No Other Materials. The Company has not distributed and, prior to the later to occur of (i) each Applicable Time and (ii) completion of the distribution of the Shares, will not distribute any prospectus (as such term is defined in the 1933 Act and the rules and regulations promulgated by the Commission thereunder) in connection with the offering and sale of the Shares other than the Registration Statement, the General Disclosure Package and the Prospectus or other materials, if any, permitted by the 1933 Act or by the rules and regulations promulgated by the Commission thereunder and approved by the Agents.

 

(ww) Certificates. Any certificate signed by any officer of the Company delivered to the Agents or to counsel for the Agents shall be deemed a representation and warranty by the Company to the Agents as to the matters covered thereby.

 

3.                                      (a) On the basis of the representations, warranties and agreements herein contained and subject to the terms and conditions set forth herein, upon an Agent’s acceptance of the terms of a Placement Notice (as defined in Section 3(b) below) or such other instructions provided by the Company to such Agent pursuant to Section 3(b) or upon receipt by such Agent of an Acceptance (as defined in Section 3(c) below), as the case may be, and unless the sale of the Placement Shares (as defined in Section 3(b) below) as described therein has been declined, suspended or otherwise terminated in accordance with the terms of this Agreement, the Company agrees to issue and sell through the applicable Agent, as sales agent, and such Agent agrees, subject to the limitations and provisions in this Section 3 or as may otherwise be agreed to between the parties from time to time, to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell as sales agent for the Company, the Shares. Sales of the Shares, if any, through any Agent acting as sales agent will be made by means of ordinary brokers’ transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.

 

(b) The Shares are to be sold on a daily basis or otherwise as shall be agreed to by the Company and the applicable Agent on any day that is a trading day for the NYSE (other than a day on which the NYSE is scheduled to close prior to its regular weekday closing time) (each, a “Trading Day”), and on which the Company has instructed such Agent to make such sales and such Agent has agreed to make such sales, in each case in accordance with Section 3(c) below. On any Trading Day, the Company may sell Shares through any one Agent of the Company’s choice in its sole discretion. For the avoidance of doubt, the foregoing limitation to sell Shares through only one of the Agents of the Company’s choice on any Trading Day shall not apply to sales solely to employees or security holders of the Company or its Subsidiaries, or to a trustee or other person acquiring such securities for the accounts of such persons in which Sandler O’Neill & Partners, L.P., Evercore Group L.L.C., SunTrust Robinson Humphrey, Inc., BB&T Capital Markets, a division of BB&T Securities, LLC, Fifth Third Securities, Inc. or Janney Montgomery Scott LLC is acting for the Company in a capacity other than as an Agent under this Agreement. Prior to the commencement of the offering, when the Company wishes to issue and sell the Shares hereunder, it will notify the applicable Agent at least one or five (as applicable) “business days,” as defined in Rule 100 of Regulation M (a “Regulation M Business Day”), prior to the Trading Day on which sales are desired to commence by e-mail notice (or other method mutually agreed to in writing by the parties) containing the parameters in accordance with which it desires the Shares to be sold, which shall at a minimum include the number of Shares desired to be issued (the “Placement Shares”), a form of which containing

 

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such minimum sales parameters necessary is attached hereto as Annex I (a “Placement Notice”). The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule I (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from the applicable Agent set forth on Schedule I as shall be set forth in a written notice from such Agent to the Company from time to time. On any Trading Day that the Company wishes to issue and sell the Shares hereunder (each, a “Placement”), the Company may, prior to 9:30 a.m. (New York City Time) on such Trading Day, instruct the applicable Agent by telephone (confirmed promptly by email, which confirmation will be promptly acknowledged by the Agent), or such other method mutually agreed to in writing by the parties, as to the maximum number of Shares to be sold by such Agent on such day (in any event not in excess of the number available for sale under the Prospectus and the currently effective Registration Statement) and the minimum price per Share at which such Shares may be sold. For purposes of this Agreement, whenever a party is required to take action or refrain from taking action one or five Regulation M Business Days prior to a particular date, the determination as to whether the applicable period shall be one or five Regulation M Business Days will depend on whether, at the particular time in question, the applicable “restricted period,” as defined in Rule 100 of Regulation M, for the Shares is one or five Regulation M Business Days.

 

(c) If the applicable Agent agrees to accept such proposed terms included in the Placement Notice (which it may decline to do for any reason in its sole discretion) or, following discussion with the Company, agrees to accept amended terms, such Agent will, prior to 4:30 p.m. (New York City Time) on the business day following the business day on which such Placement Notice is delivered to such Agent, issue to the Company a notice by e-mail (or other method mutually agreed to in writing by the parties) addressed to all of the individuals from the Company and such Agent set forth on Schedule I) setting forth the terms that such Agent is willing to accept. Where the terms provided in the Placement Notice are amended as provided for in the immediately preceding sentence, such terms will not be binding on the Company or the applicable Agent until the Company delivers to such Agent an acceptance by e-mail (or other method mutually agreed to in writing by the parties) of all of the terms of such Placement Notice, as amended (the “Acceptance”), which e-mail shall be addressed to all of the individuals from the Company and the applicable Agent set forth on Schedule I. The Placement Notice (as amended by the corresponding Acceptance, if applicable) shall be effective upon receipt by the Company of such Agent’s acceptance of the terms of the Placement Notice or upon receipt by such Agent of the Company’s Acceptance, as the case may be, unless and until (i) the entire amount of the Placement Shares set forth in the Placement Notice has been sold, (ii) the Company issues a subsequent Placement Notice with parameters superseding those on the earlier dated Placement Notice, (iii) this Agreement has been terminated under the provisions of Section 10 or (iv) either party shall have suspended the sale of the Placement Shares in accordance with the terms of this Agreement. It is expressly acknowledged and agreed that neither the Company nor the applicable Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to such Agent and either (x) such Agent accepts the terms of such Placement Notice or (y) where the terms of such Placement Notice are amended, the Company accepts such amended terms by means of an Acceptance pursuant to the terms set forth above, and then only upon the terms specified in the Placement Notice (as amended by the corresponding Acceptance, if applicable) and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice (as amended by the corresponding Acceptance, if applicable), the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable) will control.

 

(d) The Company or the applicable Agent may, upon notice to the other party hereto by telephone (confirmed promptly by e-mail to those individuals specified on Schedule I), suspend or terminate the offering of the Shares for any reason and at any time; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder or which an investor has agreed to purchase but which have not been delivered by the Company and paid for by such investor as contemplated hereby, prior to the giving of such notice.

 

(e) Under no circumstances shall the aggregate gross sale price or number of Shares sold pursuant to this Agreement exceed (i) the Maximum Amount, as reduced by the aggregate gross sales price of prior sales of Shares under this Agreement, (ii) the amount available for issuance under the Prospectus and the then currently effective Registration Statement or (iii) authorized from time to time to be issued and sold under this Agreement by the Board or the Designated Subcommittee and notified to the applicable Agent in writing. In addition, under no circumstances shall any Shares be sold at a price lower than the minimum price therefor authorized from time to time by the Company’s board of directors (the “Board”) or a duly authorized committee or subcommittee thereof (the “Designated Subcommittee”) and notified to the applicable Agent in writing. Notwithstanding anything to the contrary contained herein (other than the following sentence), the parties hereto agree that compliance with the limitations set forth in this Section 3(e) regarding the aggregate offering price of the Shares issued and sold under this Agreement shall be the sole responsibility of the Company, and the applicable Agent shall have no obligation in connection with such compliance. Each Agent covenants and agrees not to make any sales of the Shares on behalf of the Company other than as permitted by the terms of this Agreement.

 

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(f) Subject to the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable) or such other instructions provided by the Company to the applicable Agent pursuant to Section 3(b), such Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the 1933 Act, including without limitation sales made directly on the NYSE, on any other existing trading market for the Common Stock or to or through a market maker. Subject to the terms of the Placement Notice (as amended by the corresponding Acceptance, if applicable) or such other instruction provided by the Company to the applicable Agent pursuant to Section 3(b), such Agent may also sell Placement Shares by any other method permitted by law, including but not limited to privately negotiated transactions subject to the prior written approval of the Company. Notwithstanding anything to the contrary herein and for a period of time beginning one or five Regulation M Business Days, as applicable, prior to the time when the first sale pursuant to a Placement Notice occurs and continuing through the time such Placement Notice is in effect, the applicable Agent agrees that in no event will it or any of its affiliates engage in any market making, stabilization or other market or trading activity with regard to the Shares if such activity would be prohibited under Regulation M or other anti-manipulation rules under the 1933 Act or the 1934 Act.

 

(g) The compensation payable to the applicable Agent for sales of Shares in no event shall exceed 2.00% of the gross sales price of the Shares. The remaining proceeds, after further deduction for any transaction fees, transfer taxes or other similar fees, taxes or charges imposed by any federal, state, local or other governmental, regulatory or self-regulatory organization in respect of such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”). The applicable Agent shall notify the Company as promptly as practicable if any deduction described in the preceding sentence will be required.

 

(h) The applicable Agent shall provide written confirmation (which may be by e-mail) to the Company following the close of trading on the NYSE each day on which Shares are sold under this Agreement setting forth the number of Shares sold on such day, the gross sales prices of the Shares, the Net Proceeds to the Company and the compensation payable by the Company to such Agent under this Agreement with respect to such sales.

 

(i) Settlement for sales of Shares will occur on the second business day that is also a Trading Day following the trade date on which such sales are made, unless another date shall be agreed to by the Company and the applicable Agent (each such day, a “Delivery Date”). On each Delivery Date, the Shares sold through the applicable Agent for settlement on such date shall be delivered by the Company to such Agent against payment of the Net Proceeds from the sale of such Shares. Settlement for all Shares shall be effected by book-entry delivery of Shares to the applicable Agent’s account at The Depository Trust Company against payment by such Agent of the Net Proceeds from the sale of such Shares in same day funds delivered to an account designated by the Company. If the Company or its transfer agent (if applicable) shall default on its obligation to deliver Shares through the applicable Agent on any Delivery Date, the Company shall (A) indemnify and hold such Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (B) pay such Agent any commission to which it would otherwise be entitled absent such default. If the applicable Agent breaches this Agreement by failing to deliver the applicable Net Proceeds on any Delivery Date for Shares delivered by the Company, such Agent will pay the Company interest based on the effective overnight federal funds rate until such proceeds, together with such interest, have been fully paid.

 

(j) The Company agrees that any offer to sell, any solicitation of an offer to buy, or any sales of Shares or any other equity security of the Company shall only be effected by or through the applicable Agent, from the period beginning one or five Regulation M Business Days, as applicable, prior to the time when the first sale pursuant to a Placement Notice occurs and continuing through the time such Placement Notice is in effect; provided, however, that the foregoing limitation shall not apply to (i) exercise of any option, warrant, right, unit or any conversion privilege set forth in the instrument governing such security or any other security of the Company or the Subsidiaries or (ii) issuances and sales solely to employees, directors or security holders of the Company or the Subsidiaries, or to a trustee or other person acquiring such securities for the accounts of such persons.

 

(k) The Company consents to the Agents trading in the Common Stock for the Agents’ own accounts and for the accounts of their clients at the same time as sales of the Shares occur pursuant to this Agreement or pursuant to a Terms Agreement.

 

(l) The Company acknowledges and agrees that (i) there can be no assurance that the Agents will be successful in selling the Shares, (ii) the Agents may not solicit any offers to buy the Shares, (iii) the Agents will incur no liability or obligation to the Company or any other person or entity if they do not sell the Shares for any reason other than a

 

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failure by the Agents to use their commercially reasonable efforts consistent with their normal trading and sales practices to sell such Shares as required under this Section 3, subject to the limitations and provisions in this Section 3 or as may otherwise be agreed to between the parties from time to time and (iv) the Agents shall be under no obligation to purchase Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the applicable Agent and the Company in a Terms Agreement.

 

(m) At each Applicable Time, each Delivery Date and each Representation Date, the Company shall be deemed to have affirmed each representation, warranty, covenant and other agreement contained in this Agreement. Any obligation of the Agents to use their commercially reasonable efforts to sell the Shares on behalf of the Company shall be subject to the continuing accuracy of the representations and warranties of the Company, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions specified in Section 8 of this Agreement.

 

4.             Alternative Arrangements.

 

(a) If the Company wishes to issue and sell the Shares through any Agent of the Company’s choice other than as set forth in Section 3 of this Agreement (an “Alternative Placement”), it will notify the applicable Agent of the proposed terms of such Alternative Placement. If such Agent, acting as principal or agent, wishes to accept such proposed terms (which it may decline to do for any reason in its sole discretion) or, following discussions with the Company wishes to accept amended terms, such Agent and the Company will enter into a Terms Agreement, setting forth the terms of such Alternative Placement.

 

(b) The terms set forth in a Terms Agreement will not be binding on the Company or any Agent unless and until the Company and such Agent have each executed such Terms Agreement accepting all of the terms of such Terms Agreement. In the event of a conflict between the terms of this Agreement and the terms of a Terms Agreement, the terms of such Terms Agreement will control.

 

5.                                      (a) Notwithstanding any other provision of this Agreement, (i) the Company shall not offer or sell, or instruct the Agents to offer or sell, any Shares, (ii) the Company, by notice to the Agents given by telephone (confirmed promptly by e-mail), shall cancel any instructions for such offer or sale of Shares, and (iii) the Agents shall not be obligated to offer or sell any Shares, (x) at any time or during any period that the Company is or could be deemed to be, or the Agents reasonably believe that the Company is, in possession of material non-public information or (y) except as provided in Section 5(b) below, at any time from and including the date (each, an “Announcement Date”) on which the Company shall issue a press release containing, or shall otherwise publicly announce, its earnings, revenues or other results of operations (each, an “Earnings Announcement”) through and including the time that is twenty-four (24) hours after the time that the Company files (a “Filing Time”) a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K that includes consolidated financial statements as of and for the same period or periods, as the case may be, covered by such Earnings Announcement. For purposes of this Section 5(a) and Section 5(b) below, references to “twenty-four (24) hours” shall exclude any hours in a day that is not a business day.

 

(b) If the Company wishes to offer or sell Shares on any date during the period from and including an Announcement Date through and including the time that is twenty-four (24) hours after the corresponding Filing Time, the Company shall (i) prepare and deliver to the Agents (with a copy to counsel to the Agents) a Current Report on Form 8-K which shall include substantially the same financial and related information as was set forth in the relevant Earnings Announcement (other than any earnings projections or similar forward-looking data) (each, an “Earnings 8-K”), in form and substance reasonably satisfactory to the Agents, and obtain the consent of the Agents to the filing thereof (such consent not to be unreasonably withheld, conditioned or delayed), (ii) provide the Agents with the officers’ certificate and accountants’ letter called for by Sections 6(n) and (p), respectively, and (iii) file (and not furnish) such Earnings 8-K with the Commission. If the Company fully satisfies the requirements of clauses (i) through (iii) of this Section 5(b), then the provisions of Section 5(a), except as otherwise provided herein, shall not be applicable for the period from and after the time at which the foregoing conditions shall have been satisfied (or, if later, the time that is twenty-four (24) hours after the time that the relevant Earnings Announcement was first publicly released) through and including the time that is twenty-four (24) hours after the Filing Time of the relevant Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be. For purposes of clarity, the parties hereto agree that (A) the delivery of any officers’ certificate or accountants’ letter pursuant to this Section 5(b) shall not relieve the Company from any of its obligations under this Agreement with respect to any such Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, including, without limitation, the obligation to deliver officers’ certificates, accountants’ letters and legal opinions and related letters as provided in Section 8 hereof, (B) this Section 5(b) shall in no way affect the provisions of clause (x) of Section 5(a), which shall have independent application and (C) the provisions of this Section 5(b) shall in no way affect the Company’s ability to file, subject to compliance with other applicable provisions of

 

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this Agreement, Current Reports on Form 8-K relating to earnings or other matters.

 

6.             The Company agrees with the Agents as follows:

 

(a) The Company will prepare the Prospectus in a form approved by the Agents and file such Prospectus pursuant to Rule 424(b) under the 1933 Act on or prior to the date that is one business day following the date hereof unless otherwise agreed to by the Agents and will make no further amendment or any supplement to the Registration Statement or Prospectus (other than through any documents incorporated therein by reference) which shall be reasonably disapproved by the Agents promptly after reasonable notice thereof; to advise the Agents, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and during the Prospectus Delivery Period (defined as such period of time after the first date of the public offering of the Shares as in the opinion of counsel for the Agents a prospectus relating to the Shares is required by law to be delivered (or required to be delivered but for Rule 172 under the 1933 Act) in connection with sales of the Shares) to furnish the Agents with copies thereof; to advise the Agents, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Issuer Free Writing Prospectus or Prospectus, of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement, any Issuer Free Writing Prospectus or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Issuer Free Writing Prospectus or Prospectus or suspending any such qualification, promptly to use its commercially reasonable efforts to obtain the withdrawal of such order.

 

(b) The Company will, during any period when the delivery of a prospectus is required in connection with the offering or sale of Shares (including, without limitation, pursuant to Rule 173(d) of the 1933 Act), if any event shall have occurred 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 in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus (including, without limitation, any document incorporated by reference therein) in order to comply with the 1933 Act or the 1934 Act, notify the Agents and, upon their request, file such document and prepare and furnish without charge to the Agents as many copies as the Agents may from time to time reasonably request of an amended or supplemented Prospectus (or incorporated document, as the case may be) that will correct such statement or omission or effect such compliance. Upon such notification, the Agents will cease selling the Shares on the Company’s behalf pursuant to this Agreement and suspend the use of the Prospectus until such amendment or supplement is filed; provided, however, that such suspension or termination shall not affect or impair the parties’ respective obligations with respect to the Shares sold hereunder or which an investor has agreed to purchase but which has not been delivered by the Company and paid for by such investor as contemplated hereby, prior to the giving of such notice.

 

(c) The Company represents and agrees that, unless it obtains the prior written consent of the Agents, and the Agents represent and agree that, unless they obtain the prior written consent of the Company, they have not made and will not make any offer relating to the Shares that would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the 1933 Act, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the 1933 Act, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Agents is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or 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 Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. The Company represents that it has satisfied the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.

 

(d) Promptly from time to time to take such action as the Agents may reasonably request to qualify the Shares for offering and sale under the securities laws of such jurisdictions as the Agents may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction.

 

(e) During the period in which a prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with any sale of Shares (including, without limitation, pursuant to Rule 173(d) of the 1933 Act), to furnish the Agents with copies of the Prospectus or a supplement to the Prospectus in New York City in such quantities as the Agents may

 

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from time to time reasonably request.

 

(f) To make generally available to its securityholders as soon as practicable an earnings statement of the Company and its consolidated subsidiaries (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158).

 

(g) To furnish to its stockholders, as soon as practicable after the end of each fiscal year, an annual report (including a balance sheet and statements of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by an independent registered public accounting firm) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the effective date of the Registration Statement), to make available to its stockholders consolidated summary financial information of the Company and its consolidated subsidiaries for such quarter in reasonable detail.

 

(h) Until the earlier of the Shares ceasing to be outstanding or the third year anniversary of the latest effective date of the Registration Statement, to furnish to the Agents copies of all reports or other communications (financial or other) furnished to stockholders, and to deliver to you as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; provided the Company will be deemed to have furnished such reports and financial statements to the Agents to the extent they are filed on the Commission’s EDGAR system.

 

(i) To use the net proceeds received by it from the sale of the Shares pursuant to this Agreement in the manner specified in each of the General Disclosure Package and the Prospectus under the caption “Use of Proceeds.”

 

(j) To use its reasonable best efforts to list the Shares on the NYSE.

 

(k) To file with the Commission such information on Form 10-K or Form 10-Q as may be required by Rule 463 under the 1933 Act.

 

(l) To comply, and to use its reasonable best efforts to cause the Company’s directors and officers, in their capacities as such, to comply, in all material respects, with all effective applicable provisions of the Sarbanes-Oxley Act and the rules and regulations thereunder.

 

(m) The Company will reasonably cooperate on a timely basis with any reasonable due diligence request from, or review conducted by, the Agents or their counsel from time to time in connection with the transactions contemplated hereby, including, without limitation, and upon reasonable notice, providing information and making available documents and appropriate corporate officers, during regular business hours and at the Company’s principal offices and/or by telephone, as the Agents or their counsel may reasonably request (each such process, a “Due Diligence Process”).

 

(n) Upon commencement of the offering of Shares under this Agreement, promptly after each (i) date the Registration Statement or the Prospectus shall be amended or supplemented (other than (1) by an amendment or supplement providing solely for the determination of the terms of the Shares, (2) in connection with the filing of any report or other document under Section 13, 14 or 15(d) of the 1934 Act or (3) by a prospectus supplement relating to the offering of other securities (including, without limitation, other shares of Common Stock)) (each such date, a “Registration Statement Amendment Date”), (ii) date on which the Company shall file (x) an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Earnings 8-K or (y) an amendment to any such report or document (each such date, a “Company Periodic Report Date”) and, (iii) reasonable request by the Agents; provided, that such request follows a Due Diligence Process (each date of any such request, a “Supplemental Request Date”) (each of the date of the commencement of the offering of Shares under this Agreement and each Registration Statement Amendment Date, Company Periodic Report Date and Supplemental Request Date is hereinafter referred to as a “Representation Date”), the Company will furnish or cause to be furnished to the Agents (with a copy to counsel to the Agents) a certificate dated such Representation Date (or, in the case of an amendment or supplement to the Registration Statement or the Prospectus (including, without limitation, by the filing of an Annual Report on Form 10-K, Quarterly Report on Form 10-Q or Earnings 8-K or any amendment thereto), the date of the effectiveness of such amendment to the Registration Statement or the date of filing with the Commission of such supplement or any such Form 10-K, Form 10-Q, Earnings 8-K or amendment thereto, as the case may be), in a form reasonably satisfactory to the Agents to the effect that the statements contained in the certificate referred to in Section 8(j) of this Agreement which was last furnished to the Agents are true and correct as of the date of such certificate as though made at and as of the date of such certificate (except that such statements shall be deemed to relate to the Registration Statement, the Prospectus and the General Disclosure Package as

 

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amended and supplemented to the date of such certificate) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 8(j), but modified as necessary to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and supplemented to the date of such certificate. As used in this paragraph, to the extent there shall be an Applicable Time on or following the applicable Representation Date, “promptly” shall be deemed to be on or prior to the next succeeding Applicable Time.

 

(o) Upon commencement of the offering of Shares under this Agreement, and promptly after each other Representation Date, the Company will furnish or cause to be furnished to the Agents (with a copy to counsel to the Agents), unless the Agents otherwise agree in writing, the written opinion and letter of counsel to the Company, dated such Representation Date (or, in the case of an amendment or supplement to the Registration Statement or the Prospectus (including, without limitation, by the filing of an Annual Report on Form 10-K or Quarterly Report on Form 10-Q or any amendment thereto), the date of the effectiveness of such amendment to the Registration Statement or the date of filing with the Commission of such supplement or any such Form 10-K, Form 10-Q or amendment thereto, as the case may be), in a form and substance reasonably satisfactory to the Agents and their counsel, of the same tenor as the opinions and letters referred to in Section 8(c) of this Agreement, but modified as necessary to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and supplemented to the date of such opinion and letter or, in lieu of such opinion and letter, counsel last furnishing any such opinion and letter to the Agents shall furnish the Agents with a letter substantially to the effect that the Agents may rely on such counsel’s last opinion and letter to the same extent as though each were dated the date of such letter authorizing reliance (except that statements in such last opinion and letter shall be deemed to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and supplemented to the date of such letter authorizing reliance). As used in this paragraph, to the extent there shall be an Applicable Time on or following the applicable Representation Date, “promptly” shall be deemed to be on or prior to the next succeeding Applicable Time. Solely for the purposes of this paragraph, the term “Representation Date” shall not include the date of filing of any Earnings 8-K or any amendment thereto.

 

(p) Upon commencement of the offering of Shares under this Agreement, and promptly after each other Representation Date, the Company will cause BDO USA, LLP, or other independent accountants reasonably satisfactory to the Agents, to furnish to the Agents (with a copy to counsel to the Agents), unless the Agents otherwise agree in writing, a letter, dated such Representation Date (or, in the case of an amendment or supplement to the Registration Statement or the Prospectus (including, without limitation, by the filing of an Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Earnings 8-K or any amendment thereto), the date of the effectiveness of such amendment to the Registration Statement or the date of filing with the Commission of such supplement or any such Form 10-K, Form 10-Q, Earnings 8-K or any amendment thereto, as the case may be), in form reasonably satisfactory to the Agents and their counsel, of the same tenor as the letter referred to in Section 8(e) hereof, but modified as necessary to relate to the Registration Statement, the Prospectus and the General Disclosure Package as amended and supplemented to the date of such letter. As used in this paragraph, to the extent there shall be an Applicable Time on or following the applicable Representation Date, “promptly” shall be deemed to be on or prior to the next succeeding Applicable Time.

 

(q) The Company will not, and will cause its subsidiaries not to, and use reasonable efforts to cause its affiliates and any person acting on their behalf not to, directly or indirectly, (i) take any action designed to or that has constituted or that reasonably would be expected to cause or result in the stabilization or manipulation of the price of any security of the Company or (ii) sell, bid for or purchase the Shares to be issued and sold pursuant to this Agreement, or pay anyone any compensation for soliciting purchases of the Shares to be issued and sold pursuant to this Agreement other than the Agents.

 

(r) During the pendency of any Placement Notice (as amended by the corresponding Acceptance, if applicable) given hereunder, (i) the Company shall provide the Agents notice no less than one or five Regulation M Business Days, as applicable, before it or any of the subsidiaries or any person acting on their behalf, directly or indirectly, offers to sell, contracts to sell, sells, grants any option to sell or otherwise disposes of any Common Stock (other than Placement Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire Common Stock; provided, that no such restriction shall apply in connection with (1) the issuance, grant or sale of Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of options or other equity awards pursuant to any stock option, stock bonus or other stock or compensatory plan or arrangement described in the Prospectus (the “Equity Plans”), (2) the issuance or sale of Common Stock pursuant to any dividend reinvestment plan that the Company may adopt from time to time, provided the implementation of such is disclosed to the Agents in advance, or (3) the redemption of OP Units pursuant to the terms of the Operating Partnership Agreement; (ii) the Company shall not, and shall cause any affiliated purchasers (as defined in Rule 100 of Regulation M) of the Company to not,

 

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bid for, purchase or induce any other persons to bid for or purchase Shares; and (iii) the Company shall provide the Agents notice no less than one or five Regulation M Business Days, as applicable, before it or any of the subsidiaries or affiliates or any person acting on their behalf engages in any special selling efforts or selling methods with regard to Shares, including but not limited to presenting at any investor conference or other similar meeting where potential investors may be present.

 

(s) [Reserved].

 

(t) The Company will use its best efforts to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2019 and for each subsequent year thereafter, unless and until the Board determines in good faith that it is no longer in the best interests of the Company and its stockholders to be so qualified.

 

(u) Until completion of the distribution of the Shares, the Company will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the rules and regulations of the Commission thereunder.

 

7.             The Company covenants and agrees with the Agents that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Shares under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Permitted Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Agents; (ii) the cost of printing or producing this Agreement, any Blue Sky memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 6(d) hereof, including the fees and disbursements of counsel for the Agents in connection with such qualification and in connection with any Blue Sky memorandum (iv) all fees and expenses in connection with listing the Shares on the NYSE; (v) the filing fees incident to, and the fees and disbursements of counsel for the Agents in connection with, securing any required review by FINRA of the terms of the sale of the Shares; (vi) the cost of preparing stock certificates, if applicable; (vii) the cost and charges of any transfer agent or registrar in connection with the issuance of the Shares; and (viii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section.

 

8.             The obligations of the Agents hereunder shall be subject, in their sole discretion, to the condition that all representations and warranties and other statements of the Company herein or in certificates of any officer of the Company delivered pursuant to the provisions hereof are true and correct as of the time of the execution of this Agreement, and as of each Representation Date, Applicable Time and Delivery Date, to the condition that the Company shall have performed all of their obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the 1933 Act on or prior to the date hereof and the Company shall have complied with all other requirements applicable to the Prospectus or any supplement thereto under Rule 424(b) (without giving effect to Rule 424(b)(8)). The Company shall have complied with all filing requirements applicable to any Issuer Limited-Use Free Writing Prospectus used or referred to after the date hereof. No stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus or any Issuer Limited-Use Free Writing Prospectus shall have been issued and no proceeding or examination for such purpose shall have been initiated or threatened by the Commission, any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus (including, without limitation, in any document incorporated by reference therein) or otherwise shall have been complied with, and the Commission shall not have notified the Company of any objection to the use of the form of the Registration Statement or any post-effective amendment thereto.

 

(b) The Agents shall have received a letter from CT Corporation, or a similar firm, indicating based on available electronic databases the good standing of the Company in its jurisdiction of organization and its good standing as a foreign entity in such other jurisdictions as the Agents may reasonably request.

 

(c) Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, counsel for the Company (or, subject to the sole discretion of the Agents in the case of any written opinion or opinions required to be delivered after the commencement of the offering of the Shares under this Agreement, the in house legal counsel for the Company) shall have furnished to you such written opinion or opinions on each date specified in Section 6(o), as the case may be, in form and substance satisfactory to counsel for the Agents, to the effect set forth in Annex II and Annex III hereto and other related matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to

 

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pass upon such matters.

 

(d) Morrison & Foerster LLP, counsel for the Agents, shall have furnished to you their written opinions in such form as you may reasonably request, on each date specified in Section 6(o).

 

(e) On each date specified in Section 6(p), BDO USA, LLP shall have furnished to the Agents a letter or letters, dated the respective dates of delivery thereof, in form and substance as previously provided to counsel to the Agents.

 

(f) (i) Neither the Company nor any of the subsidiaries shall have sustained since the date of the latest audited financial statements included in each of the General Disclosure Package and the Prospectus 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, otherwise than as set forth or contemplated in the General Disclosure Package or Prospectus, and (ii) since the respective dates as of which information is given in each of the General Disclosure Package and the Prospectus there shall not have been any change in the capital stock or long-term debt of the Company or any of the subsidiaries or any change, or any development involving a prospective change not set forth or contemplated in the General Disclosure Package or Prospectus, in or affecting the Properties, the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and the subsidiaries, otherwise than as set forth or contemplated in each of the General Disclosure Package and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the reasonable judgment of the Agents so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered on the terms and in the manner contemplated in each of the General Disclosure Package and the Prospectus.

 

(g) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the NYSE; (ii) a suspension or material limitation in trading in the Company’s securities on the NYSE; (iii) a general moratorium on commercial banking activities declared by either federal or state authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or a material adverse change in general economic, political or financial conditions, including without limitation as a result of terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United States shall be such), or any other calamity or crisis, if the effect of any such event specified in these clauses (iii) or (iv) in the reasonable judgment of the Agents makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus.

 

(h) To the extent required, the Shares to be sold shall have been duly listed on the NYSE.

 

(i) Within the Prospectus Delivery Period, the Company shall have complied with the provisions of Section 6(a) hereof with respect to the furnishing of prospectuses on the business day next succeeding the date of this Agreement.

 

(j) The Company shall have furnished or caused to be furnished to you on each Representation Date specified in Section 6(n) certificates of officers of the Company satisfactory to the Agents as to the accuracy of the representations and warranties of the Company herein at and as of such Representation Date, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Representation Date, and as to the matters set forth in subsections (a) and (f) and (m) of this Section 8.

 

(k) Upon commencement of the offering of Shares under this Agreement and on such other dates as reasonably requested by Agents, the Company will furnish or cause to be furnished promptly to the Agents a Placement Notice or such other instructions provided pursuant to Section 3(b) as requested by the Agents.

 

(l) The Company and the Agents hereby agree that the date of commencement of sales under this Agreement shall be the date the Company and the Agents mutually agree (which may be later than the date of this Agreement).

 

(m) Each Subsidiary of the Company which meets the definition of “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X) has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization, with power and authority (corporate and other) to own, lease and operate its properties and conduct its business as described in each of the General Disclosure Package and the Prospectus; each such Significant Subsidiary is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify, or be in good standing would not, individually or in the aggregate, have a Material

 

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Adverse Effect; all of the issued and outstanding capital stock or other equity interest of each such subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company, directly or through subsidiaries free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim; none of the outstanding shares of capital stock or other equity interest of each such subsidiary were issued in violation of the preemptive or other similar rights of any security holder of such security; and the Company has all necessary consents and approvals under applicable federal and state laws and regulations to own its assets and carry on its businesses as currently conducted, except for those consents and approvals that would not have a Material Adverse Effect.

 

9.                                      (a) The Company shall indemnify and hold harmless the Agents, their respective affiliates, directors and officers and each person, if any, who controls the respective Agents within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each such indemnified party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall 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 or omission or alleged omission made in the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by the Agents expressly for use therein (provided that the Company and the Agents hereby acknowledge and agree that the only information that the Agents have furnished to the Company specifically for inclusion in the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any amendment or supplement thereto, are (i) the statements set forth in the last sentence of paragraph 1, the first sentence of paragraph 3 and the second sentence of paragraph 7 under the “Plan of Distribution” in the Prospectus Supplement and (ii) such other statements as the Agents may, by notice given to the Company in writing after the date of this Agreement, have been furnished to the Company by the Agents specifically for inclusion in the Registration Statement, the Prospectus, the General Disclosure Package, any Issuer Limited-Use Free Writing Prospectus or any amendment or supplement thereto (collectively, the “Agent Information”).

 

(b) The Agents, severally and not jointly, shall indemnify and hold harmless the Company, their respective affiliates, directors and officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act and Section 20 of the 1934 Act, against any losses, claims, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the General Disclosure Package, the Prospectus, or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein 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 the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by the Agents expressly for use therein, provided that the Company and the Agents hereby acknowledge and agree that the only information that the Agents have furnished to the Company specifically for inclusion in the Registration Statement, the General Disclosure Package, the Prospectus or any individual Issuer Limited-Use Free Writing Prospectus, when considered together with the General Disclosure Package, or any amendment or supplement thereto, is the Agent Information; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

 

(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than

 

20

 

under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall 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 shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim 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 any indemnified party.

 

(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Agents on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Agents on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Agents on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total commissions received by the Agents. 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 Company on the one hand or the Agents on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agents agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Agents shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares distributed to the public were offered to the public exceeds the amount of any damages which the Agents have 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 1933 Act), as determined by a final, non-appealable order by a court of competent jurisdiction, shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentations, as determined by a final, non-appealable order by a court of competent jurisdiction.

 

(e) The remedies provided in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

(f) For purposes of clarity and without limitation to any provision of this Agreement, the obligations of the Agents under this Agreement are several and not joint.

 

10.          Termination.

 

(a) The Company shall have the right, by giving written notice as hereinafter specified, to terminate either this Agreement in its entirety or any Agent from providing services hereunder in its sole discretion at any time. Any such termination shall be without liability of any party to any other party except that (i) with respect to any pending sale through any Agent for the Company, the obligations of the Company, including in respect of compensation of such Agent, shall remain in full force and effect notwithstanding such termination and (ii) the representations and warranties in Section 2 and the provisions

 

21

 

of Sections 7, 9, 13, 14, 15, 16 and 17 of this Agreement shall remain in full force and effect notwithstanding such termination, as applicable.

 

(b) The Agents shall have the right, in their sole discretion, or any one of them in its sole discretion as to itself, by giving written notice as hereinafter specified, to terminate this Agreement at any time. Any such termination shall be without liability of any party to any other party except that the representations and warranties in Section 2 and the provisions of Sections 7, 9, 13, 14, 15, 16 and 17 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(c) This Agreement shall remain in full force and effect with respect to a party unless terminated by or with respect to such party pursuant to Section 10(a) or (b) above, as applicable, or otherwise by mutual agreement of the parties; provided, that any such termination by mutual agreement or pursuant to this clause (c) shall in all cases be deemed to provide that the representations and warranties in Section 2 and the provisions of Sections 7, 9, 13, 14, 15, 16 and 17 of this Agreement shall remain in full force and effect notwithstanding such termination.

 

(d) Any termination of this Agreement shall be effective on the date specified in such notice of termination or the date mutually agreed by the parties, as the case may be; provided, that such termination shall not be effective until the close of business on the date of receipt of such notice by the applicable Agents or the Company, or the date mutually agreed by the parties, as the case may be. If such termination shall occur prior to the Delivery Date for any sale of Stock, such sale shall settle in accordance with the provisions of Section 3(i) hereof.

 

(e) Unless terminated earlier pursuant to this Section 10, this Agreement shall terminate automatically upon the issuance and sales of Shares through the Agents that collectively equal the Maximum Amount.

 

11.          The respective indemnities, agreements, representations, warranties and other statements of the Company and the Agents, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Agents or any controlling person of the Agents, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Shares.

 

12.          If this Agreement is terminated with respect to all parties, the Company shall not then be under any liability to the Agents except as provided in Section 9 hereof, which provisions shall survive termination.

 

13.          The Company acknowledges and agrees that:

 

(a) in connection with the sale of the Shares, the Agents have been retained solely to act as sales agents, and no fiduciary, advisory or other agency relationship between the Company and the Agents has been created in respect of any of the transactions contemplated by this Agreement;

 

(b) it has been advised that the Agents and their respective affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Agents have no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and

 

(c) it waives, to the fullest extent permitted by law, any claims it may have against the Agents for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Agents shall have no liability (whether direct or indirect) to the Company 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 Company, including stockholders, employees or creditors of the Company.

 

Except as otherwise provided herein, all statements, requests, notices and agreements hereunder shall be in writing, and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agents shall be directed as follows: if to Sandler O’Neill & Partners, L.P., 1251 Avenue of the Americas, 6th Floor, New York, NY 10020, Attention: General Counsel; if to Evercore Group L.L.C., 55 East 52nd Street, 36th Floor, New York, NY 10055; if to SunTrust Robinson Humphrey, Inc., 3333 Peachtree Road NE, 11th Floor, Atlanta, GA 30326, Attention: Equity Capital Markets; if to BB&T Capital Markets, a division of BB&T Securities, LLC, Capital Markets Syndicate Desk, 901 East Byrd Street, Suite 300, Richmond, VA 23219; if to Fifth Third Securities, Inc., 424 Church Street, Maildrop: UTFC6B, Nashville, TN 37219; if to Janney Montgomery Scott LLC, 1717 Arch Street, 22nd Floor, Philadelphia, PA 19103; and with respect to each notice to any Agent a copy (for informational purposes only) to Morrison & Foerster LLP, 2000 Pennsylvania Avenue, NW Suite 6000, Washington, D.C. 20006, Attention: Justin R. Salon, Esq.; and if to the Company shall be delivered or sent by mail to Community Healthcare Trust Incorporated, 3326 Aspen Grove Drive, Suite 150, Franklin, Tennessee 37067, Attention:

 

22

 

Timothy G. Wallace, with a copy (for informational purposes only) to Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, 211 Commerce Street, Suite 800, Nashville, Tennessee 37201, Attention: Tonya Mitchem Grindon. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

14.          This Agreement shall be binding upon, and inure solely to the benefit of, the Agents, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or the Agents, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares shall be deemed a successor or assign by reason merely of such purchase.

 

15.          Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C., is open for business.

 

16.          This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

17.          This Agreement may be executed by any one or more of the parties hereto 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 instrument. If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement among the Agents and the Company.

 

23

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
COMMUNITY HEALTHCARE TRUST INCORPORATED
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Timothy G. Wallace
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Timothy G. Wallace
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer and President
    
	
 
    	
 
    	
 
    	
 
    
	
Accepted as of the date hereof:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SANDLER O’NEILL & PARTNERS, L.P.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Sandler O’Neill & Partners Corp.,
    	
 
    	
 
    
	
 
    	
the sole general partner
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Bob Kleinert
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Bob Kleinert
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Managing Principal
    	
 
    	
 
    

 

Signature Page to the Sales Agency Agreement

 

24

 

	
EVERCORE GROUP L.L.C.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jeffrey Jackson
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Jeffrey Jackson
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Managing Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SUNTRUST ROBINSON HUMPHREY, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Keith Carpenter
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Keith Carpenter
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BB&T CAPITAL MARKETS, A DIVISION OF BB&T SECURITIES, LLC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Reid Burford
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Reid Burford
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Managing Director
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
FIFTH THIRD SECURITIES, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Susannah Doyle Lunke
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Susannah Doyle Lunke
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Director, ECM
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
JANNEY MONTGOMERY SCOTT LLC
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ David Lau
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
David Lau
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Managing Director
    	
 
    	
 
    

 

Signature Page to the Sales Agency Agreement

 

25

 

Schedule 2(k)(i)

Significant Subsidiaries

 

The following are the only subsidiaries of the Company that meet the definition of “significant subsidiary” (as such term is defined in Rule 1-02 of Regulation S-X):

 

· The Operating Partnership

· CHCT Illinois, LLC

· CHCT Louisiana, LLC

 

26

 

Schedule 2(k)(ii)

 

	
Community Healthcare   OP, LP
    	
 
    	
Delaware
    
	
Community Healthcare Trust, LLC
    	
 
    	
Delaware
    
	
Community Healthcare Trust Services, Inc.
    	
 
    	
Tennessee
    
	
CHCT Alabama, LLC
    	
 
    	
Delaware
    
	
CHCT Arizona, LLC
    	
 
    	
Delaware
    
	
CHCT California, LLC
    	
 
    	
Delaware
    
	
CHCT Colorado, LLC
    	
 
    	
Delaware
    
	
CHCT Connecticut, LLC
    	
 
    	
Delaware
    
	
CHCT Connecticut II, LLC
    	
 
    	
Delaware
    
	
CHCT Florida, LLC
    	
 
    	
Delaware
    
	
CHCT Georgia, LLC
    	
 
    	
Delaware
    
	
CHCT Idaho, LLC
    	
 
    	
Delaware
    
	
CHCT Illinois, LLC
    	
 
    	
Delaware
    
	
CHCT Indiana, LLC
    	
 
    	
Delaware
    
	
CHCT Iowa, LLC
    	
 
    	
Delaware
    
	
CHCT Kansas, LLC
    	
 
    	
Delaware
    
	
CHCT Kentucky, LLC
    	
 
    	
Delaware
    
	
CHCT Lending, LLC
    	
 
    	
Delaware
    
	
CHCT Louisiana, LLC
    	
 
    	
Delaware
    
	
CHCT Maryland, LLC
    	
 
    	
Delaware
    
	
CHCT Massachusetts, LLC
    	
 
    	
Delaware
    
	
CHCT Michigan, LLC
    	
 
    	
Delaware
    
	
CHCT Mississippi, LLC
    	
 
    	
Delaware
    
	
CHCT Nevada, LLC
    	
 
    	
Delaware
    
	
CHCT New Jersey, LLC
    	
 
    	
Delaware
    
	
CHCT New York, LLC
    	
 
    	
Delaware
    
	
CHCT North Carolina, LLC
    	
 
    	
Delaware
    
	
CHCT Ohio, LLC
    	
 
    	
Delaware
    
	
CHCT Oklahoma, LLC
    	
 
    	
Delaware
    
	
CHCT Pennsylvania, LLC
    	
 
    	
Delaware
    
	
CHCT Rhode Island, LLC
    	
 
    	
Delaware
    
	
CHCT South Carolina, LLC
    	
 
    	
Delaware
    
	
CHCT Tennessee, LLC
    	
 
    	
Delaware
    
	
CHCT Texas, LLC
    	
 
    	
Delaware
    
	
CHCT Virginia, LLC
    	
 
    	
Delaware
    
	
CHCT Washington, LLC
    	
 
    	
Delaware
    
	
CHCT West Virginia, LLC
    	
 
    	
Delaware
    
	
CHCT Wisconsin, LLC
    	
 
    	
Delaware
    

 

27dfin-ex1039_682.htm

Exhibit 10.39

 

AMENDED AND RESTATED

AGREEMENT OF SALE AND PURCHASE

between

DONNELLEY FINANCIAL, LLC,
a Delaware limited liability company

“Seller”

and

SECA-NJ LLC,
a Delaware limited liability company

“Buyer”

with Escrow Instructions for

CHICAGO TITLE INSURANCE COMPANY

as Escrow Agent

 

 

 

Table of Contents

AND

List of exhibits and SCHEDULES

Page

	
ARTICLE 1
	
CERTAIN DEFINITIONS1
	
 

	
 
	
Section 1.1
	
Definitions1
	
 

	
 
	
Section 1.2
	
Rules of Construction5
	
 

	
ARTICLE 2
	
AGREEMENT OF PURCHASE AND SALE; PURCHASE PRICE5
	
 

	
 
	
Section 2.1
	
Agreement of Purchase and Sale5
	
 

	
 
	
Section 2.2
	
Purchase Price5
	
 

	
 
	
Section 2.3
	
Deposit5
	
 

	
 
	
Section 2.4
	
Independent Consideration6
	
 

	
 
	
Section 2.5
	
Indivisible Economic Package6
	
 

	
 
	
Section 2.6
	
Assumption of Obligations6
	
 

	
ARTICLE 3
	
BUYER’S DUE DILIGENCE/CONDITION OF THE PROPERTY6
	
 

	
 
	
Section 3.1
	
Buyer’s Inspections and Due Diligence6
	
 

	
 
	
Section 3.2
	
Delivery Period7
	
 

	
 
	
Section 3.3
	
Site Visits7
	
 

	
 
	
Section 3.4
	
Buyer’s Due Diligence Indemnity8
	
 

	
 
	
Section 3.5
	
Confidentiality8
	
 

	
 
	
Section 3.6
	
Due Diligence Period9
	
 

	
ARTICLE 4
	
TITLE AND SURVEY9
	
 

	
 
	
Section 4.1
	
Title to Real Property9
	
 

	
 
	
Section 4.2
	
9
	
 

	
 
	
Section 4.3
	
Title Insurance11
	
 

	
ARTICLE 5
	
REMEDIES AND DEPOSIT INSTRUCTIONS11
	
 

	
 
	
Section 5.1
	
Permitted Termination; Seller Default11
	
 

	
 
	
Section 5.2
	
BUYER DEFAULT; LIQUIDATED DAMAGES12
	
 

	
 
	
Section 5.3
	
Deposit Instructions12
	
 

	
 
	
Section 5.4
	
Designation of Reporting Person13
	
 

	
ARTICLE 6
	
REPRESENTATIONS AND WARRANTIES OF SELLER14
	
 

	
 
	
Section 6.1
	
Representations and Warranties of Seller14
	
 

	
 
	
Section 6.2
	
Limited Liability15
	
 

			
	
 
	
-i-
	
 

 

Table of Contents

(continued)

Page

 

	
 
	
Section 6.3
	
Seller’s Knowledge16
	
 

	
 
	
Section 6.4
	
Liability of Representations and Warranties16
	
 

	
 
	
Section 6.5
	
Amendment to Schedule16
	
 

	
ARTICLE 7
	
REPRESENTATIONS AND WARRANTIES OF BUYER16
	
 

	
 
	
Section 7.1
	
Buyer’s Representations and Warranties16
	
 

	
 
	
Section 7.2
	
No Plan Assets18
	
 

	
 
	
Section 7.3
	
Buyer’s Independent Investigation18
	
 

	
 
	
Section 7.4
	
Buyer’s Release of Seller21
	
 

	
 
	
Section 7.5
	
Discharge22
	
 

	
ARTICLE 8
	
[RESERVED]22
	
 

	
ARTICLE 9
	
CLOSING AND CONDITIONS23
	
 

	
 
	
Section 9.1
	
Escrow Instructions23
	
 

	
 
	
Section 9.2
	
Closing23
	
 

	
 
	
Section 9.3
	
Seller’s Closing Documents and Other Items23
	
 

	
 
	
Section 9.4
	
Buyer’s Closing Documents and Other Items24
	
 

	
 
	
Section 9.5
	
Prorations and Closing Costs24
	
 

	
 
	
Section 9.6
	
Brokers26
	
 

	
 
	
Section 9.7
	
Expenses26
	
 

	
 
	
Section 9.8
	
Conditions Precedent26
	
 

	
ARTICLE 10
	
MISCELLANEOUS27
	
 

	
 
	
Section 10.1
	
Amendment and Modification27
	
 

	
 
	
Section 10.2
	
Recordation27
	
 

	
 
	
Section 10.3
	
Anti-Terrorism Law27
	
 

	
 
	
Section 10.4
	
Risk of Loss and Insurance Proceeds27
	
 

	
 
	
Section 10.5
	
Notices28
	
 

	
 
	
Section 10.6
	
Assignment29
	
 

	
 
	
Section 10.7
	
Governing Law29
	
 

	
 
	
Section 10.8
	
Counterparts; Signatures29
	
 

	
 
	
Section 10.9
	
Entire Agreement30
	
 

	
 
	
Section 10.10
	
Severability30
	
 

			
	
 
	
-ii-
	
 

 

Table of Contents

(continued)

Page

 

	
 
	
Section 10.11
	
Attorney Fees30
	
 

	
 
	
Section 10.12
	
Payment of Fees and Expenses30
	
 

	
 
	
Section 10.13
	
Confidential Information30
	
 

	
 
	
Section 10.14
	
No Joint Venture31
	
 

	
 
	
Section 10.15
	
Waiver of Jury Trial31
	
 

	
 
	
Section 10.16
	
Limited Liability32
	
 

	
 
	
Section 10.17
	
Time of Essence32
	
 

	
 
	
Section 10.18
	
No Waiver32
	
 

	
 
	
Section 10.19
	
Exculpation32
	
 

	
 
	
Section 10.20
	
Maximum Aggregate Liability32
	
 

	
 
	
Section 10.21
	
Maintenance of the Property32
	
 

	
 
	
Section 10.22
	
Local Provisions33
	
 

	
 
	
Section 10.23
	
Amendment and Restatement.34
	
 

 

 

Exhibit “A”Description of Land

Exhibit “B”Excluded Personal Property

Exhibit “C”List of Service and Other Contracts

Exhibit “D”Form of Deed

Exhibit “E”Form of Assignment and Assumption of Intangible Personal Property

Exhibit “F”Buyer’s Due Diligence Checklist

 

			
	
 
	
-iii-
	
 

 

 

AMENDED AND RESTATED AGREEMENT OF SALE AND PURCHASE

THIS AMENDED AND RESTATED AGREEMENT OF SALE AND PURCHASE (this “Agreement”), dated as of September 6, 2019, is between DONNELLEY FINANCIAL, LLC, a Delaware limited liability company (“Seller”), and SECA-NJ, LLC, a Delaware limited liability company (“Buyer”).

ARTICLE 1

CERTAIN DEFINITIONS

Section 1.1Definitions.  The parties hereby agree that the following terms shall have the meanings hereinafter set forth, such definitions to be applicable equally to the singular and plural forms, and to the masculine and feminine forms, of such terms:

1.1.1“Additional Deposit” shall have the meaning ascribed in Section 2.3.

1.1.2“Affiliate” shall mean the any person or entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Buyer or Seller, as the case may be.  For the purposes of this definition, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.

1.1.3“Agreement” shall mean this Agreement, as the same may be amended, modified, or supplemented from time to time in writing by the parties hereto.

1.1.4“Anti-Money Laundering and Anti-Terrorism Laws” shall have the meaning ascribed in subsection 7.1(h).

1.1.5“Applicable Law” shall mean all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any Governmental Entity, board of fire underwriters and similar quasi-governmental agencies or entities, and any judgment, injunction, order, directive, decree or other judicial or regulatory requirement of any Governmental Entity of competent jurisdiction affecting or relating to the Person or property in question.

1.1.6“Assignment and Assumption of Intangible Personal Property” shall have the meaning ascribed in Section 9.3.2.

1.1.7“Broker” shall mean CBRE.

1.1.8“Broker’s Commission” shall have the meaning ascribed in Section 9.6.

1.1.9“Closing” shall have the meaning ascribed in Section 9.2.

1.1.10“Closing Date” shall mean, TIME BEING OF THE ESSENCE, the date on which the Closing shall occur, but in no event later than the date set forth in Section 9.2.

 

 

1.1.11“Closing Statement” shall have the meaning ascribed in Section 9.5.1(a).

1.1.12“Contracts” shall mean the service contracts and other contracts described in Exhibit “C” and all other service contracts entered into by Seller after the Effective Date.

1.1.13“Deed” shall have the meaning ascribed in Section 9.3.1.

1.1.14“Deposit” shall have the meaning ascribed in Section 2.3.

1.1.15“Disclosure Items” shall have the meaning ascribed in Section 6.1.

1.1.16“Due Diligence” shall mean the review contemplated by Section 3.1 and related provisions of this Agreement.

1.1.17“Due Diligence Items” shall have the meaning ascribed in Section 3.2(a).

1.1.18“Due Diligence Period” shall have the meaning ascribed in Section 3.1.

1.1.19“Effective Date” shall mean September 6, 2019.

1.1.20“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.1.21“Escrow Agent” shall mean Chicago Title Insurance Company, having its office at 10 South LaSalle Street, Suite 3100, Chicago, Illinois 60603, Attention:  Beata Lewis.

1.1.22“Executive Order” shall have the meaning ascribed in subsection 7.1(h).

1.1.23“Excluded Property Records” shall have the meaning ascribed in Section 3.2.

1.1.24“Fixtures” shall mean the fixtures which are located at and affixed to any of the Improvements as of the Closing Date.

1.1.25“Government List” shall have the meaning ascribed in Section 10.3.

1.1.26“Governmental Entity” means the various governmental and quasi-governmental bodies or agencies having jurisdiction over Seller, the Real Property or any portion thereof.

1.1.27“Hazardous Materials” means (A) those substances included within the definitions of any one or more of the terms “hazardous substances,” “toxic pollutants”, “hazardous materials”, “toxic substances”, and “hazardous waste” in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (as amended), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections 1801 et seq., the Resource Conservation and Recovery Act of 1976 as amended, 42 U.S.C. Section 6901 et seq., Section 311 of the Clean Water Act, 15 U.S.C.  § 2601 et seq., 33 U.S.C. § 1251 et seq., 42 U.S.C. 7401 et seq. and the regulations and publications issued under any such laws, (B) petroleum, radon gas, lead based paint, asbestos or asbestos containing material and polychlorinated biphenyls and (C) mold 

2

 

or water conditions which may exist at the Real Property or other matters governed by any applicable federal, state or local law or statute.

1.1.28“Improvements” shall mean the buildings, improvements, and structures located on the Land, including, without limitation, all buildings and structures presently located on the Land, all apparatus, equipment and appliances used in connection with the operation or occupancy of the Land, such as heating and air conditioning systems and facilities used to provide any utility, refrigeration, ventilation, garbage disposal, or other services on the Land, and along with all on-site parking.

1.1.29“Independent Consideration” shall have the meaning ascribed in Section 2.4.

1.1.30“Initial Deposit” shall have the meaning ascribed in Section 2.3.

1.1.31“Intangible Personal Property” shall mean any intangible personal property now or hereafter owned (prior to the Closing Date) by Seller and used in the ownership, maintenance, development, and use or operation of the Real Property, Improvements and Personal Property, including, without limitation, any and all guaranties, warranties, indemnities, development rights, signage rights, plans, specifications, trade names, domain names, websites and software, together with the Licenses and Permits, but expressly excluding any trade names, domain names, websites, software and any and all other intangible personal property used by Seller exclusively in connection with the operation of Seller’s business.

1.1.32“IRS” shall mean the Internal Revenue Service.

1.1.33“IRS Reporting Requirements” shall have the meaning ascribed in Section 5.4.

1.1.34“Land” shall mean that certain parcel of land and rights, privileges and easements appurtenant thereto more particularly described on Exhibit “A” including, without limitation, all of Seller’s right, title and interest in and to (i) all rights-of-way, open or proposed streets, alleys, easements, strips or gores of land adjacent thereto, servicing such land, or used in connection with the beneficial use and enjoyment of such land and (ii) all minerals, oil, gas and other hydrocarbon substances on and under such land, as well as all air rights, water, water rights, riparian rights and water stock relating to the land.

1.1.35“Lease” shall have the meaning ascribed in Section 3.6.

1.1.36“Licensee Parties” shall mean those authorized agents, contractors, consultants and representatives of Buyer who shall inspect, investigate, test or evaluate the Property on behalf of Buyer in accordance with this Agreement.

1.1.37“Licenses and Permits” shall mean, collectively, to the extent assignable, all licenses, permits, approvals, certificates of occupancy, dedications, subdivision maps and entitlements now or hereafter issued, approved or granted by any Governmental Entity, the rights to which are intended to run with the Real Property, together with all renewals and modifications thereof.

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1.1.38“Liens” shall have the meaning ascribed in Section 4.2.

1.1.39“Operating Expenses” shall mean operating expenses, including utilities, insurance and other charges.

1.1.40“Permitted Exceptions” shall mean and include all of the following:  (i) applicable zoning and building ordinances and land use regulations; (ii) such state of facts as disclosed in the Survey, (iii) the lien of taxes and assessments not yet due and payable; (iv) any exclusions from coverage set forth in the jacket of any Owner’s Policy of Title Insurance or any standard printed exceptions; (v) any exceptions caused by Buyer, its agents, representatives or employees; (vi) such other exceptions as the Title Company shall commit to insure over, without any additional cost to Buyer, whether such insurance is made available in consideration of payment, bonding, indemnity of Seller or otherwise; and (vii) any matters deemed to constitute Permitted Exceptions under Section 4.2 hereof.

1.1.41“Permitted Outside Parties” shall have the meaning ascribed in Section 3.5.

1.1.42“Person” shall mean a natural person, partnership, limited partnership, limited liability company, corporation, trust, estate, association, unincorporated association or other entity.

1.1.43“Personal Property” shall mean all of the right, title, and interest of Seller in and to the tangible personal property, which is located at and used exclusively in connection with any of the Real Property as of the Closing Date, but specifically excluding any computer software which either is licensed to Seller, or Seller deems proprietary.  Personal Property shall not include any equipment used solely in connection with Seller’s business operations or any appraisals, budgets, strategic plans for the Real Property, internal analyses, marketing information, submissions relating to Seller’s obtaining of corporate authorization, attorney and accountant work product, attorney-client privileged documents, or other information in the possession or control of Seller which Seller deems proprietary.

1.1.44“Property” shall mean the Real Property, the Personal Property (which is not scheduled in Exhibit B), and the Intangible Personal Property.

1.1.45“Proration Items” shall have the meaning ascribed in Section 9.5.1(a).

1.1.46“Proration Time” shall have the meaning ascribed in Section 9.5.1(a).

1.1.47“Purchase Price” shall have the meaning ascribed in Section 2.2.

1.1.48“Real Property” shall mean the Land, the Improvements, and the Fixtures.

1.1.49“Reporting Person” shall have the meaning ascribed in Section 5.4.

1.1.50“Survey” shall have the meaning ascribed in Section 4.1.

1.1.51“Title Commitment” shall have the meaning ascribed in Section 4.1.

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1.1.52“Title Company” shall mean Chicago Title Insurance Company, having its office at 10 South LaSalle Street, Suite 3100, Chicago, Illinois 60603, Attention:  Lucas Kmiec.

1.1.53“Title Documents” shall have the meaning ascribed in Section 4.1.

1.1.54“Title Objections” shall have the meaning ascribed in Section 4.2.

1.1.55“Title Policy” shall have the meaning ascribed in Section 4.3.

Section 1.2Rules of Construction.  Article and Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.  All references to “Article” or “Sections” without reference to a document other than this Agreement, are intended to designate articles and sections of this Agreement, and the words “herein,” “hereof,” “hereunder,” and other words of similar import refer to this Agreement as a whole and not to any particular Article or Section, unless specifically designated otherwise.  The use of the term “including” shall mean in all cases “including but not limited to,” unless specifically designated otherwise.  No rules of construction against the drafter of this Agreement shall apply in any interpretation or enforcement of this Agreement, any documents or certificates executed pursuant hereto, or any provisions of any of the foregoing.

ARTICLE 2

AGREEMENT OF PURCHASE AND SALE; PURCHASE PRICE

Section 2.1Agreement of Purchase and Sale.  Seller agrees to sell, transfer, assign and convey to Buyer, and Buyer agrees to purchase, accept and assume, subject to the terms and conditions stated herein, all of Seller’s right, title and interest in and to the Property, except Seller shall retain the Personal Property set forth in Exhibit B, the Contracts and any intangible personal property used by Seller in connection with the operation of Seller’s business following the Closing in connection with its occupancy under the Lease (as defined herein).

Section 2.2Purchase Price.  Buyer shall pay Seller the purchase price of Thirty-One Million and NO/100 Dollars ($31,000,000.00) (“Purchase Price”) at Closing.  The Purchase Price and such other funds as may be necessary to pay Buyer’s expenses hereunder, subject to closing adjustments, shall be deposited with the Escrow Agent on or before the Closing Date in accordance with this Agreement and paid to Seller upon satisfaction of all conditions precedent to the Closing as described herein.

Section 2.3Deposit.  Within three (3) business days after this Agreement is executed by Buyer and Seller, Buyer shall deposit via wire transfer the sum of Five Hundred Thousand and NO/100 Dollars ($500,000.00) in immediately available funds as a deposit (the “Initial Deposit”) with Escrow Agent whose address is as indicated in Section 10.5.  If Buyer does not elect to terminate this Agreement pursuant to Section 3.6 below, Buyer shall deposit an additional Five Hundred Thousand and NO/100 Dollars ($500,000.00) (the “Additional Deposit”; the Initial Deposit and the Additional Deposit, together with interest earned thereon, collectively, the “Deposit”) in immediately available funds with Escrow Agent on the date that is two (2) business days after the last day of the Due Diligence Period.  The Deposit shall be non-refundable except as provided in Sections 3.6, 4.2, 5.1 and 10.4, or as otherwise expressly set forth in this Agreement, 

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and shall be held and delivered by Escrow Agent in accordance with the provisions of Article 5.  Interest earned on the Deposit shall be considered part of the Deposit and shall be deemed to have been earned by, and constitute income of, Buyer.  Except as otherwise expressly set forth herein, the Deposit shall be applied against the Purchase Price on the Closing Date.

Section 2.4Independent Consideration.  Contemporaneously with the execution and delivery of this Agreement, Buyer has paid to Seller as further consideration for this Agreement, in cash, the sum of One Hundred Dollars ($100.00) (the “Independent Consideration”), in addition to the Deposit and the Purchase Price and independent of any other consideration provided hereunder, which Independent Consideration is fully earned by Seller and is non-refundable under any circumstances.  In addition, Seller acknowledges that (a) in performing its investigation of the Property, Buyer will incur expenses, and such expenses also constitute good, valuable and sufficient consideration for this Agreement, and (b) Buyer would not have entered into this Agreement without having the opportunity to perform such investigations and without having the right to terminate this Agreement in accordance with the provisions hereof.  Accordingly, in addition to the $100 referenced above, separate consideration exists to support Seller’s obligations hereunder notwithstanding Buyer’s right to terminate this Agreement as provided herein.

Section 2.5Indivisible Economic Package.  Buyer has no right to purchase, and Seller has no obligation to sell, less than all of the Real Property, it being the express agreement and understanding of Buyer and Seller that, as a material inducement to Seller and Buyer to enter into this Agreement, Buyer has agreed to purchase, and Seller has agreed to sell, all of the Real Property, subject to and in accordance with the terms and conditions hereof.

Section 2.6Assumption of Obligations.  As additional consideration for the purchase and sale of the Real Property, at Closing Buyer will, subject to Section 7.3.2:  (a) assume and perform all obligations relating to the physical and environmental condition of the Real Property regardless of whether such obligations arise before, on or after the Closing Date; and (b) assume and agree to discharge, perform and comply with each and every liability, duty, covenant, debt or obligation of Seller of any of its Affiliates resulting from, arising out of, or in any way related to any Licenses and Permits and arising on or after the Closing Date.  The provisions of this Section 2.6 shall survive the Closing without limitation.

ARTICLE 3

BUYER’S DUE DILIGENCE/CONDITION OF THE PROPERTY

Section 3.1Buyer’s Inspections and Due Diligence.  Buyer acknowledges that commencing on the Effective Date and continuing for a period which will expire at 5:00 p.m. Pacific Time on September 25, 2019 (the “Due Diligence Period”), Buyer shall conduct its examinations, inspections, testing, studies and investigations (collectively, the “Due Diligence”) of the Property, and review information regarding the Property and such documents applicable to the Property, as Seller delivers or makes available, as set forth in Section 3.2 below.  Except for any limitations as may be imposed by Section 3.3 below, Buyer may conduct such due diligence activities, inspections, and studies of the Property as it deems necessary or appropriate, and examine and investigate to its full satisfaction all facts, circumstances, and matters relating to the Property (including the physical condition and use, availability and adequacy of utilities, access, 

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zoning, compliance with applicable laws, engineering and structural matters), title and survey matters, and any other matters it deems necessary or appropriate for purposes of consummating this transaction.  The Due Diligence shall be at Buyer’s sole cost and expense.

Section 3.2Delivery Period.

(a)On or before one (1) business day after the Effective Date, Seller shall deliver to Buyer, or make available to Buyer for inspection at the Property, the following:   (i) copies of all Contracts; and (ii) copies of any of the following items pertaining to the Property to the extent they exist and are in Seller’s possession: (x) Phase I report in connection with the Property, and any lists of Personal Property owned by Seller and located on the Real Property, (y) a copy of Seller’s existing policies of title insurance, and (z)  such other documents or materials pertaining to the Property as Buyer has scheduled in Exhibit F, or may reasonably request in connection with its Due Diligence inspections (provided, that, Seller shall have forty-eight (48) hours to respond to any such request), and which are not considered Excluded Property Records (collectively, the “Due Diligence Items”).

(b)All documents, materials, and information furnished to or made available to Buyer pursuant to this Section 3.2 are being furnished or made available to Buyer for information purposes only and without any representation or warranty by Seller with respect thereto, express or implied, except as may otherwise be expressly set forth in Section 6.1 below and as limited by the provisions of Article 6, and all such documents, materials, and information are expressly understood by Buyer to be subject to the confidentiality provisions of Section 3.5 below.

Notwithstanding any terms to the contrary in this Agreement, (a) Seller shall not be obligated or otherwise required to furnish or make available to Buyer any of the following (collectively, “Excluded Property Records”):  (i) any appraisals or other economic evaluations of, or projections with respect to, all or any portion of the Property, including, without limitation, any budgets, prepared by or on behalf of Seller or any Affiliate of Seller, and (ii) any documents, materials or information which are subject to attorney/client, work product or similar privilege, which constitute attorney communications with respect to the purchase of the Property by Seller, or which are subject to a confidentiality agreement; (b) Due Diligence Items shall not include any Excluded Property Records; and (c) Seller shall have no obligation or liability of any kind to Buyer as a result of Seller not furnishing or making available to Buyer the Excluded Property Records.

Section 3.3Site Visits.  Buyer and its Licensee Parties shall have reasonable access to the Real Property during normal business hours on at least one (1) business day prior notice to Seller.  Such notice shall describe the scope of the Due Diligence Buyer intends to conduct during Buyer’s access to the Real Property.  In all events Seller shall have the right to have a representative present during any visits to or inspections of any Real Property by Buyer or any Licensee Parties.  Buyer will conduct its Due Diligence so as to minimize any interference with the operations and occupancy of the Property.  Buyer will not enter the Real Property or contact any Governmental Entity without Seller’s prior written consent, which consent shall not be unreasonably withheld or delayed; provided, however, Buyer may make standard inquiries of Governmental Entities in connection with its Due Diligence so long as the inquiries remain subject to Section 3.5 and Section 10.13 in all respects.  In the event Buyer desires to conduct any physically intrusive Due Diligence, 

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such as sampling of soils, other media, building materials, or the like, Buyer will identify in writing exactly what procedures Buyer desires to perform and request Seller’s express written consent; provided, however, such express consent shall not be required for a Phase I investigation of the Real Property, provided, however, that such Phase I shall not include any physically intrusive testing of the Real Property.  Seller may withhold or condition consent to any physically intrusive Due Diligence in Seller’s sole and absolute discretion.  Upon receipt of Seller’s written consent, Buyer and all Licensee Parties shall, in performing such Due Diligence, comply with the agreed upon procedures and with any and all laws, ordinances, rules, and regulations applicable to the Property and will not engage in any activities which would violate any permit, license, or environmental law or regulation.  Buyer will, or shall cause any Licensee Parties to:  (a) maintain (i) commercial general liability insurance, including broad form property damage, with limits of not less than Two Million and 00/100 Dollars ($2,000,000.00) per occurrence and $2,000,000.00 in the aggregate, and (ii) umbrella excess liability insurance excess of the underlying commercial general liability insurance with limits not less than Three Million and 00/100 Dollars ($3,000,000.00) each occurrence and aggregate, in form and substance adequate to insure against all liability of Buyer and/or Buyer’s Licensee Parties, arising out of any entry or inspections of the Property pursuant to the provisions hereof, and Buyer shall provide Seller with evidence of such insurance coverage before any such entry, including evidence that Seller is an additional insured on the commercial general liability policy; (b) promptly pay when due the costs of all entry and inspections and examinations done with regard to the Property; and (c) restore the Real Property and Improvements to the condition in which the same were found before any such entry upon the Real Property and inspection or examination was undertaken.

Section 3.4Buyer’s Due Diligence Indemnity.  Buyer shall defend, indemnify, and hold Seller harmless from and against all losses, costs, damages, claims, and liabilities (whether arising out of injury or death to persons or damage to the Property or otherwise) including, but not limited to, costs of remediation, restoration and other similar activities, mechanic’s and materialmen’s liens and attorneys’ fees, arising out of or in connection with Buyer’s Due Diligence, Buyer’s breach of its obligations under Section 3.5 or Buyer’s or any Licensee Parties’ entry upon the Real Property, except to the extent any of the same are caused by the negligence or willful misconduct of Seller, Seller’s partners, shareholders or members, as applicable.  Notwithstanding the foregoing, the indemnification obligations in this Section 3.4 shall not include any losses, costs, damages, claims or liabilities arising out of the discovery of a pre-existing condition with respect to the Real Property.  The provisions of this Section 3.4 shall survive the Closing or, if the purchase and sale is not consummated, any termination of this Agreement, provided that Seller must give notice of any claim it may have against Buyer under such indemnity within one (1) year of such termination or the Closing, as applicable.

Section 3.5Confidentiality.  Buyer agrees that any information obtained by Buyer or its attorneys, partners, consultants, accountants, lenders or investors (collectively, the “Permitted Outside Parties”) in the conduct of its Due Diligence shall be treated as confidential pursuant to Section 10.13 of this Agreement and shall be used only to evaluate the acquisition of the Real Property from Seller.  Buyer further agrees that within its organization, or as to the Permitted Outside Parties, the Due Diligence Items will be disclosed and exhibited only to those persons within Buyer’s organization or to those Permitted Outside Parties who are responsible for determining the feasibility of Buyer’s acquisition of the Real Property.  Buyer agrees not to divulge the contents of such Due Diligence Items or any other information except in strict accordance with 

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Sections 3.5 and 10.13 of this Agreement.  In permitting Buyer and the Permitted Outside Parties to review the Due Diligence Items and other information to assist Buyer, Seller has not waived any privilege or claim of confidentiality with respect thereto, and no third party benefits or relationships of any kind, either express or implied, have been offered, intended or created by Seller.  The provisions of this Section 3.5 shall survive Closing without limitation.

Section 3.6Due Diligence Period.  Buyer may, by giving Seller and Escrow Agent written notice on or before the end of the Due Diligence Period, terminate its obligations hereunder without further liability except as described in this Section 3.6 and in Sections 3.4, 3.5, 9.6, 10.13 and 10.19.  If Buyer determines to proceed with the purchase of the Real Property, then Buyer shall, before the end of the Due Diligence Period, notify Seller and Escrow Agent in writing that Buyer has approved all of the matters described in Section 3.1 and 3.2.  If before the end of the Due Diligence Period, Buyer fails to give Seller such written notice, then Buyer shall be deemed to have elected to terminate this Agreement.  Buyer shall have no additional time after the expiration of the Due Diligence Period to conduct further examinations, inspections, testing, studies or investigations of any nature whatsoever regarding the Property.  If Buyer elects to terminate its obligations hereunder as described above, Buyer shall provide to Seller copies of all third-party reports and studies (excluding any appraisals, economic evaluations, projections, or confidential materials) relating to the Property in its possession, without any representation or warranty or the right to rely thereon; provided, however Seller reimburses Buyer for its actual out-of-pocket costs therefor.  During the Due Diligence Period Buyer and Seller shall negotiate in good faith a commercially standard lease between Buyer, as landlord, and Seller, as Tenant, including the following terms and otherwise in form reasonably acceptable to Seller and Buyer:  (a) a lease term of ten (10) years; (b) base rent equal to $11.50/SF per year on a triple-net (NNN) basis with two and one half percent (2.5%) annual increases; and (c) a tenant right to terminate the lease at the end of year three (3) upon payment of a termination fee in an amount equal to the base rent for months 37, 38 and 39 of the term (the “Lease”).  If, on or before the end of the Due Diligence Period, Seller and Buyer have not approved a final form of Lease and executed an amendment to this Agreement attaching such form of Lease as an exhibit, then upon expiration of the Due Diligence Period, this Agreement and both Seller’s and Buyer’s obligations hereunder shall, without further action by the parties,  automatically terminate without further liability except as described in this Section 3.6 and in Sections 3.4, 3.5, 9.6, 10.13 and 10.19, and the Deposit shall be returned to Buyer.

ARTICLE 4

TITLE AND SURVEY

Section 4.1Title to Real Property.  Seller shall make available to Buyer on the Effective Date (a) a preliminary title report or, if available, a commitment to issue an owner’s policy of title insurance with respect to the Real Property issued by the Title Company (the “Title Commitment”), (b) copies of all recorded documents referred to on Schedule B of the Title Commitment as exceptions to coverage available to the Title Company (the “Title Documents”), and (c) a current as-built ALTA survey (the “Survey”).

Section 4.2

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(a)Certain Exceptions to Title.  Buyer shall have the right to object in writing to any title matters that are not Permitted Exceptions which are disclosed in the Title Commitment or Survey (herein collectively called “Liens”) within seven (7) days after the Effective Date.  Unless Buyer shall timely object to the Liens, all such Liens shall be deemed to constitute additional Permitted Exceptions.  Any exceptions which are timely objected to by Buyer shall be herein collectively called the “Title Objections.”  Seller may elect (but shall not be obligated) to remove or cause to be removed, or insured over, at Buyer’s expense, any Title Objections, and shall be entitled to a reasonable adjournment of the Closing (not to exceed thirty (30) days) for the purpose of such removal, which removal will be deemed effected by the issuance of title insurance eliminating or insuring against the effect of the Title Objections.  Seller shall notify Buyer in writing within two (2) days after receipt of Buyer’s notice of Title Objections whether Seller elects to remove the same.  If Seller is unable to remove or endorse over any Title Objections prior to the Closing, or if Seller elects not to remove one or more Title Objections, Buyer may elect, as its sole and exclusive remedy therefore, to either (i) terminate this Agreement by giving written notice to Seller and Escrow Agent on or before the end of the Due Diligence Period, in which event the Deposit shall be paid to Buyer and, thereafter, the parties shall have no further rights or obligations hereunder except for those obligations which expressly survive the termination of this Agreement as set forth in Sections 3.4, 3.5, 9.6, 10.13 and 10.19, or (ii) waive such Title Objections, in which event such Title Objections shall be deemed additional “Permitted Exceptions” and the Closing shall occur as herein provided without any reduction of or credit against the Purchase Price.  If before the end of the Due Diligence Period, Buyer fails to give Seller and Escrow Agent such written notice, then Buyer shall be deemed to have elected to waive such Title Objections and its right to terminate this Agreement pursuant to this Section.  Notwithstanding the foregoing or anything to the contrary in this Agreement, Seller shall be obligated at Closing to cause (x) the release of any monetary liens and encumbrances affecting the Property, including the liens of any financing obtained by Seller which is secured by the Real Property, other than non-delinquent taxes and assessments, and (y) the release or other cure acceptable to Buyer and Title Company (e.g. without limitation escrowing proceeds) to remove a lien of that certain civil judgment from the Superior Court of New Jersey against RR Donnelley Financial Inc. and Donnelley Financial Services having judgment number DJ-155922-2017 (the “Judgment”) from the Title Policy (as defined below), in each case regardless of whether or not Buyer shall provide written notice of its objection to the same.

(b)Pre-Closing “Gap” Title Defects.  Whether or not Buyer shall have furnished to Seller any notice of Title Objections pursuant to the foregoing provisions of this Agreement, Buyer may notify Seller in writing of any objections to title first raised by the Title Company between (a) the end of the Due Diligence Period, and (b) the date of Closing so long as Buyer provides such written notice within three (3) business days of Buyer’s knowledge of such title matter, and in no event shall Buyer have the right to object to any title matters approved or caused by Buyer.  With respect to any objections to title set forth in such notice, Seller shall have the same option to cure and Buyer shall have the same option to accept title subject to such matters or to terminate this Agreement as those which apply to any notice of objections made by Buyer before the end of the Due Diligence Period.  If Seller elects to attempt to cure any such matters, the date for Closing shall be extended at Seller’s option by a reasonable additional time to effect such a cure, but in no event shall the extension exceed thirty (30) days after the date for Closing set forth herein.

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Section 4.3Title Insurance.  At Closing, the Title Company shall issue to Buyer or be irrevocably committed to issue to Buyer an ALTA owner’s form title policy, in the amount of the Purchase Price, insuring that fee simple title to the Real Property is vested in Buyer, or such other person or entity designated by Buyer, subject only to the Permitted Exceptions, and otherwise in the form of a proforma owner’s title policy approved by Buyer during the Due Diligence Period, including such endorsements (or modifications) to the Title Policy as Buyer may require and included in such proforma owner’s title policy (the “Title Policy”), subject only to payment of the premium therefor and subject, further, to Buyer delivering to Title Company an ALTA survey of the Real Property and Improvements, a zoning report with respect to the Property and any other deliverables as may be reasonably required by the Title Company, each in form and substance reasonably required by Title Company to issue any Buyer requested endorsements set forth in Buyer’s objection letter delivered under Section 4.2(a).  Buyer shall deliver a copy of its proforma owner’s title policy to Seller on or prior to the expiration of the Due Diligence Period.  It shall constitute a condition precedent to Buyer’s obligation to purchase the Property that, at Closing, Title Company shall be irrevocably committed to issue to Buyer the Title Policy, subject only to the payment of the premium therefor.

ARTICLE 5

REMEDIES AND DEPOSIT INSTRUCTIONS

Section 5.1Permitted Termination; Seller Default.  If the sale of the Real Property is not consummated due to the permitted termination of this Agreement by Buyer as herein expressly provided or the failure of a condition precedent to Buyer’s obligation to close as set forth in Section 9.8, the Deposit shall be returned to Buyer and Buyer will have no liability hereunder except as set forth in Sections 3.4, 3.5, 9.6, 10.13 and 10.19.  If the sale of the Real Property is not consummated due to Seller’s default hereunder, Buyer shall be entitled, as its sole and exclusive remedy, either (a) to terminate this Agreement by delivery of notice of termination to Seller, whereupon (I) Buyer shall receive a return of the Deposit and (II) only if the remedy of specific performance is unavailable to the Buyer, Seller shall reimburse Buyer for any and all out of pocket costs actually incurred by Buyer in connection with the negotiation, execution and performance of its Due Diligence under this Agreement, including, without limitation, reasonable attorneys’ fees and expenses, in an amount not to exceed $100,000, and, upon such return and reimbursement neither party shall have any further rights or obligations hereunder, or (b) to continue this Agreement pending Buyer’s action for specific performance of this Agreement.  Buyer expressly waives its rights to seek any damages in the event of Seller’s default hereunder.  Buyer shall be deemed to have elected to terminate this Agreement and receive back the Deposit if Buyer fails to file suit for specific performance against Seller in a court prescribed by Section 10.7 hereof, on or before one hundred twenty (120) days following the date upon which Closing was to have occurred.  Buyer agrees that its failure to timely commence such an action for specific performance within such one hundred twenty (120) day period shall be deemed a waiver by it of its right to commence an action for specific performance as well as a waiver by it of any right it may have to file or record a notice of lis pendens or notice of pendency of action or similar notice against any portion of the Real Property.

 

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Section 5.2BUYER DEFAULT; LIQUIDATED DAMAGES.  IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER HEREUNDER, THEN SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES, WHICH RETENTION SHALL OPERATE TO TERMINATE THIS AGREEMENT AND RELEASE BUYER FROM ANY AND ALL LIABILITY HEREUNDER, EXCEPT AS PROVIDED IN SECTIONS 3.4, 3.5, 9.6, 10.13 and 10.19.  THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER’S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.  AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT.  BY PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.  THE FOREGOING IS NOT INTENDED TO LIMIT BUYER’S SURVIVING OBLIGATIONS UNDER SECTIONS 3.4, 3.5, 9.6, 10.13 and 10.19.

	
Initials:
	
Seller __________Buyer __________

Section 5.3Deposit Instructions.  The Escrow Agent joins herein below to evidence its agreement to hold such funds in accordance with the terms and conditions of this Agreement.  Further, the following provisions shall control with respect to the rights, duties and liabilities of the Escrow Agent.

5.3.1The Escrow Agent acts hereunder as a depository only and is not responsible or liable in any manner whatsoever for the (i) sufficiency, correctness, genuineness or validity of any written instrument, notice or evidence of a party’s receipt of any instruction or notice which is received by the Escrow Agent, or (ii) identity or authority of any person executing such instruction notice or evidence.

5.3.2The Escrow Agent shall have no responsibility hereunder except for the performance by it in good faith of the acts to be performed by it hereunder, and the Escrow Agent shall have no liability except for its own willful misconduct or gross negligence.

5.3.3The Escrow Agent shall be reimbursed on an equal basis by Buyer and Seller for any reasonable expenses incurred by the Escrow Agent arising from a dispute with respect to the amount held in escrow, including the cost of any legal expenses and court costs incurred by the Escrow Agent, should the Escrow Agent deem it necessary to retain an attorney with respect to the disposition of the amount held in escrow.

5.3.4In the event of a dispute between the parties hereto with respect to the disposition of the amount held in escrow, the Escrow Agent shall be entitled, at its own discretion, to deliver such amount to an appropriate court of law pending resolution of the dispute.

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5.3.5The Escrow Agent shall invest the amount in escrow in accounts which are federally insured or which invest solely in government securities and shall be applied in accordance with the terms of this Agreement.  Interest earned thereon shall be added to the funds deposited by Buyer.

5.3.6The Title Company shall hold and dispose of the Deposit in accordance with the terms of this Agreement, or in accordance with any instruction or instructions which shall be signed jointly by both Seller and Buyer, or in accordance with separate instructions of like tenor signed by Seller and Buyer.  Once the Title Company has received its completed and signed directions to invest and form W-9, Seller and Buyer hereby instruct and authorize the Title Company to deposit the Deposit in an interest bearing account.  Without limitation on the foregoing, if the Title Company shall receive an instruction (hereinafter the “Instruction”) with respect to the Deposit, or any part thereof, from Seller but not from Buyer, or from Buyer but not from Seller (the party giving the Instruction being hereinafter referred to as the “Instructing Party” and the party which shall not have given the Instruction being hereinafter referred to as the “Non-Instructing Party”), the Title Company shall promptly transmit a copy of the Instruction received from the Instructing Party to the Non-Instructing Party.  The Instruction shall specify in detail the pertinent provisions of this Agreement that govern the Instructing Party’s instruction as to the Deposit, and if a default under this Agreement is alleged, the Instructing Party shall specify in detail the nature of such default.  The Title Company shall act in accordance with the Instruction unless within three (3) business days from receipt by the Title Company of the Instruction the Non-Instructing Party shall notify the Title Company in writing that the Title Company is not to comply with the Instruction and specifying in detail the reasons for not complying with the Instruction, and if a default under this Agreement is alleged.  If the Non-Instructing Party shall advise the Title Company not to comply with the Instruction and specifies in detail the reason for such noncompliance as aforesaid, the Title Company shall not act in accordance with the Instruction, but may thereafter either act in accordance with: (x) a new Instruction signed jointly by Seller and Buyer, or (y) a certified copy of a final court order from a court of competent jurisdiction ordering the disposition of the Deposit.

Section 5.4Designation of Reporting Person.  For the purpose of complying with any information reporting requirements or other rules and regulations of the IRS that are or may become applicable as a result of or in connection with the transaction contemplated by this Agreement, including, but not limited to, any requirements set forth in proposed Income Tax Regulation Section 1.6045-4 and any final or successor version thereof (collectively, the “IRS Reporting Requirements”), the Seller and the Buyer hereby designate and appoint the Escrow Agent to act as the “Reporting Person” (as that term is defined in the IRS Reporting Requirements) to be responsible for complying with any IRS Reporting Requirements.  The Escrow Agent hereby acknowledges and accepts such designation and appointment and agrees to fully comply with any IRS Reporting Requirements that are or may become applicable as a result of or in connection with the transaction contemplated by this Agreement.  Without limiting the responsibility and obligations of the Escrow Agent as the Reporting Person, the Seller and the Buyer hereby agree to comply with any provisions of the IRS Reporting Requirements that are not identified therein as the responsibility of the Reporting Person, including, but not limited to, the requirement that the Seller and the Buyer each retain an original counterpart of this Agreement for at least four years following the calendar year of the Closing.

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ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF SELLER

Section 6.1Representations and Warranties of Seller.  Subject to the provisions of Sections 6.2 and 7.5, Seller makes the following representations and warranties with respect to the Real Property:

(a)Status.  Seller is a limited liability company duly formed and validly existing and in good standing under the laws of the State of Delaware.

(b)Authority.  The execution and delivery of this Agreement and the performance of Seller’s obligations hereunder have been or will be duly authorized by all necessary action on the part of Seller, and this Agreement constitutes the legal, valid and binding obligation of Seller, subject to equitable principles and principles governing creditors’ rights generally.

(c)Non‐Contravention.  The execution and delivery of this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby will not (i) violate any judgment, order, injunction, decree, regulation or ruling of any court or Governmental Entity or (ii) conflict with, result in a breach of, or constitute a default under the organizational documents of Seller, any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any lease or other material agreement or instrument to which Seller is a party or by which Seller may be bound.

(d)Suits and Proceedings.  There are no legal actions, suits or similar proceedings pending, or, to Seller’s knowledge, threatened in writing against Seller or the Real Property which (i) are not adequately covered by existing insurance and (ii) if adversely determined, would adversely affect the value of the Real Property, the continued operations thereof, or Seller’s ability to consummate the transactions contemplated hereby.

(e)Non‐Foreign Entity.  Seller is not a “foreign person” or “foreign corporation” as those terms are defined in the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

(f)Consents.  No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Seller or the performance by Seller of the transactions contemplated hereby.

(g)Condemnation.  Seller has not received (i) any written condemnation notice from a Governmental Entity with respect to all or part of the Real Property, (ii) any written notice from a Governmental Entity with respect to any environmental, zoning or other land-use regulation proceedings, either instituted or pending, which would detrimentally affect the use, operation or value of the Real Property, nor (iii) has Seller received notice of any special assessment proceedings affecting the Real Property (other than as set forth in the Title Commitment).

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(h)Bankruptcy.  Seller has not (i) commenced a voluntary case, or had entered against it a petition, for relief under any federal bankruptcy act or any similar petition, order or decree under any federal or state law or statute relative to bankruptcy, insolvency or other relief for debtors, (ii) caused, suffered or consented to the appointment of a receiver, trustee, administrator, conservator, liquidator or similar official in any federal, state or foreign judicial or non-judicial proceedings, to hold, administer and/or liquidate all or substantially all of its property, or (iii) made an assignment for the benefit of creditors.

(i)No Violation of Laws.  Seller has received no written notice that the Property and the current use and operation thereof violate any applicable federal, state or municipal law, statute, code, ordinance, rule or regulation, except with respect to such violations as have been fully cured prior to the date hereof.

(j)No Other Leases at Closing.  At Closing, the Lease will be the only lease, license or other agreement granting to any party any right to occupy all or any portion of the Property.

(k)Anti-Money Laundering and Anti-Terrorism Laws

(i)Neither Seller nor, to Seller’s knowledge, its direct or indirect owners, principals, employees or affiliates, is in violation of, has been charged with or is under indictment for the violation of, or has pled guilty to or been found guilty of the violation of, any Anti-Money Laundering and Anti-Terrorism Laws (as defined below).

(ii)None of Seller or, to Seller’s knowledge, its direct or indirect owners, principals, employees or affiliates, is (A) acting, directly or indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including those persons or entities that appear on the Annex to the Executive Order, or are included on any relevant lists maintained by the Office of Foreign Assets Control of U.S. Department of Treasury (“OFAC”), the U.S. Department of State, or other U.S. government agencies, all as may be amended from time to time, (B) currently identified on any Government List (as defined below), (C) a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, or (D) an Embargoed Person (as defined below).  To Seller’s actual knowledge, none of the funds or other assets of Seller constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person.  The term “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder.

Section 6.2Limited Liability.  Seller’s representations and warranties set forth in Section 6.1 above shall survive Closing for a period of six (6) months.  Buyer will not have any right to bring any action against Seller as a result of any untruth or inaccuracy of such representations and warranties, or any such breach, unless and until the aggregate amount of all liability and losses arising out of any such untruth or inaccuracy, or any such breach, exceeds $50,000, and then only to the extent of such excess.  In addition, in no event will Seller’s liability 

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for all such breaches exceed, in the aggregate, $1,500,000.  Seller shall have no liability with respect to any of Seller’s representations, warranties and covenants herein if, prior to the Closing, Buyer has actual knowledge of any breach of a representation, warranty or covenant of Seller herein, and Buyer nevertheless consummates the transaction contemplated by this Agreement.  Sections 3.4, 3.5, 9.6, 10.13 and 10.19 will survive Closing without limitation unless a specified period is otherwise provided in this Agreement.  All other representations, warranties, covenants and agreements made or undertaken by Seller under this Agreement, unless otherwise specifically provided herein, will not survive the Closing Date but will be merged into the Deed and other closing documents delivered at the Closing.

Section 6.3Seller’s Knowledge.  For purposes of this Agreement and any document delivered at Closing, whenever the phrase “to Seller’s knowledge,” or the “knowledge” of Seller or words of similar import are used, they shall be deemed to refer to facts within the actual knowledge only of Jons S.  Besch, and no others, at the times indicated only, without duty of inquiry whatsoever.  Seller represents and warrants to Buyer that Jons S.  Besch is an individual who is knowledgeable about the Property and operation thereof and is a person within Seller responsible for the day-to-day operation of the Property.

Section 6.4Liability of Representations and Warranties.  Buyer acknowledges that the individuals named above are named solely for the purpose of defining and narrowing the scope of Seller’s knowledge and not for the purpose of imposing any liability on or creating any duties running from such individuals to Buyer.  Buyer covenants that it will bring no action of any kind against such individuals related to or arising out of these representations and warranties.

Section 6.5Amendment to Schedule.  Notwithstanding anything to the contrary in this Agreement, the Seller shall have the right to amend in writing existing and disclose in writing additional Due Diligence Items from time to time prior to the Closing to reflect changes since the date of this Agreement by providing a written copy of such amendment or supplement to the Buyer; provided, however, that any amendment or supplement to the schedules to this Agreement shall have effect only for the purposes of limiting the defense and indemnification obligations of the Seller for the inaccuracy or untruth of the representation or warranty qualified by such amendment or supplement to the Due Diligence.  In connection with any such amended or supplemental disclosure made after the expiration of the Due Diligence Period, Buyer shall be entitled to terminate the Agreement if any such amended or supplemental disclosure causes a material adverse effect with respect to the Property or Seller’s ability to consummate the transactions set forth herein by giving written notice to Seller of such termination within one (1) business day after such disclosure is received by Buyer (and the Closing Date shall be automatically extended to give Buyer sufficient time to provide such notice, if necessary), upon which termination the Deposit shall be returned to Buyer and the parties shall have no further obligations under this Agreement except any obligations that expressly survive termination hereof.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES OF BUYER

Section 7.1Buyer’s Representations and Warranties.  Buyer represents and warrants to Seller the following:

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(a)Status.  Buyer is a limited liability company duly organized and validly existing under the laws of the State of Delaware.

(b)Authority.  The execution and delivery of this Agreement and the performance of Buyer’s obligations hereunder have been or will be duly authorized by all necessary action on the part of Buyer and this Agreement constitutes the legal, valid and binding obligation of Buyer, subject to equitable principles and principles governing creditors’ rights generally.

(c)Non‐Contravention.  The execution and delivery of this Agreement by Buyer and the consummation by Buyer of the transactions contemplated hereby will not violate any judgment, order, injunction, decree, regulation or ruling of any court or Governmental Entity or conflict with, result in a breach of, or constitute a default under the organizational documents of Buyer, any note or other evidence of indebtedness, any mortgage, deed of trust or indenture, or any lease or other material agreement or instrument to which Buyer is a party or by which it is bound.

(d)Consents.  No consent, waiver, approval or authorization is required from any person or entity (that has not already been obtained) in connection with the execution and delivery of this Agreement by Buyer or the performance by Buyer of the transactions contemplated hereby.

(e)Bankruptcy.  Buyer has not (i) commenced a voluntary case, or had entered against it a petition, for relief under any federal bankruptcy act or any similar petition, order or decree under any federal or state law or statute relative to bankruptcy, insolvency or other relief for debtors, (ii) caused, suffered or consented to the appointment of a receiver, trustee, administrator, conservator, liquidator or similar official in any federal, state or foreign judicial or non-judicial proceeding, to hold, administer and/or liquidate all or substantially all of its property, or (iii) made an assignment for the benefit of creditors.

(f)Litigation.  There are no actions, claims or proceedings pending against Buyer or any of its assets or properties at law or in equity, before or by any Governmental Authority, or by any other Person, which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on Buyer’s ability to consummate the transactions contemplated hereby.

(g)Anti-Money Laundering and Anti-Terrorism Laws

(i)Neither Buyer nor, to Buyer’s knowledge, its direct or indirect owners, principals, employees or affiliates, is in violation of, has been charged with or is under indictment for the violation of, or has pled guilty to or been found guilty of the violation of, any Applicable Laws relating to terrorism, money laundering, drug-trafficking or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Action of 2001, Public Law 107-56, as amended, and Executive Order No. 13224 (Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) (the “Executive Order”) (collectively, the “Anti-Money Laundering and Anti-Terrorism Laws”).

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(ii)None of Buyer or, to Buyer’s knowledge, its direct or indirect owners, principals, employees or affiliates, is acting, directly or indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including those persons or entities that appear on the Annex to the Executive Order, or are included on any relevant lists maintained by OFAC, the U.S. Department of State, or other U.S. government agencies, all as may be amended from time to time.

(iii)Neither Buyer, nor any person controlling or controlled by Buyer, is a country, territory, individual or entity named on a “Government List” (as hereinafter defined), and the monies used in connection with this Agreement and amounts committed with respect thereto, were not and are not derived from any activities that contravene any of the Anti-Money Laundering and Anti-Terrorism Laws or any other applicable anti-money laundering or anti-bribery Applicable Laws and regulations (including funds being derived from any person, entity, country or territory on a Government List or engaged in any unlawful activity defined under Title 18 of the United States Code, Section 1956(c)(7)).

(iv)Buyer is not engaging in the transactions contemplated hereunder, directly or indirectly, in violation of any Applicable Laws relating to drug trafficking, money laundering or predicate crimes to money laundering or drug trafficking.  None of the funds of Buyer have been or will be derived from any unlawful activity with the result that the investment of direct or indirect equity owners in Buyer is prohibited by Applicable Laws or that the transactions contemplated hereunder or this Agreement is or will be in violation of Applicable Laws.  Buyer has implemented and will continue to implement procedures, and has consistently and will continue to consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times prior to and at the Closing.

Section 7.2No Plan Assets.  Buyer does not hold “plan assets” as such term is defined by Section 3(42) of ERISA.

Section 7.3Buyer’s Independent Investigation.

7.3.1Buyer has been given, or will be given before the end of the Due Diligence Period, a full opportunity to inspect and investigate each and every aspect of the Real Property, either independently or through agents of Buyer’s choosing, including, without limitation:

(a)All matters relating to title, together with all governmental and other legal requirements such as taxes, assessments, zoning, use permit requirements, and building codes;

(b)The physical condition and aspects of the Real Property, including, without limitation, the interior, the exterior, the square footage within the improvements on the Real Property, the structure, the paving, the utilities, and all other physical and functional aspects of the Real Property, including, without limitation, an examination of a Phase I environmental report in connection with the Real Property, which shall be performed or arranged by Buyer at Buyer’s sole expense;

(c)Any easements and/or access rights affecting the Real Property;

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(d)The Contracts, the Licenses and Permits, and any other documents or agreements affecting the Real Property that will remain binding on Buyer after Closing; and

(e)All other matters affecting the Real Property or delivered to Buyer by Seller in accordance with Article 3 of this Agreement.

7.3.2THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND BUYER, THIS AGREEMENT REFLECTS THE MUTUAL AGREEMENT OF SELLER AND BUYER, AND BUYER HAS CONDUCTED ITS OWN INDEPENDENT EXAMINATION OF THE PROPERTY.  OTHER THAN THE MATTERS REPRESENTED IN SECTION 6.1 HEREOF AS SUCH MAY BE LIMITED BY SECTION 6.2 HEREOF, BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR ANY OF SELLER’S AGENTS OR REPRESENTATIVES, AND BUYER HEREBY ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS HAVE BEEN MADE.  SELLER SPECIFICALLY DISCLAIMS, AND NEITHER IT NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION, WARRANTY OR ASSURANCE WHATSOEVER TO BUYER AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EITHER EXPRESS OR IMPLIED, ARE MADE BY SELLER OR RELIED UPON BY BUYER WITH RESPECT TO THE STATUS OF TITLE TO OR THE MAINTENANCE, REPAIR, CONDITION, DESIGN OR MARKETABILITY OF THE PROPERTY, OR ANY PORTION THEREOF, INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF BUYER UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (e) ANY CLAIM BY BUYER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, WITH RESPECT TO THE IMPROVEMENTS OR THE PERSONAL PROPERTY, (f) THE FINANCIAL CONDITION OR PROSPECTS OF THE PROPERTY AND (g) THE COMPLIANCE OR LACK THEREOF OF THE REAL PROPERTY OR THE IMPROVEMENTS WITH GOVERNMENTAL REGULATIONS, AND BUYER HEREBY WAIVES ANY RIGHT TO MAKE ANY CLAIM BASED ON ANY OF THE FOREGOING, IT BEING THE EXPRESS INTENTION OF SELLER AND BUYER THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE REAL PROPERTY WILL BE CONVEYED AND TRANSFERRED TO BUYER IN ITS PRESENT CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS”, WITH ALL FAULTS.  ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY IS SOLELY FOR  BUYER’S CONVENIENCE AND WAS OR WILL BE OBTAINED FROM A VARIETY OF SOURCES.  SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO (AND EXPRESSLY DISCLAIMS ALL) REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE CLOSING DOCUMENTS.  SELLER SHALL NOT BE LIABLE FOR ANY MISTAKES, OMISSIONS, MISREPRESENTATION OR ANY FAILURE TO INVESTIGATE THE PROPERTY NOR SHALL SELLER BE BOUND IN 

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ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISAL, ENVIRONMENTAL ASSESSMENT REPORTS OR OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY SELLER, ITS REPRESENTATIVES OR ANY OTHER PERSON OR ENTITY ACTING ON SELLER’S BEHALF EXCEPT, IN EACH CASE, AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY OF THE CLOSING DOCUMENTS.

Buyer represents that it is a knowledgeable, experienced and sophisticated buyer of real estate, and that it is relying solely on its own expertise and that of Buyer’s consultants in purchasing the Real Property.  Buyer acknowledges and agrees that it will have the opportunity to conduct such inspections, investigations and other independent examinations of the Property and related matters during the Due Diligence Period and will rely upon same and not upon any statements of Seller or of any officer, director, employee, agent or attorney of Seller.  Buyer acknowledges that all information obtained by or provided to Buyer will be obtained from a variety of sources and Seller will not be deemed to have represented or warranted the completeness, truth or accuracy of any of the Due Diligence Items or other such information heretofore or hereafter furnished to Buyer, except as expressly set forth in this Agreement or in any closing documents delivered by Seller at Closing.  Upon Closing, Buyer will assume the risk that adverse matters, including, but not limited to, adverse physical and environmental conditions (including any environmental conditions at, under or migrating from the Real Property), may not have been revealed by Buyer’s inspections and investigations.  Nevertheless, Buyer, upon Closing, shall be deemed to have waived and released Seller from and against any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including attorneys’ fees and court costs) of any and every kind or character, known or unknown, which Buyer might have asserted or alleged against Seller at any time by reason of or arising out of the Property.  BUYER WAIVES AND RELEASES ALL COST RECOVERY AND CONTRIBUTION AND OTHER CLAIMS AGAINST SELLER RELATING TO THE PROPERTY ARISING UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT 42 U.S.C. 9601 ET SEQ. (“CERCLA”) AND OTHER LAWS AND COMMON LAW RELATING TO PROTECTION OF THE ENVIRONMENT OR HEALTH AND SAFETY OR TO POLLUTION).  THE PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING.  Buyer acknowledges and agrees that upon Closing, Seller will sell and convey to Buyer, and Buyer will accept the Real Property, “AS IS, WHERE IS,” with all faults.  Except as expressly set forth in this Agreement or in any closing documents delivered by Seller at Closing, Buyer further acknowledges and agrees that there are no oral agreements, warranties or representations, collateral to or affecting the Property, by Seller, any agent of Seller or any third party.  Seller is not liable or bound in any manner by any oral or written statements, representations or information pertaining to the Property furnished by any real estate broker, agent, employee, servant or other person, unless the same are specifically set forth or referred to herein.  Buyer acknowledges that the Purchase Price reflects the “as is, where is” nature of this sale and any faults, liabilities, defects or other adverse matters that may be associated with the Real Property.

BUYER, WITH BUYER’S COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS, RELEASES AND WAIVERS SET FORTH IN THIS AGREEMENT, 

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AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF.  BUYER ACKNOWLEDGES AND AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH HEREIN ARE AN INTEGRAL PART OF THIS AGREEMENT, AND THAT SELLER WOULD NOT HAVE AGREED TO SELL THE REAL PROPERTY TO BUYER FOR THE PURCHASE PRICE WITHOUT THE DISCLAIMER AND OTHER AGREEMENTS SET FORTH IN THIS AGREEMENT.  THE TERMS AND CONDITIONS OF THIS SUBSECTION 7.3.2 WILL EXPRESSLY SURVIVE THE CLOSING, WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS.

The waivers and releases set forth in this Section include claims of which Buyer is presently unaware or which Buyer does not presently suspect to exist which, if known by Buyer, would materially affect Buyer’s waiver or release set forth above.

In this connection, Buyer hereby agrees and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses and other claims and liabilities which are presently unknown, unanticipated and unsuspected, and Buyer further agrees, represents and warrants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release, discharge and acquit Seller from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses and other claims and liabilities.

Buyer has initialed this Section to further indicate its awareness and acceptance of each and every provision hereof.

	
INITIALS:
	
Buyer _______

Notwithstanding anything to the contrary set forth in this Agreement, this Section 7.3.2 is not intended and shall not be construed as affecting or impairing any rights or remedies that Buyer may have against Seller with respect to (i) a breach of any of Seller’s representations or warranties contained in this Agreement, (ii) any of the obligations of Seller under this Agreement that survive the Closing as set forth in Sections 9.5.1, 9.6, 10.2, 10.13, 10.15, 10.22(a) and 10.22(b), or (iii) any acts constituting fraud by Seller as determined in a non-appealable judgement by a court of competent jurisdiction, nor is this Section 7.3.2 intended or to be construed as releasing or discharging or waiving Seller’s obligations to comply with Section 10.22 and with the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et sq. and the regulations and guidance with respect thereto promulgated by the New Jersey Department of Environmental Protection, as same may be amended from time to time (collectively “ISRA”).

Section 7.4Buyer’s Release of Seller.

7.4.1Seller Released From Liability.  Except as expressly set forth in this Agreement or in any closing documents delivered by Seller at Closing, Seller is hereby released from all responsibility and liability to Buyer regarding the condition (including its physical condition and its compliance with applicable laws, and the presence in the soil, air, structures and 

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surface and subsurface waters, of Hazardous Materials or substances that have been or may in the future be determined to be toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Property under current or future federal, state and local laws, regulations or guidelines), valuation, salability or utility of the Property, or its suitability for any purpose whatsoever.

7.4.2Buyer’s Waiver of Objections.  Buyer acknowledges that it has inspected the Real Property, observed its physical characteristics and existing conditions and had the opportunity to conduct such investigation and study on and of said Property and adjacent areas as it deemed necessary, and subject to Seller’s responsibility for any breach of the warranties and representations contained in this Agreement or in any closing documents delivered by Seller at Closing, hereby waives any and all objections to or complaints (including but not limited to actions based on federal, state or common law and any private right of action under CERCLA, RCRA or any other state and federal law to which the Real Property is or may be subject) regarding physical characteristics and existing conditions, including without limitation structural and geologic conditions, subsurface soil and water conditions and solid and hazardous waste and Hazardous Materials on, under, adjacent to or otherwise affecting the Real Property.  Except as expressly set forth in this Agreement or in any closing documents delivered by Seller at Closing, Buyer further hereby assumes the risk of changes in applicable laws and regulations relating to past, present and future environmental conditions on the Real Property, and the risk that adverse physical characteristics and conditions, including without limitation the presence of Hazardous Materials or other contaminants, may not be revealed by its investigation.

7.4.3Survival.  The foregoing waivers and releases by Buyer shall survive either (a) the Closing and the recordation of the Deed, and shall not be deemed merged into the Deed upon its recordation, or (b) any termination of this Agreement.

Section 7.5Discharge.  Notwithstanding any other provisions contained herein, or in any document or instrument delivered in connection with the transfer contemplated hereby, to the contrary (including, without limitation, any language providing for survival of certain provisions hereof or thereof), Buyer hereby acknowledges and agrees that (a) prior to Closing, Buyer’s sole recourse in the event of a breach by Seller shall be as set forth in Section 5.1 hereof, and (b) Seller shall, upon consummation of Closing, be deemed to have satisfied and fulfilled all of Seller’s covenants, indemnities, and obligations contained in this Agreement and the documents delivered pursuant hereto which are required to be satisfied and fulfilled prior to Closing, and Seller shall have no further liability to Buyer or otherwise with respect to this Agreement, the transfers contemplated hereby, or any documents delivered pursuant hereto, except to the extent of any obligation or liability Seller may have under (i) Section 6.1 as to which Seller’s liability, if any, shall be limited as provided in Section 6.2, and (ii) Sections 9.5.1, 9.6, 10.2, 10.13, 10.15, and 10.22.

ARTICLE 8

[RESERVED]

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ARTICLE 9

CLOSING AND CONDITIONS

Section 9.1Escrow Instructions.  Upon execution of this Agreement, the parties hereto shall deposit an executed counterpart of this Agreement with the Title Company, and this Agreement shall serve as escrow instructions to the Title Company as the escrow holder for consummation of the purchase and sale contemplated hereby.  Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control.

Section 9.2Closing.  The closing hereunder (“Closing”) shall be held and delivery of all items to be made at the Closing under the terms of this Agreement shall be made through escrow at Escrow Agent’s office on or before September 30, 2019 TIME BEING OF THE ESSENCE (the “Closing Date”).  Buyer shall deposit in escrow with the Escrow Agent the Purchase Price (subject to adjustments described in Section 9.5) on or prior to the Closing Date, together with all other costs and amounts to be paid by Buyer at the Closing pursuant to the terms of this Agreement, by Federal Reserve wire transfer of immediately available funds to an account to be designated by the Escrow Agent.  On the Closing Date, (a) provided all of the conditions precedent to Buyer’s obligation to close have been met or waived by Buyer, Buyer will instruct the Escrow Agent to (i) pay to Seller by Federal Reserve wire transfer of immediately available funds to an account designated by Seller, the Purchase Price (subject to adjustments described in Section 9.5), less any costs or other amounts to be paid by Seller at Closing pursuant to the terms of this Agreement, and (ii) pay all appropriate payees the other costs and amounts to be paid by Buyer at Closing pursuant to the terms of this Agreement and (b) provided all of the conditions precedent to Seller’s obligation to close have been met or waived by Seller, Seller will direct the Escrow Agent to (i) submit the Deed for recording and (ii) pay to the appropriate payees out of the proceeds of Closing payable to Seller, all costs and amounts to be paid by Seller at Closing pursuant to the terms of this Agreement.  It shall constitute a condition precedent to Seller’s obligations to consummate the Closing hereunder that all of the material representations, warranties, covenants, and agreements of Buyer contained herein shall be true and correct and/or shall have been performed, as the case may be, in all material respects.

Section 9.3Seller’s Closing Documents and Other Items.  At or before Closing, Seller shall deposit into escrow the following items:

9.3.1A duly executed and acknowledged Bargain and Sale Deed With Covenants Against Grantor’s Acts for the Real Property in the form attached hereto as Exhibit “D” (the “Deed”);

9.3.2Two (2) duly executed counterparts of an Assignment and Assumption of Intangible Personal Property in the form attached hereto as Exhibit “E” (the “Assignment and Assumption of Intangible Personal Property”);

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9.3.3An affidavit pursuant to Section 1445(b)(2) of the Code, and on which Buyer is entitled to rely, that the transferor of the Real Property is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code;

9.3.4Seller shall deliver to Buyer a set of keys to the Real Property on the Closing Date.  Location of any of the items referred to in this subsection at the Real Property on the Closing Date shall be deemed to be delivery to Buyer;

9.3.5Such other documents as may be reasonably required by the Title Company or as may be agreed upon by Seller and Buyer to consummate the purchase of the Real Property as contemplated by this Agreement, including, without limitation, any additional documents required by the applicable state, county, city or municipality to consummate the purchase of the Real Property as contemplated by this Agreement;

9.3.6Two (2) duly executed counterparts of the Lease;

9.3.7Two (2) duly executed counterparts of the Closing Statement;

9.3.8A duly executed New Jersey Seller Residency Certification/Exemption  (form GIT/REP-3) and Affidavit of Consideration for use by Seller (form RTF-1); and

9.3.9A duly executed owner’s affidavit reasonably acceptable to Title Company addressing matters as may be reasonably requested by Title Company in order to issue the Title Policy.

Section 9.4Buyer’s Closing Documents and Other Items.  At or before Closing, Buyer shall deposit into escrow the following items:

9.4.1The balance of the Purchase Price and such additional funds as are necessary to close this transaction;

9.4.2Two (2) duly executed counterparts of the Assignment and Assumption of Intangible Personal Property;

9.4.3Two (2) duly executed counterparts of the Lease;

9.4.4Such other documents as may be reasonably required by the Title Company or as may be agreed upon by Seller and Buyer to consummate the purchase of the Real Property as contemplated by this Agreement, including, without limitation, any additional documents required by the applicable state, county, city or municipality to consummate the purchase of the Real Property as contemplated by this Agreement; and

9.4.5Two (2) duly executed counterparts of the Closing Statement.

Section 9.5Prorations and Closing Costs.

9.5.1

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(a)Seller and Buyer agree to adjust, as of 11:59 p.m. on the day immediately preceding the Closing Date (the “Proration Time”), the following (collectively, the “Proration Items”):  real estate and personal property taxes and assessments (subject to the terms of 9.5.1(b) below), utility bills (except as hereinafter provided), and Operating Expenses payable by the owner of the Real Property.  Seller will be charged and credited for the amounts of all of the Proration Items relating to the period up to and including the Proration Time, and Buyer will be charged and credited for all of the Proration Items relating to the period after the Proration Time.  Such preliminary estimated Closing prorations shall be set forth on a preliminary closing statement to be prepared by Seller and submitted to Buyer for Buyer’s approval prior to the Closing Date (the “Closing Statement”).  The Closing Statement, once agreed upon, shall be signed by Buyer and Seller and delivered to the Escrow Agent for purposes of making the preliminary proration adjustment at Closing subject to the final cash settlement provided for below.  The preliminary proration shall be paid at Closing by Buyer to Seller (if the preliminary prorations result in a net credit to Seller) or by Seller to Buyer (if the preliminary prorations result in a net credit to Buyer) by increasing or reducing the cash to be delivered by Buyer in payment of the Purchase Price at the Closing.  If the actual amounts of the Proration Items are not known as of the Proration Time, the prorations will be made at Closing on the basis of the best evidence then available (and, in the case of ad valorem real estate and personal property taxes, the last available tax bill); thereafter, when actual figures are received (not to exceed 9 months after closing), re-prorations will be made on the basis of the actual figures, and a final cash settlement will be made between Seller and Buyer.  No prorations will be made in relation to insurance premiums, and Seller’s insurance policies will not be assigned to Buyer.  Final readings and final billings for utilities will be made if possible as of the Proration Time, in which event no proration will be made at Closing with respect to utility bills.  Seller will be entitled to all deposits presently in effect with the utility providers, and Buyer will be obligated to make its own arrangements for deposits with the utility providers.  The provisions of this Section 9.5.1(a) will survive the Closing for twelve (12) months.

(b)All ad valorem real estate taxes with respect to the Real Property (to the extent not prorated in (a) above) not delinquent as of Closing shall be prorated as of the Proration Time on a cash basis for the calendar year in which the Closing occurs, regardless of the year for which such taxes are assessed, and Buyer will pay all increases in such taxes due to the change in ownership or use of the Real Property contemplated by this Agreement, and the same will not be prorated.  Notwithstanding the foregoing, if any such taxes are payable directly by Seller pursuant to the Lease, then such amounts shall not be prorated.

(c)Buyer shall receive a credit against the Purchase Price at Closing for all payments due or owing under any Contracts for periods prior to the Closing Date, which amounts shall be prorated as of the Proration Time.  If Seller has paid any amounts under any Contracts for periods after the Proration Time, Buyer shall pay such amounts to Seller at Closing in addition to the Purchase Price.  Notwithstanding the foregoing, if any of the Contracts will be held by Seller pursuant to the Lease, then amounts with respect to such Contracts shall not be prorated.

(d)Seller shall pay (i) all charges and premiums payable with respect to the Title Policy (excluding the cost of any endorsements to the Title Policy but including the cost of any title examination fees) that is allocable to standard coverage, (ii) one-half (1/2) of all escrow 

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charges, (iii) the recording fees in connection with recording the Deed, (iv) all documentary or other state, county or local transfer taxes payable in connection with the sale contemplated herein, (v) all costs related to the release of any monetary liens and encumbrances affecting the Property, other than non-delinquent taxes and assessments, and the Judgment, including, all recording fees in connection therewith, and (vi) any additional costs and charges customarily charged to sellers in accordance with common escrow practices in the county in which the Real Property is located, other than those costs and charges specifically required to be paid by Buyer hereunder.  Buyer shall pay (w) the portion of the premium for the Title Policy that is allocable to extended coverage and the cost of any endorsements to the Title Policy requested by Buyer or Buyer’s lender, if any, (x) the cost of the Survey, (y) one-half (1/2) of all escrow charges, and (z) any additional costs and charges customarily charged to buyers in accordance with common escrow practices in the county in which the Real Property is located (including without limitation the New Jersey “mansion tax”), other than those costs and charges specifically required to be paid by Seller hereunder.

Section 9.6Brokers.  Buyer hereby represents and warrants to Seller that it did not employ or use any broker or finder to arrange or bring about this transaction, and that there are no claims or rights for brokerage commissions or finder’s fees in connection with the transactions contemplated by this Agreement, other than the commission (“Broker’s Commission”) required to be paid by Seller to Broker pursuant to a separate agreement between Seller and Broker.  Seller represents and warrants that Seller has not employed any broker with respect to this transaction, other than Broker, and Seller shall only pay the Broker’s Commission.  If any person brings a claim for a commission or finder’s fee based upon any contact, dealings, or communication with Buyer, then Buyer shall defend Seller from such claim, and shall indemnify Seller and hold Seller harmless from any and all costs, damages, claims, liabilities, or expenses (including, without limitation, reasonable attorneys’ fees and disbursements) incurred by Seller with respect to the claim.  The provisions of this Section 9.6 shall survive the Closing or, if the purchase and sale is not consummated, any termination of this Agreement.

Section 9.7Expenses.  Except as provided in Sections 9.5 and 9.6, each party hereto shall pay its own expenses incurred in connection with this Agreement and the transactions contemplated hereby, including, without limitation, in the case of Buyer, all third-party engineering and environmental review costs and all other Due Diligence costs.

Section 9.8Conditions Precedent. 

The following shall be conditions precedent to Buyer’s obligation to close:

(a)Each of the conditions precedent set forth in Section 4.3 and Section 10.22(a) have been satisfied in full. 

(b)All of Seller’s representations and warranties contained in or made pursuant to this Agreement shall have been true and correct when made and shall be true and correct as of the Closing Date.

(c)Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement set forth in Section 4.2, Article 9, Section 10.4 and Section 10.21.

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The conditions precedent contained in this Section are intended solely for the benefit of Buyer.  If any of the conditions precedent is not satisfied, Buyer shall have the right in its sole discretion either to waive in writing the condition precedent and proceed with the purchase of the Property or terminate this Agreement.  If Buyer shall not have approved or waived in writing all of the conditions precedent on or prior to the Closing Date, then this Agreement shall automatically terminate.  In the event of the termination of this Agreement pursuant to the provisions of this Section, then the Deposit shall be returned to Buyer.

ARTICLE 10

MISCELLANEOUS

Section 10.1Amendment and Modification.  Subject to applicable law, this Agreement may be amended, modified, or supplemented only by a written agreement signed by Buyer and Seller.

Section 10.2Recordation.  Neither this Agreement nor any memorandum or notice of this Agreement may be recorded by any party hereto without the prior written consent of the other party hereto.  The Buyer also agrees not to file any lis pendens or other instrument against the Real Property in connection herewith other than in connection with a claim for specific performance under Section 5.1.  In furtherance of the foregoing, the Buyer (i) acknowledges that the filing of a lis pendens or other evidence of the Buyer’s rights or the existence of this Agreement against or encumbering the Real Property could cause significant monetary and other damages to the Seller, and (ii) hereby indemnifies the Seller from and against any and all liabilities, damages, losses, costs or expenses (including without limitation reasonable attorneys’ fees and expenses) arising out of a breach of this Section 10.2.  The provisions of this Section 10.2 shall survive the Closing or any termination of this Agreement.

Section 10.3Anti-Terrorism Law.  Each party shall take any actions that may be required to comply with the terms of the USA Patriot Act of 2001, as amended, any regulations promulgated under the foregoing law, the Executive Order, the other Anti-Money Laundering and Anti-Terrorism Laws, or any other Applicable Laws, regulations or executive orders designed to combat terrorism, drug-trafficking or money laundering, if applicable, to this Agreement.  Each party represents and warrants to the other party that it is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of Treasury (the “Government List”), as last updated prior to the date of this Agreement.

Section 10.4Risk of Loss and Insurance Proceeds.

10.4.1Minor Loss.  Buyer shall be bound to purchase the Real Property for the full Purchase Price as required by the terms hereof, without regard to the occurrence or effect of any damage to the Real Property or destruction of any improvements thereon or condemnation of any portion of the Real Property, provided that:  (a) the cost to repair any such damage or destruction, or the diminution in the value of the remaining Real Property as a result of a partial condemnation, equals One Million  Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) or less, and (b) upon the Closing, there shall be a credit against the Purchase Price due hereunder equal to the amount of any insurance proceeds or condemnation awards collected by Seller as a 

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result of any such damage or destruction or condemnation, plus the amount of any insurance deductible, less any sums expended by Seller toward the restoration or repair of the Real Property or in collecting such insurance proceeds or condemnation awards.  If the proceeds or awards have not been collected as of the Closing, then such proceeds or awards shall be assigned to Buyer, except to the extent needed to reimburse Seller for sums expended prior to the Closing to repair or restore the Real Property or to collect any such proceeds or awards.

10.4.2Major Loss.  If the amount of the damage or destruction or condemnation as specified above exceeds One Million  Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), then Buyer may at its option, to be exercised by written notice to Seller within ten (10) business days of Seller’s notice of the occurrence of the damage or destruction or the commencement of condemnation proceedings, terminate this Agreement.  Buyer’s failure to elect to terminate this Agreement within said ten business day period shall be deemed an election by Buyer to terminate the Agreement.  If Buyer elects or is deemed to have elected to terminate this Agreement within such ten (10) business day period, the Deposit shall be returned to Buyer and neither party shall have any further rights or obligations hereunder except as provided in Sections 3.4, 3.5, 9.6, 10.13 and 10.19.  If Buyer elects to proceed with the purchase, then upon the Closing, there shall be a credit against the Purchase Price due hereunder equal to the amount of any insurance proceeds or condemnation awards collected by Seller as a result of any such damage or destruction or condemnation, plus the amount of any insurance deductible, less any sums expended by Seller toward the restoration or repair of the Real Property or in collecting such insurance proceeds or condemnation awards.  If the proceeds or awards have not been collected as of the Closing, then such proceeds or awards shall be assigned to Buyer, except to the extent needed to reimburse Seller for sums expended prior to the Closing to repair or restore the Real Property or to collect any such proceeds or awards.

Section 10.5Notices.  All notices required or permitted hereunder shall be in writing and shall be served on the parties at the following address:

	
If to Seller:
	
Donnelley Financial, LLC
35 W. Wacker Drive, 35th Floor
Chicago, Illinois 60601
Attention:  Michael Bontempi
E-mail: michael.x.bontempi@dfinsolutions.com

	
with Copies to:
	
Donnelley Financial, LLC
35 W. Wacker Drive, 35th Floor
Chicago, Illinois 60601
Attention:  General Counsel
E-mail: jennifer.reiners@dfinsolutions.com

	

	
Jones Day
77 W. Wacker Drive, Suite 3500
Chicago, Illinois 60601
Attention: Kyle M. Baltes, Esq.
E-mail:  kbaltes@jonesday.com

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If to Buyer:
	
SECA-NJ, LLC
3347 Michelson Drive, Suite 200
Irvine, California  92612
Attention:  Mr. Steven R. Layton

	
with Copies to:
	
Seyfarth Shaw LLP
601 South Figueroa Street, Suite 3300
Los Angeles, California  90017
Attention:  Richard C. Mendelson, Esq.
E-mail: rmendelson@seyfarth.com

	
If to Escrow Agent:
	
Chicago Title Insurance Company
10 South LaSalle Street, Suite 3100
Chicago, Illinois 60603
Attention:  Beata Lewis
E-mail:  Beata.Lewis@ctt.com

Any such notices may be sent by (a) certified mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the U.S. mail, (b) a nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) business day after deposit with such courier, or (c) e-mail transmission, in which case notice shall be deemed delivered upon transmission if such transmission occurs before 5:00 p.m. Pacific Time on a business day, otherwise such notice shall be deemed delivered on the next business day following transmission.  The above addresses may be changed by written notice to the other party; provided that no notice of a change of address shall be effective until actual receipt of such notice.  All notices may be given either by a party or by such party’s attorneys.

Section 10.6Assignment.  Buyer and Seller shall not have the right to assign this Agreement, without the prior written consent of the other party.  Notwithstanding the foregoing, Buyer may assign its interests herein to an Affiliate upon written notice to Seller.  This Agreement will be binding upon and inure to the benefit of Seller and Buyer and their respective successors and permitted assigns, and no other party will be conferred any rights by virtue of this Agreement or be entitled to enforce any of the provisions hereof.  Whenever a reference is made in this Agreement to Seller or Buyer, such reference will include the successors and permitted assigns of such party under this Agreement.

Section 10.7Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE WHERE THE REAL PROPERTY IS LOCATED, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS.

Section 10.8Counterparts; Signatures.  This Agreement may be executed in two or more fully or partially executed counterparts, each of which will be deemed an original binding the signer thereof against the other signing parties, but all counterparts together will constitute one and the same instrument.  Faxed or pdf/scanned emailed signatures shall be valid as originals.

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Section 10.9Entire Agreement.  This Agreement and any other document to be furnished pursuant to the provisions hereof embody the entire agreement and understanding of the parties hereto as to the subject matter contained herein.  There are no restrictions, promises, representations, warranties, covenants, or undertakings other than those expressly set forth or referred to in such documents.  This Agreement and such documents supersede all prior agreements and understandings among the parties with respect to the subject matter hereof.

Section 10.10Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction will, as to such 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.

Section 10.11Attorney Fees.  If any action is brought by any party to this Agreement to enforce or interpret its terms or provisions, the prevailing party will be entitled to reasonable attorney fees and costs incurred in connection with such action prior to and at trial and on any appeal therefrom.

Section 10.12Payment of Fees and Expenses.  Each party to this Agreement will be responsible for, and will pay, all of its own fees and expenses, including those of its counsel and accountants, incurred in the negotiation, preparation, and consummation of this Agreement and the transaction contemplated hereunder.

Section 10.13Confidential Information.  The parties acknowledge that the transaction described herein is of a confidential nature and shall not be disclosed except to Permitted Outside Parties or as required by law.  Prior to Closing, no party shall make any public disclosure of the specific terms of this Agreement, except as required by law (including SEC regulations and NYSE requirements).  In connection with the negotiation of this Agreement and the preparation for the consummation of the transactions contemplated hereby, each party acknowledges that it will have access to confidential information relating to the other party.  Each party shall treat such information as confidential, preserve the confidentiality thereof, and not duplicate or use such information, except to Permitted Outside Parties in connection with the transactions contemplated hereby.  In the event of the termination of this Agreement for any reason whatsoever, Buyer shall return to Seller, all documents, work papers, engineering and environmental studies and reports and all other materials (including all copies thereof obtained from Seller in connection with the transactions contemplated hereby), and each party shall use its best efforts, including instructing its employees and others who have had access to such information, to keep confidential and not to use any such information.  Except as required by applicable law, neither party shall issue any press release or make any statement to the media, without the other party’s consent, which consent shall not be unreasonably withheld.  Notwithstanding anything to the contrary contained in this Agreement, the confidentiality obligations of this Section 10.13 and Section 3.5 above shall not apply to any information that the recipient can prove (a) at the time of disclosure is in the public domain or becomes available to the public without breach of this Agreement by such recipient, (b) is lawfully obtained from a source that, to the best of recipient’s knowledge, is not under an obligation of confidentiality to the disclosing party, (c) is lawfully in the recipient’s possession in written or other recorded form prior to the time of disclosure, (d) is disclosed on a non-confidential basis to a third party by, or with the permission of, the disclosing party, or (e) is developed by, or 

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on behalf of, the recipient by individuals who have not received or without the use of any confidential information.  Except as otherwise required by law or court order, if the recipient is compelled to disclose (a) any confidential information of the disclosing party, (b) the fact that confidential information of the disclosing party has been made available by either disclosing party or that discussions or negotiations between the parties are taking place, or (c) any of the terms of any existing or proposed relationship, subject to then applicable law, the recipient shall provide the disclosing party with prompt written notice of such request so that the disclosing party may seek a protective order or other appropriate remedy, or waive compliance with the provisions of this Agreement. If a protective order or other remedy is not obtained, or compliance with the provisions of this Agreement is waived, the receiving party required to disclose the information shall furnish only that portion of confidential information that in its reasonable judgment is legally required, and that it will use its best efforts, at the expense of the disclosing party seeking the protective order or other remedy, to obtain reliable assurance that confidential treatment will be accorded to that portion of confidential information that is being disclosed.  The provisions of this Section 10.13 shall survive the Closing or, if the purchase and sale is not consummated, any termination of this Agreement.  The terms of the confidentiality provisions of this Agreement supersede any previously executed document with respect to confidentiality between the parties, including without limitation that certain Mutual Non-Disclosure and Non-Solicitation Agreement/Vendor Disclosure Agreement, dated as of August 27, 2019, by and between Seller and Buyer.

Section 10.14No Joint Venture.  Nothing set forth in this Agreement shall be construed to create a joint venture between Buyer and Seller.

Section 10.15Waiver of Jury Trial.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (EACH, AN “ACTION”) (A) ARISING OUT OF THIS AGREEMENT, INCLUDING ANY PRESENT OR FUTURE AMENDMENT THEREOF OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT (AS HEREAFTER AMENDED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND REGARDLESS OF WHICH PARTY ASSERTS SUCH ACTION; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY.  EACH PARTY TO THIS AGREEMENT HEREBY AGREES THAT THE PROVISIONS CONTAINED HEREIN HAVE BEEN FAIRLY NEGOTIATED ON AN ARMS LENGTH BASIS, WITH BOTH SIDES AGREEING TO THE SAME KNOWINGLY AND BEING AFFORDED THE OPPORTUNITY TO HAVE THEIR RESPECTIVE LEGAL COUNSEL CONSENT TO THE MATTERS CONTAINED HEREIN.  ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SELLER AND BUYER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY AND THE AGREEMENTS CONTAINED HEREIN REGARDING THE APPLICATION OF JUDICIAL REFERENCE IN THE EVENT OF THE 

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INVALIDITY OF SUCH JURY TRIAL WAIVER.  THE PROVISIONS OF THIS SECTION 10.15 SHALL SURVIVE THE CLOSING OR THE TERMINATION OF THIS AGREEMENT.

Section 10.16Limited Liability.  Neither the members, managers, employees or agents of Seller, nor the shareholders, officers, directors, employees or agents of any of them shall be liable under this Agreement and all parties hereto shall look solely to the assets of Seller for the payment of any claim or the performance of any obligation by Seller.

Section 10.17Time of Essence.  Time is of the essence of this Agreement.

Section 10.18No Waiver.  No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver, nor shall a waiver in any instance constitute a waiver in any subsequent instance.  No waiver shall be binding unless executed in writing by the party making the waiver.

Section 10.19Exculpation.  Notwithstanding anything to the contrary contained herein, the Seller’s shareholders, partners, members, the partners or members of such partners, the shareholders of such partners, members, and the trustees, officers, directors, employees, agents and security holders of the Seller and the partners or members of the Seller assume no personal liability for any obligations entered into on behalf of the Seller and its individual assets shall not be subject to any claims of any person relating to such obligations.  The foregoing shall govern any direct and indirect obligations of the Seller under this Agreement.  The provisions of this Section 10.19 shall survive the Closing and any termination of this Agreement.

Section 10.20Maximum Aggregate Liability.  Notwithstanding any provision to the contrary contained in this Agreement or the Closing documents described in Sections 9.3 and 9.4, the maximum aggregate liability of the Seller, and the maximum aggregate amount which may be awarded to and collected by Buyer, in connection with the purchase and sale of the Real Property under this Agreement and under all Closing documents including, without limitation, in connection with the breach of any of Seller’s warranties for which a claim is timely made by Buyer, which, as set forth more fully in Section 6.2, is subject to a materiality threshold, and Seller’s aggregate liability shall not exceed the Seller’s Liability Cap; provided, however, that this Section 10.20, the materiality threshold and the Seller’s Liability Cap shall not apply to Seller’s obligations under Section 9.5 (Prorations and Closing Costs).  As used herein, “Seller’s Liability Cap” means $1,500,000.  The provisions of this Section shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.

Section 10.21Maintenance of the Property.  Between the Effective Date and the Closing, Seller shall (i) maintain the Property in good order, condition and repair, reasonable wear and tear excepted, and (ii) make all repairs, maintenance and replacements of the Improvements and otherwise operate the Property in the same manner as before the Effective Date, as if Seller were retaining the Property.  Through the Closing Date, Seller shall maintain or cause to be maintained, at Seller’s sole cost and expense, a policy or policies of insurance as was in effect prior to the Effective Date, and after the Closing Date the Seller’s and Buyer’s insurance obligations and requirements will be as set forth in the Lease.

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Section 10.22Local Provisions.  

(a)ISRA Provisions. 

(i)Seller shall take all necessary actions to comply with the laws, rules and regulations pertaining to ISRA and site remediation, including the New Jersey Department of Environmental Protection’s (“NJDEP”) Technical Requirements for Site Remediation, N.J.A.C. 7:26E, and the New Jersey Site Remediation Reform Act, as it may be amended from time to time (“SRRA”), that are triggered by the consummation of the transactions contemplated by this Agreement, including the following actions:

(ii)In the event ISRA compliance is required, as a condition to Closing, Seller shall make the necessary filings with NJDEP and deliver to Buyer evidence of Sellers’ compliance with ISRA to allow the Closing to proceed.  Seller’s evidence of ISRA compliance for Closing shall be in the form of (A) a Remediation Certification and an established Remediation Funding Source in the form of a Remediation Trust Fund, (B) a de minimis quantity exemption (“DQE”) approved by NJDEP, (C) a Remediation in Progress Waiver approved by NJDEP, or (D) an Unrestricted Use Response Action Outcome (“RAO”) issued by a Licensed Site Remediation Professional licensed by the State of New Jersey in accordance with SRRA (an “LSRP”) (collectively items (A) through (D) are referred to as “ISRA Clearance”).  Seller shall provide drafts of all reports or other documents prepared by the LSRP for Buyer’s review not less than one (1) business days prior to submission, and Seller shall request that its LSRP review and consider in good faith Buyer’s comments provided to the LSRP prior to submittal, and incorporate them as appropriate in the LSRP’s sole but reasonable discretion.  

(iii)In the event Seller is required to provide the ISRA Clearance to Buyer, Seller shall cause its LSRP to issue a reliance letter to Buyer, in a form reasonably acceptable to Buyer, allowing Buyer, its successors and/or assigns, and any lender making a loan secured by the Property, to rely on all documents submitted to NJDEP by the LSRP in connection with the ISRA Clearance for the Property.  The receipt of the ISRA Clearance shall be a condition precedent to Buyer’s obligation to proceed with Closing.  

(iv)In the event Buyer does not receive the ISRA Clearance on or prior to Closing, Seller shall have the right to extend the Closing by up to thirty (30) days.  In the event Buyer does not receive the ISRA Clearance on or prior to the Closing Date, as same may be extended as permitted by this Agreement, Buyer shall have the right, in its sole discretion, to terminate this Agreement upon written notice to Seller, in which event the Deposit shall be returned to Buyer. In the event of such termination, the Escrow Agent shall refund the Deposit to Buyer, and neither party shall have any further rights or liabilities hereunder except as expressly set forth herein .  

(v)Notwithstanding that Buyer receives the ISRA Clearance on or prior to Closing, Seller shall remain liable for fully completing compliance with ISRA, and Seller shall defend, indemnify, and hold Buyer harmless from and against all losses, costs, damages, claims, and liabilities, including attorneys’ fees, arising out of or in connection with Seller’s failure to comply with ISRA with respect to the Property and this Section 10.22(a).  

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Capitalized terms used herein that are not defined herein shall have the same meanings as in ISRA.  Sellers’ obligations to comply with ISRA and this Section 10.22(a) shall survive the Closing

(b)Bulk Sales Law. The Buyer shall comply with N.J.S.A. 54:50-38, and to that end, the Buyer shall complete and execute Form C-9600 and shall do so promptly upon the Effective Date. If it so chooses, the Seller shall complete, execute and deliver to the Buyer a Form TTD (Asset Transfer Tax Declaration) and shall do so promptly upon the Effective Date. The Buyer and the Seller shall cooperate and coordinate in good faith in connection with the completion and filing of such forms in accordance with this Section 10.22(b) ); provided, however, Seller shall provide to Buyer the necessary information no later than September 10, 2019 in order for Buyer to submit From C-9600. The Buyer shall, at least ten (10) business days prior to the Closing Date, simultaneously deliver the completed Form C 9600 and the Form TTD, to the extent the Seller has delivered such form to the Buyer, along with a copy of this Agreement, executed, and any other required documents, to the State of New Jersey Department of the Treasury, Division of Taxation (the “Division”). If a clearance letter from the Division stating the Buyer will not assume any obligation of the Seller and no escrow is required is not issued prior to the Closing, the payment to the Seller of the balance of the Purchase Price at Closing shall be reduced by any amount which the Division may inform the Buyer must be withheld therefrom (the “NJ Escrow”). The NJ Escrow shall be held by a third-party escrow agent (pursuant to an escrow agreement in form and substance to be mutually agreed upon by the escrow agent, the Buyer and the Seller prior to the date of Closing, with all escrow fees to be paid by the Seller) until the Division provides a clearance letter to the Buyer stating the Buyer will not assume any obligation of the Seller and the NJ Escrow is no longer required. The escrow agent shall hold and release the NJ Escrow in accordance with direction from the Division, including direction to the Buyer that it may pay all or a portion of the amount withheld to the Seller, with such amount to be paid to the Seller within five (5) business days, or that the Division requires payment of all or a portion of the amount withheld for any taxes owed to the State of New Jersey by the Seller. If the Division informs the Buyer that the NJ Escrow is insufficient to pay the taxes owed to the State of New Jersey, the (i) Buyer shall notify Seller of such deficiency within two (2) business days of receiving such notice from the Division, and (ii) within five (5) business days of receiving such notice from the Buyer, the Seller shall pay the Division any such deficiency.  The Seller hereby agrees to indemnify, defend and hold Buyer harmless from any and all claims arising from any tax liability accruing against Buyer under N.J.S.A. 54:50-38 and any interest and penalties thereon; provided, however, any interest and penalties assessed by the Division resulting solely from Buyer’s failure to deliver timely notice to the Seller of any deficiency shall be borne solely by the Buyer.  The provisions of this Section 10.22(b) shall survive the Closing.

Section 10.23Amendment and Restatement. This Agreement amends and restates in its entirety that certain Agreement of Sale and Purchase, dated as of September 6, 2019, by and among Seller, Escrow Agent and Buyer’s Affiliate.  

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

SELLER:DONNELLEY FINANCIAL, LLC,
a Delaware limited liability company

By:  /s/ Jons Besch

Name: Jons S. Besch

Title:  Executive Vice President of Operations

 

BUYER:

SECA-NJ, LLC, 
a Delaware limited liability company

	
 
	

	
 

By: /s/ Perry Schonfeld

Name: Perry Schonfeld

Title: Authorized Signatory

ESCROW AGENT:

The Escrow Agent is executing this Agreement to evidence its agreement to hold the Deposit and act as escrow agent in accordance with the terms and conditions of this Agreement.

CHICAGO TITLE INSURANCE COMPANY

By:  /s/ Beata Lewis
Name: Beata Lewis
Title:  Escrow Officer, AVP

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