Document:

Exhibit 10.42

 

 

STANDARD LIBOR GRID NOTE
 (LIBOR ONLY)
 New York

 

	
As of January 1, 2013
    	
 
    	
$10,000,000.00
    	
 
    

 

	
BORROWER (Name):
    	
GTJ REIT, INC. a   corporation organizes under the law of the State of Maryland and FARM SPRINGS ROAD, LLC, a limited   liability company organized under the laws of the State of Connecticut,   jointly and severally, each with is chief executive office
    

(Address of residence/chief executive office):   444 Merrick Road, Suite 370, Lynbrook, New York 11563

 

BANK: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation with its principal banking office at One M&T Plaza, Buffalo, NY 14203. Attention: Office of General Counsel

 

1. DEFINITIONS. Each capitalized term shall have the meaning specified herein and the following terms shall have the indicated meanings:

 

a.              “Aggregate Outstandings” shall mean, on the date of determination thereof, the aggregate Outstanding Principal Amount of all Loans plus any L/C Obligations at such time.

b.              “Aggregate Letters of Credit Outstanding” means, on the date of determination, the sum of (a) the aggregate maximum stated amount at such time which is available or available in the future to be drawn under all outstanding Letters of Credit and (b) the aggregate amount of all payments on account of drawings under Letters of Credit made by the Bank under any Letter of Credit that has not been reimbursed by the Borrower.

c.               “Authorized Person” shall mean, each individually, Jerome Cooper, as Chief Executive Officer; Paul Cooper, as Executive Vice President; Douglas A. Cooper, as Treasurer and as Secretary; and David Oplanich, as Chief Financial Officer. Mention of the Authorized Person’s name is for reference purposes only and the Bank may rely on a person’s title to ascertain whether someone is an Authorized Person who may act on behalf of the Borrower in connection herewith.

d.              “Automatic Adjustment Rate Determination Date”,  when applicable, shall mean two (2) London Business Days before the first day of the applicable Interest Period.

e.               “Automatic Continuation Option” shall, with respect to any LIBOR Rate Loan, mean the option to have the then-current Interest Period duration, as previously selected by Borrower, remain the same for the succeeding Interest Period.

f.                “Base Rate” shall mean two (2) percentage point(s) above the rate of interest announced by the Bank as its prime rate of interest (“Prime Rate”).

g.               “Base Rate Loan” shall mean a Loan which bears interest at the Base Rate.

h.              “Continuation Date” shall mean the date that Borrower’s election to continue a LIBOR Rate Loan for another Interest Period becomes effective in accordance with this Note.

i.                  “Credit Agreement” means the Credit Agreement, dated the date hereof, between the Borrower and the Bank, as same may be amended, restated, supplemented or modified, from time to time. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

j.                 “Draw Date” shall mean, in relation to each Loan, the date that such Loan is made or deemed to be made to Borrower pursuant to this Note.

k.              “Interest Period” shall mean, with respect to any LIBOR Rate Loan, the period commencing on the Draw Date or Continuation Date for such LIBOR Rate Loan and ending on the date that shall be the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) of the calendar month that is one (1), three (3) or six (6) months after the commencement of such period, in accordance with Borrower’s election made pursuant to the terms of this Note; provided, however, that if an Interest Period would end on a day that is not a Joint Business Day, such Interest Period shall be extended to the next succeeding Joint Business Day, unless such next succeeding Joint Business Day would fall in the next calendar month, in which case such Interest Period shall end on the immediately preceding Joint Business Day. To the extent that the preceding clause results in either the extension or shortening of an Interest Period for a particular Loan, the Bank shall have the right (but not the obligation) to shorten or extend, respectively, the succeeding Interest Period so that it shall end on a day that numerically corresponds to the Draw Date for such Loan.

I.                “Interest Rate Floor” shall mean 4.0%

m.          “Joint Business  Day” shall mean  a day that is both a New York Business Day and a London Business Day.

n.              “LIBOR” shall mean the rate per annum (rounded upward, if necessary, to the nearest 1/16th of 1%) obtained by dividing (i) the applicable London Interbank Offered Rate (in accordance with the LIBOR Rate selected by Borrower for each Loan; see LIBOR Rate definition below) as fixed by the British Bankers Association for United States dollar deposits in the London interbank market at approximately 11:00 a.m. London, England time (or as soon thereafter as practicable), as determined by the Bank from any broker, quoting service or commonly available source utilized .by the Bank, by (ii) a percentage equal to 100% minus the stated maximum rate of all reserves required to be maintained against “Eurocurrency Liabilities” as  specified in Regulation D (or against any other category of liabilities which includes deposits by reference to which the interest rate on any LIBOR Rate Loan or Loans is determined or any category of extensions of credit or other assets which includes loans by a non-United States’ office of a bank to United States’ residents) on such date to any member bank of the Federal Reserve System. Notwithstanding any provision above, the practice of rounding to determine LIBOR may be discontinued at any time in the Bank’s sole discretion.

 

1

 

o.              “LIBOR Rate” shall mean, for each LIBOR Rate Loan and/or as otherwise applicable, in accordance with the terms of this Note: the greater of (a) three and one-half percentage points (3.5%) above the one-month, three-month or six-month LIBOR (as selected by the Borrower for each LIBOR Rate Loan), each with an Interest Period of equal duration, or (b) the Interest Rate Floor.

p.              “L/C Obligations” shall mean the aggregate of (i) the then undrawn and unexpired amount of any then-outstanding Letter of Credit and (iii) the aggregate amount of all unpaid L/C Reimbursement Obligations.

q.              “L/C Reimbursement Obligations” shall mean the obligation of the Borrower to reimburse the Bank pursuant to the Letter of Credit Documents for amounts drawn under a Letter of Credit.

r.                 “Letter of Credit” shall mean any standby letter of credit issued by the Bank in accordance with the provisions of the Letter of Credit Documents.

s.                “Letter of Credit Documents” shall mean, collectively, the Application for Irrevocable Standby Letter of Credit and the Standby Letter of Credit Agreement, each entered into between the Borrower and the Bank, and any modification, extension, amendment or renewal documents executed in connection therewith, and any future Application for Irrevocable Standby Letter of Credit and Standby Letter of Credit Agreement executed between the Borrower and the Bank.

t.                 “LIBOR Rate Loan” shall mean a Loan that bears interest at a LIBOR Rate. Each advance of funds hereunder, to the extent originally priced at the LIBOR Rate, shall be treated as a separate LIBOR Rate Loan.

u.              “Loan” shall mean a loan made to Borrower by the Bank pursuant to this Note.

v.              “London Business Day” shall mean any day on which dealings in United States dollar deposits are carried on by banking institutions in the London interbank market.

w.            “Maturity Date” shall mean August 26, 2014.

x.              “Maximum Principal Amount” shall mean Ten Million and 00/100 Dollars ($10,000,000.00).

y.              “Minimum Borrowing Amount” shall mean $100,000.00, with minimum increments thereafter of $100,000.00.

z.               “New York Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banking institutions in New York, New York are authorized or required by law or other governmental action to remain closed for business.

aa.       “Outstanding Principal Amount” shall mean, at any point in time, the actual outstanding principal amount under this Note.

 

2.                   PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES; FEES.

 

a.         Promise to Pay. For value received, and intending to be legally bound, Borrower promises to pay to the order of the Bank, on or before the Termination Date, the Maximum Principal Amount or the Outstanding Principal Amount, if less, plus interest as set forth below plus the reimbursement obligations with respect to all Letters of Credit and all fees and costs (including without limitation the Bank’s attorneys’ fees and disbursements, whether for internal or outside counsel) the Bank incurs in order to collect any amount due under this Note, to negotiate or document a workout or restructuring, or to preserve its rights or realize upon any guaranty or other security for the payment of this Note (“Expenses”).

 

b.         Interest. Each Loan shall earn interest on the Outstanding Principal Amount thereof calculated on the basis of a 360-day year for the actual number of days of each year (365 or 366) as follows:

 

i.                       LIBOR Rate Loans. Interest shall accrue each day on each LIBOR Rate Loan from and including the first day of each Interest Period applicable thereto until, but not including, the last day of each such Interest Period or the day the LIBOR Rate Loan is paid in full (if sooner) at a rate per annum equal to the LIBOR Rate, as determined using LIBOR in effect on the following dates, as applicable: (a) for new LIBOR Rate Loans, two (2) London Business Days before the Draw Date; (b) for continuations of LIBOR Rate Loans (other than as provided for in subsection 4(c) below), the Joint Business Day the Bank receives (or is deemed to receive) the Notice of Continuation in accordance with the terms of this Note; (c) for LIBOR Rate Loans where the Automatic Continuation Option is in effect, the applicable Automatic Adjustment Rate Determination Date for such LIBOR Rate Loan.

 

ii.                    Base Rate Loans. Interest shall accrue on a Base Rate Loan from and including the first date a Loan becomes a Base Rate Loan to, but not including, the day such Base Rate Loan is paid in full, at the rate per annum equal to the Base Rate. Any change in the Base Rate resulting from a change in the Prime Rate shall be effective on the date of such change.

 

c.          Maximum Legal Rate. It  is the intent of the Bank and Borrower that in no event shall interest be payable at a  rate in excess of the maximum rate permitted by applicable law (the “Maximum Legal Rate”). Solely to the extent necessary to prevent interest under this Note from exceeding the Maximum Legal Rate, any amount that would be treated as excessive under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically canceled, and, if received by the Bank, shall be refunded to Borrower.

 

d.         Payments; Late Charge; Default Rate. The Borrower promises to pay interest on the unpaid principal balance from time to time outstanding hereunder from the date hereof until paid in full. All accrued and unpaid interest shall be payable monthly in arrears on the 1st day of each month, commencing September 1, 2011, and on the date of payment in full of this Note. All Payments shall be made in immediately available United States funds at any banking office of the Bank. Absent demand for payment in full, Borrower shall pay all accrued and unpaid interest, in amounts that may vary, monthly, or as otherwise invoiced by the Bank. If any payment is not received within five days of its due date, Borrower shall pay a late charge equal to the greatest of (a) 5% of the delinquent amount, or (b)  $50.00. In addition, upon the occurrence and during the continuance of a Default or an Event of Default the interest rate for all amounts outstanding under this Note (excluding any defaulted payment of principal accruing interest in accordance with the immediately preceding sentence) shall, at the option of the Bank, increase to 4 percentage points above the otherwise applicable rate (“Default Rate”), and any judgment entered hereon or otherwise in connection with any suit to collect amounts due hereunder shall bear interest at such Default Rate. Payments may be applied in any order in the sole discretion of the Bank, but prior to demand, shall be applied first to past due interest, Expenses, late charges, and principal payments, if any, which are past due, then to current interest and Expenses and late charges, and last to remaining principal.

 

2

 

e.          Prepayment of LIBOR Rate Loans; Breakage Fee. If Borrower (i) pays the principal balance, in whole or in part, on any LIBOR Rate Loan, on any day other than the last day of an Interest Period, (ii) fails to draw down or accept an advance, in whole or in part, on a LIBOR Rate Loan after giving a Request therefor, or (iii) otherwise tries to revoke any LIBOR Rate Loan, in whole or in part, or if there occurs a Bankruptcy Event (as defined below) or the applicable interest rate on any Loan is converted from the LIBOR Rate to the Base Rate pursuant to this Note, then Borrower shall be liable for and shall pay the Bank, on demand, the higher of $250.00 or the actual amount of the liabilities, expenses, costs or funding losses that are a direct or indirect result of such prepayment or other condition described above, whether such liability, expense, cost or loss is by reason of (a) any reduction in yield, by reason of the liquidation or reemployment of any deposit or other funds acquired by the Bank, (b) the fixing of the interest rate payable on any LIBOR Rate Loans, or (c) otherwise (collectively, the “Breakage Fee”). The determination by the Bank of the foregoing amount shall, in the absence of manifest error, be conclusive and binding upon Borrower.

 

To the extent that the Aggregate Outstandings exceeds the Maximum Principal Amount, then the Borrower shall immediately prepay the Loans to the extent necessary to cause compliance with the foregoing. To the extent that such prepayments are insufficient to cause such compliance, the Borrower shall pledge to the Bank, Cash Collateral in an amount equal to the amount of such shortfall, which Cash Collateral shall secure the reimbursement obligations of the Borrower with respect to drawings under Letters of Credit.

 

f.           Amendment Fee. The Borrower shall pay the Bank an amendment fee of $18,000 in connection with this Note. Such amendment fee shall be deemed an Obligation under the Credit Agreement and shall be deemed fully earned upon execution of this Note by Borrower.

 

g.          Early Termination Fee. If Borrower shall terminate the Credit Agreement, this Note or any of the Loans hereunder for any reason, whether by voluntary prepayment or otherwise, or the Obligations (as defined in the Credit Agreement), in each case, prior to September 30, 2013, the Borrower shall pay to Bank an early termination fee in an amount equal $50,000. Such early termination fee shall be deemed an Obligation under the Credit Agreement.

 

3.                   LOANS; LETTERS OF CREDIT; USE OF PROCEEDS.

 

a.         General. Except as otherwise provided herein, each Loan advanced hereunder shall be in the form of a LIBOR Rate Loan. The Bank may make any Loan in reliance upon any oral, telephonic, written, teletransmitted or other request (the “Request(s)”) that the Bank in good faith believes to be valid and to have been made by Borrower or on behalf of Borrower by an Authorized Person. The Bank may act on the Request of any Authorized Person until the Bank shall have received from Borrower, and had a reasonable time to act on, written notice revoking the authority of such Authorized Person. The Bank shall incur no liability to Borrower or to any other person as a direct or indirect result of making any Loan pursuant to  this paragraph. This Note is the “Note” referred to in the Credit Agreement and is issued pursuant to and entitled to the benefits of the Credit Agreement to which reference is hereby made for a more complete statement of the terms and conditions under which the Loans evidenced hereby were made or will be made and are to be repaid.

 

b.   Request for LIBOR Rate Loans. Borrower shall give the Bank its irrevocable Request for each LIBOR Rate Loan specifying:

 

i.                  the Draw Date for the LIBOR Rate Loan, which shall be at least two (2) Joint Business Days following the date of the Request; provided, however, if a Request is received by the Bank after 2:00 p.m. (Eastern Standard Time), the Request for such LIBOR Rate Loan shall be deemed to have been received on the next New York Business Day;

 

ii.               the aggregate amount of such LIBOR Rate Loan, which amount shall not be less than the Minimum Borrowing Amount;

 

iii.            the applicable LIBOR Rate selection and corresponding Interest Period duration (see LIBOR Rate definition above); and

 

iv.           whether the Automatic Continuation Option will be in effect for such LIBOR Rate Loan. The Automatic Continuation Option shall be in effect for each LIBOR Rate Loan, unless otherwise specified by Borrower in writing.

 

c.          Letters of Credit.

 

i.                       Generally. Subject to the terms and conditions set forth in this Agreement, upon the written request of the Borrower in accordance herewith, the Bank shall issue Letters of Credit at any time on or before the Maturity Date. Notwithstanding the foregoing, at no time shall the Aggregate Letters of Credit Outstanding exceed $1,000,000 and no Letter of Credit shall be issued or created if, after giving effect to the same, the Aggregate Outstandings would exceed the Maximum Principal Amount. Furthermore, notwithstanding anything contained herein to the contrary, the Bank shall be under no obligation to issue a Letter of Credit if any order, judgment or decree of any court, arbitrator or governmental authority shall purport by its terms, to enjoin, restrict or restrain the Bank in any respect relating to the issuance of such Letter of Credit or a similar letter of credit, or any law, rule, regulation, policy, guideline or directive (whether or not having the force of law) from any governmental authority with jurisdiction over the Bank shall prohibit or direct the Bank in any respect relating to the issuance of such Letter of Credit or a similar letter of credit, or shall impose upon the Bank with respect to any Letter of Credit, any restrictions, any reserve or capital requirement or any loss, cost or expense not reimbursed by the Borrower to the Bank. Each request for issuance of a Letter of Credit by the Borrower shall be in writing and shall be received by the Bank by no later than 12:00 p.m. (New York, New York time), on the day which is at least two Business Days prior to the proposed date of issuance. Such issuance shall occur by no later than 3:00 p.m. on the proposed date of issuance (assuming proper prior notice as aforesaid). Subject to the terms and conditions contained herein, the expiry date, and the amount and beneficiary of the Letters of Credit will be as designated by the Borrower. Each Letter of Credit issued by the Bank hereunder shall identify: (i) the dates of issuance and expiry of such Letter of Credit, (ii) the amount of such Letter of Credit (which shall be a sum certain), (iii) the beneficiary of such Letter of Credit, and (iv) the drafts and other documents necessary to be presented to the Bank upon drawing thereunder. No Letter of Credit issued hereunder shall expire more than 365 days from the date of issuance or creation thereof, and in no event shall any Letter of Credit mature after the Business Day which is immediately prior to the Maturity Date.

 

3

 

The Borrower agrees to execute and deliver to the Bank such further documents and instruments in connection with any Letter of Credit issued hereunder (including without limitation, applications therefor) as the Bank in accordance with its customary practices may request.

 

ii.                    Drawings Under Letters of Credit. The Borrower hereby absolutely and unconditionally promises to pay the Bank the amount of each drawing under a Letter of Credit on the date of such drawing, if the Borrower receives notice of such drawing or payment prior to 12:00 noon, New York, New York time, or if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York, New York time, on the Business Day immediately following the day that the Borrower receives such notice; provided, however, if any drawing was in an amount not less than the Minimum Borrowing Amount, the Borrower may, subject to the conditions to borrowing set forth herein, request that such payment be financed with a Loan in an equivalent amount, and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by such Loan.

 

iii.                 Letter of Credit Obligations Absolute. (a) The obligation of the Borrower to reimburse the Bank as provided hereunder in respect of drawings under Letters of Credit shall rank pari passu with the obligation of the Borrower to repay the Loans hereunder, and shall be absolute and unconditional under any and all circumstances. Without limiting the generality of the foregoing, the obligation of the Borrower to reimburse the Bank in respect of drawings under Letters of Credit shall not be subject to any defense based on the non-application or misapplication by the beneficiary of the proceeds of any such drawing or the legality, validity, regularity or enforceability of the Letters of Credit or any related document, even though such document shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower, the beneficiary of any Letter of Credit or any financial institution or other party to which any Letter of Credit may be transferred. The Bank may accept or pay any draft presented to it under any Letter of Credit regardless of when drawn or made and whether or not negotiated, if such draft, accompanying certificate or documents and any transmittal advice are presented or negotiated on or before the expiry date of such Letter of Credit or any renewal or extension thereof then in effect, and is in substantial compliance with the terms and conditions of such Letter of Credit. Furthermore, neither the Bank nor any of its correspondents shall be responsible, as to any document presented under a Letter of Credit which appears to be regular on its face, and appears on its face to be in substantial compliance with the terms of the Letter of Credit, for the validity or sufficiency of any signature or endorsement, for delay in giving any notice or failure of any instrument to bear adequate reference to the Letter of Credit, or for failure of any Person to note the amount of any draft on the reverse of the Letter of Credit.

 

(b)  Any action, inaction or omission on the part of the Bank or any of its correspondents under or in connection with any Letter of Credit or the related instruments, documents or property, if in good faith and in conformity with such laws, regulations or customs as are applicable, shall be binding upon the Borrower and shall not place the Bank or any of its correspondents under any liability to the Borrower in the absence of (x) gross negligence or willful misconduct by the Bank or its correspondents or (y) the failure by the Bank to pay under a Letter of Credit after presentation of a draft and documents strictly complying with such Letter of Credit unless the Bank is prohibited from making such payment pursuant to a court order. The Bank’s rights, powers, privileges and immunities specified in or arising under this Agreement are in addition to any heretofore or at any time hereafter otherwise created or arising, whether by statute or rule of law or contract. All Letters of Credit issued hereunder will, except to the extent otherwise expressly provided therein or hereunder, be governed by the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce, Publication No. 500, and any subsequent revisions thereof.

 

d.         Letter of Credit Fees. The Borrower shall pay to the Bank a commission with respect to each Letter of Credit issued and/or renewed or extended by the Bank in an amount equal to one and three-quarters percent (1.75%) of the stated amount of such Letter of Credit. Such fee shall be paid on the date of issuance thereof and upon each renewal or extension thereof. In addition, the Borrower shall pay to the Bank its customary fronting fees and such other customary fees charged by the Bank with respect to the processing and administration of Letters of Credit (including, without limitation, amendments, renewals, assignments or extensions of Letters of Credit).

 

e.          Delivery of Requests and Notices. Delivery of a Notice or Request for a LIBOR Rate Loan or issuance, amendment, renewal, assignment or extension of a Letter of Credit shall be made to the Bank at the following address, or such other address designated by the Bank from time to time:

 

Manufacturers and Traders Trust Company

401 Broad Hollow Road

Melville, New York 11747

Attn: Lisa Congemi-Doutney, VP

Fax No. (631) 501-4138

Telephone No. (631) 501-4131

 

f.           Use of Proceeds. The proceeds of the Credit Loans shall be used for Permitted Acquisitions and for general working capital and other corporate purposes. Letters of Credit shall be issued by the Bank for the account of the Borrower and shall be issued, for purposes in connection with, and in the ordinary course of, the business of the Borrower consistent with historical purposes of the Borrower prior to the date hereof.

 

4.                   CONTINUATION AND CONVERSION.

 

a.         Election. An Authorized Person may, upon irrevocable Request to the Bank in accordance with subsection (b) below, elect to continue, as of the last day of the applicable Interest Period, any or a portion (subject to the Minimum Borrowing Amount limitation) of any LIBOR Rate Loan with the same or a different Interest Period, provided no partial continuation of a LIBOR Rate Loan with a different Interest Period shall reduce the outstanding principal amount of the remaining LIBOR Rate Loan with the same Interest Period to less than the Minimum Borrowing Amount.

 

4

 

b.         Notice of Continuation.

 

i.                  For an election under Section 4(a) above, an Authorized Person must deliver to the Bank, by 2:00 p.m. (Eastern Standard Time) on a New York Business Day, a Notice of Continuation for an election under Section 4(a) (“Notice of Continuation” or “Notice”), specifying:

 

(a)         the aggregate amount of each LIBOR Rate Loan to be continued;

 

(b)         the applicable LIBOR Rate selection and corresponding Interest Period duration for each LIBOR Rate Loan to be continued (see LIBOR Rate definition above); and

 

(c)          whether the Automatic Continuation Option will be in effect for each such LIBOR Rate Loan. The Automatic Continuation Option shall be in effect for each LIBOR Rate Loan, unless otherwise specified by Borrower in writing.

 

ii.     For any election in accordance with Section 4(b)(i) above, the Continuation Date shall be the later of (A) the last day of the applicable Interest Period, or (B) two (2) Joint Business Days following the date the Bank receives the Notice of Continuation, except as otherwise determined by the Bank in its sole discretion. If a Notice is received after 2:00 p.m. (Eastern Standard Time) on any New York Business Day, such Notice will be deemed to have been received on the next New York Business Day. Accordingly, as an example, if Borrower has a LIBOR Rate Loan with a one month Interest Period ending on June 15 and wants to continue the LIBOR Rate Loan with a two month Interest Period, Borrower must deliver to the Bank an appropriate Notice of Continuation by no later than 2:00 p.m. (Eastern Standard Time) on June 13 (assuming that June 13 is a New York Business Day and June 14 and 15 are Joint Business Days).

 

iii.   For LIBOR Rate Loans with the Automatic Continuation Option in effect, the Bank shall, at the end of each Interest Period, automatically continue such LIBOR Rate Loan with the same Interest Period.

 

iv.    The Bank may take action on any Notice in reliance upon any oral, telephonic, written or teletransmitted Notice that the Bank in good faith believes to be valid and to have been made by Borrower or on behalf of Borrower by an Authorized Person. No Notice may be delivered by e-mail. The Bank may act on the Notice from any Authorized Person until the Bank shall have received from Borrower, and had a reasonable time to act on, written notice revoking the authority of such Authorized Person. The Bank shall incur no liability to Borrower or to any other person as a direct or indirect result of acting on any Notice under this Note. The Bank, in its sole discretion, may reject any Notice that is incomplete.

 

c.          Expiration of Interest Period. With respect to any LIBOR Rate Loan for which an Automatic Continuation Option is not in effect, if Borrower does not deliver to the Bank an appropriate Notice of Continuation (in accordance with the terms hereof) at least two (2) Joint Business Days before the end of an Interest Period, the Bank shall have the right (but not the obligation) to immediately, and without notice, convert such LIBOR Rate Loan into a Base Rate Loan and such Loan shall accrue interest at the Base Rate until two (2) Joint Business Days after the Bank receives an appropriate Notice (in accordance with the terms hereof) electing to convert the Loan from a Base Rate Loan to a LIBOR Rate Loan. A Notice of Continuation received one (I) Joint Business Day before the end of an Interest Period may not effectuate a continuation of such Loan as a LIBOR Rate Loan as of the last day of the Interest Period. Rather, such LIBOR Rate Loan may be converted (in the manner described above) to a Base Rate Loan on the last day of the Interest Period. Such Notice of Continuation, however, will be effective two (2) Joint Business Days from the date it is received (or deemed to be received) by the Bank.

 

d.         Conversion upon Default. Unless the Bank shall otherwise consent in writing, if (i) Borrower fails to pay when due, in whole or in part, the indebtedness under the Note (whether by acceleration or otherwise), or (ii) there exists any condition or, event which with the passage of time, the giving of notice or both shall constitute an event of default under any of Borrower’s agreement with the Bank, if any, the Bank, in its sole discretion, may (i) permit any outstanding LIBOR Rate Loans to continue until the last day of the applicable Interest Period at which time such Loan shall automatically be converted into a Base Rate Loan or (ii) convert any outstanding LIBOR Rate Loans into a Base Rate Loan before the end of the applicable Interest Period applicable to such LIBOR Rate Loan. Nothing herein shall be construed to be a waiver by the Bank to have any Loan accrue interest at the Default Rate of interest (which shall be calculated from the higher of the LIBOR Rate or the Base Rate) or the right of the Bank to charge and collect a Breakage Fee.

 

5.                   SETOFF. The Bank shall have the right to set off against the amounts owing under this Note any property held in a deposit or other account with the Bank or any of its affiliates or otherwise owing by the Bank or any of its affiliates in any capacity to Borrower or any guarantor or endorser of this Note. Such set-off shall be deemed to have been exercised immediately at the time the Bank or such affiliate elects to do so.

 

6.                   FACILITY.

 

a.         Generally. Any Request for a Loan hereunder shall be limited in amount, such that the sum of (i) the principal amount of such Request; (ii) the Outstanding Principal Amount under this Note; and (iii) the aggregate face amounts of (or, if greater, Borrower’s aggregate reimbursement obligations to the Bank (or any of its affiliates) in connection with) any Letters of Credit issued by the Bank (or any of its affiliates) at the request (or for the benefit of) Borrower, pursuant to this facility; does not exceed the Maximum Principal Amount under this Note.

 

b.         Bankruptcy Event. This Note is payable on the Termination Date; provided, however, that the Outstanding Principal Amount of this Note and all accrued and unpaid interest shall automatically become immediately due and payable if Borrower commences, or has commenced against it (and is not dismissed within 45 days), any proceeding or request for relief under any bankruptcy, insolvency or similar laws now or hereafter in effect in the United States of America or any state or territory thereof or any foreign jurisdiction or any formal or informal proceeding for dissolution, liquidation or the settlement of claims against or winding up of affairs of Borrower (a “Bankruptcy Event”), or upon the occurrence of a Bankruptcy Event with regard to any guarantor or endorser of this Note.

 

5

 

Borrower hereby waives protest, presentment and notice of any kind in connection with this Note.

 

7.                   BANK RECORDS CONCLUSIVE. The Bank shall set forth on a schedule attached to this Note or maintained on computer, the date and original principal amount of each Loan and the date and amount of each payment to be applied to the Outstanding Principal Amount of this Note. The Outstanding Principal Amount set forth on any such schedule shall be presumptive evidence of the Outstanding Principal Amount of this Note and of all Loans. No failure by the Bank to make, and no error by the Bank in making, any annotation on any such schedule shall affect the Borrower’s obligation to pay the principal and interest of each Loan or any other obligation of Borrower to the Bank pursuant to this Note.

 

8.                   PURPOSE. Borrower certifies (a) that no Loan will be used to purchase margin stock except with the Bank’s express prior written consent for each such purchase and (b) that all Loans shall be used for a business purpose, and not for any personal, family or household purpose.

 

9.                   AUTHORIZATION. Borrower, if a corporation, partnership, limited liability company, trust or other entity, represents that it is duly organized and in good standing or duly constituted in the state of its organization and is duly authorized to do business in all jurisdictions material to the conduct of its business; that the execution, delivery and performance of this Note have been duly authorized by all necessary regulatory and corporate or partnership action or by its governing instrument; that this Note has been duly executed by an authorized officer, partner or trustee and constitutes a binding obligation enforceable against Borrower and not in violation of any law, court order or agreement by which Borrower is bound; and that Borrower’s performance is not threatened by any pending or threatened litigation.

 

10.            INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.

 

a.         Increased Costs. If the Bank shall determine that due to either (a) the introduction of any change (other than any change by way of imposition of or increase in reserve requirements included in the calculation of the LIBOR) in or in the interpretation of any requirement of law, or (b) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to the Bank of agreeing to make or making, funding or maintaining any LIBOR Rate Loans, then Borrower shall be liable for, and shall from time to time, upon demand therefor by the Bank, pay to the Bank such additional amounts as are sufficient to compensate the Bank for such increased costs.

 

b.         Inability to Determine Rates. If the Bank shall determine that for any reason adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period with respect to a proposed LIBOR Rate Loan, the Bank will give notice of such determination to Borrower. Thereafter, the Bank may not make or maintain LIBOR Rate Loans, as the case may be, hereunder until the Bank revokes such notice in writing. Upon receipt of such notice, Borrower may revoke any pending Request or Notice with respect to a LIBOR Rate Loan. If Borrower does not revoke such Request or Notice, the Bank may make, or continue the Loans, as proposed by Borrower, in the amount specified in the applicable Request or Notice submitted by Borrower, but such Loans shall be made or continued as Base Rate Loans instead of LIBOR Rate Loans, as the case may be.

 

c.          Illegality. If the Bank shall determine that the introduction of any law (statutory or common), treaty, rule, regulation, guideline or determination of an arbitrator or of a governmental authority or in the interpretation or administration thereof, has made it unlawful, or that any central bank or other governmental authority has asserted that it is unlawful for the Bank to make LIBOR Rate Loans, then, on notice thereof by the Bank to Borrower, the Bank may suspend the making of LIBOR Rate Loans until the Bank shall have notified Borrower that the circumstances giving rise to such determination shall no longer exist. If the Bank shall determine that it is unlawful to maintain any LIBOR Rate Loans, Borrower shall prepay in full all LIBOR Rate Loans then outstanding, together with accrued interest, either on the last date of the Interest Period thereof if the Bank may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if the Bank may not lawfully continue to maintain such LIBOR Rate Loans. If Borrower is required to prepay any LIBOR Rate Loan immediately as set forth in this subsection, then concurrently with such prepayment, Borrower may borrow from the Bank, in the amount of such repayment, a Base Rate Loan.

 

11.            MISCELLANEOUS. This Note, together with any related loan and security agreements and guaranties, contains the entire agreement between the Bank and Borrower with respect to the Note, and supersedes every course of dealing, other conduct, oral agreement and representation previously made by the Bank. All rights and remedies of the Bank under applicable law and this Note or amendment of any provision of this Note are cumulative and not exclusive. No single, partial or delayed exercise by the Bank of any right or remedy shall preclude the subsequent exercise by the Bank at any time of any right or remedy of the Bank without notice. No waiver or amendment of any provision of this Note shall be effective unless made specifically in writing by the Bank. No course of dealing or other conduct, no oral agreement or representation made by the Bank, and no usage of trade, shall operate as a waiver of any right or remedy of the Bank. No waiver of any right or remedy of the Bank shall be effective unless made specifically in writing by the Bank. Borrower agrees that in any legal proceeding a copy of this Note kept in the Bank’s course of business may be admitted into evidence as an original. This Note is a binding obligation enforceable against. Borrower and its successors and assigns and shall inure to the benefit of the Bank and its successors and assigns. If a court deems any provision of this Note invalid, the remainder of the Note shall remain in effect. Section headings are for convenience only. Singular number includes plural and neuter gender includes masculine and feminine as appropriate.

 

12.            NOTICES. Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrower (at its address on the Bank’s records) or to the Bank (at the address on page one and separately to the Bank officer responsible for Borrower’s relationship with the Bank). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) New York Business Days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) New York Business Day after delivery to a nationally recognized overnight courier service (e.g., Federal Express).

 

6

 

Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

 

13.            JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be jointly and severally liable for all amounts which become due under this Note and the term “Borrower” shall include each as well as all of them.

 

14.            GOVERNING LAW; JURISDICTION. This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York. This Note will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN NASSAU COUNTY OR SUFFOLK COUNTY, AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note.

 

15.            WAIVER OF JURY TRIAL. BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS NOTE OR THE TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

 

x Amended and Restated Note. The Borrower acknowledges, agrees and understands that this Note is given in replacement of and in substitution for, but not in payment of, a prior note dated on or about August 26, 2011, in the original principal amount of $10,000,000, given by GTJ REIT, INC. in favor of the Bank (or its predecessor-in-interest), as the same may have been amended or modified from time to time (“Prior Note”), and further, that: (a) the obligations of GTJ as evidenced by the Prior Note shall continue in full force and effect, as amended and restated by this Note and as joined by FARM SPRINGS ROAD, LLC, all of such obligations being hereby ratified and confirmed by the Borrower; (b) any and all liens, pledges, assignments and security interests securing the Borrower’s obligations under the Prior Note shall continue in full force and effect, are hereby ratified and confirmed by the Borrower, and are hereby acknowledged by the Borrower to secure, among other things, all of the Borrower’s obligations to the Bank under this Note, with the same priority, operation and effect as that relating to the obligations under the Prior Note; and (c) nothing herein  contained shall be construed to extinguish, release, or discharge, or constitute, create, or effect a novation of, or an agreement to extinguish, the obligations of the Borrower with respect to the indebtedness originally described in the Prior Note or any of the liens, pledges, assignments and security interests securing such obligations.

 

Preauthorized Transfers from Deposit Account. If a deposit account number is provided in the following blank Borrower hereby authorizes the Bank to debit available funds in Borrower’s deposit account # 9853000454 with the Bank automatically for any amount which becomes due under this Note or as directed by an Authorized Person, by telephone.

 

[the next page is the signature page]

 

7

 

Acknowledgment Borrower acknowledges that it has read and understands all the provisions of this Note, including the Governing Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.

 

	
 
    	
 
    	
GTJ REIT INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
/s/ David Oplanich
    
	
 
    	
 
    	
 
    	
David Oplanich, CFO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
FARM SPRINGS ROAD, LLC
    
	
 
    	
 
    	
By:
    	
GTJ Realty, LP, the sole member
    
	
 
    	
 
    	
By:
    	
GTJ GP, LLC, the general partner
    
	
 
    	
 
    	
By:
    	
GTJ REIT, Inc., tie e member
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ David Oplanich
    
	
 
    	
 
    	
 
    	
David Oplanich, CFO
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signature of Witness
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Typed Name of Witness
    	
 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
 
    	
 
    	
ERIC RUBENSTEIN
    
	
 
    	
 
    	
 
    	
ACKNOWLEDGMENT
    	
NOTARY PUBLIC, State of   New York
    
	
 
    	
 
    	
 
    	
 
    	
No. 01RU4747733
    
	
 
    	
 
    	
 
    	
 
    	
Qualified in Nassau County
    
	
STATE OF NEW YORK
    	
)
    	
 
    	
 
    	
Commission Expires   February 28, 2014
    
	
 
    	
 
    	
:SS.
    	
 
    	
 
    
	
COUNTY OF NASSAU
    	
)
    	
 
    	
 
    	
 
    

 

On the 26th day of December, in the year 2012, before me, the undersigned, a Notary Public in and for said State, personally appeared David Oplanich, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

 

	
 
    	
/s/ Eric Rubenstein
    
	
 
    	
Notary Public
    

 

FOR BANK USE ONLY

 

Authorization Confirmed:

Product Code: 11900

Disbursement of Funds:

	
Credit A/C
    	
 
    	
#
    	
Off Ck
    	
#
    	
Payoff Obligation
    	
#
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
$
    	
 
    	
$
    	
 
    

 

8Exhibit 10.43

	
 
    	
 
    
	

    	
 
    

 

CREDIT AGREEMENT

New York

 

Buffalo, New York      as of January 1, 2013

 

Borrower:  GTJ REIT, INC., a corporation organized under the laws of the State of Maryland (“GTJ”) and FARM SPRINGS ROAD, LLC, a limited liability company organized under the laws of the State of Connecticut (“Farm Springs”), jointly and severally, (each, a “Borrower” and collectively the  “Borrowers”), and each having its chief executive office at 444 Merrick Road, Suite 370, Lynbrook, New York 11563

 

Bank:              MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation with its chief executive office at One M&T Plaza, Buffalo, NY 14240. Attention: Office of General Counsel.

 

The Bank and the Borrowers agree as follows:

 

1.              DEFINITIONS.

 

a.              “Action” has the meaning set forth in Section 2(f) hereof.

 

b.              “Affiliate” means with respect to any Person, any corporation, partnership, limited liability company, limited liability partnership, joint venture, trust or unincorporated organization which, directly or indirectly, controls or is controlled by or is under common control with such Person. For the purpose of this definition, “control” of a Person shall mean the power, direct or indirect, to direct or cause the direction of the management or policies of such Person whether through the ownership of voting securities by contract or otherwise; provided that, in any event, any Person who owns directly or indirectly 20% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 20% or more of the partnership or other ownership interest of any Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.

 

c.               “Cash Collateral” shall mean a deposit by the Borrowers made in immediately available funds to a cash collateral account at the Bank and the taking of all action required to provide the Bank a first priority perfected security interest in such deposit.

 

d.              “Change  of Control” means  any event which results in (i) any Person, or two or more Persons acting in concert, acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of securities of GTJ (or other securities convertible into such securities) representing 30% or more of the combined voting power of all securities of GTJ entitled to vote in the election of directors; or (ii) during any period of up to 12 consecutive months individuals who at the beginning of such 12  month period were directors of GTJ, together with any director approved or nominated by the then majority of the Board of Directors of GTJ, ceasing for any reason to constitute a majority of the Board of Directors of GTJ, or (iv) any Person, or two or more Persons acting in concert, acquiring by contract or otherwise, or entering into a contract or arrangement which upon consummation will results in its or their acquisition of, or control over, securities of GTJ (or securities convertible into such securities) representing 30% or more of the combined voting power of all securities of GTJ entitled to vote in the election of directors; or (v) GTJ failing directly own, beneficially and of record, or have the right to vote, all of the outstanding membership interests of GTJ GP, LLC (formerly known as GTJ Realty Trust, LLC), a Maryland limited liability company; or (vi) GTJ GP, LLC failing to be the sole general partner of GTJ Realty LP; or (vii) GTJ failing to own, beneficially and of record, or have the right to vote at least 65% of the limited partnership interests in GTJ Realty LP; or (viii) GTJ Realty LP failing to directly own, beneficially and of record, or have the right to vote, all of the membership interests of Farm Springs.

 

e.               “Closing Date” means as of January 1, 2013.

 

f.                “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

g.               “Credit” means any and  all credit facilities and any other financial accommodations made by the Bank in favor of the Borrowers whether now or hereafter in existence.

 

h.              “Debt Service Coverage Ratio” means (a) net revenues minus (i) operating expenses and straight-line rents plus (ii) without duplication, depreciation and amortization expenses, all calculated with respect to the proposed replacement property divided by (y) the total amount of the Facility in effect at such time plus interest expense on such amount (calculated at the interest rate then in effect, based upon a 25-year amortization schedule).

 

1

 

i.                  “Default” shall mean any condition or event which upon notice, lapse of time or both would constitute an Event of Default.

 

j.                 “EBITDAR” means net earnings, plus interest, income taxes, depreciation and amortization expenses and rent expense, calculated exclusive of (i) non-cash gains or losses and (ii) other extraordinary items, all determined on a consolidated basis with respect to GTJ and its Subsidiaries, and calculated in accordance with G.A.A.P.

 

k.              “Encumbered Properties” means those properties described on Schedule 1(m). 

 

l.                  “Event of Default” has the meaning set forth in Section 6 below.

 

m.          “Facility” shall mean the loans, advances and financial accommodations to be provided to the Borrowers pursuant to this Agreement and the Note.

 

n.              “Fixed Charge Coverage Ratio” means the ratio of (x) EBITDAR minus transaction costs related to the WU/Lighthouse Transaction expenses divided by (y) current portion of long-term debt (but excluding outstandings under the Facility or under any other non-amortizing credit facility, including non-amortizing mortgage notes in existence on the Closing Date and those relating to Permitted Acquisitions) plus rent expense plus interest expense, all determined on a consolidated basis with respect to GTJ and its Subsidiaries, and calculated accordance with G.A.A.P.

 

o.              “G.A.A.P.” means, with respect to any date of determination, generally accepted accounting principles as used by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants consistently applied and maintained throughout the periods indicated.

 

p.              “Governmental Authority” means any nation or government, any state, province, city or municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board or similar body, whether federal, state, provincial, territorial, local or foreign.

 

q.              “Hazardous Materials” includes, without limit, any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended (49) U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 9601, et seq.), and in the regulations adopted and publications promulgated pursuant thereto, or any other federal, state or local environmental law, ordinance, rule or regulation.

 

r.                 “Lease” means the lease between Farm Spring and UTC with respect to  the Premises.

 

s.                “LIBOR Rate Loan” shall mean a Loan which bears interest at the LIBOR Rate.

 

t.                 “Loan” shall mean a loan made to the Borrowers by the Bank pursuant to the Note.

 

u.              “Material Adverse Effect” means a material adverse effect on (a) the business, operations, properties, or condition (financial or otherwise) of any Borrower or the Premises or (b) the ability of any Borrower to perform any of its material obligations under any Transaction Document to which it is a party.

 

v.              “Mortgage” means the Mortgage by Farm Springs in favor the Bank with respect to the premises located at 8 Farm Springs Road, Farmington, Connecticut, as same may be amended, restated, supplemented or modified, from time to time.

 

w.            “Net Worth” means (i) total assets (including tangible and intangible assets) minus loans to and receivables from any affiliated or related party minus (ii) total liabilities, all calculated on a consolidated basis with respect to GTJ and its Subsidiaries in accordance with G.A.A.P.

 

x.              “Note” means the Standard LIBOR Grid Note, in the principal amount of $10,000,000, dated the Closing Date, by the Borrowers in favor of the Bank, as same may be amended, restated, supplemented or modified, from time to time.

 

y.              “Obligations” means any and all indebtedness or other obligations of the Borrowers to the Bank in any capacity, now existing or hereafter incurred, however created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent (including obligations pursuant to any guaranty, endorsement, other assurance of payment or otherwise and reimbursement obligations with respect to letters of credit), whether joint or several, whether from time to time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions, renewals and replacements thereof, and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing, including any indebtedness or obligations (i) not yet outstanding but contracted for, or with regard to which any other commitment by the Bank exists; (ii) arising prior to, during or after any pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding; (iii) owed by the Borrowers to others and which the Bank obtained, or may obtain, by assignment or otherwise; and (iv) payable under this Agreement or the Note.

 

2

 

z.               “Person” means any natural person, corporation, limited liability company, limited liability partnership, business trust, joint venture, association, company, partnership, trust or Governmental Authority.

 

aa.       “Permitted Acquisition” means acquisitions of real property or related assets consistent with the businesses, as presently conducted, of GTJ and its Subsidiaries, provided that no Event of Default shall have occurred and is continuing at the time of, nor would occur as a result of, such proposed acquisition.

 

bb.       “Premises” means real property and improvements located at 8 Farm Springs Road, Farmington, Connecticut.

 

cc.         “Subordinated Debt” means all indebtedness of the Borrowers which has been formally subordinated to payment and collection of the Obligations.

 

dd.       “Subsidiary” means any corporation or other business entity of which at least fifty percent (50%) of the voting stock or other ownership interest is owned by a Borrower directly or indirectly through one or more Subsidiaries. If a Borrower has no Subsidiaries, the provisions of this Agreement relating to the Subsidiaries shall be disregarded, without affecting the applicability of such provisions to such Borrower alone.

 

ee.         “Transaction Documents” means this Agreement, the Note, the Mortgage and all other agreements, documents and instruments executed in connection herewith or therewith including, but not limited to, all documents and instruments executed by the Borrowers, at any time, in favor of the Bank in connection with this Agreement and the Loans made hereunder.

 

ff.           “WU/Lighthouse Transaction” means the transaction whereby GTJ Realty, LP (the sole member of Farm Springs) acquired a certain portfolio of twenty-five properties, and, in connection therewith, Jeffrey Wu, Paul Cooper, Jerome Cooper, Jeffrey Ravetz, Sarah Ravetz and Louis Sheinker became the owners of 33.29% limited partnership interests of GTJ Realty, LP.

 

gg.         “UTC” means United Technologies Corp.

 

2.              REPRESENTATIONS AND WARRANTIES. Each Borrower makes the following representations and warranties, all of which shall be deemed to be continuing representations and warranties as long as this Agreement is in effect:

 

a.              Good Standing; Authority. Each Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed. Each Borrower is duly authorized to do business in each jurisdiction in which failure to be so qualified might have a Material Adverse Effect on its business or assets and has the power and authority to own each of its assets and to use them in the ordinary course of business now and in the future.

 

b.              Compliance. Each Borrower conducts its business and operations and the ownership of its assets in compliance with each applicable statute, regulation and other law, including environmental laws, except where the failure to comply would not have a Material Adverse Effect. All approvals, including authorizations, permits, consents, franchises, licenses, registrations, filings, declarations, reports and notices (the “Approvals”) necessary for the conduct of each Borrower’s business and for the Credit have been duly obtained and are in full force and effect. Each Borrower is in compliance with the Approvals. Each Borrower is in compliance with its certificate of incorporation, by-laws, partnership agreement, articles of organization, operating agreement or other applicable organizational or governing document as may be applicable to the such Borrower depending on its organizational structure (“Governing Documents”). Each Borrower is in compliance with each agreement to which it is a party or by which it or any of its assets is bound, except where the failure to comply would not have a Material Adverse Effect.

 

c.               Legality. The execution, delivery and performance by each Borrower of this Agreement and all related documents, including the Transaction Documents, (i) are in furtherance of such Borrower’s purposes and within its power and authority; (ii) do not (A) violate any statute, regulation or other law or any judgment, order or award of any court, agency or other governmental authority or of any arbitrator with respect to such Borrower or (B) violate such Borrower’s governing documents, constitute a default under any agreement binding on such Borrower or result in a lien or encumbrance on any assets of such Borrower, other than liens in favor of the Bank; (iii) have been duly authorized by all necessary organizational actions of such Borrower and (iv) constitute legal, valid and binding obligations of each Borrower enforceable against each Borrower in accordance with its terms except to the extent that enforcement may be limited by applicable bankruptcy, reorganization, moratorium, insolvency and similar laws affecting creditors’ rights generally or by equitable principles of general application, regardless of  whether considered in a proceeding in equity or at law.

 

d.              Financial Condition. GTJ has heretofore furnished to the Bank the audited consolidated balance sheet of GTJ and its Subsidiaries and the related consolidated statement of income, retained earnings and cash flow of GTJ and its Subsidiaries, audited by BDO USA, LLP, independent certified public accountants, for the fiscal year ended December 31, 2011. Such financial statements were prepared in conformity with G.A.A.P., applied on a consistent basis, and fairly present the consolidated financial condition and consolidated results of operations of GTJ and its Subsidiaries as of the date of such financial statements and for the periods to which they relate. Other than obligations and liabilities arising in the ordinary course of business since December 31, 2011, there are no obligations or liabilities contingent or otherwise, of GTJ or any of its Subsidiaries which are not reflected or disclosed on such audited statements which would have a Material Adverse Effect. The Borrowers shall deliver to the Bank, a certificate of the Chief Financial Officer of GTJ to that effect on the Closing Date. Each Borrower is Solvent. The fiscal year of each Borrower is the calendar year.

 

3

 

e.               Title to Assets. Each Borrower has good and marketable title to each of its assets free of security interests, mortgages or other liens or encumbrances, except as set forth on the schedule attached hereto and made part hereof (the “Schedule”) titled “Permitted Liens” or pursuant to the Bank’s prior written consent.

 

f.                Judgments and Litigation. There is  no pending or threatened claim, audit, investigation, action or other legal proceeding or judgment, order or award of any court, agency or other governmental authority or arbitrator which involves any Borrower or their respective assets (including the Premises) and might have a Material Adverse Effect upon any Borrower or the Premises or threaten the validity of the Credit, any Transaction Document or any related document or action (an “Action”).

 

g.               Taxes. Each Borrower and each of their respective Subsidiaries has filed or has caused to be filed all tax returns (foreign, federal, state and local) required to be filed (including, without limitation, with respect to payroll and sales taxes) and each Borrower and each of their respective Subsidiaries has paid all taxes (including, without limitation, all payroll and sales taxes), assessments and governmental charges and levies shown thereon to be due, including interest and penalties except taxes, assessments and governmental charges and levies being contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with G.A.A.P. consistently applied shall have been provided on the books of each Borrower and their respective Subsidiaries.

 

h.              Federal Reserve Regulations; Use of Proceeds. Neither any Borrower nor any of their respective Subsidiaries is engaged principally in, nor has as one of its important activities, the business of extending credit for the purpose of purchasing or carrying any “margin stock” (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States, as amended from time to time). No part of the proceeds of any Loan and no other extension of credit hereunder will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, (i) to purchase or to carry margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock, or to refund indebtedness originally incurred for such purposes, or (ii) for any purpose which violates or is inconsistent with the provisions of Regulation T, U, or X of the Board of Governors of the Federal Reserve System.

 

i.                  Approvals. No registration with or consent or approval of, or other action by, any Governmental Authority or any other Person is required in connection with the execution, delivery and performance of this Agreement, or with the execution and delivery of other Transaction Documents to which such Borrower it is a party or the borrowings and each other extension of credit hereunder other than registrations, consents and approvals received prior to the Closing Date and disclosed to the Bank and which are in full force and effect.

 

j.                 Subsidiaries and Affiliates. Schedule 2(j)  sets forth a correct and complete list of each of each Borrower’s Subsidiaries and Affiliates as of the Closing Date showing as to each Subsidiary and Affiliate, its name, the jurisdiction of its incorporation, its shareholders or other owners of an interest in each Subsidiary and Affiliate and the number of outstanding shares or other ownership interest owned by each shareholder or other owner of an interest.

 

k.              Hazardous Materials. Each Borrower is in compliance in all material respects with all applicable environmental laws and neither any Borrower nor any of their respective Subsidiaries has used Hazardous Materials on, from, or affecting any property now owned or occupied or hereafter owned or occupied by such Borrower or any such Subsidiary in any manner which violates any applicable environmental laws. To the best actual knowledge of each officer of the Borrowers, no prior owner of any such property or any tenant, subtenant, prior tenant or prior subtenant have used Hazardous Materials on, from, or affecting such property in any manner which violates any applicable environmental law.

 

l.                   No  Default. No  Default or Event of Default has occurred and is continuing.

 

m.          Compliance with Law. Each Borrower and their respective Subsidiaries is in compliance, with all laws, rules, regulations, orders and decrees with are applicable to any Borrower or any such Subsidiary, or to any of their respective properties, including the Premises, which the failure to comply with could reasonably be expected to have a Material Adverse Effect.

 

n.              Full Disclosure. Neither this Agreement nor any certificate, financial statement or other writing provided to the Bank by or on behalf of any Borrower contains any statement of fact that is incorrect or misleading in any material respect or omits to state any fact necessary to make any such statement not incorrect or misleading. No Borrower has failed to disclose to the Bank any fact that might have a Material Adverse Effect on any Borrower.

 

3.              AFFIRMATIVE COVENANTS. So long as this Agreement is in effect,  each Borrower will comply with the following: 

 

a.              Financial  Statements and Other Information. Promptly deliver to the Bank:

 

(i)   within sixty (60) days after the end of each of its first three fiscal quarters, (a) an unaudited consolidated financial statement of GTJ and its Subsidiaries as of the end of such quarter, which financial  statement shall consist of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the period from the end of the previous fiscal year, with a consolidated balance sheet as of the quarter end all in such detail as the Bank may reasonably request and (b) Form 10Q filed with the  Securities and Exchange Commission with respect to such fiscal period;

 

4

 

(ii)           as soon as available and in any event within one hundred twenty (120) days after the end of each fiscal year, (a) (x) consolidated statements of GTJ’s and its Subsidiaries’ income and cash flows and its consolidated balance sheet as of the end of such fiscal year, and to be (check applicable box, if no box is checked the financial statements shall be audited):

 

	
x audited
    	
 
    	
o reviewed
    	
 
    	
o compiled
    

 

by GTJ’s regularly engaged independent registered public accountant, provided that such independent registered public accountant is of national or regional reputation (the “Accountant”), setting forth comparative figures for the preceding fiscal year and (y) Form 10K filed with the Securities and Exchange Commission with respect to such fiscal year; all such statements shall be certified by GTJ’s chief financial officer to be correct and in accordance with GTJ’s and its Subsidiaries’ records and to present fairly the results of GTJ’s and its Subsidiaries’ operations and cash flows and its financial position at year end and (b) annual management prepared financial statements of Farm Springs, in form and substance reasonably satisfactory to the Bank, including a balance sheet, a statement of income and expense and a certified rent roll, which shall disclose in reasonable detail all earnings and expenses with respect to Farm Springs and the Premises.

 

(iii)          with each statement of income, a certificate executed by GTJ’s chief executive and chief financial officers or other such person responsible for the financial management of GTJ (A) setting forth the computations required to establish GTJ’s compliance with each financial covenant, if any, during the statement period, (B) stating that the signers of the certificate have reviewed this Agreement and the operations and condition (financial or other) of GTj and each of its Subsidiaries during the relevant period and (C) stating that no Event of Default occurred during the period, or if an Event of Default did occur, describing its nature, the date(s) of its occurrence or period of existence and what action GTJ has taken with respect thereto

 

(iv)          within ten (10) days of request by the Bank, written status reports for the Premises in such detail as the Bank may reasonably require;

 

(v)           promptly following the filing thereof, copies of the United States federal tax returns filed by each Borrower,

 

(vi)          copies of all annual reports, proxy statements and similar information distributed to GTJ’s shareholders, partners or members, and copies of all filings with the Securities and Exchange Commission and the Pension Benefit Guaranty Corporation, and

 

(vii)         such additional information, reports or other information as the Bank may from time to time reasonably request regarding the financial and business affairs of GTJ or any Subsidiary or the Premises, all in form satisfactory to the Bank.

 

b.              Accounting; Tax Returns and Payment of Claims. Each Borrower will keep adequate records and proper books of record and account and maintain a system of accounting and reserves in accordance with generally accepted accounting principles, has filed and will file each tax return required of it and has paid and will pay when due each tax, assessment, fee, charge, fine and penalty imposed by any taxing authority upon it or any of its assets, income or franchises, as well as all amounts owed to mechanics, materialmen, landlords, suppliers and the like in the normal course of business which, if unpaid, might become a lien or charge upon such properties or any part thereof; provided, however, that neither Borrower shall be required to pay and discharge or cause to be paid and discharged any such tax, assessment, charge, levy or claim so long as the validity thereof shall be contested in good faith by appropriate proceedings, and such Borrower shall have set aside on its books adequate reserves determined in accordance with G.A.A.P. with respect to any such tax, assessment, charge, levy or claim so contested; further, provided that, subject to the foregoing proviso, each Borrower will pay or cause to be paid all such taxes, assessments, charges, levies or claims upon the commencement of proceedings to foreclose any lien which has attached as security therefore.

 

c.               Inspections. Promptly upon the Bank’s request, each Borrower will permit the Bank’s officers, attorneys or other agents to inspect its premises, examine and copy its records and discuss its business, operations and financial or other condition with its responsible officers and independent accountants.

 

d.              Operating Accounts. Maintain primary operating accounts with the Bank.

 

e.               Changes in Management and Control. Immediately upon any change in the identity of such Borrower’s chief executive officer or in its beneficial ownership, such Borrower will provide to the Bank a certificate executed by its senior individual authorized to transact business on behalf of such Borrower, specifying such change.

 

f.                Notice of Defaults and Material Adverse Changes. Immediately upon acquiring reason to know of (i) any Event of Default, (ii) any event or condition that might have a Material Adverse Effect upon any Borrower or the Premises, (iii) any Action, (iv) the request by UTC to renew or terminate the Lease, or (v) the acquisition, creation or establishment of any new Subsidiary and the acquisition of any new real properties, the Borrowers will provide to the Bank a certificate executed by such Borrower’s senior individual authorized to transact business on behalf of such Borrower, specifying the date(s) and nature of the event or the Action and what action such Borrower has taken or proposes to take with respect to it.

 

g.               Existence, Properties, Insurance. Do or cause to be done all things necessary to preserve and keep in full force and effect its corporate or limited liability company, as applicable, existence, rights and franchises and comply in all material respects with all laws applicable to it; at all times maintain, preserve and protect all franchises, patents, trademarks, trade names and service marks necessary for the operation of its respective business, and preserve all of its property, in each case, material to its business and keep all property in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, replacements, betterments and improvements thereto so that the business carried on in connection therewith may be properly conducted in the ordinary course at all times in the manner and custom of similar businesses; at all times preserve and maintain in full force and effect all governmental rights, privileges, qualifications, permits, licenses and franchises necessary for the normal conduct of its business; and at all times maintain its property in good repair and will on request provide the Bank with evidence of insurance coverage satisfactory to the Bank, including fire and hazard, liability, workers’ compensation and business interruption insurance and flood hazard insurance as required.

 

5

 

h.              Payment of Indebtedness. Pay all indebtedness and obligations, now existing or hereafter arising, as and when due and payable except where (i) the validity or amount thereof is being contested in good faith and by appropriate proceedings, which proceedings shall include good faith negotiations, (ii) such Borrower has set aside on its books adequate reserves with respect thereto in accordance with G.A.A.P. applied on a consistent basis, and (iii) the failure to make such payment pending such contest could not reasonably be expected to have a Material Adverse Effect.

 

i.                  Compliance with Applicable Laws. Comply with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority, the breach of which could reasonably be expected to have a Material Adverse Effect, including, without limitation, the rules and regulations of the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation.

 

j.                 Environmental Laws. Comply in all material respects with the requirements of all applicable environmental laws, provide to the Bank all documentation in connection with such compliance that the Bank may reasonably request, and defend, indemnify, and hold harmless the Bank and its employees, agents, officers, and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way related to, (a) the presence, disposal, or release of any Hazardous Materials on any property at any time owned or occupied by any Borrower or any Subsidiary of any Borrower; (b) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (c) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Materials, and/or (d) any violation of applicable Environmental Laws, including, without limitation, reasonable attorney and consultant fees, investigation and laboratory fees, court costs, and litigation expenses.

 

k.              Further Assurances. Promptly upon the request of the Bank, each Borrower will execute and deliver each writing and take each other action that the Bank deems necessary or desirable in connection with any transaction contemplated by this Agreement

 

4.              NEGATIVE COVENANTS. As long as this Agreement is in effect, no Borrower shall violate any of the following covenants:

 

a.              Indebtedness. Permit any indebtedness (including direct and contingent liabilities and indebtedness with respect to the Premises and all properties of the Borrowers other than the Encumbered Properties) not described on Schedule 4(a)except for (i) indebtedness owing to the Bank, (ii)trade indebtedness or current liabilities for salary, wages and related compensation incurred in the ordinary course ofbusiness and not substantially overdue and (iii)indebtedness incurred in connection with Permitted Acquisitions.

 

b.              Guaranties. Become a guarantor, a surety, or otherwise liable for the debts or other obligations of another, whether by guaranty or suretyship agreement, agreement to purchase indebtedness, agreement for furnishing funds through the purchase of goods, supplies or services (or by way of stock purchase, capital contribution, advance or loan) for the purpose of paying or discharging indebtedness, or otherwise, except (i)as an endorser of instruments for the payment of money deposited to its bank account for collection in the ordinary course of business, (ii)as guarantor or surety under any performance bonds entered into in the ordinary course of business, (iii) except as may be specified in Schedule 4(b) and (iv) guaranties and other contingent obligations in connection with Permitted Acquisitions.

 

c.               Liens. Permit any of its assets (including the Premises, but excluding the Encumbered Properties) to be subject to any security interest, mortgage or other lien or encumbrance, except as set forth on Schedule 4(c) and except for (i)liens in favor of the Bank, (ii)liens for taxes, assessments or charges not yet due; (iii)pledges and deposits to secure obligations or performance for workers’ compensation, bids, tenders, contracts other than notes, appeal bonds or public or statutory obligations; (iv)materialmens’, mechanics’, carriers’ and similar liens arising in the normal course of business and (v)liens arising or assumed in connection with Permitted Acquisition, provided that such liens shall not extend to the Premises.

 

d.              Investments. Make any investment other than in FDIC insured deposits or United States Treasury obligations of less than one year, or in money market or mutual funds administering such investments, except for Permitted Acquisitions and as set forth on Schedule 4(d),

 

e.               Loans. Make any loan, advance or other extension of credit except as disclosed on Schedule 4(e), except for endorsements of negotiable instruments deposited to such Borrower’s deposit account for collection, trade credit in the normal course of business and intercompany loans approved in writing by the Bank, such approval not to be unreasonably withheld, delayed, or conditioned.

 

f.                Distributions. Following the occurrence of an Event of Default, declare or pay any distribution, except for (i) dividends payable solely in stock, (ii) cash distributions and dividends paid to GTJ by Farm Springs and (iii) distributions required to be made to maintain GTJ’s status as a real estate investment trust.

 

6

 

g.               Changes In Form. (i) Transfer or dispose of substantially all of its assets, (ii) acquire substantially all of the assets of any other entity if a Default or an Event of Default has occurred and is then continuing or would occur as a result thereof, (iii) do business under or otherwise use any name other than its true name, (iv) make any material change in its business, structure, purposes or operations that might have a Material Adverse Effect on any Borrower or the Premises, or (v) participate in any merger, consolidation or other absorption (provided that any Subsidiary of each Borrower may merge with and into such Borrower or another Subsidiary so long as no Default or Event of Default has occurred and is then continuing or would occur as a result thereof).

 

h.              Nature of Business. Change or alter in any material respect the nature of its business, from the nature of the business engaged in by it on the Closing Date, except as otherwise permitted herein.

 

i.                  Sale and Leaseback. Enter into any arrangement or arrangements with any Person whereby it shall sell or transfer any property, whether real or personal, used or useful in its business, whether now owned or hereafter acquired, if at the time of such sale or disposition it intends to lease or otherwise acquire the right to use or possess (except by purchase) such property or like property for a substantially similar purpose.

 

j.                 Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan to be used for any purpose which violates or is inconsistent with the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System.

 

k.              Accounting Policies and Procedures; Tax Status. (i) Permit any change in the accounting policies and procedures of any Borrower including a change in fiscal year, without the prior written consent of the Bank; provided, however, that any policy or procedure required to be changed by the FASB (or other board or committee of the FASB in order to comply with Generally Accepted Accounting Principles) may be so changed, or (ii) permit any change or take any action to change the tax status under the Code of any Borrower.

 

l.                  Hazardous Materials. Cause or permit any of its properties or assets to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Materials, except in compliance with all applicable federal, state and local laws or regulations, or cause or permit, as a result of any intentional or negligent act or omission on the part of any Borrower or any tenant or subtenant, a release of Hazardous Materials in violation of applicable law or regulation onto such property or asset or onto any other property, except to the extent any noncompliance or violation referred to in this subsection (m) could not reasonably be expected to have a Material Adverse Effect.

 

m.          Limitations on Fundamental Changes. Merge or consolidate with, or sell, assign, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now or hereafter acquired) to any Person, or acquire all or substantially all of the assets or the business or stock of any Person (other than Permitted Acquisitions) or liquidate, wind up or dissolve or suffer any liquidation or dissolution.

 

n.              Subordinated Debt. Directly or indirectly prepay, defease, purchase, redeem, or otherwise acquire any Subordinated Debt or amend or modify any of the terms thereof.

 

o.              Transactions with Affiliates. Except as set forth on Schedule 4(o), enter into any transaction including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any Affiliate, except in the ordinary course of business and pursuant to the reasonable requirements of such Borrower’s business and upon fair and reasonable terms no less favorable to such Borrower they would obtain in a comparable arms length transaction with a Person not an Affiliate.

 

p.              Impairment of Security Interest. Take or omit to take any action which might or would have the result of effecting or impairing the security interest in any property subject to a security interest in favor of the Bank and, except for permitted liens described in Section 4(c) above, no Borrower shall grant to any person any interest whatsoever in any property subject to a security interest in favor of the Bank.

 

q.              Sale of Assets. Sell, lease, transfer or otherwise dispose of their respective properties and assets, including the Premises, whether or not pursuant to an order of a federal agency or commission, except for (a) the sale of assets disposed of in the ordinary course of business, (b) the sale or other disposition of properties, assets, or businesses no longer used or useful in the conduct of their respective businesses, (c) dispositions of property and assets made in accordance with the terms of the Mortgage and (d) the sales or dispositions of assets which would not materially adversely affect the Bank’s collateral position.

 

r.                 Lease. Amend or modify the Lease in any manner materially adverse to the interests of the Bank.

 

5.              FINANCIAL COVENANTS. During  the term of this Agreement, no Borrower shall violate, and shall not suffer or permit any of its Subsidiaries to violate, any of the following covenants (complete applicable financial covenant) or any Additional Financial Covenants on Schedule 5. Unless a different measurement period is specified, compliance for the financial covenants shall be required at all times.

 

A.            GTJ and its Subsidiaries shall maintain Net Worth of not less than $70,000,000 on December 31, 2012 and at all times thereafter, measured quarterly as of each fiscal quarter end on a trailing four-quarter basis.

 

7

 

B.                 GTJ and its Subsidiaries shall maintain Fixed Charge Coverage Ratio of not less than 1.30:1.0, measured for the previous four quarters as of each fiscal quarter end, on a trailing four-quarter basis.

 

6.              DEFAULT.

 

a.              Events of Default. Any of the following events or conditions shall constitute an “Event of Default”: (i) failure by any Borrower to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise) the Obligations (including without limitation principal, interest, fees and any reimbursement obligations with respect to a drawing under any Letter of Credit), or any part thereof, which failure is not cured within ten (10) days thereafter, or there occurs any event or condition which after notice, lapse of time or after both notice and lapse of time will permit acceleration of any Obligation; (ii) default by any Borrower in the performance of any material obligation, term, covenant or condition of this Agreement, the other Transaction Documents or any other agreement with the Bank or any of its Affiliates or Subsidiaries (a “Bank Affiliate”); (iii) any representation or warranty made or deemed made by any Borrower in this Agreement or any other Transaction Document shall prove to be false or misleading in any material respect when made or given or when deemed made or given; (iv) failure by any Borrower to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise) any indebtedness or obligation owing to any third party or any Bank Affiliate, the occurrence of any event which could result in acceleration of payment of any such indebtedness or obligation or the failure to perform any agreement with any third party or any Bank Affiliate, to the extent such failure would have a Material Adverse Effect; (v) any Borrower is dissolved, becomes insolvent, generally fails to pay or admits in writing its inability generally to pay its debts as they become due; (vi) any Borrower makes a general assignment, arrangement or composition agreement with or for the benefit of its creditors or makes, or sends notice of any intended, bulk sale; the sale, assignment, transfer or delivery of all or substantially all of the assets of any Borrower to a third party; or the cessation by any Borrower as a going business concern; (vii) any Borrower files a petition in bankruptcy or institutes any action under federal or state law for the relief of debtors or seeks or consents to the appointment of an administrator, receiver, custodian or similar official for the wind up of its business (or has such a petition or action filed against it and such petition action or appointment is not dismissed or stayed within forty-five (45) days); (viii) the reorganization, merger, consolidation or dissolution of any Borrower (or the making of any agreement therefor); (ix) the entry of any judgment or order of any court, other governmental authority or arbitrator against any Borrower which would have a Material Adverse Effect; (x) falsity, omission or inaccuracy of facts submitted to the Bank or any Bank Affiliate (whether in a financial statement or otherwise); (xi) an adverse change in any Borrower, its business, assets, operations, affairs or condition (financial or otherwise) from the status shown on any financial statement or other document submitted to the Bank or any Bank Affiliate, and which change the Bank determines will have a Material Adverse Effect on (a) any Borrower, its business, assets, operations or condition (financial or otherwise), or (b) the ability of any Borrower to pay or perform the Obligations; (xii) any pension plan of any Borrower fails to comply with applicable law or has vested unfunded liabilities that, in the opinion of the Bank, might have a Material Adverse Effect on any Borrower’s ability to repay its debts; (xiii) any indication or evidence received by the Bank that any Borrower may have directly or indirectly been engaged in any type of activity which, in the Bank’s reasonable discretion, might result in the forfeiture or any property of any Borrower to any governmental authority; (xiv) Change of Control; (xv) sale, transfer or other disposition of the Premises without the prior written consent of the Bank; (xvi) any material provision of any Transaction Document shall for any reason cease to be in full force and effect in accordance with its terms or any Borrower shall so assert in writing; (xvii) vacancy of the Premises for more than six (6) months following the expiration of the Lease if the Borrowers have not provided substitute collateral satisfactory to the Bank, in its sole discretion, with a value not less than $14,300,000 (based upon a 70% loan-to-value ratio) and pro forma evidence of a Debt Service Coverage Ratio of not less than 1.25:1.00; (xviii) the occurrence of any event described in Section 6(a)(i) through and including 6(a)(xvi) with respect to any endorser, guarantor or any other party liable for, or whose assets or any interest therein secures, payment of any of the Obligations; or (xv) the Bank in good faith deems itself insecure with respect to payment or performance of the Obligations.

 

b.              Rights and Remedies Upon Default. Upon the occurrence of any Event of Default, the Bank without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon any Borrower or any other person (all and each of which demands, presentments, protests, advertisements and notices are hereby waived), may exercise all rights and remedies under each Borrower’s agreements with the Bank or its Affiliates, applicable law, in equity or otherwise and may declare all or any part of any Obligations not payable on demand to be immediately due and payable without demand or notice of any kind and terminate any obligation it may have to grant any additional loan, credit or other financial accommodation to the Borrowers. All or any part of any Obligations whether or not payable on demand, shall be immediately due and payable automatically upon the occurrence of an Event of Default in Section 6(a)(vi) above. The provisions hereof are not intended in any way to affect any rights of the Bank with respect to any Obligations which may now or hereafter be payable on demand. With respect to all Letters of Credit (as defined in the Note) that shall not have matured or presentment for honor shall not have occurred; the Borrowers shall provide the Bank with Cash Collateral in an amount equal to the aggregate undrawn amount of such Letters of Credit. Such Cash Collateral shall be applied to reimburse the Bank for drawings under Letters of Credit for which the Bank has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy other Obligations, with any amount remaining after such satisfactions to be returned to the Borrowers or paid to such other party as may legally be entitled to the same.

 

7.              EXPENSES. The Borrowers shall jointly and severally pay to the Bank on demand all reasonable costs and expenses (including all fees and disbursements of counsel retained for advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain), which the Bank may incur in connection with (i) the administration of the Obligations, including any administrative fees the Bank may impose for the preparation of discharges, releases or assignments to third-parties; (ii) the enforcement and collection of any Obligations or any guaranty thereof; (iv) the exercise, performance ,enforcement or protection of any of the rights of the Bank hereunder; or (v) the failure of any Borrower to perform or observe any provisions hereof. After such demand for payment of any cost, expense or fee under this Section or elsewhere under this Agreement, the Borrower shall pay interest at the highest default rate specified in any instrument evidencing any of the Obligations from the date payment is demanded by the Bank to the date reimbursed by the Borrowers.

 

8

 

All such costs, expenses or fees under this Agreement shall be added to the Obligations.

 

8.              TERMINATION. This Agreement shall remain in full force and effect until (i) all Obligations outstanding, or contracted or committed for (whether or not outstanding), shall be finally and irrevocably paid in full and (ii) all Transaction Documents have been terminated by the Bank.

 

9.              RIGHT OF SETOFF. If an Event of Default occurs, the Bank shall have the right to set off against the amounts owing under this Agreement and the other Transaction Documents any property held in a deposit or other account or otherwise with the Bank or its Affiliates or otherwise owing by the Bank or its Affiliates in any capacity to any Borrower or any guarantor of, or endorser of any of the Transaction Documents evidencing, the Obligations. Such setoff shall be deemed to have been exercised immediately at the time the Bank or such Affiliate elect to do so.

 

10.       MISCELLANEOUS.

 

a.              Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrowers (at their address on the Bank’s records) or to the Bank (at the address on page one and separately to the Bank officer responsible for Borrowers’ relationship with the Bank). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (1) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

 

b.              Generally Accepted Accounting Principles. Any financial calculation to be made, all financial statements and other financial information to be provided, and all books and records, system of accounting and reserves to be kept in connection with the provisions of this Agreement, shall be in accordance with generally accepted accounting principles consistently applied during each interval and from interval to interval; provided, however, that in the event changes in generally accepted accounting principles shall be mandated by the Financial Accounting Standards Board or any similar accounting body of comparable standing, or should be recommended by GTJ’s certified public accountants, to the extent such changes would affect any financial calculations to be made in connection herewith, such changes shall be implemented in making such calculations only from and after such date as the Borrowers and the Bank shall have amended this Agreement to the extent necessary to reflect such changes in the financial and other covenants to which such calculations relate.

 

c.               Indemnification. If after receipt of any payment of all, or any part of, the Obligations, the Bank is, for any reason, compelled to surrender such payment to any person or entity because such payment is unenforceable, void or voidable whether as a preference, an impermissible setoff, or a diversion of trust funds, or for any other reason, the Transaction Documents shall continue in full force and the Borrowers shall be jointly and severally liable, and shall jointly and severally indemnify and hold the Bank harmless for, the amount of such payment surrendered. The provisions of this Section shall be and remain effective notwithstanding any contrary action which may have been taken by the Bank in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Bank’s rights under the Transaction Documents and shall be deemed to have been conditioned upon such payment having become final and irrevocable. The provisions of this Section shall survive the termination of this Agreement and the Transaction Documents.

 

d.              Further Assurances. From time to time, each Borrower shall take such action and execute and deliver to the Bank such additional documents, instruments, certificates, and agreements as the Bank may reasonably request to effectuate the purposes of the Transaction Documents.

 

e.               Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies. All rights and remedies of the Bank pursuant to this Agreement and the Transaction Documents shall be cumulative, and no such right or remedy shall be exclusive of any other such right or remedy. In the event of any irreconcilable inconsistencies, this Agreement shall control. No single or partial exercise by the Bank of any right or remedy pursuant to this Agreement or otherwise shall preclude any other or further exercise thereof, or any exercise of any other such right or remedy, by the Bank.

 

f.                Governing Law; Jurisdiction. This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York. Except as otherwise provided under federal law, this Agreement will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. EACH BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN NASSAU COUNTY OR SUFFOLK COUNTY AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWERS’ ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST ANY BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF ANY BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Each Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Borrowers. Each Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.

 

9

 

g.               Joint and Several; Successors and Assigns. If there is more than one Borrower, each of them shall be jointly and severally liable for all amounts, which become due, and the performance of all obligations under this Agreement, and the term “the Borrower” shall include each as well as all of them. This Agreement shall be binding upon the Borrowers and upon their heirs and legal representatives, their successors and assignees, and shall inure to the benefit of, and be enforceable by, the Bank, its successors and assignees and each direct or indirect assignee or other transferee of any of the Obligations; provided, however, that this Agreement may not be assigned by the Borrower without the prior written consent of the Bank.

 

h.              Waivers; Changes in Writing. No failure or delay of the Bank in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. Each Borrower expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Bank (including representations to make loans to the Borrowers) and agrees that none of the foregoing shall operate as a waiver of any right or remedy of the Bank. No notice to or demand on any Borrower in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances. No waiver of any provision of this Agreement or consent to any departure by any Borrower therefrom shall in any event be effective unless made specifically in writing by the Bank and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No modification to any provision of this Agreement shall be effective unless made in writing in an agreement signed by the Borrowers and the Bank.

 

i.                  Interpretation. Unless the context otherwise clearly requires, references to plural includes the singular and references to the singular include the plural; references to “individual” shall mean a natural person and shall include a natural person doing business under an assumed name (e.g., a “DBA”); the word “or” has the inclusive meaning represented by the phrase “and/or”; the word “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; and captions or section headings are solely for convenience and not part of the substance of this Agreement. Any representation, warranty, covenant or agreement herein shall survive execution and delivery of this Agreement and shall be deemed continuous. Each provision of this Agreement shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting law. If any provision nevertheless is held invalid, the other provisions shall remain in effect. The Borrowers agree that in any legal proceeding, a photocopy of this Agreement kept in the Bank’s course of business may be admitted into evidence as an original.

 

j.                 Participations and Assignments. The Bank reserves the right to (a) or assign all or a portion of the Loans and its commitments thereunder, with the consent, not to be unreasonably withheld, of the Borrowers unless the assignee is an affiliate of the Bank or an Event of Default has occurred and is then continuing, and (b) grant participations in the Loans and commitments thereunder to one or more financial institutions, provided, however, that no assignment shall be made or participation granted to an entity which is a competitor of any Borrower without the consent of the Borrowers, which consent may be withheld in the sole discretion of Borrowers. The Borrowers authorize Bank to disclose to any prospective assignee or participant, once approved by the Borrowers (if Borrowers’ approval is required hereunder), any and all financial information in such Bank’s possession concerning the Borrowers which has been delivered to Bank pursuant to this Agreement; provided that each such prospective participant shall execute a confidentiality agreement in form and substance reasonably acceptable to the Borrowers.

 

k.              Waiver of Jury Trial. THE BORROWERS AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THE BORROWERS AND THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. THE BORROWERS REPRESENT AND WARRANT THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. THE BORROWE ACKNOWLEDGE THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

 

L.             This Agreement amends and restates, in its entirety, and is given in substitution for (but not in satisfaction of) the Credit Agreement dated as of August 26, 2011 between GTJ and the Bank (as  amended, the “Prior Agreement”), provided that nothing contained herein or in any Transaction Document shall limit or affect the liens and security interests heretofore granted, pledged and/or assigned to the Bank by GTJ and Farm Springs. The execution and delivery of this Agreement shall not be construed to have constituted a repayment of any principal of, or interest on, the Note delivered in connection with the Prior Agreement, as same shall be amended and restated in connection with this Agreement.

 

M.         This Agreement shall become effective upon receipt by the Bank of (a) the following, each duly executed and delivered by the Borrowers and in form and substance satisfactory to the Bank, (i) this Agreement, (ii) an amended and restated Note, (iii) an amendment to each of the Mortgage and the environmental indemnity agreement and reaffirmation of the assignment of leases and rents (each delivered in connection with the Prior Agreement), (b) an updated appraisal to be ordered by the Bank, at the expense of the Borrowers, indicating an appraised value of the Premises not less than $14,300,000, (c) an amendment fee of $18,000 and (d) such other documents and agreements that the Bank shall reasonably require.

 

[the next page is the signature page]

 

10

 

Acknowledgment. Borrowers acknowledge that they have read and understand all the provisions of this Agreement, including the Governing Law, Jurisdiction and Waiver of Jury Trial, and has been advised by counsel as necessary or appropriate.

 

	
 
    	
MANUFACTURERS AND TRADERS TRUST COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GTJ REIT, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ David Oplanich
    
	
 
    	
 
    	
David Oplanich, CFO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FARM SPRINGS ROAD, LLC
    
	
 
    	
By:
    	
GTJ Realty, LP, the sole member 
    
	
 
    	
By:
    	
GTJ GP, LLC, the general partner 
    
	
 
    	
By:
    	
GTJ REIT, Inc., the sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Oplanich
    
	
 
    	
 
    	
David Oplanich, CFO
    

 

11

 

ACKNOWLEDGMENT

 

	
STATE OF NEW YORK
    	
)
    
	
 
    	
: SS.
    
	
COUNTY OF SUFFOLK
    	
)
    

 

On the              day of December, in the year 2012, before me, the undersigned, a Notary Public in and for said State, personally appeared      , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	
 
    	
 
    
	
 
    	
Notary Public
    

 

ACKNOWLEDGMENT

 

	
STATE OF NY
    	
)
    
	
 
    	
: SS.
    
	
COUNTY OF Nassau
    	
)
    

 

On the 26th day of December, in the year 2012, before me, the undersigned, a Notary Public in and for said State, personally appeared David Oplanich, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	
 
    	
/s/ Eric Rubenstein
    
	
 
    	
Notary Public
    
	
 
    	
 
    
	
 
    	
ERIC RUBENSTEIN
    
	
 
    	
NOTARY PUBLIC, State of   New York
    
	
 
    	
No. 01RU4747733
    
	
 
    	
Qualified in Nassau County
    
	
 
    	
Commission Expires   February 28, 2014
    

 

BANK USE ONLY

 

	
Authorization Confirmed:
    	
 
    
	
 
    	
Signature
    

 

12

 

Acknowledgment. Borrowers acknowledge that they have read and understand all the provisions of this Agreement, including the Governing Law, Jurisdiction and Waiver of Jury Trial, and  has been advised by counsel as necessary or appropriate.

 

	
 
    	
MANUFACTURERS AND TRADERS TRUST COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Lisa Congemi Doutney
    
	
 
    	
 
    	
Name:
    	
Lisa Congemi
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GTJ REIT, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
David Oplanich, CFO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
FARM SPRINGS ROAD,  LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
GTJ Realty, LP, the sole member
    
	
 
    	
By:
    	
GTJ GP, LLC,  the general partner
    
	
 
    	
By:
    	
GTJ REIT, Inc., the sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
David Oplanich, CFO
    

 

11

 

ACKNOWLEDGMENT

 

	
STATE OF NEW YORK
    	
)
    
	
 
    	
: SS.
    
	
COUNTY OF SUFFOLK
    	
)
    

 

On the 26 day of December, in the year 2012, before me, the undersigned, a Notary Public in and for said State, personally appeared Lisa Congemi Dontney, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

 

	
 
    	
/s/ Diana R. Alomar
    
	
 
    	
Notary Public
    
	
 
    	
 
    
	
 
    	
Diana R. Alomar
    
	
 
    	
Notary Public, State of   New York
    
	
 
    	
No. 01PA5058236
    
	
 
    	
Qualified in Suffolk   County
    
	
 
    	
Commission Expires May 17,   2014
    

 

ACKNOWLEDGMENT

 

	
STATE OF 
    	
)
    
	
 
    	
: SS.
    
	
COUNTY OF 
    	
)
    

 

On the    day of December, in the year 2012, before me, the undersigned, a Notary Public in and for said State, personally appeared , personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

	
 
    	
 
    
	
 
    	
Notary Public
    

 

BANK USE ONLY

 

	
Authorization Confirmed:
    	
 
    
	
 
    	
Signature
    

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00212-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00212-of-00352.parquet"}]]