Document:

Exhibit 10.19

LEASE AGREEMENT

THIS Lease Agreement (the “Lease”) entered into this 28th day of November, 2017, between Gallina Development Corporation, 1890 South Winton Road, Suite 100, Rochester, New York 14618, as LESSOR, and Transcat, Inc., 35 Vantage Point Drive, Rochester, New York 14624 as LESSEE. WITNESSETH THAT: The LESSOR, having full authority to make the agreement hereinafter set forth, does hereby demise and lease unto the LESSEE, and the LESSEE does hereby hire and take from the LESSOR those certain premises located in the Town of Ogden, County of Monroe, and State of New York, described as follows:

Being a parcel of land, with improvements, on the south side of Vantage Point Drive, Lot R-1A, (the “Property”) together with the office and warehouse building thereon, (the “Building”), being identified as 35 Vantage Point Drive, containing approximately 48,500 square feet. More particularly identified by the lined portion on the attached plot plan, which shall be made a part hereof and designated Exhibit A (the “Demised Premises”).

TO HAVE AND TO HOLD the same for a term beginning on the Commencement Date (as hereinafter defined) and ending on the last day of the 134th full month after the Commencement Date (the “Termination Date”) and the LESSEE hereby agrees to pay thereof an annual rental for the first twelve (12) months of the lease term (the “Base Rent”) of Four Hundred Thousand and 00/100 Dollars ($400,000.00), payable in equal monthly installments of Thirty Three Thousand Three Hundred Thirty Three and 33/100 Dollars ($33,333.33), with said Base Rent increasing 1% per annum effective on the anniversary date of the Commencement Date each year, all payable in advance on the first business day of each month during the said term at the office of the LESSOR at 1890 South Winton Road, Suite 100, Rochester, New York 14618. The first monthly installment of the stipulated rental payments shall be paid to the LESSOR on the Commencement Date of the Lease. LESSOR and LESSEE acknowledge that as an accommodation to LESSEE, LESSOR has agreed to waive the security deposit normally held by LESSOR. LESSEE certifies to LESSOR that it shall faithfully perform all of the covenants and conditions of this Lease.

LESSOR shall give LESSEE with no less than thirty (30) days written notice specifying the date on which LESSOR’s construction will be complete and the Demised Premises will be ready for occupancy by LESSEE (the date, after the end of such thirty (30) day period, when LESSOR delivers actual and exclusive possession of the Demised Premises to LESSEE shall be the “Commencement Date”). For at least two (2) weeks period prior to the Commencement Date, LESSOR will provide LESSEE with access to the Demised Premises so that it can prepare the Demised Premises for its occupancy, so long as LESSEE does not disrupt LESSOR’s final construction in any way.

LESSOR agrees to construct and install at LESSOR’s expense, the improvements and alterations described in the Building Specifications (Exhibit B) and Floor Plan (Exhibit C), attached hereto. Such improvements and alterations shall (i) be constructed and installed in a good, timely, and workmanlike manner (ii) comply with applicable building codes, laws, ordinances, regulations and other requirements of governmental authorities having jurisdiction thereof, and (iii) shall be substantially completed so that the Demised Premises are suitable for occupancy on or before the Commencement Date.

Upon occupancy of the Demised Premises by LESSEE on or after the Commencement Date, LESSOR and LESSEE agree to enter into a Demised Premises Acceptance and Lease Commencement Date Agreement, which will memorialize the Commencement Date, the Termination Date and any other required modifications to the Lease.

PROVIDED ALWAYS, that this Lease is entered into upon the following terms and conditions, all of which the parties hereto covenant to keep and perform.

	1.	
   The LESSEE will not damage, destroy, or commit any undue waste, reasonable wear and tear excluded, on the Demised Premises and will conform with all applicable laws and ordinances respecting the use and occupancy thereof, provided that the LESSEE shall in no event be required to make any alterations, additions or improvements to the Demised Premises. The LESSEE is hereby permitted to use and occupy the Demised Premises for its lawful business purpose of general office and lab space for the testing, selling, warehousing, and distributing of calibration instruments. Nothing herein contained shall be construed to relieve the LESSEE from making such repairs and alterations which may be required under the provisions of this Lease.

2. INSPECTION

The LESSOR may enter upon the Demised Premises at all reasonable times upon reasonable notice to inspect the condition thereof, but such right shall not be exercised in a manner to interfere unreasonably with the business of the LESSEE.

3. POSSESSION

The LESSOR hereby agrees to deliver physical possession of the Demised Premises to LESSEE at the Commencement Date of the Lease term. The LESSOR will warrant and defend the LESSEE in the enjoyment and peaceful possession of the Demised Premises during the term hereof.

4. WAIVERS

It is agreed that the waiving of any of the covenants of this Lease by either party shall be limited to the particular instance and shall not be deemed to waive any other breaches of such covenant.

5. OPTION TO EXTEND TERM

The LESSEE may, at its sole election, extend this Lease, and all the terms and conditions, subject to Paragraph 31 of this Lease, for two (2) successive period(s) of five (5) year(s), upon written notice to the LESSOR at no later than one hundred eighty (180) days prior to the expiration of the original term or extension hereof. If any option as herein before provided, is not exercised by LESSEE, as herein before provided, this Lease shall terminate absolutely at the expiration date of the initial term, or the then current option period, without further notice by either party to the other.

Notwithstanding anything to the contrary, LESSEE may only exercise its right to extend the Lease, one (1) option period at a time.

6. HOLDING OVER

At a minimum of thirty (30) days prior to the expiration of the term of this Lease, or of the term of any extension thereof, LESSEE shall provide LESSOR with written notice of its intention to hold over for any reason, and it is hereby agreed that, in the absence of a written agreement to the contrary, such tenancy shall be from month to month only, terminable upon thirty (30) days written notice by either party. The rental for each month of such hold over period shall be an amount equal to 1.25 times the rent for the last month of the expired Lease term.

7. ASSIGNMENT/SUBLET

The LESSEE may assign this Lease or sublet the Demised Premises in whole or in part to its parent company or to any subsidiary or affiliated company without the consent of the LESSOR. For any assignment or subletting other than the foregoing, the LESSOR's written consent shall be required, which consent it agrees it will not unreasonably withhold provided that the assignee or sublessee is of comparable financial strength to LESSEE and is a user compatible with the other tenancies of the park. It being understood, however, that in the event of an assignment to parent company, a subsidiary or an affiliated company, that no further assignment may be made without the written consent of LESSOR, subject to the above referenced qualifications.

The LESSEE may assign this Lease without the consent of LESSOR, but following prior written notice to LESSOR, in the event of the sale of all or substantially all of the business and/or assets of LESSEE, whether by way of merger, consolidation, asset sale, stock sale or otherwise.

No assignment or sublease shall release LESSEE from any liabilities under this Lease.

LESSEE shall pay all of the LESSOR’S reasonable out-of-pocket costs, charges and expenses, including reasonable attorney’s fees, incurred in connection with any assignment or sublease requested or made by LESSEE.

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8. ADDRESSES FOR NOTICES

All notices given by either party hereto to the other under any of the provisions hereof shall be sent certified mail with adequate postage affixed, addressed to the LESSEE at 35 Vantage Point Drive, Rochester, New York 14624, and to the LESSOR at 1890 South Winton Road, Suite 100, Rochester, New York 14618.

9. FIXTURES

If the LESSEE shall install at its expense any shelving, light fixtures, portable or temporary partitions, air conditioners, voice/data cabling, advertising sign, roof antennas, satellite dishes or any trade or business fixtures or equipment, any articles so installed shall be the property of the LESSEE which the LESSEE at its election may, and at the request of the LESSOR will, remove at the termination of this agreement or any renewal or extension thereof, provided that in such removal the LESSEE shall satisfactorily repair any damages occasioned to the Demised Premises.

10. ALTERATIONS/ADDITIONS

LESSEE may make, at its own cost and expense alterations and additions to Demised Premises with written consent of LESSOR first obtained, which permission shall not be unreasonably withheld. Such alterations or additions to remain the property of the LESSEE, to be insured by LESSEE, which the LESSEE at its election may, and at the request of the LESSOR will, remove at termination of this agreement or any extension hereof, provided that in such removal the LESSEE shall repair any damage occasioned to the Demised Premises. Notwithstanding the foregoing, the LESSEE shall be permitted to make up to $50,000 in interior, non-structural, cosmetic alterations in and to the Demised Premises in any calendar year without obtaining the consent of the LESSOR, but shall give proper notice to LESSOR of work being done.

11. DAMAGES TO STRUCTURE

That in case of damage or injury to the said Demised Premises, said damage or injury being caused by the carelessness, gross negligence, or improper conduct on the part of the said LESSEE, its agents or employees, the said LESSEE shall cause the said damage or injury to be repaired as speedily as possible at its own cost and expense.

12. DAMAGE LESSOR'S LIABILITY

It is expressly agreed and understood by and between the parties to this agreement, that the LESSOR shall not be liable for any damage or injury by water, which may be sustained by the LESSEE, or other person, or for any other damage or injury resulting from the carelessness, negligence, or improper conduct on the part of the LESSEE, or its agents or employees, or by reason of breakage, or obstruction of water or soil pipes, or other leakage in or about said Building, or by reason of riots, strikes, or felonious or attempted felonious entry, unless such damage is caused by LESSOR's negligence.

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13. PROPERTY DAMAGE

That the LESSEE shall, in case of fire or other casualty, give immediate notice thereof to the LESSOR who shall thereupon cause the damage to be repaired with reasonable speed; but if the damage is so extensive that it cannot be rendered tenantable and put in good repair within sixty (60) days, then either party shall, on ten (10) days written notice of his intention, have the option to terminate this Lease and accrued rent shall be paid up to the time of the casualty. It is, however, agreed that, if without fault, neglect or improper conduct of the LESSEE, its agents, servants or employees, only a portion of the Demised Premises shall be rendered untenantable by fire, the elements, or otherwise, the LESSEE shall continue to pay rent only for such portion of the Demised Premises as may reasonably be occupied during the time required to make the necessary repairs, and during the time of such partial occupancy the LESSEE shall pay rental in such proportion to the entire rental herein reserved that the space actually occupied bears to the entire space herein leased. LESSOR’S obligation to restore the Demised Premises is expressly conditioned upon availability of adequate insurance proceeds for restoration. In the event adequate insurance proceeds are not available, LESSOR, in its sole discretion, may terminate the Lease. LESSOR’S obligation to restore Demised Premises are contingent on LESSEE being in full compliance with all Lease covenants. LESSOR is not obligated to restore LESSEE’S leasehold improvements.

14. WAIVER OF SUBROGATION

To the extent permitted by law and without affecting the coverage provided by insurance required to be maintained, LESSOR and LESSEE hereby release each other of any claims for property damage to the extent that such damage may be covered under the terms of their respective property insurance policies. Each party agrees to require its insurance carrier to include waiver of subrogation clauses in its property insurance policies.

15. LESSEE'S MAINTENANCE

Except as hereinafter provided, the LESSEE agrees throughout the term of this Lease at its own cost and expense and in a manner satisfactory to the LESSOR, to keep and maintain the Demised Premises in good repair inside, including but not limited to walls, ceilings, floors, flooring, plumbing and lighting fixtures, heating and air conditioning system, fire alarm systems, all asphalt, drives, parking areas, sidewalks, and any damage caused by LESSEE, and any and all replacements made by the LESSEE; and the LESSEE hereby releases the LESSOR from all obligation whatsoever to maintain or repair said Demised Premises or any portion thereof, as herein before enumerated or otherwise, and agrees to maintain the Demised Premises and all portions and parts thereof in a manner equal to the maintenance of similar quality industrial buildings in Monroe County, normal wear and tear not withstanding. In the event that the LESSEE shall fail immediately to maintain, repair and care for the Demised Premises and make such repairs and replacements or render such care to the Demised Premises as are herein above required, including entering into a written semi-annual maintenance contract for the HVAC systems, with a reputable contractor, after fifteen (15) days written notice and demand of same by LESSOR, LESSOR may make such repairs or perform such maintenance, and any sum so expended or liability incurred by the LESSOR shall be immediately due from the LESSEE as additional rent to be billed at 105% of actual cost to LESSOR and LESSEE further agrees upon the expiration or other termination of this Lease, or any renewal thereof, that he shall peacefully quit and surrender to LESSOR the Demised Premises broom clean, in good order and condition, ordinary wear and tear by the elements excepted and it is further understood and agreed that the LESSOR shall be responsible only for major structural repairs not occasioned by any fault, neglect or omission of the LESSEE.

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LESSEE shall contract for and be responsible for the completion of all: Building and Grounds maintenance (as defined below), landscaping, snowplowing, salting, refuse removal, and other required third party services during the term of this Lease and any renewals thereof. Building and Grounds maintenance shall include all costs, expenses and disbursements which property owner or LESSOR incurs, pays, or becomes obligated to pay in connection with the operation and maintenance of the Demised Premises, Building, and Property, but expressly excludes capital replacements, capital improvements or repairs, structural issues, as well as those items for which LESSOR is responsible under Section 16 hereof.

16. LESSOR REPAIRS/SERVICES

The LESSOR represents that both the interior and exterior of the Demised Premises, including exterior walls and roof are in good condition and repair and the LESSOR, at his expense will make all structural renewals and repairs necessary, including replacement of rooftop HVAC equipment, not required to negligence of LESSEE, during the term of this Lease or any renewal thereof.

In the event LESSEE does not keep and maintain the Demised Premises as provided per Section 15 of this Lease, LESSOR shall have the option, following written notice to LESSEE, to contract for and be responsible for the completion of said items detailed in Section 15, during the term of this Lease and any renewals thereof, which will be billed as additional rent at 105% of actual cost.

17. PROPERTY INSURANCE

The LESSOR will carry adequate “special form” property insurance on the Building, Business Loss of Income insurance and General Liability insurance. LESSEE will reimburse LESSOR for said insurance charges, as stated in Paragraph 20, during the term of this Lease and any renewals thereof. In the event that the LESSEE shall fail to pay such insurance charges as they shall become due, the LESSOR may pay same and the LESSEE shall pay said insurance charges as Additional Rent on the next ensuing rent date. Such failure to pay said insurance charges shall constitute a default in the Lease at the option of the LESSOR. If by reason of the use of the Demised Premises by the LESSEE the rates for the insurance of the Demised Premises are increased as compared with the rates now in effect, the LESSEE agrees to pay as Additional Rent, all excess premiums caused thereby; such Additional Rent to become due immediately upon effecting the insurance by the LESSOR and payable with the next succeeding installment of rent.

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18. SIGNS

The LESSEE shall neither place, or cause, or allow to be placed, any sign or signs of any kind whatsoever at, in or about the entrance to said Demised Premises or any other part of same, except in or at such place or places as may be indicated by the LESSOR and consented to by it, which consent shall not be unreasonably withheld. Signs shall be placed on the face of the Building adjacent to entrance door to Demised Premises.

19. CONSENT

Whenever in this Lease, a right of the LESSEE is contingent upon prior consent or approval of the LESSOR, the LESSOR covenants that it will not unreasonably condition, delay or withhold such consent.

20. ADDITIONAL RENT

If not directly paid by LESSEE, the LESSEE will reimburse LESSOR for all costs incurred by LESSOR for: real property taxes, which will be paid directly to the taxing authority, and in the event that LESSEE does not pay taxes directly to the taxing authority, LESSEE shall be responsible for reimbursing LESSOR for said taxes, assessment, building insurance, snow removal, lawn care, refuse removal, common area maintenance, and administrative, (collectively referred to as “Additional Rent”), during the term of this Lease and any renewals thereof. In the event that the LESSEE shall fail to pay such Additional Rent as it shall come due, the LESSOR may pay same, and bill LESSEE at 105% of actual cost, and the LESSEE shall pay said Additional Rent on the next ensuing rent date; such failure to pay Additional Rent shall constitute a default in the lease at the option of the LESSOR.

Common Area Maintenance charges shall not include the following:

a) Salaries or benefits for LESSOR’s executives and employees above the grade of building manager, and of any employees in excess of the time devoted to the Building.

b) Expenditures for which LESSOR is reimbursed from any insurance carrier, from any lessee, or from any other source.

c) Cost of repairs or replacements incurred by reason of fire or other casualty or condemnation.

d) Advertising and promotional expenditures.

e) Costs incurred in performing work or furnishing services for any lessee (including LESSEE), whether at such LESSEE’s or LESSOR’s expense, to the extent such work or service is in excess of any work or service that LESSOR is obligated to furnish to LESSEE at LESSOR’s expense.

f) Depreciation, except as provided above.

g) Bad debt loss, rent loss, or reserves for either of them.

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i) Financing costs, including points, commitment fees, broker’s fees, and mortgage interest and amortization payments.

j) Costs incurred in connection with the construction of the Building or the initial development of the Property.

k) Costs incurred by LESSOR arising out of its failure to perform or breach of any of its covenants, agreements, representations, warranties, guarantees or indemnities made under this Lease.

l) Costs of compliance, fines or penalties incurred by LESSOR due to violations of or non-compliance with any applicable legal requirements.

m) Costs incurred in the removal, abatement or other treatment of underground storage tanks or Hazardous Substances present in the building or on the Property.

n) Legal fees, space planners fees, broker’s commissions and other costs incurred in connection with marketing space, leasing space, or negotiating leases with lessees of the building, or legal fees in connection with disputes between LESSOR and any other lessee of the Building, or between LESSOR and any mortgagee.

20.1 (a) Jobs Plus Tax Abatement Policy

LESSEE acknowledges that it is receiving an enhanced real property tax abatement program commonly described as the “Jobs Plus Initiative” whereby it pays its proportionate share of property taxes on the Property pursuant to a Payment-in-Lieu-of-Tax Agreement (“PILOT”), executed by LESSOR and the County of Monroe Industrial Development Agency (the “Agency”). In consideration for this enhanced PILOT, the LESSOR has leased the Demised Premises to the LESSEE who has agreed to create thirty One (31) additional full-time jobs within a three (3) year period as defined in the PILOT and maintain those jobs for the duration of the term of the PILOT. The LESSEE agrees and understands that the Agency or its duly appointed agent may examine the LESSEE’S books and records during normal business hours and upon reasonable notice (a minimum of 48 hours) to determine the LESSEE’S compliance with the Jobs Plus Initiative

As long as the Property and Building is owned by the LESSOR and leased to the LESSEE, the LESSOR agrees to pay annually to the Taxing Jurisdictions as a payment in lieu of taxes, an amount equal to 100% of the taxes, service charges, special ad valorem levies, special assessments and improvements district charges or similar tax equivalents, less the percentages of exemption set forth on the schedule below, with respect to taxes and special ad valorem levies on the Property and Building within the description contained in paragraph 5 of Section 485-b (notwithstanding that the procedural steps to obtain an exemption may not have been complied with) levied upon or with respect to the Property and Building by the Taxing Jurisdictions, following next applicable tax status date:

	YEARS OF EXEMPTION	     	PERCENTAGE OF EXEMPTION
	                	1	                		                    	90%	                    
		2				80%	
		3				70%	
		4				60%	
		5				50%	
		6				40%	
		7				30%	
		8				20%	
		9				10%	
		10				0%	

provided however, that the LESSOR need not comply with procedures to obtain such exemption as provided in the New York Real Property Tax Law, and provided further that the LESSOR, shall do all things necessary and shall make application and follow such procedures to obtain such exemption to the extent that the LESSOR shall determine necessary.

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Further, provided that:

(i) The LESSEE maintain its present job level as stated in the Application dated September 27th, 2017 by LESSOR to Agency and creates Thirty One (31) new jobs in three (3) years and maintains those Thirty One (31) new jobs for the duration of the term of the PILOT. The three-year period commences when the earliest of the following occurs; (i) the Facility is completely constructed; (ii) the Company receives a Certificate of Occupancy; and (iii) the Facility is reassessed by Town of Ogden Assessor; and

(ii) Monroe County residents be given preference for created jobs; and

(iii) The LESSEE shall report its compliance with these provisions as requested by the LESSOR and the Agency; and

(iv) If the Thirty One (31) new jobs are not created by the end of the three (3) year period or not continuously maintained for duration of the term of the PILOT, the exemption schedule will revert back to Section 485-b of the New York Real Property Tax Law and the LESSEE agrees to pay in any year for which the job creation requirements are not met (the "Disqualifying Year”), as an additional payment in lieu of taxes, an amount equal to the difference between the tax benefits received in years one through the Disqualifying Year under the PILOT and the tax benefits which would have been received in years one through the Disqualifying Year under Section 485-b of the New York Real Property Tax Law. In the event the LESSEE abandons or otherwise vacates the County of Monroe, then the LESSEE shall pay back all benefits for all years as if the Property and Building was owned by it outright and absolutely with no tax abatement.

(v) The payments required hereunder for any non-compliance shall be paid by the LESSEE to any and all affected taxing jurisdictions whether or not billed. However, if the LESSEE has made a good faith effort to achieve the job creation standard, it may apply in writing for relief from the obligation for repayment of taxes abated, based on a showing of unforeseen economic circumstances, fiscal hardship, or other good cause. Application for relief from the repayment obligation shall be made to the Agency, which shall examine the application and make recommendations to the Legislature regarding the requested relief; the recommendations may include, but not be limited to, relief in whole or in part from the repayment obligation, or an alternate schedule for attaining the job creation standard.

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(vi) The tax benefits provided for herein shall be deemed to commence in the first year in which the LESSEE receives any tax benefits relative to the Property and Building, whether under this Lease, or any statutory exemption. In no event shall the LESSEE be entitled to receive tax benefits relative to the Property and Building for more than ten (10) consecutive years. The LESSEE agrees that it will not seek any tax exemption for the Property and Building which would provide benefits for more than ten (10) consecutive years.

20.1(b). Special district charges, unless otherwise exempt, and Monroe County Pure Waters charges are to be paid in full in by LESSOR in accordance with normal billing practices and charged back to LESSEE as Additional Rent, per Sections 20 and 28 of this Lease.

20.1(c). The LESSOR shall pay, within the applicable grace period and without penalty, the amounts set forth in Paragraphs 20.1(a) and 20.1(b) hereof applicable to taxes, special ad valorem levies, special assessments or similar tax equivalents, less the percentages of exemption on similar property subject to taxation by the Taxing Jurisdictions, as appropriate.

20.1 (d) Notwithstanding anything contained herein to the contrary, upon the occurrence of (i) the closure of the Demised Premises, (ii) a significant unapproved change in use of the Demised Premises, (iii) a significant reduction in employment at the Demised Premises or (iv) a significant Event of Default under the PILOT, the Agency shall have the right to recapture all real property tax abatements provided hereunder pursuant to the following schedule:

	Year of Recapture	     	Percent of Recapture
	1		100%
	2		100%
	3		50%
	4		50%
	5		25%
	6		25%
	After year 6		At Agency’s Discretion

The above-reference periods begin on the effective date of this Lease. Any such recapture is at the sole and exclusive discretion of the Agency. The Agency shall notify the LESSEE in writing within ninety (90) days of such Event of Default under the PILOT of its intent to recapture the PILOT benefits (or any portion thereof); provided, however, that such period shall not commence to run until the Agency has been properly notified or ascertains any such Event of Default under the PILOT. For purposes of this Section only, a “significant reduction” shall mean more than twenty percent (20%) of the employment as stated in the application.

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20.1 (e) In the event that the Property is transferred from the Agency to the LESSOR, and the LESSEE is ineligible for a continued tax exemption under some other tax incentive program, or the exemption is less than that described in Paragraph 20.1(a) herein, the LESSOR agrees to pay no later than the next tax lien date, (plus any applicable grace period) to each of the Taxing Jurisdictions, an amount equal to the taxes and assessments which would have been levied on the Facility if the Facility had been classified as fully taxable as of the date of transfer or loss of eligibility of all or a portion of the exemption described herein and the LESSEE agrees to reimburse LESSOR for the aforementioned payments, as Additional Rent.

21. WARRANTIES SUBROGATION

The LESSOR agrees that the LESSEE shall be subrogated to all rights accruing in the LESSOR by virtue of any representation, warranty, or guarantee, with respect to the roof, plumbing and heating systems and any and all improvements to the Building in the event, and to the extent, that LESSEE has incurred any expense in connection with or as a result of said aforementioned items.

22. MORTGAGE SUBORDINATION/ESTOPPEL CERTIFICATES

The Lease and the rights of the LESSEE thereunder, shall be subject and subordinate to any mortgage or mortgages, and to any renewals and replacements thereof, which may now be on, or which may hereafter be placed on Demised Premises, or on the Property of which the Demised Premises may be a part. LESSEE agrees to confirm said subordination in writing, upon the request of LESSOR. LESSEE agrees to execute within twenty (20) days of receipt from LESSOR, an Estoppel Certificate certifying that this Lease is in full force and effect and further confirming the terms of the Lease.

23. DEFAULTS

LESSEE Default: The happening of any one or more of the following events by the LESSEE shall constitute an Event of Default under this Lease:

	(i)	
   a default in the payment of any rent or additional rent or required payment due under this Lease, which default continues for a period of ten (10) days after LESSEE’s receipt of written notice thereof from the LESSOR;

		
    

	(ii)	
   a default in the performance of or compliance with any of the other material terms or conditions contained or referred to in this Lease which continues for a period of thirty (30) days after written notice of the default from LESSOR to LESSEE, except for any default not capable of being remedied within the thirty (30) day period, in which event the time permitted to LESSEE to cure the default shall be extended for as long as shall be reasonably necessary to cure the default, provided LESSEE commences promptly and proceeds to cure the default and provided further that the period of time shall not be extended so as to jeopardize the interests of LESSOR in this Lease or so as to subject LESSOR or LESSEE to any civil or criminal liabilities;

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	(iii)	
   a filing by or against LESSEE of a petition in bankruptcy or insolvency, or for reorganization, or for the appointment of a receiver or trustee of all or a portion of LESSEE’S property or an assignment by LESSEE for the benefit of LESSEE’S creditors; or

		
    

	(iv)	
   a levy upon or taking of the leasehold interest created by this Lease in execution, attachment or other process of law.

LESSOR Default: If the LESSOR defaults in the performance or observance of any material provision of this Lease, the LESSEE must give the LESSOR written notice specifying in what manner the LESSOR has defaulted and if such default shall not be cured by the LESSOR within the period of time provided for elsewhere in this Lease, and otherwise within thirty (30) days after deliver of such notice (except that if such default cannot be cured within said thirty (30) day period, this period shall be extended for a reasonable amount of time, provided that the LESSOR commences to cure such default within such thirty (30) day period and proceeds diligently thereafter to effect such cure), the LESSEE, may, in addition to any other remedies to which it may be entitled under this Lease and under law or equity, withhold payment of Base Rent and Additional Rent due and to accrue hereunder (to the extent necessary to cover the costs estimated by the LESSEE to cure such default) and provided that LESSEE has given at least thirty (30) days written notice that LESSEE intends to withhold Base Rent in the event such default is not cured, for so long as the LESSOR remains in default.

24. TERMINATION

	24.1	
   Termination After Default. Upon the occurrence of an Event of Default, and after giving of any notice required by subparagraph (ii) of Paragraph 23 and the expiration of any opportunity to cure accorded to LESSEE thereunder, LESSOR at any time thereafter may give written notice to LESSEE specifying the Event of Default and stating that this Lease shall terminate on the date specified in the notice, which shall be at least five days after giving of the notice, and upon the date specified in the notice, this Lease and all right of LESSEE hereunder shall terminate.

		
    

	24.2	
   Surrender of Demised Premises; Re-entry. Upon the termination of this Lease pursuant to Paragraph 24.1, LESSEE shall peaceably surrender the Demised Premises to LESSOR, and LESSOR may without notice re-enter the Demised Premises and repossess it by force, summary proceedings, or otherwise, and may dispossess LESSEE and remove LESSEE and all other persons and property from the Demised Premises and may have, hold, and enjoy the Demised Premises and the right to receive all rent due.

		
    

	24.3	
   Reletting. At any time after the termination of this Lease, LESSOR may relet the Demised Premises or any part thereof, in the name of LESSOR or otherwise, for any term and upon any conditions as LESSOR in LESSOR’S discretion may determine, and may collect the rent due. LESSOR shall in no way be responsible liable for any failure to relet the Demised Premises or any part of the Demised Premises or any failure to collect any rent due upon any reletting.

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	24.4	
   Lessee Remains Liable. No termination of this Lease shall relieve LESSEE of LESSEE’S liabilities and obligations under this Lease, and the liabilities and obligations shall survive any termination. In the event of any termination, whether or not the Demised Premises or any part thereof shall have been relet, LESSEE shall pay to LESSOR the rent and additional rent required to be paid by LESSEE up to the time of the termination. Thereafter, LESSEE until the end of what would have been the Term in the absence of termination, shall be liable to LESSOR for and shall pay to LESSOR the amount of rent and additional rent which would be payable under this Lease by LESSEE if the Lease were still in effect, less the net proceeds to LESSOR of any reletting.

25. LEGAL

In the event of any default by the LESSOR or LESSEE under the terms of this Lease and either party institutes a legal proceeding to cure such default or any eviction proceeding, in addition to any other requirements under this Lease, the non-prevailing party shall be responsible for the payment of reasonable attorney's fees and all court costs.

26. INDEMNITY

LESSOR and LESSEE shall defend each other and hold the other party harmless from and against all claims, actions, losses, damages, and expenses (including reasonable attorneys’ fees) incurred by the other in connection with the loss of life, personal injury or damage to property caused during the term of this Lease, directly or indirectly, by the act or omission of the other party, its agents, employees, licensees, invitees or contractors, arising (i) from any occurrence in or about the Demised Premises, or (ii) from the use by the LESSEE of any part of the Demised Premises, or (iii) from any work undertaken by the LESSOR or LESSEE on the Demised Premises.

27. LESSEE INSURANCE

The LESSEE covenants and agrees during the term to obtain and keep in full force and effect the following insurance policies, containing the following minimum coverages: (1) Commercial General Liability insurance to include coverage for bodily injury, property damage, contractual liability and personal injury arising out of the LESSEE’S use, maintenance and/or business operations with respect to the Demised Premises or any part of the Property, the limits of which shall not be less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate; (2) Comprehensive Automobile Liability insurance providing Bodily Injury and Property Damage coverage of no less than One Million Dollars ($1,000,000) Combined Single Limit covering all owned, non-owned, leased and hired vehicles of the LESSEE; (3) Workers Compensation and Disability insurance per the applicable state statutes coverage to be applicable for all employees of the LESSEE; (4) Employer’s Liability coverage applicable for all employees of the LESSEE subject to a limit of no less than One Hundred Thousand Dollars ($100,000) per Accident, One Hundred Thousand Dollars ($100,000) Disease per Employee and Five Hundred Thousand Dollars ($500,000) Disease Policy Limit; (5) Umbrella Liability Policy of not less than One Million Dollars ($1,000,000) and (6) Special Form Property Insurance covering LESSEE’S property (at full replacement cost) including: Business Personal Property, Improvements and Betterments and Business Income coverage.

13

LESSEE’S Commercial General Liability, Automobile Liability and Umbrella Liability coverages shall be endorsed to name LESSOR as additional insured on a primary and non-contributory basis. All insurance to be procured by LESSEE shall be issued by insurance carriers licensed to do business in the State of New York and having a current policy year A.M. Best rating of “A-,X” or better. LESSEE shall also name the LESSOR and LESSOR’S managing agent as an additional insured on the General Liability and Umbrella Liability policies. All Liability policies, including Workers Compensation & Employers Liability shall contain a Waiver of subrogation in favor of LESSOR.

LESSEE shall provide to the LESSOR, prior to the occupancy of the Demised Premises, and ten (10) days subsequent to each renewal date of said policies binding evidence of such required insurance in the form of Certificate of Liability and Evidence of Property coverage naming the LESSOR and LESSOR’S managing agent as Certificate Holder and evidencing the required coverages and limits and protection of the LESSOR’s insurable interests as noted above. LESSEE shall also provide a clause of thirty (30) days notice of cancellation by any company providing LESSOR with binding evidence of insurance. If in the event of non-notice by any company to LESSOR, LESSEE agrees to provide all primary insurance.

LESSEE shall require all contractors and service providers hired by LESSEE to perform any and all: service, maintenance and repair operations at the Demised Premises, to provide to LESSOR, prior to said contractor or service provider commencing any work at the Demised Premises, evidence of liability insurance as described in Section 27 of this Lease, with LESSOR named as an additional insured on said liability policy.

28. HIDDEN DEFECTS

LESSEE shall not be responsible for repair or correction of hidden defects or latent conditions existing at the inception of this Lease.

29. UTILITIES

Public service connections into said Building including electricity, gas, sewer and water, shall be provided by LESSOR. All water consumption, water pollution control charges, and all sewer charges incidental to the use and occupancy of the Demised Premises shall be paid by the LESSEE. Sewer charges shall include the cost, if any, of the operation, maintenance, repair and administration of a sewage treatment plant or sewage lift station, in the event such a plant services the Demised Premises. LESSEE further agrees to pay directly to the service provider all charges incurred by the LESSEE for the consumption of gas, electricity, and water on the Demised Premises.

14

30. COMPLETION OF PREMISES

The LESSOR shall make every effort to complete the agreed improvements on said Demised Premises and deliver possession thereof to the LESSEE by, on, or about January 1, 2018. LESSOR agrees to make the Demised Premises available to the LESSEE, on a rent-free basis, for at least two (2) weeks prior to the estimated delivery date in order to allow LESSEE, to prepare the Demised Premises for its occupancy, so long as LESSEE does not disrupt LESSOR’s final construction in any way.

31. In the event that the LESSEE shall exercise its right of renewal option as contained in the paragraph designated as "Option to Extend Term", the rental rate during the first year of such renewal term shall be increased by one percent (1%) over the rent in effect during the year immediately prior to the beginning of such renewal term, and shall likewise increase by one percent (1%) at the beginning of each new year during such renewal term.

32. LATE FEE/LATE PAYMENTS

A late charge of 2%, shall be paid as Additional Rent, if the Base Rent or any Additional Rent, is not received by the 10th day of the month or within 30 days of the billing date, respectively.

If LESSEE fails to pay, when due and payable, any installment of Base Rent, Additional Rent, or any other sum payable to LESSOR under the terms of this Lease, the unpaid amount will bear interest at the rate of ten percent (10%) per annum from the date due to the date of payment. This amount shall be Additional Rent under the terms of this Lease Agreement. Notwithstanding the foregoing, in no event may any late charge and/or interest provided in this Section 32 exceed the maximum permitted by law or be imposed prior to the date permitted by law.

33. CONDEMNATION

A. If the whole of the Demised Premises shall be taken for any public or quasi-public use under any statute or by right of eminent domain, or by private purchase in lieu thereof, then this Lease shall automatically terminate as of the date that title shall be taken. If any part of the Demised Premises shall be so taken so as to render the remainder thereof unusable for the purposes for which the Demised Premises were leased, then the LESSOR and LESSEE shall each have the right to terminate this Lease on thirty (30) days written notice to the other given within ninety (90) days after the date of such taking.

B. All compensation awarded or paid upon such a total or partial taking of the Demised Premises shall belong to and be the property of LESSOR without any participation by LESSEE; provided, however, that nothing contained herein shall be construed to preclude LESSEE from prosecuting any claim directly against the condemning authority in such condemnation proceedings for loss of business, and/or depreciation for damage to, and/or cost of removal of, and/or for the value of stock, and/or trade fixtures, furniture and other personal property belonging to LESSEE; provided, however, that no such claim shall diminish or otherwise adversely affect LESSOR's award. The current rental shall in any case be apportioned as of the date of actual possession by the condemning authority.

15

34. LESSEE covenants and agrees, at its sole cost and expense, to indemnify, protect, defend and save harmless LESSOR from and against any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands, defenses, judgments, suits, actions, proceedings, costs, disbursements and/or expenses (including, without limitation, attorneys' and experts' fees, expenses and disbursements) of any kind or nature whatsoever which may at any time be imposed upon, incurred by or asserted or awarded against LESSOR relating to, resulting from or arising out of (a) the use of the Demised Premises by LESSEE for the storage, treatment, generation, transportation, processing, handling, production or disposal of any hazardous substance or as a landfill or other waste disposal site or for military, manufacturing or industrial purposes or for the storage of petroleum or petroleum based products, (b) the introduction by LESSEE of any hazardous substance or a release by LESSEE of any hazardous substance on, at or from the Demised Premises, (c) the failure to promptly undertake and diligently pursue to completion all necessary appropriate and legally authorized investigative, containment, removal, clean-up and other remedial actions with respect to a release or threat of a release of any hazardous substance on, at or from the Demised Premises, to the extent caused by the LESSEE (d) human exposure to any hazardous substance, noises, vibrations or nuisances of whatever kind to the extent the same arise from LESSEE's use or operation on the Demised Premises, (e) violation by LESSEE of any applicable environmental law, or (f) non-compliance by LESSEE with any environmental permit, (g) a material misrepresentation or inaccuracy in any representation of warranty by LESSEE. The provisions of this paragraph shall survive the termination of the Lease.

LESSOR certifies to LESSEE that, to the best of its knowledge, without independent inquiry, the Property is in compliance with all existing environmental rules, laws and regulations. If an environmental condition is discovered during the term, it shall be LESSOR’s responsibility to abate those conditions, except to the extent caused by Lessee or any prior company of LESSEE that has occupied the Property. LESSOR covenants and agrees to indemnify, protect and save LESSEE harmless against and from any and all damages, losses, liabilities, obligations, penalties, claims, litigation, demands of any kind or nature whatsoever (including without limitation, attorneys’ fees) which may at any time be imposed upon, incurred by or asserted against LESSEE and arising from or as a result of any environmental condition that is the responsibility of LESSOR.

35. In order to more effectively secure to the LESSOR the rent and other terms herein provided, it is agreed as further condition of this Lease that the filing of any petition in bankruptcy, or assignment for the benefit of creditors by or against the LESSEE shall be deemed to constitute a breach of this Lease, and thereupon ipso facto and without entry or any other action by the LESSOR this Lease shall become and be terminated and notwithstanding any other provision of this Lease the damages for such breach in an amount equal to the amount of the rent reserved in this Lease for the residue to the term hereof, less the fair rental value of the Demised Premises for the residue of said term plus all costs of re-renting.

16

36. LESSOR and LESSEE represent and warrant that there are no claims for brokerage commissions or finder’s fee in connection with the execution of this Lease. LESSOR and LESSEE agree that no broker shall be entitled to receive a separate commission from LESSOR in connection with this Lease or any amendment, renewal or modification hereof.

37. LESSEE shall submit certified Corporate Financial Statements, and any appropriate and necessary notes or schedules, or adequate substitute financial information and/or banking references, upon reasonable request by LESSOR or LESSOR’S financial institution.

38. LESSEE shall, at its sole cost and expense, promptly comply with all laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments and governmental agencies, which are applicable to the Demised Premises arising out of LESSEE’s use, manner of use, or occupancy thereof, and as are required; provided, however, that the LESSOR shall, at its sole cost and expense, comply with all laws, ordinances, orders, rules, regulations and requirements applicable to repairs, replacements or alterations or other obligations in general purpose buildings and common areas which are required by this Lease to be performed by the LESSOR and are not required because of LESSEE’s unique use of the Demised Premises, as stated above.

39. It shall be mutually agreed that upon the Commencement Date of this Lease, but not before, the existing Lease dated April 1, 1999, amended March 5, 1999, amended April 1, 2009, amended April 4, 2013 and expiring on March 31, 2019 by and between Gallina Development Corporation as LESSOR and Transcat, Inc., formerly Transmation, Inc., as LESSEE shall be terminated in its entirety. It is also agreed that upon Commencement Date, LESSOR shall credit LESSEE the amount of Five Thousand and 00/100 Dollars ($5,000.00) to be used towards Base Rent, which was prior held as LESSEE’s security deposit.

17

This Lease and all the provisions hereof shall be binding upon and inure to the benefit of the successors and assigns of both parties hereto. The paragraph headings in this Lease are for convenience only and do not form a part of this Lease. They shall not limit or affect in any way the meaning of the paragraphs. This Lease shall be construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the LESSOR and the LESSEE have executed this Lease. A memorandum of this Lease will be executed by the parties for filing in the Monroe County Clerk's Office.

				Transcat, Inc.
	 
	DATE	       November 28, 2017		     	BY: 	       /s/ Michael J. Tschiderer
					       Michael J. Tschiderer, CFO
	 
				Gallina Development Corporation
	 
	DATE: 	       November 24, 2017			BY:	       /s/ Andrew R. Gallina
					       Andrew R. Gallina, President

18

	STATE OF NEW YORK)	
	COUNTY OF MONROE	S.S.
	CITY OF ROCHESTER)	

On the 28th day of November in the year 2017 before me, the undersigned, personally appeared Michael J. Tschiderer, 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 individuals(s) acted, executed the instrument.

		       s/ Jennifer Nelson
		       Notary Public

	STATE OF NEW YORK	
	COUNTY OF MONROE	S.S.
	CITY OF ROCHESTER	

On the 24th day of November in the year 2017 before me, the undersigned, personally appeared Andrew R. Gallina, 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 individuals(s) acted, executed the instrument.

		       Anna Marie Finnegan
		       Notary Public

19ex_115615.htm

Exhibit 10.20

 

 

 

 

______________________________________________________

 

AGREEMENT OF SALE

 

Between

 

NATHAN’S FAMOUS OPERATING CORP.,

 

Seller

 

AND

 

660 86 LLC,

 

Purchaser

 

__________________________________

 

 

Dated: September 8, 2017

 

______________________________________________________

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

	
			ARTICLE 1

				3
	
			SALE

				3
	 	 
	 	 
	
			ARTICLE 2

				4
	
			PURCHASE PRICE

				4
	 	 
	 	 
	
			ARTICLE 3

				7
	
			TITLE

				7
	 	 
	 	 
	
			ARTICLE 4

				9
	
			REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

				9
	 	 
	 	 
	
			ARTICLE 5

				10
	
			INSPECTION PERIOD

				10
	 	 
	 	 
	
			ARTICLE 6

				12
	
			REPRESENTATIONS AND WARRANTIES OF PURCHASER

				12
	 	 
	 	 
	
			ARTICLE 7

				12
	
			APPORTIONMENTS

				12
	 	 
	 	 
	
			ARTICLE 8

				13
	
			CLOSING

				13
	 	 
	 	 
	
			ARTICLE 9

				14
	
			DELIVERIES AT CLOSING

				14
	 	 
	 	 
	
			ARTICLE 10

				15
	
			FIRE OR OTHER CASUALTY

				15
	 	 
	 	 
	
			ARTICLE 11

				15
	
			EMINENT DOMAIN

				15

 

 

 

 

	
			ARTICLE 12

				15
	
			BROKERAGE

				15
	 	 
	 	 
	
			ARTICLE 13

				16
	
			TERMINATION

				16
	 	 
	 	 
	
			ARTICLE 14

				16
	
			DEFAULT

				16
	 	 
	 	 
	
			ARTICLE 15

				17
	
			NOTICES

				17
	 	 
	 	 
	
			ARTICLE 16

				18
	
			AMENDMENT

				18
	 	 
	 	 
	
			ARTICLE 17

				18
	
			ASSIGNMENT

				18
	 	 
	 	 
	
			ARTICLE 18

				19
	
			CONSTRUCTION

				19
	 	 
	 	 
	
			ARTICLE 19

				19
	
			RECORDING

				19
	 	 
	 	 
	
			ARTICLE 20

				19
	
			GOVERNING AUTHORITY

				19
	 	 
	 	 
	
			ARTICLE 21

				19
	
			WAIVER; JURY WAIVER

				19
	 	 
	 	 
	
			ARTICLE 22

				20
	
			INVALIDITY

				20

 

 

 

 

	
			ARTICLE 23

				20
	
			COUNTERPARTS

				20
	 	 
	 	 
	
			ARTICLE 24

				20
	
			LIMITATION OF SELLER'S LIABILITY

				20
	 	 
	 	 
	
			ARTICLE 25

				21
	
			REPRESENTATION BY COUNSEL

				21
	 	 
	 	 
	
			ARTICLE 26

				21
	
			ATTORNEYS' FEES

				21
	 	 
	 	 
	
			ARTICLE 27

				21
	
			MERGER

				21
	 	 
	 	 
	
			ARTICLE 28

				22
	
			DISCLAIMERS AND WAIVERS

				22
	 	 
	 	 
	
			ARTICLE 29

				23
	
			NO FINANCING CONTINGENCIES

				23
	 	 
	 	 
	
			ARTICLE 30

				23
	
			CERTIORARI PROCEEDINGS

				23
	 	 
	 	 
	
			ARTICLE 31

				24
	
			LEASEBACK

				24
	 	 
	 	 
	
			EXHIBIT A

				 
	
			LEGAL DESCRIPTION OF PROPERTY

				 
	 	 
	 	 
	
			EXHIBIT B

				 
	
			PERMITTED EXCEPTIONS

				 
	 	 
	 	 
	
			EXHIBIT C

				 
	
			FORM OF SURRENDER AGREEMENT

				 

 

 

 

 

AGREEMENT, made as of this _____ day of _______, 2017, by and between NATHAN’S FAMOUS OPERATING CORP., a Delaware corporation, having an address at One Jericho Plaza, Second Floor, Wing A, Jericho, NY 11753 (hereinafter referred to as the "Seller"), and 660 86 LLC, a New York limited liability company, having an address at 9322 Third Avenue, Brooklyn, NY 11209 (hereinafter referred to as the "Purchaser").

 

W I T N E S S E T H :

 

WHEREAS, Seller is the owner of certain property located in the Borough of Brooklyn, City of New York, State of New York, known as 650-666 86th Street, Brooklyn, New York designated on the City tax map as Section 10, Block 6056, Lots 12 & 15 in Kings County, and more particularly described hereinbelow; and

 

WHEREAS, Purchaser desires to purchase and Seller desires to cause the conveyance to Purchaser of the property described hereinbelow, subject to and in accordance with the terms, conditions and provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, and subject to the terms and conditions hereof, Seller and Purchaser hereby covenant and agree as follows:

 

 

ARTICLE 1

SALE

 

1.01     Seller agrees to sell to Purchaser and Purchaser agrees to purchase from Seller the following property upon the terms and conditions set forth herein:

 

(a)     all that certain parcel of land more particularly described on Exhibit A attached hereto and made a part hereof (the "Land") together with the buildings, and improvements erected thereon (collectively the "Improvements" and the Land and Improvements are hereinafter sometimes collectively referred to as the "Property");

 

(b)     all right, title and interest of the Seller in and to any land lying in the bed of any highway, street, road or avenue, open or proposed, including vaults, if any, and any possible strips or gores in front of or abutting or adjoining the Land, and any award made or to be made in lieu thereof;

 

(c)     all right, title and interest of the Seller in and to any and all rights of way, appendages, appurtenances, easements, sidewalks, paved parking areas, alleys, gores or strips of land adjoining or appurtenant to the Land or any portion thereof and used in conjunction therewith, and or in any way belonging to the Property; and

 

(d)     all right, title and interest of the Seller in and to all fixtures, equipment and other personal property attached to or appurtenant to the Improvements other than any such property that is owned by the business operating thereon (the "Personal Property");

 

3

 

 

(e)     to the extent assignable, permits, licenses, if any, (other than any permit or license for Seller’s business) held solely for use in connection with all or any portion of the Property.

 

(f)     any development or air rights appurtenant to the Property or any portion thereof;

 

All of the above referenced property, rights and interest to be sold to Purchaser pursuant to this Agreement (including the Land, buildings and Improvements shall be referred to collectively as the Property.

 

ARTICLE 2

PURCHASE PRICE

 

2.01     The purchase price (the "Purchase Price") is Twelve Million Two Hundred Fifty Thousand and 00/100 ($12,250,000.00) Dollars, which shall be paid as follows:

 

(a)     Six Hundred Thousand and 00/100 ($600,000.00) Dollars (the "Downpayment") to the Escrow Agent upon Purchaser's execution of this Agreement; and

 

(b)     Eleven Million Six Hundred Fifty Thousand and 00/100 ($11,650,000.00) Dollars on the Closing Date, by wire transfer to Seller's account at such bank as Seller shall designate, or by bank check or certified check directly to Seller's order or as otherwise requested by Seller.

 

2.02       (a)     The Downpayment shall be held in escrow by Seller's attorneys, Farrell Fritz, P.C. ("Escrow Agent") in accordance with the terms of this Agreement. The Downpayment shall be placed in an interest-bearing account, and the interest accrued thereon (the "Interest") shall be paid over as follows:

 

(i) in the event title closes hereunder, the Interest shall be paid to the Seller at closing with Interest allocated against the Purchase Price;

 

(ii) in the event title does not close by reason of a default by Seller, the Interest shall be paid to Purchaser, together with the monies to be remitted to Purchaser pursuant to Article 24 of this Agreement; and

 

(iii) in the event title does not close by reason of a default by Purchaser, the Downpayment plus Interest shall be paid to Seller and this Agreement shall be null and void, and there shall be no further liability on behalf of either party.

 

(b)     The Escrow Agent shall hold the Downpayment in an interest-bearing account, and shall dispose of the Downpayment plus the Interest in accordance with the rights and obligations of the parties hereto.

 

4

 

 

2.03     The Escrow Agent shall deliver the Downpayment to Seller or to Purchaser, as the case may be, under the following conditions:

 

(a)     The Downpayment shall be delivered to Seller upon Escrow Agent's receipt of written demand therefor from Seller (with copy sent to Purchaser), stating that Purchaser has defaulted in the performance of its obligations under this Agreement and setting forth the facts and circumstances underlying such default, if Purchaser shall not have given written notice of objection within the ten (10) day period specified in Section 2.04; or

 

(b)     The Downpayment shall be delivered to Purchaser upon Escrow Agent's receipt of written demand therefor from Purchaser (with copy sent to Seller), stating that Seller has defaulted in the performance of any of its material obligations under this Agreement or because this Agreement was terminated under circumstances entitling Purchaser to the return of the Downpayment, and setting forth the facts and circumstances underlying such default or termination, if Seller shall not have given written notice of objection within the ten (10) day period specified in Section 2.04; or

 

(c)     The Downpayment shall be delivered to Purchaser or Seller as directed by joint written instructions of Seller and Purchaser.

 

2.04     If Escrow Agent receives a written demand on behalf of the Purchaser or Seller (the “Noticing Party”) pursuant to Section 2.03(a) or 2.03(b) stating that this Agreement has been canceled or terminated and that the Noticing Party is entitled to the Downpayment, or that the other party hereto (the “Non-Noticing Party”) has defaulted in the performance of its obligations hereunder, Escrow Agent shall mail (by certified mail, return receipt requested) a copy of such request to the Non-Noticing Party and its attorney. The Non-Noticing Party shall have the right to object to such request for the Downpayment by written notice of objection delivered to and received by Escrow Agent within ten (10) days (excluding Saturdays, Sundays and State of New York and federal holidays) after the date of Escrow Agent’s mailing of such copy of the Non-Noticing Party, but not thereafter. If Escrow Agent shall not have so received a written notice of objection from the Non-Noticing Party, Escrow Agent shall deliver the Downpayment, together with the Interest earned thereon, to the Noticing Party. If Escrow Agent shall have received a written notice of objection within the time herein prescribed, Escrow Agent shall continue to hold the Downpayment and the Interest until Escrow Agent receives either (a) a written notice signed by both Seller and Purchaser stating who is entitled to the Downpayment (and any Interest) or (b) in the event of litigation between Seller and Purchaser, the Escrow Agent shall deposit the Downpayment, and the Interest with the clerk of the court in which said litigation is pending or (c) the Escrow Agent may take such affirmative steps as the Escrow Agent, at the Escrow Agent's option, may elect in order to terminate the Escrow Agent's duties hereunder, including, but not limited to, depositing the Downpayment and the Interest in court and commencing an action for interpleader, the costs thereof to be borne by whichever of Seller or Purchaser is the losing party or (d) a final non-appealable order of a court of competent jurisdiction directing disbursement of the Downpayment in a specific manner, in either of which events Escrow Agent shall then disburse the Downpayment in accordance with such notice or order. Escrow Agent shall not be or become liable in any way or to any person for its refusal to comply with any such requests or demands until and unless it has received a direction of the nature described in subdivision (a) through (c) above, but subject to the express terms of this Article 2.

 

5

 

 

2.05     At the time the Downpayment is paid to Purchaser, Seller or a third party pursuant to this Article 2 or pursuant to a final, unappealable court order, the Interest shall thereupon be paid to the recipient of the Downpayment.

 

2.06     The Escrow Agent may rely and act upon any instrument or other writing believed by it to be genuine and purporting to be signed and presented by any person or persons purporting to have authority to act on behalf of Seller or Purchaser, as the case may be, and shall not be liable in connection with the performance of any duties imposed upon the Escrow Agent by the provisions of this Agreement, except for the Escrow Agent's own willful default or gross negligence. The Escrow Agent shall have no duties or responsibilities except those set forth herein. The Escrow Agent shall not be bound by any modification, cancellation or rescission of this Agreement unless the same is in writing and signed by Purchaser and Seller, and, if the Escrow Agent's duties are hereunder affected, unless the Escrow Agent shall have given prior written consent thereto. The Escrow Agent shall be reimbursed by Seller and Purchaser for any expenses (including reasonable legal fees of outside counsel) incurred in connection with its services as Escrow Agent under this Agreement, and such liability shall be joint and several. In the event that the Escrow Agent shall be uncertain as to the Escrow Agent's duties or rights hereunder, or shall receive instructions from Purchaser or Seller which, in the Escrow Agent's opinion, are in conflict with any of the provisions hereof, the Escrow Agent shall be entitled to hold and apply the Downpayment and the Interest pursuant to Section 2.04 hereof and may decline to take any other action. After delivery of the Downpayment and Interest in accordance herewith, the Escrow Agent shall have no further liability or obligation of any kind whatsoever.

 

2.07     The Escrow Agent shall have the right at any time to resign upon five (5) business days' prior notice to Seller and Purchaser. Seller and Purchaser shall jointly select a successor Escrow Agent and shall notify the Escrow Agent of the name and address of such successor Escrow Agent within five (5) business days after receipt of notice. If the Escrow Agent has not received notice of the name and address of such successor Escrow Agent within such period, the Escrow Agent shall have the right to select on behalf of Seller and Purchaser a bank or trust company to act as successor Escrow Agent hereunder, for such compensation as such bank or trust company shall reasonably require. At any time after the five (5) business day period, the Escrow Agent shall have the right to deliver the Downpayment and the Interest to any successor Escrow Agent selected hereunder, and upon such delivery the successor Escrow Agent for all purposes hereunder and shall have all of the rights and obligations of the Escrow Agent hereunder, and the resigning Escrow Agent shall have no further responsibilities or obligations hereunder.

 

2.08     Notwithstanding any other provision of this Agreement, no notice, demand, request or other communication to the Escrow Agent in connection herewith shall be binding on the Escrow Agent unless it is in writing, refers specifically to this Agreement, is addressed to the Escrow Agent and is actually received by the Escrow Agent.

 

6

 

 

2.09     The Escrow Agent is acting hereunder as stakeholder only, without compensation and for the convenience and at the request of the parties. Escrow Agent shall not be liable for any action taken or omitted in good faith, provided that the Escrow Agent shall be liable for its gross negligence or willful misconduct in any event. Escrow Agent shall not be liable for and the parties jointly and severally agree to indemnify Escrow Agent against and hold Escrow Agent harmless from the payment of any interest or court costs or legal fees in any legal action that may be brought to recover the monies held in escrow or any part thereof unless the Escrow Agent shall fail or refuse to pay over any such monies pursuant to a final judgment, order or decree. At any time, Escrow Agent shall be entitled, in its sole discretion, to apply to any court of competent jurisdiction to determine the rights of the parties hereof, and in the event of such application of the deposit with such court, Escrow Agent shall be relieved and discharged from any liability or responsibility to the parties hereto.

 

 

ARTICLE 3

TITLE

 

3.01     Purchaser shall accept title to the Property subject to the matters set forth on Exhibit B attached hereto and made a part hereof (the "Permitted Exceptions").

 

3.02     (a)     Seller may, at closing, satisfy any lien or encumbrance which Seller is obligated or elects to cure hereunder from the Purchase Price, and may direct the title company to make payment directly to third parties for such purpose.

 

(b)     Purchaser shall promptly order a commitment for title insurance (the "PTR"). Promptly after receipt of the PTR, and in no event later than fifteen (15) days after the date of full execution of this Agreement, Purchaser shall forward a copy of such report, together with a copy of any underlying documents referenced therein, to Seller's counsel. Purchaser shall also instruct the title company to promptly deliver directly to Seller's counsel copies of any updates or continuations of and any supplements to the PTR. With such report, update, continuation, and/or supplement, Purchaser shall deliver to Seller a written statement ("Exceptions Notice") setting forth any liens or encumbrances affecting, or other defects in or objections to, title to the Property disclosed by such materials ("Exceptions") to which Purchaser objects. No Permitted Exceptions shall be included in any Exceptions Notice. The failure by Purchaser to deliver an Exceptions Notice within the time period specified therefor, or, if delivered, the failure to note any particular Exception thereon, shall constitute a waiver by Purchaser of any and all Exceptions disclosed by the materials which are not so noted in such Exceptions Notice, and all such Exceptions not so noted shall be deemed Permitted Exceptions.

 

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(c)     If Purchaser timely notifies Seller of any Exceptions in accordance with Section 3.02(b), Seller shall be entitled to reasonable adjournments of the Closing, during which Seller may attempt to remove such Exceptions; provided, however, that Seller shall not be required to bring any action or proceeding, or take any steps, or otherwise incur any expense in excess of $500,000.00 to remove any Exception. If for any reason Seller is unable or unwilling to remove any such Exception as of the Closing Date, Seller shall so notify Purchaser in writing. If Purchaser determines not to take title to the Property subject to such Exception, Purchaser shall notify Seller, within five (5) days of its receipt of such notice, that it is terminating this Agreement in accordance with the provisions of Article 13. If Purchaser does not forward such notice, Purchaser shall be deemed to have elected to perform all of Purchaser's obligations hereunder and to accept title to the Property, subject to such Exceptions and all Permitted Exceptions, without any abatement of the Purchase Price or liability therefor on the part of the Seller. Notwithstanding the foregoing, Seller hereby agrees to satisfy any mortgages or other liens or encumbrances placed by Seller against title to the Property which are curable by the payment of money either prior to Closing or simultaneously with Closing using proceeds from the sale.

 

(d)     Unpaid franchise taxes of any corporation in the chain of title shall be no objection to title provided that the title company agrees to insure against collection of same out of the Property.

 

(e)     If the PTR discloses judgments or other returns against other person having names the same as or similar to that of Seller, Seller shall upon request deliver to the title company an affidavit showing that such judgments or other returns are not against Seller.

 

(f)     If on the Closing Date, the Property is subject to liens, encumbrances or title exceptions which would be grounds for Purchaser to reject title hereunder, the same shall not be deemed an objection to title if, at closing, the title company will issue or bind itself to issue a policy which will insure Purchaser against collection therefrom, or enforcement thereof, against the Property at no cost to Purchaser.

 

3.03     Within thirty (30) days of the date hereof, Purchaser will order, at its sole cost and expense, a survey of the Property from a licensed surveyor.

 

3.04     Possession of the Property shall be deemed given by Seller to Purchaser at the completion of closing by delivery of a Bargain and Sale with Covenants Against Grantor's Acts Deed (the "Deed"), subject to the Permitted Exceptions.

 

3.05     The acceptance of the Deed for the Property by Purchaser shall be deemed to be full performance and discharge of every agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement and, except as specified in this Agreement, no provision, representation, covenant, obligation or agreement of the parties shall survive the Closing Date.

 

3.06     Notwithstanding anything contained in this Article 3 to the contrary, Seller shall transfer the title free and clear of any financing agreements affecting the Property and any leasehold mortgage, security agreements or UCC’s shall be satisfied or released at the Closing.

 

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ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

 

4.01     Seller warrants, represents and covenants to and with Purchaser that the following are true and correct on the date hereof:

 

4.1.1      Seller is a corporation duly formed and in good standing under the laws of the State of its organization or formation and has the requisite power and authority to enter into and to perform the terms of this Agreement.

 

4.1.2      Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code 1986, as amended, or any regulations promulgated thereunder (collectively, the “Code”).

 

4.1.3      There are no leases or occupancy agreements or franchise agreements regarding the Property.

 

4.1.4      Seller has not received written notice of any pending or threatened condemnation or eminent domain proceedings that would affect the Property or any portions thereof.

 

4.1.5.     Seller has full right, power and authority to execute, deliver and perform this agreement without obtaining any further consents or approvals from third parties, and this agreement, when executed by Seller and Purchaser will constitute the valid binding agreement of Seller, enforceable against seller according with its terms

 

4.1.6     To the Seller’s actual knowledge, there is no claim, action, suit, arbitration, proceeding, or investigation pending, by or before any court or arbitration body, any governmental, administrative or regulatory authority, or any other similar body which would adversely affect the Property. Seller agrees to give purchaser prompt notice of the commencement of any such claim, action, suit, arbitration, proceeding or investigation prior to Closing.

 

4.1.7     To Seller’s actual knowledge, there are no judgments, orders or writs against or affecting Seller or the Property that would affect the ability of Seller to complete the transactions contemplated in this Agreement.

 

4.1.8     Seller will authorize Purchaser to pursue any pending real estate tax certiorari proceedings or other proceedings or protests brought by Seller to reduce the real estate taxes, assessments, valuations or other impositions on the premises or any portion thereof for any period after the Closing that have not been settled and which is permitted by law.

 

4.1.9     Seller has not entered into any service contracts affecting the Property, and there are no employee agreements, which will survive the Closing.

 

4.1.10 Seller has no actual knowledge of any hazardous materials or environmental conditions affecting the Property and Seller has no actual knowledge of any reported spills with the Department of Environmental Conservation (“DEC”). Seller will provide copies of any environmental reports within its possession concerning any hazardous conditions at the Property.

 

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4.1.11 The Nathan’s business occupying the Property shall be vacated within three (3) months of the Closing by Surrender Agreement to be executed at the Closing.

 

The foregoing Seller representations in Section 4.1.11 shall not survive the Closing.

 

 

4.02     Seller covenants that:

 

(a)     From the date hereof until the Closing Date or earlier termination of this Agreement, Seller shall use reasonable efforts to operate and maintain the Property in a manner generally consistent with the manner in which Seller has operated and maintained the Property prior to the date hereof.

 

ARTICLE 5

INSPECTION PERIOD

 

5.01     (a)     Purchaser, or Purchaser's agent, employees and/or contractors shall, subject to the terms and conditions below, have the right to enter the Property to make engineering inspections, environmental audits and such other tests, analysis and investigations. (collectively, the "Inspections") of the Property as are not prohibited hereunder and which Purchaser deems desirable. Purchaser shall return the Property to the same condition it was in prior to conducting any Inspections. All such Inspections shall be subject to the following terms and conditions:

 

(i)     All Inspections shall be at Purchaser's sole cost and expense.

 

(ii)     Purchaser shall, promptly upon receipt of any report or other information produced as a result of any Inspections, provide Seller with a copy or detailed description thereof.

 

(iii)     Purchaser may not conduct any Phase II environmental study without the prior written consent of Seller, which consent shall not be unreasonably withheld. If Purchaser conducts a Phase I environmental audit, then Purchaser shall promptly furnish a copy thereof to Seller. If Seller refuses to grant its consent to a Phase II audit after being furnished a copy of the Phase I audit, then Purchaser may (1) terminate this Agreement in which case Seller shall return to Purchaser the Downpayment plus Interest, or (2) waive the request for such Phase II audit.

 

(iv)     No Inspection shall interfere with the conduct of business on the Property.

 

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(v) Purchaser and each such entering agent shall have delivered to Seller a certificate of insurance indicating that Purchaser shall have in place liability insurance naming Seller as an additional insured in an amount of $1,000,000 per occurrence and $2,000,000 in the aggregate.

 

(vi) All entry shall be during reasonable business hours and after reasonable prior notice to Seller so that a representative of Seller may be available at the Property.

 

(vii) All entry shall be at the sole risk and expense of Purchaser, its employees, agents, servants, representatives and contractors.

 

(viii) Purchaser agrees to indemnify and hold Seller harmless from any damage or injury to persons or property, and any claim, action or damage arising out of or in connection with Purchaser or its contractors, agents, representatives, servants or employees during their entry upon the Property.

 

(b)     On or before sixty (60) days from the date hereof (the “Inspection Period”), Purchaser shall notify Seller in writing whether the Inspections, are acceptable to Purchaser and whether a Phase II environmental assessment is necessary. If Purchaser so notifies Seller in writing within said time period that a Phase II is necessary and the Purchaser delivers a copy of the Phase I environmental audit to Seller substantiating same, the Inspection Period shall be extended for such reasonable period necessary for the completion of the Phase II environmental audit, but not to exceed an additional sixty (60) days (for a total of one hundred twenty (120) days) which extended period shall be solely for the completion of the Phase II environmental audit.

 

(i)     If the Inspections are not acceptable to Purchaser, Purchaser shall notify the Seller of the result of said Inspections within sixty (60) days from the date hereof except that if Purchaser extends the Inspection Period for a Phase II environmental audit and the results of the Phase II environmental audit are not acceptable to Purchaser, Purchaser shall notify Seller of the results of the Phase II environmental audit and deliver a copy of such report prior to the expiration of the extended Inspection Period and Seller shall have until the Closing Date during which time it may, at its option, cure the unacceptable matter.

 

(ii)     If Seller elects not to cure the unacceptable matter and notifies, the Purchaser of its election not to cure, in writing then this Agreement and Purchaser's obligation hereunder to purchase the Property may be terminated at Purchaser's sole and absolute election, within three (3) business days of the aforementioned written notice from Seller and in the event of such termination, Seller agrees to refund to Purchaser the Downpayment plus Interest.

 

(iii)     In the event that Purchaser does not elect to terminate this Agreement within the time period set forth herein then Purchaser shall be deemed to have waived the unacceptable matter and any rights to terminate under this Article 5 and there shall be no adjustment to the Purchase Price.

 

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(iv)     In the event Seller cures the unacceptable matter, this Agreement and Purchaser's obligations hereunder shall remain in full force and effect and there shall be no adjustment in the Purchase Price.

 

(v)     In the event Purchaser does not so notify Seller on or before the expiration of the Inspection Period, Purchaser's obligations under this Agreement, shall become unconditional. The provisions of this Section 5.01 shall survive closing or the cancellation or termination of this Agreement.

 

 

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

6.01     Purchaser represents and warrants that:

 

(a)     Purchaser is a New York limited liability company, licensed to do business in the State of New York, and has all requisite power to own its property and to carry on its business as presently conducted, and Purchaser has complete and unrestricted power to execute, deliver and perform this Agreement and the transactions contemplated hereby;

 

(b)     The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate or conflict with any judgment, decree or order of any court applicable to or affecting Purchaser, (ii) breach the provisions of or constitute a default under any contract, agreement, instrument or obligation to which Purchaser is a party or by which Purchaser is bound, or (iii) violate or conflict with any law or governmental regulation applicable to Purchaser;

 

(c)     This Agreement and all other agreements, documents and instruments executed by Purchaser pursuant hereto are and will be the valid and binding obligations of Purchaser enforceable in accordance with their terms;

 

6.02     All representations and warranties made by Purchaser hereunder shall be true as of the Closing Date, and shall survive the closing or the earlier termination of this Agreement.

 

 

ARTICLE 7

APPORTIONMENTS

 

7.01     The following shall be apportioned with respect to the Property as of 12:01 a.m., on the day of closing, as if Purchaser were vested with title to the Property during the entire day upon which closing occurs:

 

(a)     taxes and assessments levied against the Property;

 

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(b)     gas, electricity and other utility charges for which Seller is liable, if any, such charges to be apportioned at closing on the basis of the most recent meter reading occurring prior to closing; and

 

(c)     any other operating expenses or other items pertaining to the Property which are customarily prorated between a purchaser and a seller in the area in which the Property is located.

 

(d)     Notwithstanding the foregoing, Purchaser shall be responsible for all taxes and assessments, gas, electric and other utilities charge and all operating expenses or items pertaining to the Property during the period of its post-Closing possession, pursuant to a Surrender Agreement to be executed and delivered at the Closing.

 

7.02     Notwithstanding anything contained in the foregoing provisions:

 

(a)     Any taxes paid at or prior to closing shall be prorated based upon the amounts actually paid. If taxes and assessments for the current year have not been paid before closing, Seller shall be charged at closing an amount equal to that portion of such taxes and assessments which relates to the period before closing and Purchaser shall pay the taxes and assessments prior to their becoming delinquent. Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed shall be based upon the tax rate and/or assessed valuation last fixed. To the extent that the actual taxes and assessments for the current year differ from the amount apportioned at closing, the parties shall make all necessary adjustments by appropriate payments between themselves following closing.

 

 

7.03     If on the date hereof the Property or any part thereof shall be or shall have been affected by a special assessment or assessments which are or may become payable in annual installments, of which the first installment is then a charge or lien, or has been paid, then for the purposes of this Agreement all the unpaid installments of any such assessment, including those which are to become due and payable after closing, shall be payable by the Purchaser at or subsequent to the closing (subject, however, to adjustment as provided in Section 7.01 hereof).

 

 

ARTICLE 8

CLOSING

 

8.01     The Closing shall take place on or before March 15, 2018, but no later than March 23, 2018, time being of the essence as to such outside date (the "Closing Date") at the offices of Seller's attorneys, Farrell Fritz, P.C., 400 RXR Plaza, Uniondale, New York.

 

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ARTICLE 9

DELIVERIES AT CLOSING

 

9.01     At Closing, Seller shall deliver to Purchaser:

 

(a)     the Bargain and Sale Deed with Covenant Against Grantor’s Acts;

 

(b)     New York City and State transfer forms, including TP-584 and RP-5217 forms duly executed by Seller;

 

(c)     a FIRPTA affidavit indicating that Seller is not a "foreign person", as such term is defined in the Internal Revenue Code of 1954, as amended; and

 

(d)     a satisfaction or release of the leasehold mortgage.

 

(e)     proof reasonably satisfactory to the Purchaser’s title agent that all city, state or business incorporation taxes have been paid by the Seller.

 

(f)     proof satisfactory to the Purchaser that any franchise agreements affecting the occupancy have been terminated subject to the six month wind up period.

 

(g)     such other documents which are required to be delivered by Seller pursuant to this Agreement.

 

 

9.02     At Closing, Purchaser shall:

 

(a)     pay to Seller the balance of the Purchase Price;

 

(b)     execute the New York City and State transfer forms, including TP-584 and RP-5217 forms; and

 

(c)     deliver such other documents which are required to be delivered by Purchase under this Agreement.

 

 

9.03     At Closing, Seller and Purchaser shall execute a Surrender Agreement as more particularly described in Article 31 of this Agreement.

 

9.04     Seller shall pay all state and local transfer, documentary stamps and other taxes and charges relating to the transfer of the Property and normally paid by sellers of real property in the State of New York. The Purchaser shall pay all taxes and charges normally paid by purchaser of real property in the State of New York. The provisions of this Section 9.03 shall survive closing.

 

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ARTICLE 10

FIRE OR OTHER CASUALTY

 

10.01     Seller and Purchaser hereby waive the provisions of all applicable laws relating to the occurrence of a casualty, and agree that the provisions of this Article 10 shall govern in lieu thereof. If at any time prior to Closing the Improvements shall be damaged by fire or other casualty (a "Casualty Event"), whether or not such destruction or damage is covered by insurance, Seller shall have no obligation to repair, rebuild or otherwise reconstruct the Improvements. If prior to the delivery of the deed hereunder part or all of the Property is damaged or destroyed by fire or other cause, Seller shall at the closing assign the claim and endorse any proceeds of any fire insurance actually received by it referable to or arising from the damage and there shall be no abatement or credit on account of the Purchase Price and no duty or obligation on Seller to repair or restore any damage or to make any repairs to the Property by reason of such fire, or casualty. Prior to the Closing or earlier termination of this Agreement, adjustment of any insurance claim shall be conducted by Seller.

 

 

ARTICLE 11

EMINENT DOMAIN

 

11.01     If, prior to Closing, all or any material part of the Property shall be taken by eminent domain so as to interfere with Purchaser’s proposed development of the Property (a "Material Taking"), Purchaser may elect by written notice to cancel this Agreement, such notice to be given within five (5) days of Purchaser’s knowledge of any such taking. In the event Purchaser shall so elect, both parties shall be relieved of and released from any further liability hereunder, and Seller shall forthwith repay to Purchaser the Downpayment and the Interest. Unless so cancelled, this Agreement shall remain in full force and effect and Seller shall assign, transfer and set over to Purchaser all of Seller's right, title and interest in and to any awards that may be made on account of such taking. In the event of any taking by eminent domain which shall not be a Material Taking, this Agreement shall continue unmodified and in full force and effect with the condemnation award payable in full to Purchaser.

 

 

ARTICLE 12

BROKERAGE

 

12.01     Seller and Purchaser warrant to each other they have not dealt with any broker, finder or like agent in connection with this transaction, other than City RE Group LLC, which Broker Seller agrees to pay in accordance with the provisions of a separate agreement. Seller and Purchaser agree to, and hereby do, indemnify and save each other harmless and their respective legal representatives, heirs, successors and assigns against and from any loss, liability or expense, including reasonable attorneys' fees, arising out of any claim or claims for commission or other compensation for bringing about this Agreement or the transaction contemplated hereby made by any other broker, finder or like agency which are based in whole or in part on dealing with such party or its representatives.

 

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ARTICLE 13

TERMINATION

 

13.01     This Agreement may be terminated by Seller, in the event Purchaser, within ten (10) days after Seller shall have given notice to Purchaser of such failure, shall fail timely to perform the obligations on its part to be performed pursuant to the terms of this Agreement, or in the event that Seller is unable to convey the Property in accordance with the terms of this Agreement. Notwithstanding the foregoing, upon receipt of a notice from Seller of its inability to convey the Property in accordance with the provisions of this Agreement, which notice shall specify the reason for, and the extent of, such inability, Purchaser shall have the right to elect by written notice, sent to Seller within ten (10) days from the date of Seller's aforesaid notice, to purchase such right, title, and interest in and to the Property as Seller may be able to convey and assign, without any reduction in the Purchase Price unless provided to the contrary in this Agreement or any amendment thereto. Nothing contained herein shall obligate Seller to commence any legal proceedings to cure its inability to convey title to the Property under this Agreement.

 

13.02     This Agreement may be terminated by Purchaser only in the event that Seller is unable to convey the Property free and clear of any tenancies or possessory interests. Seller shall have not more than three (3) months from the Closing Date to deliver the Property vacant, broom clean and free of debris. In lieu of delivering the Property at Closing vacant, broom clean and free of debris, Seller will enter into a surrender agreement in the form attached hereto whereby Seller shall wind up its business, vacate the Property and deliver same in broom clean condition and free of all debris.

 

13.03     In the event of a termination of this Agreement due to Seller's inability to convey the Property in accordance with the terms of this Agreement, Purchaser shall be entitled to the return of the Downpayment plus the Interest.

 

 

ARTICLE 14

DEFAULT

 

14.01     Purchaser Default. If Purchaser defaults under this Agreement at or prior to the Closing Date by failing to complete the closing in accordance with the terms of this Agreement or in any other respect, then upon the termination of this Agreement, Seller shall be entitled to retain the Downpayment and Interest as liquidated damages and not as a penalty. The retention of the Downpayment and Interest shall be Seller's sole remedy in the event of Purchaser's default at or prior to the Closing Date. Seller and Purchaser agree that the actual damages to Seller in the event of such breach are impractical to ascertain as of the date of this Agreement and the amount of the Downpayment and Interest is a reasonable estimate thereof. Upon payment of the Downpayment and Interest to Seller as liquidated damages, this Agreement shall (except as herein otherwise expressly provided) be and become null and void and all copies will be surrendered to Seller. Nothing contained in this Section 14.01 shall be deemed to limit Seller's rights against Purchaser by reason of the indemnity obligations of Purchaser to Seller set forth in this Agreement, which obligations shall survive the termination of this Agreement.

 

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14.02     Seller Default. In the event that Seller is unable to convey title in accordance with the terms of this Agreement, the sole liability of Seller will be to refund to Purchaser the amount paid on account of the Purchase Price and to pay the net cost of examining the title, which cost is not to exceed the charges approved by the New York State Insurance Department and the next cost of any survey made in connection therewith incurred by Purchaser, and upon such refund and payment being made this Agreement shall be considered cancelled. In the event that Seller fails to consummate this Agreement for any reason other than Purchaser's default or the permitted termination of this Agreement by Seller or Purchaser as herein expressly provided, Purchaser shall be entitled, as its sole remedy, either (a) to receive the return of the Downpayment plus Interest, which return shall operate to terminate this Agreement and release Seller from any and all liability hereunder, or (b) to enforce specific performance of Seller's obligation to execute the documents required to convey the Property to Purchaser, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder and if such remedy as provided herein is unavailable due to any prior conveyance of the Property, or other reason beyond the control of Purchaser, Purchaser shall be entitled to demand the return of the Downpayment plus Interest provided that Purchaser is entitled to such remedy pursuant to the terms of this Section 14.02. Notwithstanding the foregoing, the Purchaser shall be entitled to enforce Seller’s performance under this Agreement by bringing an action for specific performance within sixty (60) days of the Closing Date or any adjournment thereof. In any action for specific performance, the Purchaser may file a notice of pendency.

 

 

ARTICLE 15

NOTICES

 

15.01     Any notice, statement, demand or other communication required or permitted to be given, rendered or made by either party to the other pursuant to the terms of this Agreement or pursuant to any applicable law or requirement of any public authority, shall be in writing and shall be deemed to have been properly given, rendered or made, if hand delivered with receipt acknowledged or sent by registered or certified mail, return receipt requested, or by overnight courier, addressed as appropriate, if to Purchaser at the address listed above, with a copy to and if to Seller, at the addresses listed above, with a copy to:

 

If to Seller, a copy to:

 

Farrell Fritz, P.C.

400 RXR Plaza

Uniondale, New York 11556

Attention:  Robert E. Sandler

Telephone: (516) 227-0706

Facsimile: (516) 336-2224

 

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and to

 

If to Purchaser, a copy to:

 

Sweeney, Reich & Bolz, LLP

1981 Marcus Avenue, Suite 200

Lake Success, New York 11042

Attention: Rashel M. Mehlman, Esq.

Telephone: (718) 459-9000

With a courtesy copy to Rmehlman@srblawfirm.com

 

 

Any such notice, if given by hand, shall be deemed given on the date delivered or, if mailed, shall be deemed to have been given, rendered or made two (2) business days following the day so mailed, or, if sent by overnight courier, shall be deemed given, rendered or made upon receipt. Either party may, by notice as aforesaid, designate a different address or addresses for notices, statements, demands or other communications intended for it. The attorneys for the respective parties hereto may transmit or receive any notice hereunder on behalf of their respective clients.

 

 

ARTICLE 16

AMENDMENT

 

16.01     This Agreement may not be changed or terminated orally. All written amendments hereto shall be executed by both parties hereto. All provisions of this Agreement shall apply to and bind the heirs, executors, administrators, successors and assigns of the respective parties.

 

 

ARTICLE 17

ASSIGNMENT

 

17.01     This Agreement shall bind and inure to the benefit of Seller and Purchaser and their respective heirs, executors, administrators, personal and legal representatives, successors and permitted assigns. Purchaser shall not assign Purchaser's rights under this Agreement without the prior written consent of Seller, which consent may be withheld absolutely. Notwithstanding the foregoing, Purchaser may assign any membership interests to a family member, family trust or SLAT and this Agreement may be assigned for IRS 1031 purposes, if applicable. In the event Seller consents to such assignment, Purchaser and such assignee shall execute and deliver an assignment of this Agreement in the form reasonably acceptable to Seller. Any subsequent assignment may be made only with the prior written consent of Seller. No assignment of Purchaser's rights hereunder shall relieve Purchaser of its liabilities under this Agreement. This Agreement is solely for the benefit of Seller and Purchaser; there are no third party beneficiaries hereof. Any assignment of this Agreement in violation of the foregoing provisions shall be null and void.

 

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ARTICLE 18

CONSTRUCTION

 

18.01     All terms and words used in this Agreement, regardless of number and gender, shall be construed to include any other number, or any other gender, as the context or sense of this Agreement or any other section or clause herein may require, as if such words had been fully and properly written in the required number and gender.

 

18.02     Should any of the provisions of this Agreement require interpretation, it is agreed that the court interpreting or construing this Agreement shall not apply a presumption that the terms of any provision shall be more strictly construed against one party by reason of the rule of construction that a document is to be construed more strictly against the party who itself or through its agent prepared such document, it being agreed that both parties and their respective agents have participated in the preparation of this Agreement.

 

 

ARTICLE 19

RECORDING

 

19.01     Unless provided for under this Agreement, the parties agree that neither this Agreement nor any memorandum or notice hereof shall be recorded or filed. If Purchaser records or files this Agreement or a notice or memorandum hereof, Seller may, at its sole option, declare this Agreement terminated, in which event, Purchaser shall be deemed to have defaulted in its obligations hereunder.

 

 

ARTICLE 20

GOVERNING AUTHORITY

 

20.01     This Agreement shall be deemed to have been made in, and shall be governed by and construed in accordance with the laws of the State of New York.

 

 

ARTICLE 21

WAIVER; JURY WAIVER

 

21.01     The waiver of a breach of any term of condition of this Agreement shall not be deemed to constitute a waiver of any other or subsequent breach of the same or any other term or condition hereof.

 

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21.02     PURCHASER AND SELLER DO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, OR UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING OR SELLER AT CLOSING, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ANY ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THIS AGREEMENT OR THE PROPERTY (INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR DEFENSES ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER INTO AND ACCEPT THIS AGREEMENT AND THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING AND SHALL SURVIVE THE CLOSING OR TERMINATION OF THIS AGREEMENT.

 

ARTICLE 22

INVALIDITY

 

22.01     The invalidity of any term or provision of this Agreement shall not be deemed to affect the validity of the remainder of this Agreement or of any other term or provision thereof.

 

 

ARTICLE 23

COUNTERPARTS

 

23.01     This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of them together shall constitute one and the same instrument.

 

 

ARTICLE 24

LIMITATION OF SELLER'S LIABILITY

 

24.01     Except as otherwise provided herein, the liability of Seller hereunder for its failure or inability to comply with the requirements or terms of this Agreement is hereby limited only to the obligation of Seller to return to Purchaser the Downpayment plus Interest, and upon such return, the liability of Seller shall wholly cease, and Purchaser shall have no further claim against Seller.

 

24.02     Notwithstanding anything contained in Article 24.01 herein to the contrary, the Purchaser shall be permitted to enforce its right to close under this Agreement by bringing an action for specific performance within sixty (60) days of the Closing Date or any adjournment thereof. In any action for specific performance, the Purchaser may file a notice of pendency.

 

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ARTICLE 25

REPRESENTATION BY COUNSEL

 

25.01     Each party hereto hereby acknowledges and agrees that it has consulted legal counsel in connection with the negotiation of this Agreement and that it has bargaining power equal to that of the other parties hereto in connection with the negotiation and execution of this Agreement. Accordingly, the parties hereto agree the rule of contract construction to the effect that an agreement shall be construed against the draftsman shall have no application in the construction of interpretation of this Agreement. Attorneys are hereby authorized to sign any amendments or written changes to this Agreement on behalf of their clients.

 

 

ARTICLE 26

ATTORNEYS' FEES

 

26.01     If either party fails to perform any of its obligations under this Agreement or if a dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party not prevailing in such dispute shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements in an amount not exceeding $25,000. Any such attorneys' fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys' fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment.

 

 

ARTICLE 27

MERGER

 

27.01     It is understood and agreed that all understandings and agreements heretofore had between the parties hereto are merged in this Agreement, which fully and completely expresses their agreement, and that the same is entered into after full investigation, neither party relying upon any other statement or representation made by the other not embodied in this Agreement. Purchaser expressly agrees that there are no verbal or written statements or representations pertaining to the Property furnished by any agent, employee, servant or any other person acting on Seller's behalf which are not contained in this Agreement and for which Seller is liable or bound.

 

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ARTICLE 28

DISCLAIMERS AND WAIVERS

 

28.01     Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4, PURCHASER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER OR ANY TENANT MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, (F) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY, (G) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY, OR (H) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING THE EXISTENCE IN OR ON THE PROPERTY OF HAZARDOUS MATERIALS OR (I) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF OF PURCHASER ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4, NO PERSON HAS MADE, ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY OR PROMISE REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED HEREIN; AND NO SUCH REPRESENTATION, WARRANTY, AGREEMENT, GUARANTY, STATEMENT OR PROMISE IF ANY, MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4, NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER AND AGREES TO ACCEPT THE PROPERTY AT THE CLOSING AND WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER (INCLUDING, BUT NOT LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM OR RELATED TO THE PROPERTY OR TO ANY HAZARDOUS MATERIALS ON THE PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4, MAKES NO REPRESENTATIONS AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION. EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE 4, SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENT, REPRESENTATION OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS WITH ALL FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING. PURCHASER HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND, SAVE AND HOLD HARMLESS SELLER FROM AND AGAINST ANY AND ALL DEBTS, DUTIES, OBLIGATIONS, LIABILITIES, SUITS, CLAIMS, DEMANDS, CAUSES OF ACTION, DAMAGES, LOSSES, FEES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND EXPENSES AND COURT COSTS) IN ANY WAY RELATING TO, OR IN CONNECTION WITH OR ARISING OUT OF PURCHASER'S ACQUISITION, OWNERSHIP, LEASING, USE, OPERATION, MAINTENANCE AND MANAGEMENT OF THE PROPERTY. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE CLOSING OR ANY TERMINATION HEREOF.

 

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ARTICLE 29

NO FINANCING CONTINGENCIES

 

29.01     This Agreement is not contingent upon either (i) Purchaser's ability to finance the transaction contemplated hereby, or (ii) any other matter or condition except as may be expressly stated to the contrary herein.

 

 

ARTICLE 30

CERTIORARI PROCEEDINGS

 

30.01 Seller shall produce copies of all tax certiorari notices for the past three (3) years and if the Closing takes place, Seller shall authorize Purchaser to continue the notices without lapse to the extent permitted by law and provided such proceedings have not been settled prior to Closing.  Seller is hereby authorized to continue any proceeding or proceedings now pending for the reduction of the assessed valuation of the Premises, and to try or settle the same in Seller's discretion. The net refund of taxes and interest, if any, for any tax year for which Purchaser shall be entitled to share in the refund shall be divided between Seller and Purchaser in accordance with the proportion of said period covered by such refund in which the Premises was owned by Seller to the entire period covered, after deduction therefrom a pro rata share of all expenses, including counsel fees, necessarily incurred in obtaining such refund, the allocation of such expenses to be based upon the total refund obtained in the proceeding and in any other proceeding simultaneously involved in the trial of settlement. Purchaser shall deliver to Seller, upon demand, receipted tax bills and cancelled checks used in payment of such taxes and shall execute any and all consents or other documents, and do any act or thing necessary for the collection of such refund by Seller. Any refunds due for periods prior to Purchaser's ownership shall remain the property of the Seller. Purchaser shall have the right to control any such proceedings for periods subsequent to closing. The provisions of this paragraph shall survive the closing. Notwithstanding any other provision, Purchaser is under no obligation to incur any costs in furtherance of any tax certiorari proceeding.

 

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ARTICLE 31

SURRENDER AGREMENT

 

31.01 Simultaneously with the Closing, if Seller elects, the parties shall execute a Surrender Agreement which provides for the occupancy of the Property after Closing in the form annexed hereto as Exhibit C (the “Surrender Agreement”), which agreement the parties shall execute simultaneously with the closing of this transaction.

 

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the day and year first above written.

 

	 	
			SELLER:

				
			NATHAN’S FAMOUS OPERATING CORP.

			
	 	 	 
	 	 	
			By:        /s/ ERIC GATOFF

			Title:     CEO

			
	 	 	 
	 	 	 
	 	PURCHASER:  	660 86 LLC
	 	 	 
	 	 	
			By:        /s/ TIM ZISS 

			Title:     Managing Member

			

 

 

RECEIPT BY ESCROW AGENT

The undersigned Escrow Agent hereby

acknowledges receipt of the Downpayment

by check, subject to collection, to be

held in escrow pursuant to Article 2

of this Agreement.

 

FARRELL FRITZ, P.C.

 

 

Dated: September 8, 2017

 

 

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