EXHIBIT 10.5

 

AGREEMENT FOR SALE AND PURCHASE

 

THIS AGREEMENT FOR SALE AND PURCHASE (“Agreement”), made this 9th day of May,
2016 (the “Effective Date”), by and between GRAY EAGLE DEVELOPMENT, LLP, an
Indiana limited liability partnership [dba 96th & Olio Road Self Storage]
("Seller") and SSG MCCORDSVILLE LLC, a Delaware limited liability company
("Buyer"),

 

W I T N E S S E T H:

 

WHEREAS, Seller is the owner of the fee simple estate of all that certain tract
or parcel of land located in Fishers, Indiana, and commonly known as 13942 East
96th Street, McCordsville, IN 46055 and more particularly described in Exhibit A
(the "Land"), together with all improvements situate thereon (together with the
Land, the "Project"); a current plan of the Project is attached hereto as
Exhibit B and made a part hereof;

 

WHEREAS, Seller desires to sell and Buyer desires to buy, inter alia, the
Project at the price and on the other terms and conditions hereinafter set
forth;

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
agreements and covenants herein contained, and intending to be legally bound
hereby, the parties covenant and agree as follows:

 

 

1.

Agreement to Sell and Purchase

 

Seller shall sell and convey, and Buyer shall purchase, the Project; together
with the easements, rights, privileges and appurtenances belonging thereto;
together with Seller's right, title and interest, if any, in and to any land
lying in the bed of any street, road or avenue, open or proposed, in front of or
adjoining the Land to the center line thereof; together with all sign posts and
signage used by Seller in connection with the Project; together with all
appurtenant easements for ingress and egress and utilities; together with all
fixtures and equipment now located in, upon, attached or appurtenant to or used
in the operation of the Project; together with all real property leases,
licenses and self-storage rental agreements (collectively, the “Leases”) and the
lighting fixtures, air-conditioning units, window screens and other appliances,
furniture, equipment, customer lists, rights to facility telephone and fax
numbers, email addresses, yellow pages ads and other local ads, inventories
(including all boxes, cash registers, packaging materials, locks and all other
contents of the retail store located on the Project) and other personal property
and supplies owned by Seller and used or acquired for use at the Project (the
"Personalty", and all of the foregoing property, real, personal and mixed, being
collectively called the "Property").  The purchase of the Property shall not
include the use of any name or logo belonging to Seller, except that Buyer, at
no additional cost or liability to Buyer, may use the Seller’s name and logo on
the existing Property signage for a period not to exceed 60 days following
Closing; provided, however, such use of Seller’s name and logo shall be at no
cost or liability to Seller.  Buyer use commercially reasonable efforts to cause
its own new signage to be placed at the Property post-Closing.

h/re/self storage/McCordsville IN/agtofsale 050316

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2.

Purchase Price

 

Buyer shall pay Seller for the Property the sum of SEVEN MILLION SEVEN HUNDRED
THOUSAND AND 00/100 DOLLARS ($7,700,000.00) (the "Purchase Price") as follows:

 

(a)FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00) no later than three (3)
business days after the Effective Date and, unless Buyer earlier terminates (or
is deemed to have terminated) this Agreement as herein provided, FIFTY THOUSAND
AND 00/100 DOLLARS ($50,000.00) within three (3) business days after the date of
the Feasibility Study Clearance Letter, as hereinafter defined (all such monies,
together with any additional deposit required hereunder, and together with
interest which shall accrue thereon, being collectively called the "Deposit"),
all to be held in escrow by First American Title Insurance Company ("Title
Company" and "Escrow Agent"), with an address at 251 E. Ohio St., Suite 200,
Indianapolis, IN 46204, Attn: Monica Chavez; telephone: 317-616-7336, and
disbursed in accordance herewith; and

 

(b)The balance of the Purchase Price at Closing (hereinafter defined) by wire
transfer of immediately available Federal funds, subject to the prorations set
forth herein.

 

 

3.

Representations and Warranties of Seller

 

Seller represents, warrants and covenants to Buyer (which representations and
warranties shall be true as of the Effective Date of this Agreement and as of
the Closing Date, as hereinafter defined, and shall survive Closing) that:

 

(a)Seller has full power and authority to enter into, and to perform its
obligations under, this Agreement.  This Agreement has been duly authorized by
all necessary action of Seller.  

 

(b)There is no claim, action, suit or proceeding pending or, to the best of
Seller’s knowledge, threatened against, by or otherwise affecting Seller or the
Property or any portion thereof or relating to or arising out of ownership,
management or operation of the Property in any court or before or by any
federal, state, county, township or municipal department, commission, board,
bureau or agency.    

 

(c)All of the obligations of Seller under any contracts affecting the Property
which ought to be fulfilled prior to the Closing Date or arising from conditions
existing prior thereto will be timely performed by Seller.

 

(d)Seller has no employees, and Buyer shall not be assuming any
employment-related liabilities of Seller under this Agreement.

 

(e)The Leases described in Exhibit C (the "Lease Schedule"), true, correct and
complete copies of which will be made available to Buyer, are all of the leases,
licenses and

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rental agreements affecting the Property as of the date shown thereon Lease
Schedule accurately sets forth, as of the date set forth thereon, with respect
to each Lease:  (i) the names, and unit numbers or leased premises, of the
lessees; (ii) the monthly rents, which might be in excess of the rates described
in the Leases due to increased rental rates; and (iii) the expiration
dates.  Seller shall make all Leases affecting the Property available to Buyer
for Buyer’s review at Seller’s offices; provided, however, Seller shall provide
to Buyer .pdf copies of those Leases with Montessori Academy at Geist, Inc. and
Thomas A. Grant, respectively, by email.  Seller further represents and warrants
that: 

 

(i)the Leases are in full force and effect;

 

(ii)no amendments, oral or written, have been made with respect to the Leases,
other than those listed in the Lease Schedule or made in accordance with
Paragraph 5(c);

 

(iii)none of the lessees under the Leases have made any security deposits
thereunder, other than Montessori Academy at Geist, Inc., the amount of which
deposit is shown on Schedule 3(e) attached hereto and made part hereof;

 

(iv)there are no rights of use for any portions of the Property now in effect or
hereafter to come into effect, except the rights under the Leases or made in
accordance with Paragraph 5(c), and no lessee has any option, agreement of sale,
extension or renewal, or any other right, title or interest in the Property
acquired directly through Seller, other than its rights of use as aforesaid; and

 

(v)the information relating to the Leases as set forth in the Lease Schedule is
true, correct and complete as of the date shown thereon.

 

(f)Attached hereto as Exhibit D (the "Contract Schedule") is a true, correct and
complete list of all service contracts and other contracts (other than the
Leases) respecting the operation of the Property (the "Contracts").  The
Contracts are currently in full force and effect and Seller has performed or, if
performance is not currently required, will perform all its obligations
thereunder.  Buyer agrees to assume the Contracts set forth on Schedule 3(f).

 

(g)Seller is not a "foreign person" within the meaning of Section 1445 of the
United States Internal Revenue Code, as amended, or its regulations.  

 

(h)To the best of Seller’s knowledge, no part of the Property is in violation of
applicable laws, codes, or regulations, including (without limitation) those
related to health, safety, access, and/or the environment.

 

(i)To the best of Seller’s knowledge, there are no "hazardous substances" (as
defined in any applicable law) located on the Project.

 

(j)The Project is zoned PUD M; to the best of Seller’s knowledge, the current
uses of the Project are permissible under such zoning classification.

 

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(k)Seller manages and operates the Project; Braun & Sullivan, LLP provide
employment, payroll and bookkeeping services to Seller. 

 

(l)To the best of Seller’s knowledge, there are no structural or other defects
in or upon the Project, including (without limitation) HVAC or other mechanical
systems, and all such systems are in good working order.

 

(m)There are no existing or pending contracts of sale, options to purchase or
rights of first refusal (or the like) with respect to all or any part of the
Property.

 

(n)The Property has direct access to and from a public right-of-way.  

 

As used herein, “the best of Seller’s knowledge” shall mean the actual and
constructive knowledge of any one or both of: Seller’s principals Richard Braun
and Christopher Sullivan, both of whom are involved in the day to day operations
of the Seller and the Property.

 

Buyer represents and warrants to Seller (which representations and warranties
shall be true as of the date of this Agreement and as of the Closing Date, as
hereinafter defined, and shall survive Closing) that Buyer has full power and
authority to enter into, and to perform its obligations under, this
Agreement.  This Agreement has been duly authorized by all necessary limited
liability company action of Buyer.  Neither the execution, delivery or
performance of this Agreement by the Buyer, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or
provisions of, or conflict with or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of the
Buyer pursuant to the terms of any indenture, mortgage, deed of trust, note,
evidence of indebtedness or any other agreement or instrument by which the Buyer
is bound.

 

 

4.

Conditions Precedent to Closing; Default

 

(a)Buyer's obligation to close hereunder shall be expressly conditioned upon the
occurrence or fulfillment of each of the following conditions on or prior to the
Closing Date or such earlier date as may be provided in this Paragraph 4(a):

 

(i)All of the representations and warranties by Seller set forth in this
Agreement shall be true and correct in all material respects as if made on the
Closing Date.

 

(ii)Seller shall have performed (in all material respects) all covenants and
agreements required by this Agreement to be performed by Seller at or prior to
the Closing Date.

 

(iii)There shall have been no material and adverse change to the condition of
the Project since the Feasibility Study Termination Date.  

 

If any of the conditions set forth above in Paragraph 4(a)(i)-(iii) are not
satisfied, Buyer, in addition to its other remedies set forth herein, shall be
entitled to (A) terminate this Agreement and receive back the Deposit, and this
Agreement shall be deemed null and void, (B) pursue specific performance and/or
(C) pursue any other remedies at law or in equity.  

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(b)Seller's obligation to close hereunder shall be expressly conditioned upon
Buyer's performance (in all material respects) of all covenants and agreements
required by this Agreement to be performed by Buyer at or prior to the Closing
Date.  Upon Buyer's failure to perform (in all material respects) all such
covenants and agreements, Seller shall be entitled to receive the Deposit from
Escrow Agent, as liquidated damages and not as a penalty, and such receipt shall
be Seller's sole remedy.  In no event shall Seller bring action, sue or seek
damages or recourse against any principal, member, affiliate or parent company
of Buyer (including, without limitation, Global Self Storage, Inc.).

 

 

5.

Feasibility Study; Termination; Seller's Operations Prior to Closing; Signage

 

(a)Within three (3) business days after the Effective Date or within such other
time as hereinafter set forth, Seller shall:

 

(i)Provide to Buyer, via a data room or other electronic means:

All existing Surveys and Site Plans, existing Title Policies, Income and Expense
Reports and 2016 1st Quarter Income and Expense Report, Sitelink Reports
[Management Summary Reports for Dec. 31, 2014; Dec. 31, 2015; March 31, 2016 and
as of today; most recent Occupancy Statistics report; most recent Rent Roll
report]; Copies of Service Contracts, 2015, 2014 and 2013 Tax Returns, 2015 &
2016 Due and Payable Property Taxes, Property valuations (appraisal summary
letters of October 2, 2015 and May 2, 2008 appraisals), Last 12 Months Bank
Statements, Leases with Montessori Academy at Geist, Inc. and Thomas A. Grant,
and all insurance policies affecting the Property.

 

(ii)Make available to Buyer for review and inspection at Seller’s offices,
copies of all materials in Seller’s possession respecting the Property
including, without limitation: environmental reports, permits and approvals,
building plans, appraisals, site plans, and related documentation, agency
agreements and related documentation, licenses, zoning materials, tax bills and
any other records affecting all or any part of the Property.  

 

(iii)Make available to Buyer for review and inspection at Seller’s offices
copies of all materials respecting the Property including, without limitation,
the following:

 

(a)

Original plans for the Project;

 

(b)

2014 & 2015 Income and expense statements;

 

(c)

A report listing all tenants, unit #s and a sample copy of the form of lease
used by Seller;

 

(d)

List of personal property to be transferred to Buyer;

 

(e)

Copies of all service Contracts and other contracts relating to the Property;

 

(f)

Copies of last three years tax returns for the Property;

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(g)

Copies of the last twelve months of operating statements and utility bills for
the Property;  

 

(h)

Copies of the last twenty-four months of property taxes, valuation and
tax-related documents, insurance policies and invoices, marketing and
advertising expenses with invoices affecting the Property;

 

(i)

Copies of all material correspondence sent to or received from all Property
tenants (and the representatives of such tenants) associated with  material
issues relating to the Leases within the twelve (12) month period preceding the
Effective Date (and Seller shall promptly forward to Buyer any such
correspondence sent or received during the term of this Agreement relating to
materials issues associated with the Leases);

 

(j)

The Property management contract with amendments (if applicable), and any
employment contracts (if applicable),;

 

(k)

A summary of pending insurance claims and pending litigation (including, without
limitation, all eviction and auction actions pending), if any;

 

(l)

Bank statements for all of Seller’s accounts relating to the Property for the
last 12 months;

 

(m)

Copies of all guaranties or warranties with respect to the roof or other
portions of the Property, if any; and

 

(n)

Copies of all certificates of occupancy and/or other permits and approvals
affecting the Property.

 

Electronic versions of all items to be provided by Seller to Buyer under
Paragraph 5(a)(i) will be sent by Seller to Buyer at the following email
address:  mwinmill@globalselfstorageinc.com; provided, however, that Seller
shall email electronic versions of the most recent Project survey and title
policy to Buyer’s counsel at amaguire@mkbattorneys.com.  Hard copies of all
items referenced in this Paragraph 5(a) shall be sent by Seller to Buyer at the
physical address referenced in Paragraph 15, if requested at Buyer’s sole cost
and expense.

 

(iii)During the term of this Agreement, Seller will afford Buyer, its agents and
representatives, upon reasonable prior notice of at least forty-eight (48) hours
and at reasonable times, with full access to the Property, for Buyer's
inspection, testing and review.  The results of such inspection or testing shall
be provided to Seller, upon request.  Notwithstanding the foregoing, Buyer’s
access to the Property shall not include any subsurface sampling of soil or
groundwater without Seller’s express written consent. Without limiting the
foregoing, Seller shall make available to Buyer at the Project all Leases (with
all Lease guarantees, tenant correspondence and related materials).  Buyer shall
restore any portion of the Property disturbed by Buyer’s testing activities on
the Property to its condition as existed prior to such disturbance. Buyer shall
indemnify, hold harmless and defend (using counsel selected by Seller) Seller
against all claims, losses, costs, demands and liabilities to the extent caused
by Buyer’s access to the Property pursuant to this Paragraph 5(a)(iii).  Buyer
shall provide Seller with a certificate of insurance evidencing liability
insurance against property loss and personal injury in connection

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with such activities in an amount of not less than $1,000,000 combined single
limit and naming Seller as an additional insured.  Buyer shall promptly notify
Seller in the event the policy of insurance evidenced by the certificate of
insurance is cancelled by the insurance company or notice of cancellation is
given by the insurance company.  This Paragraph 5(a)(iii) shall survive the
Closing or any prior termination of this Agreement.  

 

(b)The “Feasibility Study Termination Date” shall be that date which is
forty-five (45) days after the Effective Date.  On or before the Feasibility
Study Termination Date, Buyer shall have the right to terminate this Agreement
(for any reason or for no reason) by delivery of notice to Seller, and this
Agreement shall be deemed terminated (and the Deposit shall be returned to
Buyer) upon Buyer’s delivery of such termination notice.  If Buyer elects to
proceed to Closing hereunder, Buyer shall provide Seller with notice of same
("Feasibility Study Clearance Letter") within two (2) business days after the
Feasibility Study Termination Date.  In the event that Buyer fails to timely
provide a Feasibility Study Clearance Letter to Seller, this Agreement shall be
deemed terminated (and the Deposit shall be promptly returned to Buyer) if,
within five (5) business days after Buyer’s receipt of notice from Seller
referencing Buyer's failure to timely provide a Feasibility Study Clearance
Letter, Buyer fails to provide a Feasibility Study Clearance Letter to Seller.  

 

(c)During the term of this Agreement, Seller shall not, without Buyer's consent
(which shall not be unreasonably withheld), enter into or extend:

 

(i)any Lease or other possessory arrangement regarding the Property (A) for a
term (including any renewals) of more than one (1) year, (B) which calls for
rental and other payments which are less than those currently payable for the
space being rented, except for competitive price matching, or (C) which grants
the lessee any concessions which will not be fully performed by Seller prior to
Closing; or

 

(ii)except for the web-based SiteLink Software, LLC agreement renewal, any
service or other contract regarding the Property for a term which will extend
past the Closing Date.

 

(d)During the term of this Agreement and extending beyond the Closing Date,
Seller shall reasonably cooperate with Buyer’s efforts to obtain permits and
approvals respecting Buyer’s Project signage at no cost to Seller.  Without
limiting the generality of the foregoing, Seller shall sign applications for
permits for Buyer’s submission respecting Buyer’s sign panels upon Buyer’s
request at no cost to Seller.  Notwithstanding the foregoing, in the event this
Agreement is terminated, Buyer shall promptly cause the withdrawal, at Buyer’s
sole cost and expense, all of submissions for Buyer’s sign panels.

 

(e)Seller shall use commercially reasonable efforts to obtain a signed estoppel
certificate from each of Seller’s non-storage unit tenants, including without
limitation Montessori Academy at Geist, Inc. and Thomas A. Grant, in a form
pre-approved by Buyer, on or before the Feasibility Study Termination Date.

 

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(f)On or before the Feasibility Study Termination Date, Buyer shall provide
written notice to Seller indicating which Contracts (if any) Buyer elects to
assume at Closing.  Without limiting the generality of the foregoing, Buyer
shall assume Seller’s Contract with SiteLink only if such Contract is for
web-based service and Buyer shall assume those contracts set forth on Schedule
3(f).   

 

 

6.

Closing

 

Closing of the transaction contemplated herein ("Closing") shall be a remote
Closing by escrow, on a date (the "Closing Date") selected by Buyer and Seller
which is not later than fifteen (15) days after the date of the Feasibility
Study Clearance Letter.  

 

 

7.

Evidence and Condition of Title

 

(a)At Closing, Seller shall cause title to the Property (other than the
Personalty) to be fee simple and: (i) good and marketable and free and clear of
all tenancies, liens, encumbrances and title objections, other than the Leases;
and (ii) insurable as such, at regular rates, by Title Company.  Title to the
Personalty shall be good and marketable and free and clear of all liens,
security interests and other encumbrances.

 

(b)After the execution of this Agreement, Buyer shall apply for a commitment for
title insurance from Title Company (the "Title Commitment").  Seller agrees to
cooperate with Buyer and Title Company in connection therewith, including
(without limitation) delivering to Buyer copies of any requested deeds, plans,
surveys and title policies in Seller's possession or control.  Buyer shall have
the right to deliver a notice to Seller of the existence of any requirements,
conditions or exceptions noted in the Title Commitment or a current survey of
the Project which are unsatisfactory to Buyer (such exceptions being called
"Title Defects"), with which Buyer shall include a copy of the Title Commitment,
copies of recorded exceptions specified therein and, at Buyer’s option, a
current survey of the Project.

 

(c)(i)     If Buyer notifies Seller of the existence of any Title Defects,
Seller shall have ten (10) days from the date of such notice to notify Buyer
whether Seller intends to cure such Title Defects, except that in all cases
Seller must discharge at or prior to Closing all monetary liens affecting the
Property.  Seller's failure to notify Buyer within such 10-day period shall be
conclusively deemed to be Seller's notice to Buyer of Seller's decision not to
cure the Title Defects, except such monetary liens.

 

(ii)If Seller notifies, or is deemed to have notified, Buyer of its intention
not to cure all Title Defects, Buyer shall have ten (10) days thereafter to
notify Seller of its decision whether to take such title as Seller may give or
of terminating this Agreement, and in the latter event, the Deposit shall be
promptly returned to Buyer and this Agreement shall terminate.

 

(d)If Seller agrees to cure any Title Defects and such Title Defects remain
uncured at Closing, or if additional Title Defects created after the issuance of
the Title Commitment exist at the time of Closing, then Buyer may, at Buyer’s
option: (i) take such title as Seller can give, with a credit against the
Purchase Price in an amount necessary to cure or correct any Title Defects which
constitute monetary liens in an ascertainable amount (as reasonably determined
by Buyer); or (ii) elect to receive a return of the Deposit, whereupon this
Agreement shall terminate.

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(e)Subject to Paragraph 5(c)(i), Seller shall not allow the Property or any part
thereof to be transferred or encumbered during the term of this Agreement.

 

 

8.

Delivery of Documents and Other Items; Employees

 

(a)At Closing, Seller shall deliver to Buyer:

 

(i)A special warranty deed (the "Deed") to the Property, duly executed and
acknowledged by Seller and in proper form for recording.

 

(ii)A Bill of Sale to the Personalty duly executed by Seller.

 

(iii)A valid assignment of the Leases and all security deposits required to be
held by Seller pursuant to the Leases, duly executed and acknowledged, assigning
to Buyer all of Seller's interest in the Leases and such security deposits,
together with the original executed Leases (which Seller shall leave at the
Project for Buyer) and an updated, true, correct and complete version of the
Lease Schedule.

 

(iv)A credit to Buyer in the amount of all security deposits in connection with
the Leases, including any required interest thereon, as of the Closing Date.

 

(v)An executed assignment to Buyer of all of the interest of Seller under the
Contracts that are assignable, but only to the extent Buyer desires to assume
any thereof in addition to those Contracts set forth in Paragraph 5(f) that
Buyer agreed to assume, together with originals of such Contracts, if available.

 

(vi)An executed general assignment of all governmental plans and approvals,
utility rights, and the other intangible property rights respecting the
ownership and operation of the Property.

 

(vii)Such documents, affidavits, disclosure forms and indemnities as Title
Company or Buyer shall require, including (without limitation) (A) documents or
affidavits in connection with seller gain withholdings required under applicable
law, (B) gap affidavit and (C) Seller’s completed and signed State of Indiana
Sales Disclosure form which, to the extent permitted under applicable law, may
be in addition to a separate State of Indiana Sales Disclosure form submitted by
Buyer.

 

(viii)Such limited liability partnership documents and other organization
documents as Title Company shall reasonably require to evidence Seller's
formation, existence and authority to consummate the sale of the Property and
delivery of the Deed.

 

(ix)An executed version of the final closing statement prepared by the Title
Company.

 

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(x)A certificate in the form of Exhibit E, executed and acknowledged by Seller,
in accordance with Section 1445 of the Internal Revenue Code, as amended. 

 

(xi)A non-competition agreement signed by Seller and Richard Braun and
Christopher Sullivan, in a form acceptable to Buyer and Seller and Seller’s
members, in connection with Paragraph 23.

 

(xii)All keys, passcards and passcodes (for doors, security systems, management
kiosks or otherwise) used in connection with the Property.

 

(b)At Closing, Buyer shall deliver to Seller (i) an executed version of the
final closing statement prepared by the Title Company, (ii) the balance of the
Purchase Price due, and (iii) such limited liability company documents and other
organization documents as Title Company shall reasonably require to evidence
Buyer's formation, existence and authority to consummate the purchase of the
Property and delivery of the Purchase Price.

 

(c)Effective as of the Closing Date, Seller shall cause (i) the termination of
the on-site Property manager (the “Manager”) and (ii) the Manager to be paid all
amounts that the Manager is due through the Closing Date (including accrued
wages and benefits).  At such time, Buyer shall have the right, in its
discretion, to enter into a separate employment agreement with the Manager.  If
requested by Buyer, Seller agrees to cooperate with Buyer's efforts to retain
the Manager (including, without limitation, delivering a jointly-signed letter
to the Manager explaining this transaction and Buyer's willingness to hire him).

 

(d)Pursuant to Section 9(e), the Seller and Buyer acknowledge and agree that
they shall settle any prorations that are not paid on the Closing Date by the
Post-Closing Settlement Date (as defined herein).

 

 

9.

Apportionment

 

The following items are to be computed and apportioned between Buyer and Seller
as of the Closing Date on a per diem and on a 365 day year basis unless
otherwise set forth below:

 

(a)Water and sewer rents.

 

(b)Seller shall pay all real estate taxes and assessments affecting the Property
(collectively, “Taxes”) which are due and payable on or before the Closing Date
and Buyer shall pay all Taxes which are due and payable after the Closing
Date.  Notwithstanding the foregoing, after Closing, Buyer shall timely pay
Taxes covering the period of Seller’s ownership of the Property in an amount not
to exceed Fifty-Eight Thousand Dollars ($58,000) and Seller shall timely pay all
other Taxes (including, without limitation, any applicable agricultural rollback
tax) covering any period of Seller’s ownership of the Property.  Each party
shall indemnify, hold harmless and defend the other party (using counsel
selected by the other party) against all claims, losses, costs, demands and
liabilities in connection with the foregoing Paragraph 9(b).

 

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(c)Any amounts payable under the Contracts to be assumed by Buyer; provided,
that if Buyer receives a bill for any such amount after the Closing Date which
bill covers a period prior to the Closing Date, Seller shall pay to Buyer that
part of such amount properly allocable to the period prior to the Closing
Date.   

 

(d)The rents and charges due under all Leases, hot and cooled water charges,
electricity and other utility charges and all other additional rent, sundry
charges paid by lessees under the Leases and other income to Seller to the
extent collected by Seller prior to the Closing Date and which, as of the
Closing Date, represent payments thereof to Seller which are applicable in whole
or in part to a period of time subsequent to the Closing Date.  

 

(e)All of the items referenced in Paragraph 9(d) which are due and payable prior
to the Closing Date, but which have not been collected by Seller, shall be
pro-rated as follows at Closing: Current rental income shall be pro-rated as of
the Closing Date.  Income received on the Closing Date shall be credited to
Buyer.  All prepaid rents covering any time period from or after the Closing
Date shall be transferred to Buyer.  All deposits shall be transferred to
Buyer.  All accounts not yet paid and delinquent 30 days or less as of the
Closing Date (“Recent AR”) shall be considered paid for pro-ration
calculations.  All accounts not yet paid and delinquent 31 days or more as of
the Closing Date (“Aged AR” and, collectively with Recent AR, “Past Due”) shall
become the property of Buyer with no pro-ration.  After the Closing Date Buyer
shall use good faith efforts to collect Past Due rental payments and (i) after
Buyer collects payment for Past Due accounts covering periods from and after the
Closing Date, Buyer shall remit to Seller any collected Recent AR rent dating to
the term of Seller’s ownership and (ii) after Buyer collects payment of rent
from tenant Jeff Witt/Integrity, Inc. covering periods from and after the
Closing Date, Buyer shall remit to Seller any collected Aged AR rent from tenant
Jeff Witt/Integrity, Inc. dating to the term of Seller’s ownership.  The parties
acknowledge and agree that on or before that date which is two (2) years after
the Closing Date (the “Post-Closing Settlement Date”), the parties shall have
calculated all such prorations set forth in this Section 9 and made any
applicable payments to the other party.  

 

(f)Payment of all utility company charges, for periods through the Closing Date
(including, without limitation, electricity, water and sewer) shall be made by
Seller.  Adjustments for utilities respecting periods during which Closing
occurs shall be based upon the next bill received and such adjustment shall
occur after the Closing Date.  Seller shall retain the right to the refund of
all utility deposits.  With respect to any utility adjustment, Seller shall
obtain meter (or other measuring device) readings of the utility consumption as
of the Closing Date and, wherever possible, Seller shall pay directly to the
utility company the amount determined to be due as of the Closing Date.  

 

At Closing, Seller shall credit Buyer $890.16 for the replacement of Project
sign panels damaged during Seller’s term of ownership.

 

This Paragraph 9 shall survive Closing.

 

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10.

Other Costs. 

 

Each party shall pay its own legal fees.  Seller shall pay the cost of a base
owner's title policy and the cost of title endorsements necessitated by Title
Defects, and Buyer shall pay the cost of any additional title endorsements
selected by Buyer.  Buyer shall pay all survey update costs.  Buyer shall pay
all Deed recording costs, and Buyer and Seller shall each pay one half of all
applicable closing fees (including, without limitation, such fees imposed by the
Title Company).  Seller shall (a) pay all sales and use taxes, employer
withholding taxes and all taxes respecting the Property or the Seller incurred
or imposed in connection with any period on or prior to the Closing Date, except
as otherwise provided for in Paragraph 9(b); and (b) indemnify, hold harmless
and defend (using counsel selected by Buyer) Buyer against all claims, losses,
costs, demands and liabilities in connection with the foregoing Paragraph
10(a).  This Paragraph 10 shall survive Closing.  

 

 

11.

Title Company as Deposit Holder

 

(a)Title Company shall hold the Deposit in an interest-bearing account and shall
disburse the Deposit in accordance with the terms of this Agreement.  Upon such
disbursement, Title Company shall be released and discharged from all
obligations hereunder.

 

(b)Title Company, in its sole discretion, may at any time deposit the Deposit,
with a court of competent jurisdiction selected by it and, in such event, Title
Company shall be fully released and discharged from all obligations hereunder
with respect to the Deposit.  Alternatively, Title Company may hold the Deposit
pending receipt of joint instructions from Seller and Buyer.

 

(c)The duties of Title Company hereunder are only as herein specifically
provided and are purely ministerial in nature.  Title Company shall incur no
liability whatever, as long as Escrow Agent acts in good faith.  Title Company
may refuse to take any action respecting the Deposit or this Agreement, unless
indemnified to its satisfaction by Buyer and/or Seller.

 

(d)Seller and Buyer agree to sign an escrow agreement if requested by the Title
Company.

 

 

12.

Insurance

 

Seller shall maintain in effect until the Closing Date its current insurance
policies with respect to the Property.  In the event of damage to the Property
by fire or any other casualty, Seller shall promptly notify Buyer and this
Agreement shall not be affected thereby, provided the cost of repairing such
damage shall not exceed the sum of $50,000.00, and provided all such costs are
covered by such policies or Seller shall agree to pay any deficiency, to be
specified in Seller's notice.  If, however, damage caused by fire or other
casualty insured under such policies shall exceed $50,000.00, or if the damage
is not fully covered by such policies and Seller does not agree to pay Buyer at
Closing the cost of repairing the uncovered damage, Buyer shall have the right
and option to cancel and terminate this Agreement by giving notice to Seller
within fifteen (15) days after Buyer receives Seller's notification of such
damage.  Thereupon, Buyer

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shall be entitled to promptly receive back the Deposit, whereupon this Agreement
shall be null and void and Seller’s election to not pay the deficiency shall not
be deemed a default under this Agreement.  If, in the event of a casualty, this
Agreement shall not be terminated as in this Paragraph 12 provided, Seller shall
pay or assign to Buyer at Closing all monies received or receivable from the
insurance companies which wrote such policies, all claims against such insurance
companies as a result of the losses covered by such policies and any deficiency
amount agreed upon by Seller as described above in this Paragraph 12, less
documented amounts previously expended by Seller for repair of the casualty
damage.

 

 

13.

Condemnation

 

In the event that all or part of the Property is taken by condemnation or
eminent domain proceeding between the date of this Agreement and the Closing
Date, Buyer may (a) cancel this Agreement, if the part of the Property so taken
is material to the use or value of the Property, or (b) take title subject to
such condemnation or taking and receive the proceeds thereof, and Seller shall
assign all of Seller’s rights to unpaid proceeds to Buyer at Closing.  Buyer
shall notify Seller of its election not more than fifteen (15) days after notice
from Seller of the occurrence of the condemnation or taking and the extent
thereof.  If Buyer shall elect to cancel this Agreement pursuant to (a) above,
then Buyer shall be entitled to receive back the Deposit, whereupon this
Agreement shall be null and void.

 

 

14.

Brokers

 

Seller and Buyer each represent and warrant to the other that it has neither
engaged nor dealt with any broker or finder in connection with this Agreement,
other than Seller’s broker MJ Partners (which includes A.M. Macy Co.) (the
"Broker").  Seller and Buyer each agree to indemnify, save harmless and defend
the other from and against all claims, losses, liabilities and expenses,
including reasonable attorneys' fees, through any and all appeals, arising out
of any claim made by any other broker, finder or other intermediary who claims
to have been engaged by such party in connection with the transactions
contemplated by this Agreement.  Seller shall be responsible for paying the
Broker a commission respecting the sale of the Property upon Closing of this
transaction.  The provisions of this Paragraph 14 shall survive Closing or any
prior termination of this Agreement.

 

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15.

Notices 

 

All notices and other communications hereunder ("Notices") shall be in writing
and be (a) mailed first class, certified mail, return receipt requested, postage
pre-paid, (b) sent via recognized overnight delivery service (i.e., Federal
Express), or (c) sent by email, with an original to follow via (a) or (b) above
and addressed:

 

IF TO SELLER:

Richard Braun

 

Gray Eagle Development, LLP

 

6054 E. 10th St.

 

Indianapolis, IN  46219

 

Email: rbraun@braunsullivan.com

 

WITH A COPY TO:

Alexandra S. Sylvia

Plews Shadley Racher & Braun LLO

1346 N. Delaware St.

Indianapolis, IN 46202

Email: asylvia@psrb.com

 

IF TO BUYER:

Mark C. Winmill

Global Self Storage, Inc.

3814 Route 44

Millbrook, NY 12545

Email: mwinmill@globalselfstorageinc.com

 

WITH A COPY TO:

Andrew Maguire

McCausland Keen & Buckman

80 W. Lancaster Avenue, 4th Floor

Devon, PA  19333

Email: amaguire@mkbattorneys.com

 

Notices shall be deemed received: three (3) business days after mailed in
conformity with (a) above; one (1) business day after sent via delivery service
in conformity with (b) above; or on the day sent by email in conformity with (c)
above.  Notices may be given by a party’s attorney on its behalf.

 

 

16.

Successors and Assigns

 

This Agreement shall inure to the benefit of and be binding upon the parties and
their respective legal representatives, successors and assignees, as the case
may be.  Without need for Seller consent, Buyer shall have the right to assign
all or any of its interest and rights under this Agreement to any entity
controlled by, controlling or under common control with Buyer.  Otherwise,
Seller’s consent shall be required for any assignment of rights under this
Agreement.  

 

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17.

Binding Effect; Amendments 

 

This Agreement contains the final and entire agreement between the parties with
respect to the subject matter hereof.  The parties shall not be bound by any
terms, conditions, statements, warranties or representations, oral or written,
not herein contained.  This Agreement may not be changed orally but only by an
instrument in writing and signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.  

 

 

18.

Counterparts

 

This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.  Electronically transmitted copies of counterpart signature
pages of this Agreement shall have the same force and effect as originals.

 

 

19.

Litigation

 

In connection with any litigation arising out of this Agreement, the prevailing
party shall be entitled to recover all costs incurred, including reasonable
attorney's fees.  The parties each waive trial by jury in any legal action
between the parties arising out of this Agreement.

 

 

20.

Governing Law; Time of the Essence

 

This Agreement shall be construed and interpreted in accordance with the laws of
the State of Indiana.  The parties agree that all time is of the essence.

 

 

21.

Paragraph Headings

 

The paragraph headings in this Agreement are inserted for convenience of
reference only and in no way define, describe or limit the scope or intent of
this Agreement or any of the provisions hereof, and shall not constitute a part
of this Agreement.

 

 

22.

Seller Cooperation Post-Closing

 

After Closing, Seller shall sign and deliver to Buyer all reasonable documents
and materials reasonably requested by Buyer.  Seller shall promptly make
payments to Buyer in the amount of all Project rental payments erroneously
delivered to Seller and/or erroneously made payable to Seller after Closing for
any monies due to Buyer as provided for in Paragraph 9.  This Paragraph 22 shall
survive Closing.  

 

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23.

Non-Competition   

 

For a period of two (2) years following the Closing Date, the following parties
shall not develop, purchase or invest in any self storage facility or mini
storage facility within a five (5) mile radius of the Project: Seller, Seller’s
principals, Richard Braun and Christopher Sullivan and Seller’s affiliates
excluding any affiliates of Alan Small (collectively, the “Seller
Parties”).  The Seller Parties acknowledge that the restrictions set forth in
this Paragraph 23 are reasonable and necessary for the protection of Buyer’s
purchase of, and interest in, the Property.  This Paragraph 23 shall survive
Closing.

 

 

24.

1031 Exchange

 

Either party may effect a like-kind exchange under Section 1031 of the Internal
Revenue Code of 1986, as amended (the “Code”).  Accordingly, each party agrees
that it will cooperate with the other to effect a tax-free exchange in
accordance with the provisions of Section 1031 of the Code and the regulations
promulgated with respect thereto, provided same shall not delay the Closing,
unless agreed to by the other party in its sole discretion.  The exchanging
party shall be solely responsible for any additional fees, costs or expenses
incurred in connection with the like-kind exchange contemplated by it pursuant
to this Paragraph 24, and neither party shall be required to incur any debt,
obligation or expense in accommodating the other hereunder.  In no event shall
either party’s ability or inability to effect a like-kind exchange, as
contemplated hereby, in any way delay the Closing or relieve the other from its
obligations and liabilities under this Agreement.  Each party hereby agrees to
indemnify and hold harmless the other from any liability, losses or damages
incurred by the other in connection with or arising out of the Section 1031
like-kind exchange of the exchanging party, including but not limited to any tax
liability.  This Paragraph 24 shall survive Closing.

 

 

25.

Confidentiality

 

Buyer, Seller and their respective representatives shall hold in strict
confidence all data and information obtained with respect to the opposite party,
its business, the Property or the transaction contemplated by this Agreement
(including the existence and terms of this Agreement), whether obtained before
or after the execution and delivery of this Agreement, and shall not disclose
the same to others, other than to counsel, accountants or agents or independent
contractors associated with the Property, who must agree to maintain the
information in strict confidence, or in a judicially or administratively ordered
proceeding where the disclosure is required by-law, or in connection with
reporting requirements related to securities laws.  In the event this Agreement
is terminated for any reason or the transaction does not close in accordance
with the terms hereof, each party shall promptly return to the other any
statements, documents, schedules, exhibits or other written information obtained
in connection with this Agreement or the transaction contemplated herein
(including all materials provided under Paragraph 5).  Notwithstanding anything
herein to the contrary, Buyer representatives shall have the right to contact
any officials representing The Town of McCordsville (and any political
subdivisions or departments thereof), The City of Fishers (and any political
subdivisions or departments thereof), Hamilton County (and any political
subdivisions or departments thereof) or Hancock County (and any political
subdivisions or departments thereof) in connection with the Property or the
transaction contemplated under this Agreement.

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The provisions of this Paragraph 25 shall survive termination or Closing.  

 

 

26.

Effective Date  

 

The Effective Date shall be the later of (a) the date that Seller executes this
Agreement and provides proof of same to Buyer, or (b) the date that Buyer
executes this Agreement and provides proof of same to Seller.  The Effective
Date shall be inserted in the preamble at the top of page one of this Agreement.

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
below written.

 

 

SELLER:

 

 

 

GRAY EAGLE DEVELOPMENT, LLP

 

[dba 96th & Olio Road Self Storage]

 

Date of Execution:  ___________, 2016

By:

 

 

Name:

 

 

Title:

 

 

 

BUYER:

 

 

 

SSG MCCORDSVILLE LLC

 

Date of Execution:  ____________, 2016

By:

 

 

Name:

 

 

Title: