Exhibit 10.6

 

FOURTH AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE

 

 

THIS FOURTH AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE (this “Amendment”) is
made effective as of October 13, 2014 (the “Effective Date”), by and among the
seller entities identified on the signature pages attached hereto (collectively,
“Sellers”, or each, a “Seller”) and CubeSmart, L.P. (“Purchaser”).

 

RECITALS

 

A.            Sellers and Purchaser entered into that certain Agreement for
Purchase and Sale on August 25, 2014 (as amended by that certain First Amendment
to Agreement for Purchase and Sale dated as of October 2, 2014, that certain
Second Amendment to Agreement for Purchase and Sale dated as of October 7, 2014
and that certain Third Amendment to Agreement for Purchase and Sale dated as of
October 9, 2014, the “Agreement”) in connection with the purchase and sale of
twenty-six (26) self-storage facilities, as more fully described therein.

 

B.            Sellers and Purchaser wish to amend the Agreement upon the terms
and conditions contained herein.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Sellers and Purchaser do hereby covenant
and agree as follows:

 

1.            Definitions.  Capitalized terms which are used in this Amendment,
but not defined in this Amendment, shall have the meanings ascribed to such
terms as set forth in the Agreement.

 

2.            Waiver of Termination Rights.  In consideration of the terms of
this Amendment, Purchaser waives its rights to terminate the Agreement prior to
the Disapproval Date pursuant to Sections 3(c), 5 and 6 of the Agreement and, in
furtherance thereof, Purchaser shall be deemed to have delivered a written
notice approving the Property in accordance with Section 3(c) of the Agreement. 
Furthermore, Purchaser has elected not to deliver a Notice of MAC with respect
to the Phase II Facilities pursuant to Section 3(e) of the Agreement and hereby
waives its right to terminate the Agreement pursuant to Section 3(e) thereof.

 

3.            Unpermitted Occupancy of 3402 North Kedzie Avenue,
Chicago, Illinois.  Seller served a demand for possession and notice to quit to
Medina Lawncare, Inc., 3610 North Cicero Avenue, Chicago, Illinois (attention
Carlos Medina, Jr.) in connection with the property located at 3402 North Kedzie
Avenue, Chicago, Illinois (the “Kedzie Property”).  Seller shall use diligent
and commercially reasonable efforts to cause Medina Lawncare, Inc. (“Medina”) to
vacate its occupancy of a portion of the Kedzie Property on or before the Group
Two Closing (provided that Seller’s inability or failure to cause Medina to
vacate the Kedzie Property shall not be deemed to be a Seller default under the
Agreement or a failure of a condition under the Agreement, nor shall any such
inability or failure constitute an excuse for Purchaser’s failure to perform
under the Agreement (including, without limitation, Purchaser’s obligation to
close the purchase and sale of the Properties under the Agreement)).  For
purposes of this paragraph 3, “diligent and commercially reasonable efforts”
shall mean, if Medina does not voluntarily surrender possession of the
applicable portion of the Kedzie Property, commencing an eviction proceeding to
cause Medina to vacate from the Kedzie Property and pursuing the same with
commercially reasonable diligence until the Group Two Closing, including the
delivery of such notices and filings as are required in connection therewith
upon advice of counsel.

 

4.            Judgment Lien Against 80 East Horizon Ridge Parkway, Henderson,
Nevada.  Seller shall use commercially reasonable efforts to cause the Title
Agency to insure over the judgment lien recorded against the property located at
80 East Horizon Ridge Parkway, Henderson, Nevada by Rib Roof, Inc. on or before
the Group One Closing.  In the event the Title Agency does not agree to insure
over such judgment lien and such judgment lien is not otherwise removed of
record on or prior to the Group One Closing Date, such lien shall be a
Non-Seller Liquidated Lien.

 

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5.            Telecom Leases at 1372 East 5th Street, Ontario, California and
3915 Green River Drive, Corona, California.  Seller shall deliver to the telecom
lease tenants at the properties located at 1372 East 5th Street, Ontario,
California and 3915 Green River Drive, Corona, California estoppel letters in a
form reasonably acceptable to Purchaser (and Purchaser shall provide such form
to Seller for Seller’s delivery to such tenants), and Seller shall use diligent
and commercially reasonable efforts to obtain such executed estoppels on or
before the Group One Closing (provided that Seller’s inability or failure to
obtain either or both such estoppel certificates (or Seller’s inability or
failure to obtain either or both such estoppel certificates in the form
requested by Purchaser) shall not be deemed to be a Seller default under the
Agreement or a failure of a condition under the Agreement, nor shall any such
inability or failure constitute an excuse for Purchaser’s failure to perform
under the Agreement (including, without limitation, Purchaser’s obligation to
close the purchase and sale of the Properties under the Agreement)).  For
purposes of this paragraph 5, “diligent and commercially reasonable efforts”
shall mean delivering the forms of estoppel certificates provided by Purchaser
to such tenants and following-up with such tenants regarding the execution and
delivery of the estoppels, but shall not require Seller to pay any fee or
otherwise take any extraordinary steps to obtain such estoppels. 
Notwithstanding the foregoing, if Seller does not obtain such executed estoppels
on or before the Group One Closing, the applicable Seller(s) shall deliver an
estoppel in favor of Purchaser at the Group One Closing stating (i) the most
recent date to which rent has been received by Seller under the applicable
telecom lease and (ii) whether, to Seller’s knowledge (as such term is defined
in the Agreement), a material default then exists under such telecom lease.  
Any such estoppel delivered by Seller shall constitute a representation of
Seller pursuant to the Agreement and shall be subject to all applicable
provisions thereof, including, without limitation, Section 16(a).

 

6.            Residential Tenants at 1372 East 5th Street, Ontario, California. 
Seller shall use diligent and commercially reasonable efforts to cause the
residential tenants currently occupying a portion of the property located at
1372 East 5th Street, Ontario, California to vacate such property on or before
the Group One Closing (provided that Seller’s inability or failure to cause such
tenants to vacate possession on or before the Group One Closing shall not be
deemed to be a Seller default under the Agreement or a failure of a condition
under the Agreement, nor shall any such inability or failure constitute an
excuse for Purchaser’s failure to perform under the Agreement (including,
without limitation, Purchaser’s obligation to close the purchase and sale of the
Properties under the Agreement)).  For purposes of this paragraph 6, “diligent
and commercially reasonable efforts” shall mean providing whatever notices that
are contemplated under such tenants’ occupancy agreements in an effort to cause
such tenants to vacate such premises prior to the Group One Closing and to
periodically follow-up with such tenants in an effort to cause such tenants to
vacate such premises.  In the event such residential tenants have not vacated
the property by the Group One Closing, Seller, at Seller’s expense, shall
continue to use commercially reasonable efforts to cause such tenants to vacate
possession of the property after the Group One Closing.  Such obligation shall
expressly survive the Group One Closing.

 

7.            Closing Credit for Matters Affecting 6201 Harlem Avenue,
Chicago, Illinois, 9801 West 55th Street, Countryside, Illinois and 407 East
25th Street, Chicago, Illinois.  At the Group One Closing Seller shall provide a
credit to Purchaser in the amount of Three Hundred Thousand Dollars ($300,000)
(the “Illinois Credit”) in full and final satisfaction of any and all claims,
objections or issues related to the following properties resulting from or
arising out of Purchaser’s diligence inspections under Section 3(c) (including,
without limitation, the physical condition of the following properties, any
customer concessions and claims related to the following properties, any
diminished value of the following properties resulting from zoning or other
violations and any flooding or other physical or legal conditions or defects
relating to the following properties ): (a) 6201 South Harlem Avenue,
Chicago, Illinois; (b) 9801 West 55th Street, Countryside, Illinois; and (c) 407
East 25th Street, Chicago, Illinois; and in consideration thereof, Seller shall
have no obligation to cure the same.  The Illinois Credit shall be allocated
amongst the properties referenced in the immediately preceding sentence as
follows:

 

(a)           6201 South Harlem Avenue, Chicago, Illinois: $83,019

 

(b)           9801 West 55th Street, Countryside, Illinois: $188,679

 

(c)           407 East 25th Street, Chicago, Illinois: $28,302

 

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Seller acknowledges that such allocations shall be for the exclusive use of
Seller and that Purchaser shall not be bound by such allocations for any
internal purposes, including, without limitation, insurance, accounting or
valuation purposes; provided, that Purchaser acknowledges that such allocations
shall apply for purposes of calculating transfer taxes and other relevant
closing considerations.

 

8.            BP Amoco Letter Agreement Regarding 407 East 25th Street,
Chicago, Illinois.  With respect to the property located at 407 East 25th
Street, Chicago, Illinois Seller shall use diligent and commercially reasonable
efforts to obtain from BP Amoco on or before the Group One Closing an agreement
with BP Amoco whereby BP Amoco agrees to perform certain work necessary to
obtain closure of the UST release and related NFR status so that such property
is protective of human health and environment per IEPA standards (the
“Environmental Agreement”) (provided that Seller’s inability or failure to
obtain the Environmental Agreement on or before the Group One Closing shall not
be deemed to be a Seller default under the Agreement or a failure of a condition
under the Agreement, nor shall any such inability or failure constitute an
excuse for Purchaser’s failure to perform under the Agreement (including,
without limitation, Purchaser’s obligation to close the purchase and sale of the
Properties under the Agreement)).  Notwithstanding the foregoing, if Seller is
unable to obtain the Environmental Agreement on or before the Group One Closing,
Seller agrees to withhold from its closing proceeds in a strict joint order
escrow account (in a form reasonably acceptable to Seller, Purchaser and Title
Agent) with Title Agent at the Group One Closing the amount of Seventy-Five
Thousand Dollars ($75,000) (the “Environmental Holdback”).  If Seller is able to
obtain the Environmental Agreement within six (6) months after the Group One
Closing, upon Seller’s delivery to Purchaser of the Environmental Agreement
executed by BP Amoco (and concurrent notice to Title Agent), then Title Agent
shall automatically release the Environmental Holdback to Seller.  If Seller is
not able to obtain the Environmental Agreement prior to the expiration of such
six (6) month period, the full amount of the Environmental Holdback shall be
automatically released to Purchaser in full satisfaction of any environmental or
other obligations of Seller in connection with such matter.  If following the
Group One Closing an environmental claim is made against Purchaser or the
property referred to in this Paragraph 8 that would otherwise have been
addressed by the Environmental Agreement, and Seller has theretofore been unable
to obtain the Environmental Agreement, then Purchaser shall be permitted to draw
down the Environmental Holdback for the purposes of defending such claim and to
take actions necessary to protect human health at the property in accordance
with applicable laws.  The foregoing obligations shall survive Closing.

 

9.            Closing Credit for Zoning, Permitting and Other Matters.  Seller
shall provide a Closing credit to Purchaser in the amount of Sixty Thousand
Dollars ($60,000) in full and final satisfaction of any and all objections,
claims or issues related to the zoning, permitting, violation, code, parking,
paving, unauthorized storage and other matters identified in Schedule A to
Purchaser’s September 29, 2014 notice letter to Seller (as well as the issues
related to the certificates of occupancy for buildings 1-7 related to the 1700
Diamond Hill Road, Woonsocket, Rhode Island property and such other zoning,
permitting, violation, code, parking and paving issues as were identified in
Purchaser’s September 17, September 24 and September 25 letters to Seller and
not otherwise expressly addressed in this Amendment) and in consideration
thereof, Seller shall have no obligation to cure the same.  Such Closing credit
shall be allocated amongst the Properties in accordance with the Facility
Factors scheduled on Exhibit M to the Agreement, and the portions of such credit
allocable to each of the Group One Properties and the Group Two Properties in
accordance with such Facility Factors allocation shall be paid at the Group One
Closing and the Group Two Closing, respectively.  Seller acknowledges that the
use of the Facility Factors as contemplated in this paragraph 9 shall be for the
exclusive use of Seller and that Purchaser shall not be bound by such use for
any internal purposes, including, without limitation, insurance, accounting or
valuation purposes; provided, that Purchaser acknowledges that such allocations
shall apply for purposes of calculating transfer taxes and other relevant
closing considerations.

 

10.         Ratification.  Except as expressly provided in this Amendment, all
of the terms and provisions of the Agreement shall remain unaffected, unchanged
and unimpaired by reason of this Amendment.  The Agreement, as amended by this
Amendment, is hereby ratified, confirmed and continued in full force and
effect.  In the event of any conflict or inconsistency between this Amendment
and the Agreement, the terms of this Amendment shall govern and control.

 

11.         Counterparts.  This Amendment may be executed in counterparts, in
which case all such counterparts taken together shall constitute one and the
same instrument which is binding upon all parties hereto, notwithstanding that
all of the parties are not signatories to the original or the same counterpart. 
Facsimile and PDF/Adobe Acrobat signatures shall be treated as original
signatures.

 

[signatures on following pages]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the Effective Date.

 

PURCHASER:

 

CUBESMART, L.P.

 

By:         CubeSmart, its general partner

 

 

By: /s/ Jeffrey P. Foster

Jeffrey P. Foster

Senior Vice President, Chief Legal Officer & Secretary

 

SELLERS:

 

GROUP ONE SELLERS:

 

STORAGE PARTNERS OF SOUTH HARLEM, LLC

 

By:                            HSREP II Holding, LLC, a Delaware limited
liability company

 

By:                            HSRE REIT II, a Maryland real estate investment
trust, its
sole member

 

 

By:/s/ Stephen M. Gordon

Name:        Stephen M. Gordon

Its:              Trustee

 

WWP-HSRE SDO, LLC

WWP-HSRE ONTARIO GE, LLC

WWP-HSRE ONTARIO, LLC

 

By:                            HSRE-WWP I, LLC, a Delaware limited liability
company

 

By:                            HSRE-WWP IA, LLC, a Delaware limited liability
company

 

By:                            HSREP II Holding, LLC, a Delaware limited
liability
company

 

By:                            HSRE REIT II, a Maryland real estate
investment trust, its sole member

 

 

By: /s/ Stephen M. Gordon

Name:        Stephen M. Gordon

Its:              Trustee

 

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HSREP II STORAGE – BOLINGBROOK, LLC

HSREP II STORAGE – CANAL, LLC

HSREP II STORAGE – CHESTNUT, LLC

HSREP II STORAGE – COLTON, LLC

HSREP II STORAGE – COUNTRYSIDE, LLC

HSREP II STORAGE – EXETER, LLC

HSREP II STORAGE – FORSYTH, LLC

HSREP II STORAGE – GEORGESVILLE, LLC

HSREP II STORAGE – HENDERSON, LLC

HSREP II STORAGE – JOHNSTON, LLC

HSREP II STORAGE – MORSE, LLC

HSREP II STORAGE – POLARIS, LLC

HSREP II STORAGE – ROBERTS, LLC

HSREP II STORAGE – SANFORD, LLC

HSREP II STORAGE – TWENTY FIFTH, LLC

HSREP II STORAGE – WAKEFIELD, LLC

HSREP II STORAGE – WAVERLY, LLC

HSREP II STORAGE – WESTERN, LLC

HSREP II STORAGE – WOONSOCKET, LLC

 

By:                            HSREP II Storage I, LLC, a Delaware limited
liability company

 

By:                            HSREP II Storage Holding I, LLC, a Delaware
limited
liability company

 

By:                            HSREP II Holding, LLC, a Delaware limited
liability company

 

By:                            HSRE REIT II, a Maryland real estate
investment trust, its sole member

 

 

By: /s/ Stephen M. Gordon

Name:        Stephen M. Gordon

Its:              Trustee

 

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GROUP TWO SELLERS:

 

STORAGE PARTNERS OF BLUE ISLAND, LLC

STORAGE PARTNERS OF MAYWOOD, LLC

STORAGE PARTNERS OF NORTH KEDZIE, LLC

STORAGE PARTNERS OF SOUTH CHICAGO, LLC

 

By:                            HSRE Chicago Self Storage Holding I, LLC, a
Delaware
limited liability company

 

By:                            HSRE REIT I, a Maryland real estate investment
trust, its sole member

 

 

By: /s/ Christopher Merrill

Name:        Christopher Merrill

Its:              Trustee

 

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