AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY

 

FAMILY DOLLAR STORES – 2 PACK

 

THIS AGREEMENT (“Agreement”) is made and entered into as of the Effective Date
by and between AMERICAN REALTY CAPITAL II, LLC (“Buyer”), and SMALL, LLC
(“Seller”).

 

BACKGROUND

 

A.          Seller is the Owner of each of the Properties listed on Exhibit A1
attached hereto.

 

B.          Buyer desires to purchase the Property and Seller desires to sell
the Property to Buyer on the terms and conditions set forth in this Agreement.

 

In consideration of the mutual promises set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

1.          Terms and Definitions. The terms listed below shall have the
respective meaning given them as set forth adjacent to each term.

 

(a)          “Broker” shall mean Kase Abusharkh/The Kase Group, acting as
Seller’s agent.

 

(b)          “Closing” shall mean the consummation of the transaction
contemplated herein, which shall occur, subject to the extension set forth in
Section 10 hereof, on the later of December 20, 2011or the day following the
expiration of the Due Diligence Period (as defined herein). The date of Closing
is sometimes hereinafter referred to as the “Closing Date.” Neither party will
need to be present at Closing, it being anticipated that the parties will
deliver all Closing documents and deliverables in escrow to the Escrow Agent (or
if both Buyer and Seller agree, to Buyer’s and/or Seller’s counsel) prior to the
date of Closing.

 

(c)          “Due Diligence Period” shall mean the period beginning upon the
Effective Date and extending until 11:59 PM EST on the date that is fifteen (15)
days thereafter. Seller shall deliver to Buyer all of the Due Diligence
Materials within five (5) business days after the Effective Date, and Buyer
shall notify Seller in writing of any materials not provided within such 5 day
period and for each day that passes after such notice until all of the Due
Diligence Materials are delivered to Buyer, the Due Diligence Period and the
Closing Date shall be extended by one (1) business day. If Seller fails to
deliver to Buyer any material item required to be delivered under Section 6(b)
hereunder, the Due Diligence Period will be extended one (1) day for each day
that said delivery is delayed up to a maximum of ten (10) days. If Buyer fails
to notify Seller of any missing materials with two (2) business days after the
end of such five (5) day period, Seller’s obligation to deliver Due Diligence
materials shall be deemed fulfilled.

 

 

 

 

(d)           “Earnest Money” shall mean Seventy Three Thousand Dollars
($73,000.00). The Earnest Money shall be delivered to Escrow Agent within three
(3) business days after the Effective Date. The Earnest Money shall be deposited
by Buyer in escrow with Escrow Agent, to be applied as part payment of the
Purchase Price at the time the sale is closed, or disbursed as agreed upon in
accordance with the terms of this Agreement. Seller and Buyer each shall pay
one-half of all reasonable escrow fees charged by Escrow Agent.

 

(e)           “Effective Date” This Agreement shall be signed by both Seller and
Buyer. The date that is one (1) business day after the date of execution and
delivery of this Agreement by both Seller and Buyer shall be the “Effective
Date” of this Agreement.

 

(f)          “Escrow Agent” shall mean Chicago Title Insurance Company, whose
address is Suite 1325, 1515 Market Street, Philadelphia, PA 19102-1930,
Attention: Edwin G. Ditlow, Telephone: 215-875-4184; Telecopy: 215-732-1203;
E-mail: ditlowE@ctt.com. The parties agree that the Escrow Agent shall be
responsible for (x) organizing the issuance of the Commitment and Title Policy,
(y) preparation of the closing statement, and (z) collections and disbursement
of the funds.

 

(g)          “Guarantor” shall mean Family Dollar Stores, Inc.

 

(h)          “Guaranty” or “Guaranties” shall mean those certain guaranties of
each of the Leases executed by Guarantor.

 

(i)           “Lease” or “Leases” shall mean those certain Leases described on
Exhibit A2 attached hereto and made a part hereof and referred to in Section
6(b)(i) of this Agreement between Seller, as landlord, and Family Dollar Stores
of Mississippi, Inc. as tenant (“Tenant”), as amended.

 

(j)           “Property” shall collectively mean (i) those certain parcels of
real property, all of which are listed on Exhibit A1, together with all right,
title and interest of the Seller, if any, in and to the land lying in the bed of
any street or highway in front of or adjoining such real property, and all
appurtenances and all the estate and rights of the Seller, if any, in and
appurtenant to such parcels of real property, including, without limitation, all
appurtenant easements and rights-of-way, and Buildings (as hereinafter defined)
and all other improvements thereon, and all air and subsurface rights
appurtenant to such parcels of real property, as the case may be (such parcels
of real property, together with all such rights and appurtenances, being
collectively referred to herein as the “Land”); (ii) all of the buildings and
improvements (each individually called a “Building” and collectively called the
“Buildings”) situated on the Land; (iii) all right, title and interest of the
Seller, if any, in and to the lighting, electrical, mechanical, plumbing and
heating, ventilation and air conditioning systems used in connection with the
Land and the Buildings, and all carpeting, draperies, appliances and other
fixtures and equipment attached or appurtenant to the Land together with all
personal property (other than furniture, equipment not necessary to operate the
Buildings or building systems and not permanently affixed to the Buildings or
Land, trade fixtures and inventory) owned by the Seller and located on the Land
or on and/or in the Buildings (collectively, the “Personal Property”); (iv) all
right, title and interest of the Seller in and to all warranties and guaranties
respecting the Buildings and Personal Property; (v) to the extent not otherwise
described in subsection (i), all right, title and interest of the Seller in and
to all leases respecting the Buildings and Personal Property, including, without
limitation, all prepaid rent or security or other deposits thereunder; (vi) all
right, title and interest of Seller in and to all licenses, permits,
authorizations and approvals issued by any governmental agency or authority
which pertain to the Land and the Buildings, to the extent they exist and are
transferable and assignable; and (vii) to the extent the same are assignable,
all site plans, surveys, and plans which relate to the Land. Any references to
“Property” in the singular, such as references to “a Property” or “each
Property”, refer to an individual parcel of Land and all matters described in
(ii)-(vii) in connection with such Land.

 

 

 

 

(k)           “Purchase Price” shall mean the amount listed for each Property as
set forth opposite the designation of such Property on Exhibit A1 attached
hereto. The Purchase Price is based on a capitalization rate of 9.50% and the
rents set forth on Exhibit A2. If the rents on the Closing Date are not the same
as set forth on Exhibit A2, the Purchase Price shall be adjusted accordingly.

 

(l)            Seller and Buyer’s Notice address

 

(i)          “Seller’s Notice Address” shall be as follows, except as same may
be changed pursuant to the Notice section herein:

 

Corey J. Smith

Small, LLC

311 Telly Road

Picayune, MS 39466

Tel. No.: (601)798-4000

Email: corey@execreal.com

 

“Buyer’s Notice Address” shall be as follows, except as same may be changed
pursuant to the Notice section herein:

 

William Kahane

American Realty Capital II, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Tel. No.: (215) 887-3054

Fax No.: (646) 861-7751

Email: wkahane@arlcap.com

 

And to:

 

Jesse Galloway

American Realty Capital II, LLC

405 Park Avenue, 15th Floor

New York, NY 10022

Tel. No.: (212) 415-6516

Fax No.: (646) 861-7751

Email: jgalloway@arlcap.com

 

 

 

 

And Due Diligence Materials (if provided by email) to:

 

               duediligence@arlcap.com

 

With hard copies and/or cds to:

 

James A. (Jim) Mezzanotte

American Realty Capital, LLC

202 E Franklin Street

Monroe, NC 28112

Tel. No.: (212) 415-6570

Fax No.: (212) 415-6507

Email: jmezzanotte@arlcap.com

 

2.            Purchase and Sale of the Property. Subject to the terms of this
Agreement, Seller agrees to sell to Buyer the Property for the Purchase Price
set forth above.

 

3.            Purchase Price.

 

(a)          The Purchase Price to be paid by Buyer to Seller shall be paid by
wire transfer of immediately available funds to Escrow Agent, at the time of
Closing, or as otherwise agreed to between Buyer and Seller.

 

(b)          In the event this Agreement is terminated for any reason pursuant
to the terms hereof with respect to one or more Properties, this Agreement shall
continue in full force and effect with respect to the remaining Properties and
the Purchase Price shall be reduced by the amount shown on Exhibit A1 with
respect to such terminated Property or Properties.

 

4.          Proration of Expenses and Payment of Costs and Recording Fees.

 

(a)         All real estate taxes, rollback taxes, personal property taxes,
water and sewer use charges, and any other charges and assessments constituting
a lien on the Property (collectively “Taxes and Assessments”) due and payable on
or before the Closing Date shall be remitted to the collecting authorities or to
the Escrow Agent by Seller prior to or at Closing. There shall be no closing
adjustments between the parties for Taxes and Assessments not yet due and
payable at Closing as Seller is responsible for all such Taxes and Assessments
due in accordance with the provisions of the Lease.

 

(b)          All rents shall be prorated as of the Closing Date with Buyer being
credited for rent attributable to the day of Closing through and including the
last day of the calendar month in which the Closing Date occurs; provided,
however, if the Closing Date shall occur within ten (10) days of the end of the
month in which Closing occurs, Buyer and Seller agree that Buyer shall be
credited with the following month’s rent at Closing and Seller shall be entitled
to retain any rents received by Seller that are attributable to the month
following the month in which the Closing Date occurs and Buyer agrees to the
extent that it receives any rent attributable to such month which was adjusted
at Closing, it will refund such amount to Seller as soon as reasonably possible.

 

 

 

 

(c)           Seller shall pay or be charged with the following costs and
expenses in connection with this transaction which costs shall be referred to as
“Seller’s Closing Costs”:

 

(i)          100% of all Owner’s Title Insurance policy premiums, including
search costs and a survey endorsement, but excluding any other endorsements
issued in connection with such policies other than endorsements that Seller
elects to purchase to cover title issues, if any;

 

(ii)         Transfer taxes and conveyance fees on the sale and transfer of the
Property shall be paid by Seller;

 

(iii)        Broker’s commission payments (for both leasing and sales
commissions earned), in accordance with Section 24 of this Agreement; and

 

(iv)        All fees relating to the granting, executing and recording of the
Deed for each Property and for any costs incurred in connection with the release
of existing debt, including, but not limited to, prepayment penalty fees and
recording fees for documents providing for the release of the applicable
Property from the existing debt.

 

(d)          Buyer shall pay or be charged with the following costs and expenses
in connection with this transaction, which costs shall be referred to as
“Buyer’s Closing Costs”:

 

(i)          Title Insurance policy premiums for any endorsements issued in
connection with such policies other than endorsements that Seller elects to
purchase to cover title issues, if any, and other than a survey endorsement;

 

(ii)         all costs and expenses in connection with Buyer’s financing,
including appraisal, points, commitment fees and the like and costs for the
filing of all documents necessary to complete such financing and related
documentary stamp tax and intangibles tax; and

 

(iii)        Buyer shall pay for the cost of its own survey, Phase 1
environmental study and due diligence investigations.

 

(e)          Each party shall pay its own legal fees incidental to the
negotiation, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.

 

5.             Title. At Closing, Seller agrees to convey to Buyer fee simple
marketable title to each Property by special warranty deed, free and clear of
all liens, defects of title, conditions, easements, assessments, restrictions,
and encumbrances except for Permitted Exceptions (as hereinafter defined).

 

6.             Examination of Property. Seller and Buyer hereby agree as
follows:

 

 

 

 

(a)          Buyer shall order a title commitment (the “Title Commitment”) from
Escrow Agent, a survey and a zoning report for the Property promptly after the
date hereof. All matters shown in the Title Commitment, survey or zoning report
(“Title Matters”) with respect to which Buyer fails to object prior to the
expiration of the Due Diligence Period shall be deemed “Permitted Exceptions”.
However, Permitted Exceptions shall not include any mechanic’s lien or any
monetary lien, or any deeds of trust, mortgage, or other loan documents secured
by the Property, (collectively, “Liens”). Seller shall be required to cure or
remove all Liens (by payment, bond deposit or indemnity acceptable to Escrow
Agent). Seller agrees to remove or cure any objections of Buyer which are of a
nature that are capable of being cured with reasonable efforts prior to Closing.
Seller shall have no obligation to cure any Title Matter objected to, except as
aforesaid, provided Seller notifies Buyer of any objections which Seller elects
not to remove or cure within five (5) business days following receipt of Buyer’s
objections. In the event that Seller refuses to remove or cure any objections,
Buyer shall have the right to terminate this Agreement upon written notice to
Seller given within five (5) business days after receipt of Seller’s notice,
upon which termination the Earnest Money shall be returned to Buyer and neither
party shall have any further obligation hereunder, except as otherwise expressly
set forth herein. If any matter not revealed in the Title Commitment is
discovered by Buyer or by the Escrow Agent and is added to the Title Commitment
by the Escrow Agent at or prior to Closing, Buyer shall have until the earlier
of (i) ten (10) days after the Buyer’s receipt of the updated, revised Title
Commitment showing the new title exception, together with a legible copy of any
such new matter, or (ii) the date of Closing, to provide Seller with written
notice of its objection to any such new title exception (an “Objection”). If
Seller does not remove or cure such Objection prior to the date of Closing,
Buyer may terminate this Agreement, in which case the Earnest Money shall be
returned to Buyer, Seller shall reimburse Buyer for all out of pocket costs and
expenses incurred hereunder and neither party shall have any further obligation
hereunder, except as otherwise expressly set forth herein.

 

 

 

 

(b)          Within five (5) days following the Effective Date, Seller shall
provide to Buyer copies of the following documents and materials pertaining to
each Property to the extent within Seller’s possession or reasonably obtainable
by Seller or Seller’s counsel: (i) a complete copy of all leases affecting the
Property and all amendments thereto and of all material correspondence relating
thereto; (ii) a copy of all surveys and site plans of the Property, including
without limitation any as-built survey obtained or delivered to tenants of the
Property in connection with its construction; (iii) a copy of all architectural
plans and specifications and construction drawings and contracts for
improvements located on the Property; (iv) a copy of Seller’s title insurance
commitments and policies relating to the Property; (v) a copy of the certificate
of occupancy and zoning reports for the Property; and of all governmental
permits/approvals; (vi) a copy of all environmental, engineering and physical
condition reports for the Property; (vii) copies of the Property’s real estate
tax bills for the current and prior two (2) tax years or, if the Property has
been owned by Seller for less than two (2) tax years, for the period of
ownership; (viii) a copy of each tenant sales reports for the previous twenty
four (24) calendar months; (ix) the operating statements of the Property for the
twenty four (24) calendar months immediately preceding the Effective Date or if
the Tenant has been operating for less than twenty-four (24) months, for the
period of operation; (x) all service contracts and insurance policies which
affect the Property, if any; (xi) a copy of all warranties relating to the
improvements constructed on the Property, including without limitation any roof
warranties; and (xii) a written inventory of all items of personal property to
be conveyed to Buyer, if any (the “Due Diligence Materials”). Seller shall
deliver any other documents relating to each Property reasonably requested by
Buyer, to the extent within Seller’s possession or reasonably obtainable by
Seller or Seller’s counsel, within three (3) business days following such
request. Additionally, during the term of this Agreement, Buyer, its agents and
designees, shall have the right to enter the Property for the purposes of
inspecting the Property, conducting soil tests, and making surveys, mechanical
and structural engineering studies, inspecting construction, and conducting any
other investigations and inspections as Buyer may reasonably require to assess
the condition and suitability of the Property; provided, however, that such
activities by or on behalf of Buyer on the Property shall not damage the
Property nor interfere with construction on the Property or the conduct of
business by Tenant under the Lease; and provided further, however, that Buyer
shall indemnify and hold Seller harmless from and against any and all claims or
damages to the extent resulting from the activities of Buyer on the Property,
and Buyer shall repair any and all damage caused, in whole or in part, by Buyer
and return the Property to its condition prior to such damage, which obligation
shall survive Closing or any termination of this Agreement. Seller shall
reasonably cooperate with the efforts of Buyer and the Buyer’s representatives
to inspect the Property. After the Effective Date, Buyer shall be permitted to
speak and meet with Tenant in connection with Buyer’s due diligence. Upon
signing this agreement, Seller shall provide Buyer with the name of a contact
person(s) for the purpose of arranging site visits. Buyer shall give Seller
reasonable written notice (which in any event shall not be less than two (2)
business days) before entering the Property, and Seller may have a
representative present during any and all examinations, inspections and/or
studies on the Property. Buyer shall have the unconditional right, for any
reason or no reason, to terminate this Agreement by giving written notice
thereof to Seller prior to the expiration of the Due Diligence Period, in which
event this Agreement shall become null and void, Buyer shall receive a refund of
the Earnest Money, and all rights, liabilities and obligations of the parties
under this Agreement shall expire, except as otherwise expressly set forth
herein.

 

(c)          Within five (5) days following the Effective Date, Seller shall
request Estoppel Certificates certified to Buyer, the Approved Assignees and
their Lender, successors and assigns (and simultaneously provide Buyer with a
copy of such request) and a Waiver of Tenant’s right of first refusal. It shall
be a condition of Closing that Seller shall have obtained an estoppel
certificate from Tenant in the form attached hereto as Exhibit F for each
Property (the “Tenant Estoppel Certificate”) and an estoppel certificate from
Guarantor in the form attached hereto as Exhibit G for each Property (the
“Guarantor Estoppel Certificate”), and Seller shall use good faith efforts to
obtain the same. Seller shall promptly deliver to Buyer photocopies or pdf files
of the executed estoppel certificates when Seller receives the same.

 

(d)          Seller shall use good faith efforts to obtain a subordination,
non-disturbance and attornment agreement from Tenant in form and substance
reasonably acceptable to Buyer and Buyer’s Lender, if applicable (the “SNDA”).

 

(e)          Seller shall use good faith efforts to obtain estoppel certificates
with respect to reciprocal easement agreements as may be reasonably requested by
Buyer.

 

 

 

 

7.             Risk of Loss/Condemnation. Upon an occurrence of a casualty,
condemnation or taking with respect to any Property, Seller shall notify Buyer
in writing of same. Until Closing, the risk of loss or damage to the Property,
except as otherwise expressly provided herein, shall be borne by Seller. In the
event all or any portion of any Property is damaged in any casualty or condemned
or taken (or notice of any condemnation or taking is issued) so that: (a) Tenant
has a right of termination or abatement of rent under the Lease for such
Property, or (b) with respect to any casualty, if the cost to repair such
casualty would exceed $50,000, or (c) with respect to any condemnation, any
Improvements or access to the Property or more than five percent (5%) of the
Property is (or will be) condemned or taken, then, Buyer may elect to terminate
this Agreement with respect to each such Property by providing written notice of
such termination to Seller within ten (10) business days after Buyer’s receipt
of notice of such condemnation, taking or damage, upon which termination a
proportionate part of the Earnest Money shall be returned to the Buyer in
accordance with the Purchase Price as set forth on Exhibit A1 and neither party
hereto shall have any further rights, obligations or liabilities under this
Agreement with respect to such Property, except as otherwise expressly set forth
herein. With respect to any condemnation or taking (of any notice thereof), if
Buyer does not elect to cancel this Agreement as aforesaid, there shall be no
abatement of the Purchase Price and Seller shall assign to Buyer at the Closing
the rights of Seller to the awards, if any, for the condemnation or taking, and
Buyer shall be entitled to receive and keep all such awards. With respect to a
casualty, if Buyer does not elect to terminate this Agreement with respect to
any such Property or does not have the right to terminate this Agreement as
aforesaid, there shall be no abatement of the Purchase Price and Seller shall
assign to Buyer at the Closing the rights of Seller to the proceeds under
Seller’s insurance policies covering such Property with respect to such damage
or destruction (or pay to Buyer any such proceeds received prior to Closing) and
pay to Buyer the amount of any deductible with respect thereto, and Buyer shall
be entitled to receive and keep any monies received from such insurance
policies.

 

8.            Earnest Money Disbursement. The Earnest Money shall be held by
Escrow Agent, in trust, and disposed of only in accordance with the following
provisions:

 

(a)          If the Closing occurs, Escrow Agent shall deliver the Earnest Money
to, or upon the instructions of, Seller and Buyer on the Closing Date to be
applied as part payment of the Purchase Price. If for any reason the Closing
does not occur, Escrow Agent shall deliver the Earnest Money to Seller or Buyer
only upon receipt of a written demand therefor from such party, subject to the
following provisions of this clause (a). Subject to the last sentence of this
clause (a), if for any reason the Closing does not occur and either party makes
a written demand (the “Demand”) upon Escrow Agent for payment of the Earnest
Money, Escrow Agent shall give written notice to the other party of the Demand
within one business day after receipt of the Demand. If Escrow Agent does not
receive a written objection from the other party to the proposed payment within
five (5) business days after the giving of such notice by Escrow Agent, Escrow
Agent is hereby authorized to make the payment set forth in the Demand. If
Escrow Agent does receive such written objection within such period, Escrow
Agent shall continue to hold such amount until otherwise directed by written
instructions signed by Seller and Buyer or a final judgment of a court.
Notwithstanding the foregoing provisions of this clause (a) if Buyer delivers a
notice to Escrow Agent stating that Buyer has terminated this Agreement on or
prior to the expiration of the Due Diligence Period, then Escrow Agent shall
immediately return the Earnest Money to Buyer without the necessity of
delivering any notice to, or receiving any notice from Seller.

 

 

 

 

(b)          The parties acknowledge that Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that Escrow Agent shall
not be deemed to be the agent of either of the parties, and that Escrow Agent
shall not be liable to either of the parties for any action or omission on its
part taken or made in good faith, and not in disregard of this Agreement, but
shall be liable for its negligent acts and for any liabilities (including
reasonable attorneys’ fees, expenses and disbursements) incurred by Seller or
Buyer resulting from Escrow Agent’s mistake of law respecting Escrow Agent scope
or nature of its duties. Seller and Buyer shall jointly and severally indemnify
and hold Escrow Agent harmless from and against all liabilities (including
reasonable attorneys’ fees, expenses and disbursements) incurred in connection
with the performance of Escrow Agent’s duties hereunder, except with respect to
actions or omissions taken or made by Escrow Agent in bad faith, in disregard of
this Agreement or involving negligence on the part of Escrow Agent. Escrow Agent
has executed this Agreement in the place indicated on the signature page hereof
in order to confirm that Escrow Agent has received and shall hold the Earnest
Money in escrow, and shall disburse the Earnest Money pursuant to the provisions
of this Section 8.

 

9.            Default

 

(a)          In the event that Seller is ready, willing and able to close in
accordance with the terms and provisions hereof, and Buyer defaults in any of
its obligations undertaken in this Agreement, Seller shall be entitled to, as
its sole and exclusive remedy to either: (i) if Buyer is willing to proceed to
Closing, waive such default and proceed to Closing in accordance with the terms
and provisions hereof; or (ii) declare this Agreement to be terminated, and
Seller shall be entitled to immediately receive all of the Earnest Money as
liquidated damages as and for Seller’s sole remedy. Upon such termination,
neither Buyer nor Seller shall have any further rights, obligations or
liabilities hereunder, except as otherwise expressly provided herein. Seller and
Buyer agree that (a) actual damages due to Buyer’s default hereunder would be
difficult and inconvenient to ascertain and that such amount is not a penalty
and is fair and reasonable in light of all relevant circumstances, (b) the
amount specified as liquidated damages is not disproportionate to the damages
that would be suffered and the costs that would be incurred by Seller as a
result of having withdrawn the Property from the market, and (c) Buyer desires
to limit its liability under this Agreement to the amount of the Earnest Money
paid in the event Buyer fails to complete Closing. Seller hereby waives any
right to recover the balance of the Purchase Price, or any part thereof, and the
right to pursue any other remedy permitted at law or in equity against Buyer. In
no event under this Section or otherwise shall Buyer be liable to Seller for any
punitive, speculative or consequential damages.

 

(b)          In the event of a default in the obligations herein taken by
Seller, or in the event of the failure of a condition precedent set forth in
Section 13 of this Agreement, with respect to any or all of the Properties,
Buyer may, as its sole and exclusive remedy, either: (i) waive any unsatisfied
conditions and proceed to Closing in accordance with the terms and provisions
hereof; (ii) terminate this Agreement with respect to any or all Properties by
delivering written notice thereof to Seller no later than Closing, upon which
termination the Earnest Money shall be refunded to Buyer, Seller shall pay to
Buyer all of the out-of-pocket costs and expenses incurred by Buyer in
connection with this Agreement, which return and payment shall operate to
terminate this Agreement and release Seller and Buyer from any and all liability
hereunder, except those which are specifically stated herein to survive any
termination hereof; (iii) enforce specific performance of Seller’s obligations
hereunder; or (iv) by notice to Seller given on or before the Closing Date,
extend the Closing Date for a period of up to thirty (30) days (the “Closing
Extension Period”) to permit Seller to remedy any such default, and the “Closing
Date” shall be moved to the last day of the Closing Extension Period. If Buyer
so extends the Closing Date, then Seller may, but shall not be obligated to,
cause said conditions to be satisfied during the Closing Extension Period. If
Seller does not cause said conditions to be satisfied during the Closing
Extension Period, then Buyer shall have the remedies set forth in Section 9(b)
(i) through (iii) above except that the term “Closing” shall be revised to
reflect the Buyer’s election of remedies under this Section 9(b).

 

 

 

 

Notwithstanding the foregoing, in the event of a willful or intentional default
of Seller hereunder, Buyer shall, in addition to the foregoing remedies, be
permitted to pursue any and all rights and remedies available to Buyer at law or
in equity; provided, however, in no event shall Seller be liable to Buyer for
any punitive, speculative or indirect consequential damages.

 

10.         Closing. The Closing shall consist of the execution and delivery of
documents by Seller and Buyer with respect to each Property as set forth below,
and delivery by Buyer to Seller of the Purchase Price in accordance with the
terms of this Agreement. Seller shall deliver to Escrow Agent for the benefit of
Buyer at Closing the following executed documents for each Property:

 

(a)          A Special Warranty Deed in the form attached hereto as Exhibit B;

 

(b)          An Assignment and Assumption of Lease and Security Deposits, in the
form attached hereto as Exhibit C;

 

(c)          A Bill of Sale for the personal property, if any, in the form
attached hereto as Exhibit D;

 

(d)          An Assignment of Contracts, Permits, Licenses and Warranties in the
form of Exhibit E;

 

(e)          An original Tenant Estoppel Certificate dated no earlier than 30
days prior to the date of Closing. In addition, the business terms of the Tenant
Estoppel Certificate must be in accordance with and not contradict the Lease. If
the Lease and any amendments, bearing the original signatures of the landlord
and tenant thereunder have not been delivered to Buyer previously, a copy
thereof confirming that the copy is true, correct and complete shall be attached
to the Tenant Estoppel;

 

(f)          To the extent obtained by Seller, estoppel certificates with
respect to reciprocal easement agreements as may be reasonably requested by
Buyer;

 

(g)           An original Guarantor Estoppel Certificate dated no earlier than
30 days prior to the date of Closing;

 

(h)          A settlement statement setting forth the Purchase Price, all
prorations and other adjustments to be made pursuant to the terms hereof, and
the funds required for Closing as contemplated hereunder;

 

 

 

 

(i)          All transfer tax statements, declarations and filings as may be
necessary or appropriate for purposes of recordation of the deed;

 

(j)          Good standing certificates and corporate resolutions or member or
partner consents, as applicable, and such other documents as reasonably
requested by Escrow Agent;

 

(k)          Originals of the warranties set forth on Exhibit I, the general
contractor warranty in the form attached hereto as Exhibit J and any additional
warranties required by the Lease, re-issued at Seller’s expense, to Buyer or
Tenant, as requested by Buyer;

 

(l)          A certificate pursuant to Section 1445 of the Internal Revenue Code
of 1986, as amended, or the regulations issued pursuant thereto, certifying the
non foreign status of Seller;

 

(m)          An owner’s title affidavit as to mechanics’ liens and possession
and other matters in customary form reasonably acceptable to Buyer and Escrow
Agent;

 

(n)          An original SNDA fully executed and notarized by Tenant, if
requested by Buyer;

 

(o)          Letter to Tenant in form of Exhibit H attached hereto;

 

(p)          A copy of the Punch-List;

 

(q)          An architect’s certificate certifying that the Property has been
constructed in accordance with the approved plans and specifications;

 

(r)          A certificate of insurance or other evidence reasonably
satisfactory to Buyer memorializing and confirming that Tenant is then
maintaining policies of insurance of the types and in the amounts required by
the Lease, which shall name Buyer and its mortgagee as additional insured
parties and/or as loss payees and/or mortgagees, as appropriate, as their
respective interests may appear; and

 

(s)          Such other instruments as are reasonably required by Buyer or
Escrow Agent to close the escrow and consummate the purchase of the Property in
accordance with the terms hereof.

 

At Closing, Buyer shall instruct Escrow Agent to deliver the Earnest Money to
Seller which shall be applied to the Purchase Price, shall deliver the balance
of the Purchase Price to Seller and shall execute and deliver execution
counterparts of the closing documents referenced in clauses (b) and (i) above.
Buyer shall have the right to advance the Closing upon five (5) days prior
written notice to Seller; provided that all conditions precedent to both Buyer’s
and Seller’s respective obligations to proceed with Closing under this Agreement
have been satisfied (or, if there are conditions to a party’s obligation to
proceed with Closing that remain unsatisfied, such conditions have been waived
by such party). Buyer shall have a one time right to extend the Closing for up
to fifteen (15) days upon written notice to Seller to be received by Seller on
or prior to the date scheduled for the Closing. If Buyer timely exercises this
right to extend, any document that Seller is obligated to provide that is “time
sensitive” does not need to be provided again by Seller. The Closing shall be
held through the mail by delivery of the closing documents to the Escrow Agent
on or prior to the Closing or such other place or manner as the parties hereto
may mutually agree.

 

 

 

 

11.          Representations by Seller. For the purpose of inducing Buyer to
enter into this Agreement and to consummate the sale and purchase of the
Property in accordance herewith, Seller makes the following representations and
warranties to Buyer as of the date hereof and as of the Closing Date with
respect to the Property:

 

(a)          Seller is duly organized (or formed), validly existing and in good
standing under the laws of its state of organization, and to the extent required
by law, the State in which the Property is located. Seller has the power and
authority to execute and deliver this Agreement and all closing documents to be
executed by Seller, and to perform all of Seller’s obligations hereunder and
thereunder. Neither the execution and delivery of this Agreement and all closing
documents to be executed by Seller, nor the performance of the obligations of
Seller hereunder or thereunder will result in the violation of any law or any
provision of the organizational documents of Seller or will conflict with any
order or decree of any court or governmental instrumentality of any nature by
which Seller is bound;

 

(b)          Seller has not received any written notice of any current or
pending litigation, condemnation proceeding or tax appeals affecting Seller or
the Property and Seller does not have any knowledge of any pending litigation or
tax appeals against Seller or the Property; Seller has not initiated, nor is
Seller participating in, any action for a change or modification in the current
subdivision, site plan, zoning or other land use permits for the Property;

 

(c)          Seller has not entered into any contracts, subcontracts or
agreements affecting the Property which will be binding upon Buyer after the
Closing other than the Lease;

 

(d)          Except for violations cured or remedied on or before the date
hereof, Seller has not received any written notice from (or delivered any notice
to) any governmental authority regarding any violation of any law applicable to
the Property and Seller does not have knowledge of any such violations;

 

(e)          Seller has fee simple title to the Property free and clear of all
liens and encumbrances except for Permitted Exceptions and Seller is the sole
owner of the entire lessor’s interest in the Lease. The Property constitutes one
or more separate tax parcels for purposes of ad valorem taxation;

 

(f)          With respect to the Leases: (i) the Leases forwarded to Buyer under
Section 6(b)(i) are true, correct and complete copies of the Leases; (ii) the
Leases are in full force and effect and there is no default thereunder; (iii) no
brokerage or leasing commissions or other compensation is or will be due or
payable to any person, firm, corporation or other entity with respect to or on
account of the current term of the Leases or any extension or renewal thereof;
(iv) Seller has no outstanding obligation to provide Tenant with an allowance to
construct, or to construct at its own expense, any tenant improvements; and (v)
the rent for each Property is as set forth on Exhibit A2;

 

 

 

 

(g)          There are no occupancy rights, leases or tenancies affecting the
Property other than the Lease. Neither this Agreement nor the consummation of
the transactions contemplated hereby is subject to any first right of refusal or
other purchase right in favor of any other person or entity; and apart from this
Agreement, Seller has not entered into any written agreements for the purchase
or sale of the Property, or any interest therein which has not been terminated;

 

(h)          The transactions contemplated hereby either (i) will not constitute
a sale of all or substantially all the assets of Seller, or (ii) if such
transaction does constitute a sale of all or substantially all the assets of any
Seller, Seller shall provide to Buyer at Closing an excise tax lien waiver or
such other reasonably obtainable instruments evidencing compliance with laws or
payment of taxes to the extent required by the law of the relevant state, or an
indemnification from a party reasonably acceptable to Buyer for any resulting
liability with respect to the period prior to the Closing;

 

(i)          To Seller’s knowledge, except as set forth in the environmental
reports previously delivered by Seller to Buyer, no hazardous substances have
been generated, stored, released, or disposed of on or about the Property in
violation of any law, rule or regulation applicable to the Property which
regulates or controls matters relating to the environment or public health or
safety (collectively, “Environmental Laws”). Seller has not received any written
notice from (nor delivered any notice to) any federal, state, county, municipal
or other governmental department, agency or authority concerning any petroleum
product or other hazardous substance discharge or seepage. For purposes of this
Subsection, “hazardous substances” shall mean any substance or material which is
defined or deemed to be hazardous or toxic pursuant to any Environmental Laws.
To Seller’s knowledge, there are no underground storage tanks located on the
Property;

 

(j)          Exhibit I attached hereto is a true, correct and complete listing
of all warranties in effect for the Property (the “Warranties”).

 

The representations and warranties of Seller shall survive Closing for a period
of one (1) year.

 

12.          Representations by Buyer. Buyer represents and warrants to, and
covenants with, Seller as follows:

 

(a)          Buyer is duly formed, validly existing and in good standing under
the laws of Delaware, is authorized to consummate the transaction set forth
herein and fulfill all of its obligations hereunder and under all closing
documents to be executed by Buyer, and has all necessary power to execute and
deliver this Agreement and all closing documents to be executed by Buyer, and to
perform all of Buyer’s obligations hereunder and thereunder. This Agreement and
all closing documents to be executed by Buyer have been duly authorized by all
requisite corporate or other required action on the part of Buyer and are the
valid and legally binding obligation of Buyer, enforceable in accordance with
their respective terms. Neither the execution and delivery of this Agreement and
all closing documents to be executed by Buyer, nor the performance of the
obligations of Buyer hereunder or thereunder will result in the violation of any
law or any provision of the organizational documents of Buyer or will conflict
with any order or decree of any court or governmental instrumentality of any
nature by which Buyer is bound.

 

 

 

 

The representations and warranties of Buyer shall survive Closing for a period
of one (1) year.

 

13.          Conditions Precedent to Buyer’s Obligations. Buyer’s obligation to
pay the Purchase Price, and to accept title to the Property, shall be subject to
compliance by Seller with the following conditions precedent for each Property
on and as of the date of Closing:

 

(a)          Seller shall deliver to Buyer on or before the Closing the items
set forth in Section 10 above;

 

(b)          Buyer shall receive from Escrow Agent or any other title insurer
approved by Buyer in its judgment and discretion, a current ALTA owner’s form of
title insurance policy, or irrevocable and unconditional binder to issue the
same, with extended coverage for the Real Property in the amount of the Purchase
Price, dated, or updated to, the date of the Closing, insuring, or committing to
insure, at its ordinary premium rates Buyer’s good and marketable title in fee
simple to the Real Property and otherwise in such form and with such
endorsements as provided in the title commitment approved by Buyer pursuant to
Section 6 hereof and subject only to the Permitted Exceptions (the “Title
Policy”);

 

(c)          Buyer shall have received a valid and permanent final certificate
of occupancy (or the equivalent thereof) for the Property which shall not
contain any contingencies or require any additional work to be completed;

 

(d)          Tenant shall be in possession of the premises demised under the
Leases, open for business to the public and paying full and unabated rent under
the Leases and Tenant shall not have assigned or sublet any of the Property;

 

(e)          The representations and warranties of Seller contained in this
Agreement shall have been true when made and shall be true in all material
respects at and as of the date of Closing as if such representations and
warranties were made at and as of the Closing, and Seller shall have performed
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by Seller
prior to or at the Closing;

 

(f)          Seller shall have delivered to Buyer a written waiver by Tenant of
any right of first refusal, right of first offer or other purchase option that
Tenant has pursuant to the Leases to purchase the Property from Seller; and

 

(g)          Seller shall have made all contributions, payments and/or
reimbursements and completed any and all work required by any governmental
authority in connection with the construction and development of the Property,
including, without limitation, as required by any variance or site plan
approval.

 

In the event that the foregoing conditions precedent have not been satisfied as
of Closing, Buyer shall have the rights and remedies set forth in Section 9(b)
of this Agreement.

 

 

 

 

14.         Conditions Precedent to Seller’s Obligations. Seller’s obligation to
deliver title to the Property shall be subject to compliance by Buyer with the
following conditions precedent on and as of the date of Closing:

 

(a)          Buyer shall deliver to Escrow Agent on the Closing Date the
remainder of the Purchase Price, subject to adjustment of such amount pursuant
to Section 2 hereof; and

 

(b)          The representations and warranties of Buyer contained in this
Agreement shall have been true when made and shall be true in all material
respects at and as of the date of Closing as if such representations and
warranties were made at and as of the Closing, and Buyer shall have performed
and complied in all material respects with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by Buyer
prior to or at the Closing.

 

15.         Notices. Unless otherwise provided herein, all notices and other
communications which may be or are required to be given or made by any party to
the other in connection herewith shall be in writing and shall be deemed to have
been properly given and received on the date: (i) delivered by facsimile
transmission or by electronic mail (e.g. email), (ii) delivered in person, (iii)
deposited in the United States mail, registered or certified, return receipt
requested, or (iv) deposited with a nationally recognized overnight courier, to
the addresses set out in Section 1, or at such other addresses as specified by
written notice delivered in accordance herewith. Notwithstanding the foregoing,
Seller and Buyer agree that notice may be given on behalf of each party by the
counsel for each party and notice by such counsel in accordance with this
Section 15 shall constitute notice under this Agreement.

 

16.         Seller Covenants . Seller agrees that Seller with respect to each
Property: (a) shall continue to operate and manage the Property in the same
manner in which Seller has previously operated and managed the Property; (b)
shall, subject to Section 7 hereof and subject to reasonable wear and tear,
maintain each Property in the same (or better) condition as exists on the date
hereof; and (c) shall not, without Buyer’s prior written consent, which, after
the expiration of the Due Diligence Period may be withheld in Buyer’s sole
discretion: (i) amend the Leases in any manner, nor enter into any new lease,
license agreement or other occupancy agreement with respect to any Property;
(ii) consent to an assignment of the Leases or a sublease of the premises
demised thereunder or a termination or surrender thereof; (iii) terminate the
Leases nor release any guarantor of or security for the Leases unless required
by the express terms of the Leases; and/or (iv) cause, permit or consent to an
alteration of the premises demised thereunder (unless such consent is
non-discretionary). Seller shall promptly inform Buyer in writing of any
material event adversely affecting the ownership, use, occupancy or maintenance
of any Property, whether insured or not.

 

 

 

 

17.         Post-Closing Covenants . For a time period of one (1) year after the
date that constitutes completion of construction under the Leases for purposes
of any Landlord Warranties or responsibilities with respect to repairs and
maintenance, Seller shall be and remain responsible for such repairs and
maintenance and completing any warranty work or curing any related defaults by
the landlord under the Lease. Seller further agrees that it will remain
adequately capitalized in a manner such that Seller shall have sufficient funds
in order to comply with its obligations as described in this Section 17. In the
event that Seller fails to comply with said cure and warranty obligations, Buyer
may, after giving thirty (30) days written notice to Seller and Seller having
failed to commence and diligently pursue to completion curative action within
said time period, proceed to remedy such default on its own and shall have
recourse against Seller for any expenses incurred thereby. Neither payment nor
acceptance of the Purchase Price nor any provision in this Agreement will be
deemed to constitute a waiver by Buyer of Seller’s responsibility under this
Section. This Section, and all provisions contained herein, shall survive the
Closing. The obligations of Seller pursuant to this Section shall continue
beyond the one-year period specified herein as to warranty work or the curing of
any defaults required by the landlord pursuant to the Lease if such defect or
default is discovered during the one-year warranty period and is not cured by
the Seller within that one-year warranty period. In other words, defects or
defaults which arise or exist prior to the date of expiration of the one-year
warranty period must be cured and corrected by the Seller even though the curing
or corrective action may not be commenced or completed until after the date of
expiration of the one-year warranty period.

 

The parties shall deposit into escrow with Escrow Agent pursuant to an escrow
agreement reasonably acceptable to Seller and Buyer (the “Escrow Agreement”) a
portion of the Purchase Price equal to 135% of the estimated cost of completing
the Punch-List items, which estimate shall be reasonably acceptable to Buyer
(the “Construction Escrow Deposit”). After Closing, Seller shall complete all
Punch-List items until accepted by Tenant, and the Escrow Agreement shall
provide: (i) that Seller will have ninety (90) days to complete the Punch-List
items to Tenant’s and Buyer's reasonable satisfaction; (ii) once so completed,
the full amount of the Construction Escrow Deposit will be paid to Seller; and
(iii) if Seller fails to complete all of the Punch-List items within said 90-day
period, then Buyer shall have the right to complete the repair and receive
payment of the cost thereof from the Construction Escrow Deposit and any unused
portion of the Construction Escrow Deposit shall be paid to Seller.

 

18.         Performance on Business Days. A "business day" is a day which is not
a Saturday, Sunday or legal holiday recognized by the Federal Government.
Furthermore, if any date upon which or by which action is required under this
Agreement is not a business day, then the date for such action shall be extended
to the first day that is after such date and is a business day.

 

19.         Entire Agreement. This Agreement constitutes the sole and entire
agreement among the parties hereto and no modification of this Agreement shall
be binding unless in writing and signed by all parties hereto. No prior
agreement or understanding pertaining to the subject matter hereof (including,
without limitation, any letter of intent executed prior to this Agreement) shall
be valid or of any force or effect from and after the date hereof.

 

20.         Severability. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall be invalid or unenforceable, at any
time or to any extent, then the remainder of this Agreement, or the application
of such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby. Each provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law

 

 

 

 

21.         No Representations or Warranties. Buyer hereby acknowledges,
understands and agrees that it has an opportunity to inspect the Property as set
forth in Section 6 herein, and except as set forth in this Agreement, the
Property shall be conveyed at Closing to Buyer in “as-is” condition with no
representation or warranties whatsoever.

 

22.         Applicable Law. This Agreement shall be construed under the laws of
the State or Commonwealth in which the Property is located, without giving
effect to any state's conflict of laws principles.

 

23.         Tax-Deferred Exchange. Buyer and Seller respectively acknowledge
that the purchase and sale of the Property contemplated hereby may be part of a
separate exchange (an “Exchange”) being made by each party pursuant to Section
1031 of the Internal Revenue Code of 1986, as amended, and the regulations
promulgated with respect thereto. In the event that either party (the
“Exchanging Party”) desires to effectuate such an exchange, then the other party
(the “Non-Exchanging Party”) agrees to cooperate fully with the Exchanging Party
in order that the Exchanging Party may effectuate such an exchange; provided,
however, that with respect to such Exchange (a) all additional costs, fees and
expenses related thereto shall be the sole responsibility of, and borne by, the
Exchanging Party; (b) the Non-Exchanging Party shall incur no additional
liability as a result of such exchange; (c) the contemplated exchange shall not
delay any of the time periods or other obligations of the Exchanging Party
hereby, and without limiting the foregoing, the scheduled date for Closing shall
not be delayed or adversely affected by reason of the Exchange; (d) the
accomplishment of the Exchange shall not be a condition precedent or condition
subsequent to the Exchanging Party's obligations under the Agreement; and (e)
the Non-Exchanging Party shall not be required to hold title to any land other
than the Property for purposes of the Exchange. The Exchanging Party agrees to
defend, indemnify and hold the Non-Exchanging Party harmless from any and all
liability, damage or cost, including, without limitation, reasonable attorney's
fees that may result from Non-Exchanging Party's cooperation with the Exchange.
The Non-Exchanging Party shall not, by reason of the Exchange, (i) have its
rights under this Agreement, including, without limitation, any representations,
warranties and covenants made by the Exchanging Party in this Agreement
(including but not limited to any warranties of title, which, if Seller is the
Exchanging Party, shall remain warranties of Seller), or in any of the closing
documents (including but not limited to any warranties of title, which, if
Seller is the Exchanging Party, shall remain warranties of Seller) contemplated
hereby, adversely affected or diminished in any manner, or (ii) be responsible
for compliance with or deemed to have warranted to the Exchanging Party that the
Exchange complies with Section 1031 of the Code.

 

 

 

 

24.         Broker’s Commissions . Buyer and Seller each hereby represent that,
except for the Broker listed herein, there are no other brokers involved or that
have a right to proceeds in this transaction. Seller shall be responsible for
payment of commissions to the Broker pursuant to a separate written agreement
executed by Seller. Seller and Buyer each hereby agree to indemnify and hold the
other harmless from all loss, cost, damage or expense (including reasonable
attorneys' fees at both trial and appellate levels) incurred by the other as a
result of any claim arising out of the acts of the indemnifying party (or others
on its behalf) for a commission, finder's fee or similar compensation made by
any broker, finder or any party who claims to have dealt with such party (except
that Buyer shall have no obligations hereunder with respect to any claim by
Broker). The representations, warranties and indemnity obligations contained in
this section shall survive the Closing or the earlier termination of this
Agreement. Corey J. Smith is a licensed Real Estate Broker in the State of
Mississippi and is also a principal to this transaction.

 

25.         Assignment. Buyer may assign its rights under this Agreement,
provided, however, that no such assignment shall relieve Buyer of any of its
obligations hereunder until Closing is complete. Buyer is entering into this
Agreement for and on behalf of related special purpose entities as set forth on
Exhibit A1 (each an “Approved Assignee”) and intends to assign each respective
Approved Assignee its rights hereunder prior to Closing.

 

26.         Attorneys’ Fees. In any action between Buyer and Seller as a result
of failure to perform or a default under this Agreement, the prevailing party
shall be entitled to recover from the other party, and the other party shall pay
to the prevailing party, the prevailing party’s attorneys’ fees and
disbursements and court costs incurred in such action.

 

27.         Time of the Essence. Time is of the essence with respect to each of
Buyer’s and Seller’s obligations hereunder.

 

28.         Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each of the parties and delivered to the other party. Signatures on this
Agreement which are transmitted by electronically shall be valid for all
purposes, however any party shall deliver an original signature on this
Agreement to the other party upon request.

 

29.         Anti-Terrorism . Neither Buyer or Seller, nor any of their
affiliates, are in violation of any Anti-Terrorism Law (as hereinafter defined)
or engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law. “Anti-Terrorism Laws” shall
mean any laws relating to terrorism or money laundering, including: Executive
Order No. 13224; the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56, as the same has been, or may hereafter be, renewed, extended, amended or
replaced; the applicable laws comprising or implementing the Bank Secrecy Act;
and the applicable laws administered by the United States Treasury Department’s
Office of Foreign Asset Control (as any of the foregoing may from time to time
be amended, renewed, extended, or replaced).

 

[SIGNATURES APPEAR ON THE FOLLOWING PAGES]

 

 

 

 

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

 

BUYER:   SELLER:       AMERICAN REALTY CAPITAL II, LLC,   SMALL, LLC a Delaware
limited liability company   a limited liability company         By: /s/William
M. Kahane   By: /s/Cory J. Smith Name: William M. Kahane   Name: Cory J. Smith  
        Title: President   Title: Manager           Date: Dec. 7, 2011   Date:
Date: Dec. 7, 2011

 

THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES TO BE BOUND BY THE TERMS OF THIS
AGREEMENT RELATING TO ESCROW AGENT AND THE DEPOSIT.

 

ESCROW AGENT:

 

CHICAGO TITLE INSURANCE COMPANY

 

By:           Name:           Title:           Date:    

 

 

 

 

EXHIBITS

 

Exhibit A1 - List of Properties       Exhibit A2 - List of Leases and Rents    
  Exhibit B - Form of Special Warranty Deed       Exhibit C - Form of Assignment
and Assumption of Lease       Exhibit D - Form of Bill of Sale       Exhibit E -
Form of Assignment of Contracts, Permits, Licenses and Warranties       Exhibit
F - Form of Tenant Estoppel       Exhibit G - Form of Guarantor Estoppel      
Exhibit H - Form of Tenant Notice       Exhibit I - Warranties       Exhibit J -
General Contractor Warranty

 

 

 

 

 

EXHIBIT A1

 

LIST OF PROPERTIES

 

Family Dollar 2 Pack

 

Owner Name   City    ST    Acres    Bldg.
sq.ft.    Approved Assignee    Deposit    Purchase Price  Small, LLC   Gloster  
 MS         8,000    ARCP FDGTRMS001, LLC   $36,500.00   $721,053  Small, LLC 
 Woodville    MS         8,000    ARCP FDWVLMS001, LLC   $36,500.00   $731,579 
                                     Totals                          
$73,000.00   $1,452,633.00 

 

A1-1

 

 

 

EXHIBIT A2

 

LIST OF LEASES AND RENTS

 

Family Dollar 2 Pack

 

                Rent   Lease                                 Comm.   Term    
Current   Annual   Cap   Tenant Name   Address   City   ST   Date   Date    
Annual Rent   Bump   Rate   Family Dollar Stores, Inc.   437 N. Captain Gloster
Drive   Gloster   MS   6/24/2011   7/1/2022   $ 68,500.08   None   9.50 % Family
Dollar Stores, Inc.   184 Main Street   Woodville   MS   6/24/2011   7/1/2022  
$ 69,500.04   None   9.50 %                                                    
  Totals       $ 138,000.12          

 

A-1

 

 

 

EXHIBIT B

 

FORM OF SPECIAL WARRANTY DEED
[Subject to Local Counsel Review]

 

This document prepared by:
(and return to :)

 

___________________________
___________________________
___________________________
___________________________

 

Tax Parcel No. ______________________________

 

SPECIAL WARRANTY DEED

 

THIS INDENTURE, made on the _____ day of ______________, 2011, by and between 
___________________, a ____________________ ("Grantor"), and
_____________________________, a ______________, whose address is
_______________________________ ("Grantee")

 

WITNESSETH:

 

THAT Grantor, in consideration of the sum of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt of which is hereby acknowledged, does by
these presents, sell and convey unto the said Grantee, its successors and
assigns, the lots, tracts or parcels of land lying, being and situated in the
County of ____________, State of _____________, and more fully described on
Exhibit "A" attached hereto and incorporated herein by reference, together with
all buildings, facilities and other improvements, located thereon.

 

TO HAVE AND TO HOLD the premises aforesaid with all and singular, the rights,
easements, privileges, appurtenances and immunities thereto belonging or in any
wise appertaining unto the said Grantee and unto Grantee's successors and
assigns forever, the said Grantor hereby covenanting that Grantor will warrant
and defend the title to said premises unto the said Grantee and unto Grantee's
successors and assigns, against the lawful claims and demands of all persons
claiming under or through Grantor, but not otherwise.

 

B-1

 

 

IN WITNESS WHEREOF, Grantor has executed this Special Warranty Deed the day and
year first above written.

 

  GRANTOR:                 By:       Name:   Its:

 

[ACKNOWLEDGMENT]

 

2

 

 

EXHIBIT C

 

FORM OF
ASSIGNMENT AND ASSUMPTION OF LEASE [, GUARANTY] AND SECURITY DEPOSIT

 

______________________________ ("Assignor"), in consideration of the sum of Ten
and No/100 Dollars ($10.00) in hand paid and other good and valuable
consideration, the receipt of which is hereby acknowledged, hereby assigns,
transfers, sets over and conveys to ______________________________ ("Assignee"),
all of Assignor's right, title and interest in and to that certain Lease dated
_________________________________, between Assignor and
_____________________________ (as amended from time to time, the “Lease”),
including any and all security deposits under the Lease. [together with all of
Assignor’s right, title and interest in and to that certain Guaranty of Lease
dated _________________________________, between Assignor and
_____________________________ (as amended from time to time, the “Guaranty”).]

 

Subject to the limitations set forth below, Assignor does hereby agree to
defend, indemnify and hold harmless Assignee from any liability, damages
(excluding speculative damages, consequential damages and lost profits), causes
of action, expenses and reasonable attorneys' fees incurred by Assignee by
reason of the failure of Assignor to have fulfilled, performed and discharged
all of the various commitments, obligations and liabilities of the lessor, or
landlord under and by virtue of the Lease prior to the date of this Assignment.
Subject to the limitations set forth below, Assignee does hereby agree to
defend, indemnify and hold harmless Assignor from any liability, damages
(excluding speculative damages, consequential damages and lost profits), causes
of action, expenses and reasonable attorneys' fees incurred by Assignor by
reason of the failure of Assignee to have fulfilled, performed and discharged
all of the various commitments, obligations and liabilities of the Landlord
under and by virtue of the Lease on and after the date of this Assignment.

 

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment this
______ day of ______________, 2011, which Assignment is effective this date.
This Assignment may be executed in counterparts, which when taken together shall
be deemed one agreement.

 

  ASSIGNOR:                       By:         Name:         Title:            
ASSIGNEE:                       By:         Name:         Title:    

   

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EXHIBIT D

 

FORM OF BILL OF SALE

 

For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, ____________________, a ________________________, having an
address at ____________________________ (“Seller”), hereby bargains, sells,
conveys and transfers to ____________________________ (“Buyer”), a
_____________________________, all of Seller’s right, title and interest in and
to those certain items of personal and intangible property (including any
warranty made by third parties in connection with the same and the right to sue
on any claim for relief under such warranties) (the “Personal Property”) located
at or held in connection with that certain real property located in the State of
__________________________, as more particularly described on Schedule A
attached hereto and made a part hereof.

 

Seller has not made and does not make any express or implied warranty or
representation of any kind whatsoever with respect to the Personal Property,
including, without limitation, with respect to title, merchantability of the
Personal Property or its fitness for any particular purpose, the design or
condition of the Personal Property; the quality or capacity of the Personal
Property; workmanship or compliance of the Personal Property with the
requirements of any law, rule, specification or contract pertaining thereto;
patent infringement or latent defects. Buyer accepts the Personal Property on an
“as is, where is” basis.

 

IN WITNESS WHEREOF, Seller has caused this instrument to be executed and
delivered as of this ___ day of _______, 2011

  

  SELLER:                       By:               Name:               Title:    

 

D-1

 

 

SCHEDULE A

 

TO BILL OF SALE

 

(Add legal description of Real Property]

 

D-2

 

 

EXHIBIT E

 

FORM OF ASSIGNMENT OF CONTRACTS,
PERMITS, LICENSES AND WARRANTIES

 

THIS ASSIGNMENT, made as of the ___ day of ________, 2011 by _________________,
a _______________ (“Assignor”), to _______________________, a
__________________________________________(“Assignee”).

 

WITNESSETH:

 

WHEREAS, by Agreement of Purchase and Sale (the “Purchase Agreement”) dated as
of ________, 2010, between Assignor and Assignee, Assignee has agreed to
purchase from Assignor as of the date hereof, and Assignor has agreed to sell to
Assignee, that certain property located at ________________________ (the
“Property”); and

 

WHEREAS, Assignor desires to assign to Assignee as of the date hereof all of
Assignor’s right, title and interest in contracts, permits, trademarks, licenses
and warranties held by Assignor in connection with the Property, including
without limitation any and all guaranties of leases relating to the Property
(collectively, the “Contracts”).

 

NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Assignor hereby assigns, sets over and transfers unto Assignee to
have and to hold from and after the date hereof all of the right, title and
interest of Assignor in, to and under the Contracts. Assignor agrees without
additional consideration to execute and deliver to Assignee any and all
additional forms of assignment and other instruments and documents that may be
reasonably necessary or desirable to transfer or evidence the transfer to
Assignee of any of Assignor's right, title and interest to any of the Contracts.

 

This Assignment shall be governed by the laws of the State of _____________,
applicable to agreements made and to be performed entirely within said State.

 

IN WITNESS WHEREOF, Assignor has duly executed this Assignment as of the date
first above written.

 

  ASSIGNOR:                 a               By:       Name:       Title:    

 

E-1

 

 

 

EXHIBIT F

 

FORM OF TENANT ESTOPPEL

 

The undersigned hereby certifies to American Realty Capital II, LLC and ARC 001,
LLC (“Buyer”), ___________________ (“Lender”) and their respective successors
and assigns as follows:

 

1.          The undersigned is the tenant under that certain [Lease Agreement]
dated as of _________ __, ____, [as amended by [insert any modifications to
Lease] ([collectively,] the “Lease”) by and between _________________________
(“Landlord”) and _________________________ (“Tenant”), pursuant to which Tenant
leases that real property located at _________________________________________
(the “Premises”).

 

2.          Except as set forth above, the Lease has not been modified, changed,
altered, supplemented or amended in any respect, nor have any provisions thereof
been waived.

 

3.          The Lease is valid and in full force and effect on the date hereof.
The Lease represents the entire agreement between Landlord and Tenant with
respect to the Premises and the land on which the Premises are situated.

 

4.          Tenant is not entitled to, and has made no agreement with Landlord
or its agents or employees concerning, free rent, partial rent, rebate of rent
payments, credit or offset or reduction in rent, or any other type of rental
concession including, without limitation, lease support payments, lease
buy-outs, or assumption of any leasing or occupancy agreements of Tenant.

 

5.          The initial term of the Lease began on __________ __, _____ and
expires on ________ __, 20__. The Rent Commencement Date was __________ __,
____. Tenant has accepted possession of the Premises and is open for business.
Tenant has not sublet all or a portion of the Premises to any sublessee and has
not assigned, transferred or encumbered any of its rights or interests under the
Lease.

 

6.          Tenant has no outstanding options or rights to renew or extend the
term of the Lease. Tenant has no outstanding expansion options, other options,
rights of first refusal or rights of first offer to purchase the Premises or any
part thereof and/or the land on which the Premises are situated, or rights of
first offer to lease with respect to all or any part of the Premises.

 

7.          The [Base Annual Rent] payable under the Lease is $____________
($_________ monthly). Such [Base Annual Rent] payable under the Lease shall be
adjusted during the initial term of the Lease as follows: (a) from ___________,
20__ to and including ______________, 20__, the Base Annual Rent shall be
$_______ ($_______ monthly), (b) from ___________, 20___ to and including
____________, 20___ the Base Annual Rent shall be $________ ($________ monthly);
[and from __________, 20__ to and including __________, 20___ the fixed annual
minimum rent shall be $_________ ($__________ monthly)]. Such rent has been paid
through and including the month of ____________, 200_. Additional rent under the
Lease has been paid through and including the month of __________, 200_. No such
rent (excluding security deposits) has been paid more than one (1) month in
advance of its due date.

 

F-1

 

 

 

8.          Tenant's security deposit, if any, is $_________________ (if none,
please state “none”).

 

9.          No event has occurred and no condition exists that constitutes, or
that with the giving of notice or the lapse of time or both, would constitute, a
default by Tenant or, to the best knowledge of Tenant, Landlord under the Lease.
Tenant has no existing defenses or offsets against the enforcement of the Lease
by Landlord.

 

10.         (a)          All required contributions by Landlord to Tenant on
account of Tenant's improvements have been received by Tenant and all of
Tenant's tenant improvements have been completed in accordance with the terms of
the Lease.

 

(b)          Landlord has satisfied all its obligations to Tenant arising out of
or incurred in connection with the construction of the tenant improvements on
the Premises and no off-set exists with respect to any rents or other sums
payable or to become payable by the Tenant under the Lease.

 

11.         The undersigned is duly authorized to execute this Certificate on
behalf of Tenant.

 

Dated: ____________, 2011

 

TENANT:

 

____________________, a ________________

 

By:       Name:     Title:  

 

 

 

 

EXHIBIT G

 

GUARANTOR ESTOPPEL CERTIFICATE

 

The undersigned hereby certifies to American Realty Capital II, LLC and ARC 001,
LLC (“Buyer”), ___________________ (“Lender”) and their respective successors
and assigns as follows:

 

1.          The undersigned (“Guarantor”) is the guarantor of that certain
[Lease Agreement] dated as of _____________ __, ____, as amended by [insert
amendments] ([collectively,] the “Lease”) by and between
________________________ (“Landlord”) and __________________________ (“Tenant”),
pursuant to which Tenant leases from Landlord the land and building located at
_______________________________, as more particularly described in the Lease
(the “Premises”). Such guaranty is made pursuant to that certain Guarantee dated
as of ________ __, ____ (the “Guaranty”) from Guarantor to Landlord.

 

2.          The Guaranty has not been modified, changed, altered, supplemented
or amended in any respect, nor have any provisions thereof been waived.

 

3.          The Guaranty is valid and in full force and effect on the date
hereof.

 

4.          No voluntary actions or, to Guarantor’s best knowledge, involuntary
actions are pending against Guarantor under the bankruptcy laws of the United
States or any state thereof.

 

5.          This Certificate is delivered to induce Buyer to acquire the
Premises and Lender to provide financing in connection with such acquisition,
with the understanding that Buyer and Lender shall rely upon the truth of the
matters set forth in this Certificate.

 

The undersigned is duly authorized to execute this Certificate on behalf of
Guarantor.

 

Dated: ____________, 2011

 

            GUARANTOR:

 

            ______________, a ___________________

 

  By:         Name:       Title:  

 

G-1

 

 

EXHIBIT H

 

FORM OF NOTICE TO TENANT

 

TO:      [Tenant]

 

Re:       Notice of Change of Ownership of ______________________________

 

Ladies and Gentlemen:

 

YOU ARE HEREBY NOTIFIED AS FOLLOWS:

 

That as of the date hereof, the undersigned has transferred, sold, assigned, and
conveyed all of its right, title and interest in and to the above-described
property, (the “Property”) to [INSERT NAME OF BUYER] (the “New Owner”) and
assigned to New Owner, all of the undersigned’s right, title and interest under
that certain Lease, dated _________, between ________as tenant and
____________as landlord (the “Lease”), together with any security deposits or
letters of credit held thereunder.

 

Accordingly, New Owner is the landlord under the Lease and future notices and
correspondence with respect to your leased premises at the Property should be
made to the New Owner at the following address:

 

                 

 

You will receive a separate notification from New Owner regarding the new
address for the payment of rent. In addition, to the extent required by the
Lease, please amend all insurance policies you are required to maintain pursuant
to the Lease to name New Owner as an additional insured thereunder and promptly
provide New Owner with evidence thereof.

 

  Very truly yours,     [PRIOR LANDLORD)             By:       Name:      
Title:    

 

 

 

 

EXHIBIT I

 

 

 

 

EXHIBIT J

 

LETTER OF WARRANTY

 

___________ __, 2011

[name of Landlord]

[name of Tenant]

 

Re: ____________________________, Store No. (the “Project”)

 

____________ (“Contractor”) hereby guarantees to _____________, its successors
and assigns (“Landlord”) all work performed by it or any subcontractor on the
Project to be structurally sound, constructed in accordance with applicable law,
the plans prepared by ______________ (the “Architect”) and the [identify any
tenant specifications] (the “Tenant Specifications”) and that all materials and
equipment furnished by it or any subcontractor and work performed by it or any
subcontractor on the Project shall be free from defects in materials and
workmanship (collectively, the “Work”) for the greater of (a) one year after the
date ________________ (“Tenant”) accepts possession of the Project (the
“Warranty Commencement Date") (except that such warranties shall survive for the
first three (3) years after the Warranty Commencement Date as to defective
conditions (including without limitation, conditions which do not comply with
the Tenant Specifications or applicable law) which could not be discovered by
Landlord or Tenant in the exercise of reasonable care within one (1) year after
the Warranty Commencement Date) or (b) any time periods set forth in the Tenant
Specifications, and that there shall be no structural movement resulting from
the failure of Contractor causing damage to any portion of any structure on the
Project. All subcontractors’ guaranties and any warranties therein specified
shall be underwritten by Contractor who shall obtain and deliver the same to
Landlord before the Work will be deemed finished and accepted. Contractor's
warranties as set forth in this contract shall be assignable to Tenant, any
other tenant of the project, as applicable and/or any successor Landlord of the
Project. If any such damage should occur during any guaranty period, or if there
shall be any defect in the work, Contractor will make all necessary repairs, in
the judgment of Architect, to the work without further costs to Landlord, and
shall promptly reimburse Landlord for consequential damages, if any, suffered as
a result of the defect or the settling or structural movement. If such repairs
are not completed within seven (7) days following notification to the Contractor
of the need for repairs, or, in the event of an emergency, 24 hours following
such notification, or, if additional time is requested by Contractor, within
such reasonable time as is allowed by Architect, Landlord shall have the right
to have the repair work done by another reputable contractor to be chosen by
Landlord and Contractor promptly shall reimburse Landlord for the full cost
thereof, plus interest at the rate of fifteen percent (15%) per annum upon
billing. The provisions of this Letter of Warranty shall survive the completion
of the Work.

 

  [NAME OF CONTRACTOR]           By:         Name:       Title: