AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
 
FEDERAL EXPRESS – BUTTE, MONTANA
 
119771 RICK JONES WAY, BUTTE, MT
 
THIS AGREEMENT (“Agreement”) is made and entered into as of the Effective Date
by and between AMERICAN REALTY CAPITAL II, LLC (“Buyer”), and WILLIAM CHARLES
BUTTE MONTANA, LLC (“Seller”).
 
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)            “Brokers” There are no brokers.
 
(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 date that is the thirtieth (30th) day following the
occurrence of all of the following (collectively, the “Completion of
Construction”):  (i) completion of construction of improvements on the Property
and delivery to Buyer of the punch-list of work to be completed by landlord
under the Lease as approved by Tenant (the “Punch-List”), (ii) Tenant accepting
possession of the Property pursuant to the Lease, Tenant commencing actual
payment of rent pursuant to the Lease (and not just the obligation to pay rent
where rent is withheld by Tenant in escrow as security for completion of punch
list items), and Tenant opening for normal business operations, (iii) the date
on which Seller delivers to Buyer commercially reasonable documentation
acceptable to Buyer evidencing the completion of construction of improvements on
the Property in accordance with approved plans and specifications and (iv) the
issuance and delivery to Buyer (or, as required by the Lease, to Tenant) of all
permits, approvals and a permanent certificate of occupancy required for the
lawful occupancy of the Property and use thereof for the purposes contemplated
by Tenant.  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”  (i) “First Due Diligence Period” shall
mean the period beginning upon the date a fully executed original of this
Agreement is delivered to Buyer and extending until 11:59 PM EST on the end of
the date that is Thirty (30) days thereafter with respect to (i) all matters set
forth in Section 6(a) relating to title except such items that require a survey
and (ii) all items set forth in Section 6(b)(i).  “Second Due Diligence Period”
shall mean the period beginning upon the date that Seller delivers to Buyer a
certificate of substantial completion from Seller’s architect for the Property
(“Substantially Complete”) in accordance with the Lease and an as-built survey
and extending until 11:59 PM EST on the end of the date that is Thirty (30) days
thereafter with respect to (i) all matters set forth in Section 6(a) relating to
title that require an as-built survey and (ii) all items set forth in Section
6(b)(ii).  Both Due Diligence Periods also sometimes referred to herein as “Due
Diligence Period” or “Due Diligence Periods” as proper reading requires.  Seller
shall deliver to Buyer all of the Due Diligence Materials (i) within Five (5)
business days after the Effective Date with respect to Section 6(a) and
6(b)(i)or (ii) within Five (5) business days after such time  as such materials
become available to Seller with respect to Section 6(b)(ii).  If Seller is in
default hereunder and Buyer has notified Seller of such default prior to the
expiration of the Due Diligence Period, the Due Diligence Period will be
extended until the earlier to occur of the following:  (a) Seller has cured such
default to the reasonable satisfaction of Buyer and if such default relates to
the failure to deliver any item required to be delivered by Seller under Section
6(b)(ii) hereunder, an additional ten (10) days, (b) Buyer terminates this
Agreement in accordance with the terms hereof, or (c) the date mutually agreed
to by Buyer and Seller.
 

 
 

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(d)           “Earnest Money” shall mean Four Hundred Forty-Seven Thousand
Dollars ($447,000.00).  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 the last
execution and acceptance by both parties shall be the “Effective Date” of this
Agreement.
 
(f)           “Escrow Agent” shall mean Chicago Title Insurance Company, 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 FedEx Corporation.
 
(h)           “Guaranty” shall mean that certain Guaranty of the Lease dated
September 20, 2010 (the “Guaranty”) executed by Guarantor.
 
(i)           “Lease” shall mean that certain Lease dated as of September 20,
2010 and as amended on June ___, 2011 (the “Lease”) between Seller, as landlord,
and FedEx Freight, Inc., an Arkansas corporation, as tenant (“Tenant”), as
amended.
 
(j)           “Property” shall mean (a) that certain real property located at
119771 Rick Jones Way in Butte, Montana, being more particularly described on
Exhibit A, attached hereto and incorporated herein (the “Real Property”)
together with all buildings, facilities and other improvements located thereon
(collectively, the “Improvements”); (b) all right, title and interest of Seller
under the Lease and all security deposits (if any) that Seller is holding
pursuant to the Lease; (c) all right, title and interest of Seller in all
machinery, furniture, equipment and items of personal property of Seller
attached or appurtenant to, located on or used in the ownership, use, operation
or maintenance of the Property or the Improvements (collectively, the
“Personalty”); (d) all right, title and interest of Seller, if any, to any
unpaid award for (1) any taking or condemnation of the Property or any portion
thereof, or (2) any damage to the Property or the Improvements by reason of a
change of grade of any street or highway; (e) all easements, licenses, rights
and appurtenances relating to any of the foregoing; and (f) all right, title and
interest of Seller in and to any warranties, tradenames, logos (including any
federal or state trademark or tradename registrations), or other identifying
name or mark now used in connection with the Real Property and/or the
Improvements, but expressly excluding any such property to the extent owned by
Tenant (the “Intangible Property”).
 

 
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(k)           “Purchase Price” shall mean Eight Million Nine Hundred
Thirty-Eight Thousand Five Hundred Seventy-Seven Dollars ($8,938,577.00).
 
(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:
 
William Charles Butte Montana, LLC
Charles Thompson
1401 North Second Street
Rockford, IL 61107
Tel. No.: (815) 963-7400
Fax No.:  (815) 963-7415 ________
Email: cthompson@williamcharles.com
 
Sellers Attorney:
 
Erik W. Lindberg
1401 North Second Street
Rockford, IL 61107
Tel. No.: (815) 963-7495
Fax No.:  (815) 963-7415 ________
Email: elindberg@williamcharles.com
 
(ii)           “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:

 
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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, and Buyer agrees to purchase from
Seller, the Property for the Purchase Price set forth above.
 
3.           Payment of Purchase Price.  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.
 
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 unless Tenant is not 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.
 
(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”:
 

 
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(i)           100% of all Owner’s Title Insurance policy premiums, including
search costs and any endorsements issued in connection with such policies;
provided, however, that the Seller shall not be responsible for Owner’s Title
Insurance policy premiums in excess of $20,000.00.

(ii)           Transfer taxes and conveyance fees on the sale and transfer of
the Property.

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

(iv)           All fees relating to the granting and executing of the Deed for
the 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)           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;

(ii)           all costs of recording the Deed for the Property; 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 the 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”) for
the Property from Escrow Agent promptly after the date hereof.   All matters
shown in the Title Commitment 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
 

 
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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, if the matter in question is not caused by the
actions of the Buyer or its agents, 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, not to exceed $15,000.00, and neither party shall have any
further obligation hereunder, except as otherwise expressly set forth herein.
 
(b)           (i)            Within five (5) days following the Effective Date,
Seller shall provide to Buyer copies of the following documents and materials
pertaining to the Property to the extent within Seller’s possession or
reasonably obtainable by Seller or Seller’s counsel: (A) a complete copy of all
leases affecting the Property and all amendments thereto and of all material
correspondence relating thereto; (B) a copy of all surveys and site plans of the
Property; (C) a copy of all environmental reports for the Property (D) a copy of
all architectural plans and specifications and construction drawings and
contracts for improvements to be located on the Property; (E) a copy of Seller’s
title insurance commitments and policies relating to the Property; (F) all
contracts and insurance policies which affect the Property. (ii) Within five (5)
days following the commencement of the Second Due Diligence Period, Seller shall
provide to Buyer copies of the following documents and materials pertaining to
the Property to the extent within Seller’s possession or reasonably obtainable
by Seller or Seller’s counsel: (A) a copy of the certificate of occupancy and
zoning reports for the Property; (B) a copy of all governmental
permits/approvals; (C) a copy of all engineering and physical condition reports
for the Property; (D) copies of the Property’s real estate tax bills for the
current tax year; (E) all service contracts and insurance policies which affect
the Property; (F) a copy of all warranties relating to the improvements
constructed on the Property, including without limitation any roof warranties;
and (G) 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 the Property reasonably requested by Buyer 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
 

 
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claims, liens, or damages to the extent resulting from the activities of Buyer
or its agents 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.  Buyer shall not discuss any
due diligence related findings and/or questions with the Tenant without the
Seller’s prior written consent, prior to closing.  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 First 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.
 
In the event that the Due Diligence materials enumerated in Section 6(b)(ii)
above disclose any matters which need completion or correction, such matters
shall be completed or corrected by Seller.  Buyer’s rights and Seller’s
obligations with respect to any matters arising subsequent to the First Due
Diligence Period shall be in accordance with Sections 9(b) and 9(c).
 
(c)           Within five (5) days following the Commencement of the Second Due
Diligence Period Seller shall request Estoppel Certificates certified to Buyer,
the Approved Assignee 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 (the “Tenant Estoppel Certificate”) and an estoppel
certificate from Guarantor in the form attached hereto as Exhibit G (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, 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 the 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, 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
 

 
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or taken, then, Buyer may elect to terminate this Agreement 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
the Earnest Money shall be returned to the Buyer and neither party hereto shall
have any further rights, obligations or liabilities under this Agreement, 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 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 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 as Escrow Agent 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.
 

 
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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 the Property, 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 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, not to exceed $15,000.00,
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; (iv) if the default
relates to Seller’s failure to correct or complete any matter referred to in
Section 6(c) above, then Buyer shall have the right, but not the obligation, to
complete or correct the matter or matters in question and Seller shall reimburse
Buyer for Buyer’s out of pocket cost and expenses incurred in connection with
such completion or correction; or (v) 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”), 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 (iv) above except that
the term “Closing” shall read “Extended Closing” .
 

 
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(c)           In the event that Improvements are not Substantially Complete in
accordance with the terms of the Lease and Tenant has not commenced paying rent
on or before November 15, 2011, Buyer shall have the right to increase the
capitalization rate on which the Purchase price is based (7.80%) by 0.10% and an
additional 0.10% for every thirty (30) day thereafter until Tenant has commenced
paying rent.  If Tenant has not commenced paying rent on or before December 31,
2011, then Buyer shall have the absolute right to terminate this Purchase and
Sale Agreement, at which time the Escrow Agent shall return the entire Deposit
to Buyer, Seller shall pay to Buyer all of the out-of-pocket costs and expenses
incurred by Buyer in connection with this Agreement, not to exceed $15,000.00,
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.
 
10.           Closing.  The Closing shall consist of the execution and delivery
of documents by Seller and Buyer, 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:
 
(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 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;
 
(f)           An original Guarantor Estoppel Certificate dated no earlier than
30 days prior to the date of Closing;
 
(g)           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;
 
(h)           All transfer tax statements, declarations and filings as may be
necessary or appropriate for purposes of recordation of the deed;
 
(i)           Good standing certificates and corporate resolutions or member or
partner consents, as applicable, and such other documents as reasonably
requested by Escrow Agent;
 

 
10

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(j)           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;
 
(k)           To the extent not previously delivered to Buyer, the Lease and any
amendments, bearing the original signatures of the landlord and tenant
thereunder, or a copy thereof bearing an original certification of Tenant
confirming that the copy is true, correct and complete; the leasing files; and
copies of all books and records applicable to the Property which are identified
by Buyer by written notice to Seller and reasonably necessary for the orderly
transition of operation of the Property;
 
(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 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 (g)
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.  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

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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:
 
(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, with the exception of the Temporary Emergency
Water Service Agreement dated October 20, 2010 by and between Seller and City
and County of Butt-Silver Bow, Montana;
 
(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 Lease:  (i) the Lease forwarded to Buyer under
Section 6(b) is a true, correct and complete copy of the Lease; (ii) the Lease
is 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 Lease 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; (v) the
property is to be improved with approximately 45,826 square feet of improvements
and fixtures attached thereto, together with paved and concrete parking and (vi)
The total scheduled annual base rent (the “Annual Net Rent”) for the initial
term of the Lease will be $697,209.00 per annum;
 

 
12

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(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; and
 
(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.
 
 
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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 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
Lease, open for business to the public and paying full and unabated rent under
the Leases and Tenant shall not have assigned or sublet 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 Lease to purchase the Property from Seller;
 
(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; and
 

 
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(h)           Following Completion of Construction, Buyer shall have received an
as-built ALTA survey containing the items set forth in Exhibit K and certified
to Buyer, the Approved Assignee ( as hereinafter identified) and  Buyers lender,
at such time as the lender is identified, Such survey shall also confirm that
the Improvements are legal conforming and comply with the approved site plan and
any variance issued in connection with the construction and development of the
Property and that the Improvements do not encroach upon any easement which has
not been insured over by the Title Policy.
 
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 Seller 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 it:  (a) shall use good
faith efforts to complete construction of the Improvements in a prompt and
timely manner; (b) shall, subject to Section 7 hereof and subject to reasonable
wear and tear, maintain the 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 Lease in any manner, nor enter into any
new lease, license agreement or other occupancy agreement with respect to the
Property; (ii) consent to an assignment of the Lease or a sublease of the
premises demised thereunder or a termination or surrender thereof; (iii)
terminate the Lease nor release any guarantor of or security for the Lease
unless required by the express terms of the Lease; 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 the Property, whether insured or not.

 
 
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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 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.
 
 
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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.
 

 
17

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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.  While no Brokers have been retained by
either Buyer or Seller related to the sale of the Property and/or have a right
to a sale commission, Seller as part of the Tenant’s normal procurement process,
entered into a commission agreement with Fischer & Company solely related to the
selection of Seller to construct the Property.  Seller is obligated to pay
Fischer & Company the remaining fifty percent (50%) of its commission upon
occupancy by Tenant of $209,163.70, which Seller shall pay to Fischer & Company
upon the occupancy of the Tenant.  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.
 
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 a related special purpose entity titled ARC
FEBTTMT001, LLC (“Approved Assignee”) and intends to assign 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.           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.
 
28.           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).
 
 
18

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[SIGNATURES APPEAR ON THE FOLLOWING PAGES]
 
 
19

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

 
BUYER:
 
SELLER:
AMERICAN REALTY CAPITAL II, LLC
 
WILLIAM CHARLES BUTTE MONTANA, LLC
         
By:
/s/ William M. Kahane
 
By:
/s/ Charles F. Thompson
Name:
William M. Kahane
 
Name:
Charles F. Thompson
Title:
President
 
Title:
President
Date:
June 3, 2011
 
Date:
June 3, 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:
/s/ Edwin G. Ditlow
Name:
Edwin G. Ditlow
Title:
Vice President
Date:
June 6, 2011
   

 

 
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EXHIBITS
 
Exhibit A
-
Real Property
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 K
-
Survey Requirements

 

 
 

--------------------------------------------------------------------------------

 

EXHIBIT A
 
LEGAL DESCRIPTION OF PROPERTY
 

 
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

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

_________________________________

 
By:                                                                
 
Name:
 
Its:
 

 
[ACKNOWLEDGMENT]
 

 
 
2

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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:
 

 
 
3

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_______________________________

 
 
By:
   

 
Name:
   

 
Title:
   

 
4

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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

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SCHEDULE A
 
TO BILL OF SALE
 
(Add legal description of Real Property]
 

 
D-2

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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 ________, 2006, 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

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EXHIBIT F
 
FORM OF TENANT ESTOPPEL
 
The undersigned hereby certifies to American Realty Capital II, 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

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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:

 
F-2

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EXHIBIT G
 
GUARANTOR ESTOPPEL CERTIFICATE
 
The undersigned hereby certifies to American Realty Capital II, 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.
 
 
G-1

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The undersigned is duly authorized to execute this Certificate on behalf of
Guarantor.
 
Dated: ____________, 2011
 
GUARANTOR:

______________, a ___________________

By:                                                               
Name:
Title:

 

 
G-2

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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:
 
 

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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:                                                     

 

 
 

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EXHIBIT I
 

 

 
 

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EXHIBIT J
 
LETTER OF WARRANTY
 
___________ __, 200_
[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:

 
 
 

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EXHIBIT K
 
Survey Requirements

MINIMUM STANDARD DETAIL REQUIREMENTS FOR
ALTA/ACSM LAND TITLE SURVEYS
(Effective February 23, 2011)

1.           Purpose - Members of the American Land Title Association (ALTA)
have specific needs, unique to title insurance matters, when asked to insure
title to land without exception as to the many matters which might be
discoverable from survey and inspection, and which are not evidenced by the
public records.

For a survey of real property, and the plat, map or record of such survey, to be
acceptable to a title insurance company for the purpose of insuring title to
said real property free and clear of survey matters (except those matters
disclosed by the survey and indicated on the plat or map), certain specific and
pertinent information must be presented for the distinct and clear understanding
between the insured, the client (if different from the insured), the title
insurance company (insurer), the lender, and the surveyor professionally
responsible for the survey.
In order to meet such needs, clients, insurers, insureds, and lenders are
entitled to rely on surveyors to conduct surveys and prepare associated plats or
maps that are of a professional quality and appropriately uniform, complete and
accurate. To that end, and in the interests of the general public, the surveying
profession, title insurers and abstracters, the ALTA and the National Society of
Professional Surveyors, Inc. (NSPS) jointly promulgate the within details and
criteria setting forth a minimum standard of performance for ALTA/ACSM Land
Title Surveys.  A complete 2011 ALTA/ACSM Land Title Survey includes the on-site
fieldwork required under Section 5 herein, the preparation of a plat or map
showing the results of the fieldwork and its relationship to record documents as
required under Section 6 herein, any information in Table A herein that may have
been negotiated with the client, and the certification outlined in Section 7
herein. 
2.           Request for Survey - The client shall request the survey or arrange
for the survey to be requested, and shall provide a written authorization to
proceed from the person or entity responsible for paying for the survey.  Unless
specifically authorized in writing by the insurer, the insurer shall not be
responsible for any costs associated with the preparation of the survey. The
request shall specify that an "ALTA/ACSM LAND TITLE SURVEY" is required and
which of the optional items listed in Table A herein, if any, are to be
incorporated.  Certain properties, including, but not limited to, marinas,
campgrounds, trailer parks and leased areas, may present issues outside those
normally encountered on an ALTA/ACSM Land Title Survey. The scope of work
related to such properties should be discussed with the client, lender and
insurer, and agreed upon in writing prior to requesting the survey. The client
may need to secure permission for the surveyor to enter upon the property to be
surveyed, adjoining properties, or offsite easements.
 
3.
Surveying Standards and Standards of Care

 
A.
Effective Date - The 2011 Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys are effective February 23, 2011.  As of that date, all
previous versions of the Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys are superseded by these standards.

 
B.
Other Requirements and Standards of Practice - Some Federal agencies, many
states and some local jurisdictions have adopted statutes, administrative rules
and/or ordinances that set out standards regulating the practice of surveying
within their jurisdictions. In addition to the standards set forth herein,
surveyors shall also conduct their surveys in accordance with all applicable
jurisdictional requirements and standards of practice. Where conflicts between
the standards set forth herein and any such jurisdictional requirements and
standards of practice occur, the more stringent shall apply.

 
 
 

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C.
The Normal Standard of Care - Surveyors should recognize that there may be
unwritten local, state, and/or regional standards of care defined by the
practice of the ‘prudent surveyor’ in those locales.

 
D.
Boundary Resolution - The boundary lines and corners of any property being
surveyed as part of an ALTA/ACSM Land Title Survey shall be established and/or
retraced in accordance with appropriate boundary law principles governed by the
set of facts and evidence found in the course of performing the research and
survey.

 
E.
Measurement Standards - The following measurement standards address Relative
Positional Precision for the monuments or witnesses marking the corners of the
surveyed property.

 
i.
“Relative Positional Precision” means the length of the semi-major axis,
expressed in feet or meters, of the error ellipse representing the uncertainty
due to random errors in measurements in the location of the monument, or
witness, marking any corner of the surveyed property relative to the monument,
or witness, marking any other corner of the surveyed property at the 95 percent
confidence level (two standard deviations).  Relative Positional Precision is
estimated by the results of a correctly weighted least squares adjustment of the
survey.

 
ii.
Any boundary lines and corners established or retraced may have uncertainties in
location resulting from (1) the availability, condition, history and integrity
of reference or controlling monuments, (2) ambiguities in the record
descriptions or plats of the surveyed property or its adjoiners, (3) occupation
or possession lines as they may differ from the written title lines, and (4)
Relative Positional Precision. Of these four sources of uncertainty, only
Relative Positional Precision is controllable, although due to the inherent
errors in any measurement, it cannot be eliminated. The magnitude of the first
three uncertainties can be projected based on evidence; Relative Positional
Precision is estimated using statistical means (see Section 3.E.i. above and
Section 3.E.v. below).

 
iii.
The first three of these sources of uncertainty must be weighed as part of the
evidence in the determination of where, in the surveyor’s opinion, the boundary
lines and corners of the surveyed property should be located (see Section 3.D.
above).  Relative Positional Precision is a measure of how precisely the
surveyor is able to monument and report those positions; it is not a substitute
for the application of proper boundary law principles.  A boundary corner or
line may have a small Relative Positional Precision because the survey
measurements were precise, yet still be in the wrong position (i.e. inaccurate)
if it was established or retraced using faulty or improper application of
boundary law principles.

 
iv.
For any measurement technology or procedure used on an ALTA/ACSM Land Title
Survey, the surveyor shall (1) use appropriately trained personnel, (2)
compensate for systematic errors, including those associated with instrument
calibration, and (3) use appropriate error propagation and measurement design
theory (selecting the proper instruments, geometric layouts, and field and
computational procedures) to control random errors such that the maximum
allowable Relative Positional Precision outlined in Section 3.E.v. below is not
exceeded.

 
v.
The maximum allowable Relative Positional Precision for an ALTA/ACSM Land Title
Survey is 2 cm (0.07 feet) plus 50 parts per million (based on the direct
distance between the two corners being tested).  It is recognized that in
certain circumstances, the size or configuration of the surveyed property, or
the relief, vegetation or improvements on the surveyed property will result in
survey measurements for which the maximum allowable Relative Positional
Precision may be exceeded.  If the maximum allowable Relative Positional
Precision is exceeded, the surveyor shall note the reason as explained in
Section 6.B.ix below.

4.           Records Research - It is recognized that for the performance of an
ALTA/ACSM Land Title Survey, the surveyor will be provided with appropriate data
which can be relied upon in the preparation of the survey. The request for an
ALTA/ACSM Land Title Survey shall set forth the current record description of
the property to be surveyed or, in the case of an original survey, the current
record description of the parent parcel that contains the property to be
surveyed.  Complete copies of the most recent title commitment, the current
record description of the property to be surveyed (or, in the case of an
original survey, the parent parcel), the current record descriptions of
adjoiners, any record easements benefiting the property, the record easements or
servitudes and covenants burdening the property (all hereinafter referred to
collectively as "Record Documents"), documents of record referred to in the
Record Documents, documents necessary to ascertain, if possible, the
junior/senior relationship pursuant to Section 6.B.vii. below, and any other
documents containing desired appropriate information affecting the property
being surveyed, and to which the ALTA/ACSM Land Title Survey shall make
reference, shall be provided to the surveyor for use in conducting the survey.
Reference is made to Section 3.B. above.
 
 
 

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5.           Field Work - The Survey shall be performed on the ground (except as
otherwise negotiated pursuant to Table A, Item 15 below, if selected by the
client), and the field work shall include the following:
 
A.
Monuments

 
i.
The location and description of any monuments or lines that control the
boundaries of the surveyed property.

 
ii.
The location, size and type of any monuments found (or set, if Table A, Item 1
is requested by the client, or if otherwise required – see Section 3.B. above)
on the boundary of the surveyed property.

 
B.
Rights of Way and Access

 
i.
The distance from the appropriate corner or corners of the surveyed property to
the nearest right of way line, if the surveyed property does not abut a right of
way.

 
ii.
The name of any street, highway or other public or private way abutting the
surveyed property, and the width and location of the travelled way relative to
the nearest boundary line of the surveyed property.

 
iii.
Visible evidence of physical access (such as, but not limited to, curb cuts and
driveways) to any abutting streets, highways or other public ways.

 
iv.
The location and character of vehicular, pedestrian or other forms of access by
other than the apparent occupants of the surveyed property to or across the
surveyed property, including, but not limited to driveways, alleys, private
roads, sidewalks and footpaths observed in the process of conducting the survey.

 
v.
Without expressing a legal opinion as to ownership or nature, the location and
extent of any potentially encroaching driveways, alleys, and other ways of
access from adjoining properties onto the surveyed property observed in the
process of conducting the survey.

 
vi.
Where documentation of the width or location of any abutting street, road or
highway right of way was not disclosed in Record Documents provided to the
surveyor or was not otherwise available from the controlling jurisdiction (see
Section 6.C.iv. below), the evidence and location of parcel corners recovered
which might indicate the width or location of such right of way lines.

 
vii.
Evidence of access to and from waters adjoining the surveyed property, such as
paths, boat slips, launches, piers and docks observed in the process of
conducting the survey.

 
C.
Lines of Possession, and Improvements along the Boundaries

 
i.
The character and location of evidence of possession or occupation along the
perimeter of the surveyed property, both by the occupants of the surveyed
property and by adjoiners, observed in the process of conducting the survey.

 
ii.
The character and location of all walls, buildings, fences, and other
improvements within five feet of each side of the boundary lines, observed in
the process of conducting the survey.

 
iii.
Without expressing a legal opinion as to the ownership or nature of the
potential encroachment, the evidence, location and extent of potentially
encroaching structural appurtenances and projections observed in the process of
conducting the survey, such as fire escapes, bay windows, windows and doors that
open out, flue pipes, stoops, eaves, cornices, areaways, steps, trim, etc., by
or onto adjoining property, or onto rights of way, easements or setback lines
disclosed in Record Documents provided to the surveyor.

 
 
 

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D.
Buildings

Based on the normal standard of care, the location of all buildings on the
surveyed property shown perpendicular to the nearest perimeter boundary line(s)
and expressed to the appropriate degree of precision.
 
E.
Easements and Servitudes

 
i.
Evidence of any easements or servitudes burdening the surveyed property,
disclosed in the Record Documents provided to the surveyor and observed in the
process of conducting the survey.

 
ii.
Evidence of easements or servitudes not disclosed in the Record Documents
provided to the surveyor, but observed in the process of conducting the survey,
such as those created by roads; rights of way; water courses; ditches; drains;
telephone, fiber optic lines, or electric lines; water, sewer, oil or gas
pipelines on or across the surveyed property and on adjoining properties if they
appear to affect the surveyed property.

 
iii.
Surface indications of underground easements or servitudes on or across the
surveyed property observed in the process of conducting the survey.

 
iv.
Evidence of use of the surveyed property by other than the apparent occupants
observed in the process of conducting the survey.

 
F.
Cemeteries

As accurately as the evidence permits, the location of cemeteries, gravesites,
and burial grounds (i) disclosed in the Record Documents provided to the
surveyor, or (ii) observed in the process of conducting the survey.
 
G.
Water Features

 
i.
The location of springs, together with the location of ponds, lakes, streams,
and rivers bordering on or running through the surveyed property, observed
during the process of conducting the survey. See Table A, Item 19 for wetlands
locations.

 
 

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ii.
The location of any water boundary on the surveyed property. The attribute(s) of
the water feature located (e.g. top of bank, edge of water, high water mark,
etc.) should be congruent with the boundary as described in the record
description or, in the case of an original survey, in the new description. (See
Section 6.B.vi. below).

6.           Plat or Map - A plat or map of an ALTA/ACSM Land Title Survey shall
show the following information. Where dimensioning is appropriate, dimensions
shall be in accordance with the appropriate standard of care.

 
A.
The evidence and locations gathered during the field work as outlined in Section
5 above.

 
B.
Boundary, Descriptions, Dimensions and Closures

 
i.
The current record description of the surveyed property, and any new description
of the surveyed property that was prepared in conjunction with the survey,
including a statement explaining why the new description was prepared.
Preparation of a new description should be avoided unless deemed necessary or
appropriate by the surveyor and insurer. Preparation of a new description should
also generally be avoided when the record description is a lot or block in a
platted, recorded subdivision.

 
ii.
The location and description of any monuments, lines or other evidence that
control the boundaries of the surveyed property or that were otherwise relied
upon in establishing or retracing the boundaries of the surveyed property, and
the relationship of that evidence to the surveyed boundary. In some cases, this
will require notes on the plat or map.

 
iii.
All distances and directions identified in the record description of the
surveyed property (and in the new description, if one was prepared). Where a
measured or calculated dimension differs from the record by an amount deemed
significant by the surveyor, such dimension shall be shown in addition to, and
differentiated from, the corresponding record dimension.

 
iv.
The directional, distance and curve data necessary to compute a mathematical
closure of the surveyed boundary. A note if the record description does not
mathematically close. The basis of bearings and, when it differs from the record
basis, the difference.

 
v.
The remainder of any recorded lot or existing parcel, when the surveyed property
is composed of only a portion of such lot or parcel, shall be graphically
depicted.  Such remainder does not need to be included as part of the actual
survey, except to the extent necessary to locate the lines and corners of the
surveyed property, and it need not be fully dimensioned or drawn at the same
scale as the surveyed property.

 
vi.
When the surveyed property includes a water boundary, a note on the face of the
plat or map noting the date the boundary was measured, which attribute(s) of the
water feature was/were located, and the caveat that the boundary is subject to
change due to natural causes and that it may or may not represent the actual
location of the limit of title.  When the surveyor is aware of natural or
artificial realignments or changes in such boundaries, the extent of those
changes and facts shall be shown or explained.

 
vii.
The relationship of the boundaries of the surveyed property (i.e. contiguity,
gaps, or overlaps) with its adjoiners, where ascertainable from Record Documents
and/or from field evidence gathered during the process of conducting the survey
of the property being surveyed. If the surveyed property is composed of multiple
parcels, the extent of any gaps or overlaps between those parcels shall be
identified.  Where gaps or overlaps are identified, the surveyor shall, prior to
preparation of the final plat or map, disclose this to the insurer and client
for determination of a course of action concerning junior/senior rights.

 
 

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viii.
When, in the opinion of the surveyor, the results of the survey differ
significantly from the record, or if a fundamental decision related to the
boundary resolution is not clearly reflected on the plat or map, the surveyor
shall explain this information with notes on the face of the plat or map.ix.A
note on the face of the plat or map explaining the site conditions that resulted
in a Relative Positional Precision that exceeds the maximum allowed under
Section 3.E.v. of these standards.

 
x.
A note on the face of the plat or map identifying the title commitment/policy
number, effective date and name of the insurer for any title work provided to
the surveyor.

 
C.
Easements, Servitudes, Rights of Way, Access and Record Documents

 
i.
The width and recording information of all plottable rights of way, easements
and servitudes burdening and benefitting the property surveyed, as evidenced by
Record Documents which have been provided to the surveyor.

 
ii.
A note regarding any right of way, easement or servitude evidenced by a Record
Document which has been provided to the surveyor (a) the location of which
cannot be determined from the record document, or (b) of which there was no
observed evidence at the time of the survey, or (c) that is a blanket easement,
or (d) that is not on, or does not touch, the surveyed property, or (e) that
limits access to an otherwise abutting right of way, or (f) in cases where the
surveyed property is composed of multiple parcels, which of such parcels the
various rights of way, easements, and servitudes cross.

 
iii.
A note if no physical access to a public way was observed in the process of
conducting the survey.

 
iv.
The width of abutting rights of way and the source of such information (a) where
available from the controlling jurisdiction or (b) where disclosed in Record
Documents provided to the surveyor.

 
v.
The identifying titles of all recorded plats, filed maps, right of way maps, or
similar documents which the survey represents, wholly or in part, with their
recording or filing data.

 
vi.
For non-platted adjoining land, names and recording data identifying adjoining
owners according to current public records.  For platted adjoining land, the
recording data of the subdivision plat.

 
vii.
Platted setback or building restriction lines which appear on recorded
subdivision plats or which were disclosed in Record Documents provided to the
surveyor.

 
D.
Presentation

 
i.
The plat or map shall be drawn on a sheet of not less than 8 ½ by 11 inches in
size at a legible, standard engineering scale, with that scale clearly indicated
in words or numbers and with a graphic scale. When recordation or filing of a
plat or map is required by law, such plat or map shall be produced in recordable
form. The boundary of the surveyed property drawn in a manner that distinguishes
it from other lines on the plat or map.  A north arrow (with north to the top of
the drawing when practicable), a legend of symbols and abbreviations, and a
vicinity map showing the property in reference to nearby highway(s) or major
street intersection(s).

 
ii.
Supplementary or detail diagrams when necessary.

 
iii.
If there are no visible buildings on the surveyed property, a note stating “No
buildings existing on the surveyed property” shall appear on the face on the
survey.

 
 

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iv.
The surveyor’s project number (if any), and the name, registration or license
number, signature, seal, street address, telephone number, and email address of
the surveyor who performed the survey. The date(s) of any revisions made by said
surveyor.

 
v.
Sheet numbers where the plat or map is composed of more than one sheet.

 
vi.
The caption “ALTA/ACSM Land Title Survey.”

7.            Certification - The plat or map of an ALTA/ACSM Land Title Survey
shall bear only the following certification, unaltered, except as may be
required pursuant to Section 3.B. above:

To (name of insured, if known), (name of lender, if known), (name of insurer, if
known), (names of others as negotiated with the client):

This is to certify that this map or plat and the survey on which it is based
were made in accordance with the 2011 Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys, jointly established and adopted by ALTA and NSPS,
and includes Items   of Table A thereof. The field work was completed on
___________.

 
Date of Plat or Map:_____  (Surveyor’s signature, printed name and seal with
Registration/License Number)

8.           Deliverables - The surveyor shall furnish copies of the plat or map
of survey to the insurer and client, and as otherwise negotiated with the
client. Hard copies shall be on durable and dimensionally stable material of a
quality standard acceptable to the insurer. Digital copies of the plat or map
may be provided in addition to, or in lieu of, hard copies in accordance with
the terms of the contract. When required by law or requested by the client, the
plat or map shall be produced in recordable form and recorded or filed in the
appropriate office or with the appropriate agency.

LEGAL DISCLAIMER
Fidelity Due Diligence Services (FDDS) is a “service provider” for Fidelity
National Title Group (FNTG) and is a dba of American Surveying and Mapping, Inc.
(ASM).  ASM is an independent contractor that is not owned by FNTG nor an agent.
FNTG is not responsible and does not make warranties or guarantees regarding the
products or services offered by the service provider. FNTG is not a land
surveying, zoning or engineering company. FNTG consist of Fidelity National
Title Insurance Company, Chicago Title Insurance Company, Ticor Title Insurance,
Commonwealth Land Title Insurance Corporation, Lawyers Title Insurance
Corporation, Security Union Title Insurance Company and Alamo Title Insurance
Company and all respective trade marks, services marks and logos belonging to
FNTG are with FNTG’s express permission.

 
 

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TABLE A

OPTIONAL SURVEY RESPONSIBILITIES AND SPECIFICATIONS

NOTE:  The items of Table A must be negotiated between the surveyor and
client.  It may be necessary for the surveyor to qualify or expand upon the
description of these items (e.g., in reference to Item 6(b), there may be a need
for an interpretation of a restriction). The surveyor cannot make a
certification on the basis of an interpretation or opinion of another party.
Notwithstanding Table A Items 5 and 11(b), if an engineering design survey is
desired as part of an ALTA/ACSM Land Title Survey, such services should be
negotiated under Table A, item 23.

If checked, the following optional items are to be included in the ALTA/ACSM
LAND TITLE SURVEY, except as otherwise qualified (see note above):

 
1.
 
__X__ Monuments placed (or a reference monument or witness to the corner) at all
major corners of the boundary of the property, unless already marked or
referenced by existing monuments or witnesses. . This item is subject to local
jurisdictions that have specific requirements for setting monuments such as
California and Washington. The settings of monuments in these states may require
a plat submittal review and approval process, which would require additional
negotiations. 

 
2.
__X__
Address(es) if disclosed in Record Documents, or observed while conducting the
survey.

 
3.
 
__X__ Flood zone classification (with proper annotation based on federal Flood
Insurance Rate Maps or the state or local equivalent) depicted by scaled map
location and graphic plotting only.

 
4.
__X__ Gross land area (and other areas if specified by the client).

 
5.
_____ Vertical relief with the source of information (e.g. ground survey or
aerial map), contour interval, datum, and originating benchmark identified.

 
6.
 
__X__ (a) Current zoning classification, as provided by the insurer, or as
obtained by surveyor from contacting the local county or municipality. A note
referencing the source of the information shall be included.

 
__X__
(b) Current zoning classification and building setback requirements, height and
floor space area restrictions as set forth in that classification, as provided
by the insurer. If none, so state. Or a note referencing the source of the
information shall be included.

 
7.
__X__
(a) Exterior dimensions of all buildings at ground level.

(b) Square footage of:

 
__X__
(1) exterior footprint of all buildings at ground level.

_____      (2) other areas as specified by the client.

 
__X__
(c) Measured height of all buildings above grade at a location specified by the
client. If no location is specified, the point of measurement shall be
identified.

 
 
8.
__X__
Substantial features observed in the process of conducting the survey (in
addition to the improvements and features required under Section 5 above) such
as parking lots, billboards, signs, swimming pools, landscaped areas, etc.

 
 

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9.
__X__
Striping, number and type (e.g. handicapped, motorcycle, regular, etc.) of
parking spaces in parking areas, lots and structures.

 
10.
__X__
(a) Determination of the relationship and location of certain division or party
walls designated by the client with respect to adjoining properties (client to
obtain necessary permissions).

 
_____
(b) Determination of whether certain walls designated by the client are plumb
(client to obtain necessary permissions).

11.
Location of utilities (representative examples of which are listed below)
existing on or serving the surveyed property as determined by:

__X__     (a) Observed evidence.

 
_____
(b) Observed evidence together with evidence from plans obtained from utility
companies or provided by client, and markings by utility companies and other
appropriate sources (with reference as to the source of information).

 
·
Railroad tracks, spurs and sidings;

 
·
Manholes, catch basins, valve vaults and other surface indications of
subterranean uses;

 
·
Wires and cables (including their function, if readily identifiable) crossing
the surveyed property, and all poles on or within ten feet of the surveyed
property. Without expressing a legal opinion as to the ownership or nature of
the potential encroachment, the dimensions of all encroaching utility pole
crossmembers or overhangs; and

 
·
utility company installations on the surveyed property.

 
 
Note - With regard to Table A, item 11(b), source information from plans and
markings will be combined with observed evidence of utilities to develop a view
of those underground utilities.  However, lacking excavation, the exact location
of underground features cannot be accurately, completely and reliably depicted. 
Where additional or more detailed information is required, the client is advised
that excavation may be necessary.

 
12.
__X__
Governmental Agency survey-related requirements as specified by the client, such
as for HUD surveys, and surveys for leases on Bureau of Land Management managed
lands.

 
13.
__X__
Names of adjoining owners of platted lands according to current public records.

 
14.
__X__
Distance to the nearest intersecting street as specified by the client.

 
15.
_____
Rectified orthophotography, photogrammetric mapping, airborne/mobile laser
scanning and other similar products, tools or technologies as the basis for the
showing the location of certain features (excluding boundaries) where ground
measurements are not otherwise necessary to locate those features to an
appropriate and acceptable accuracy relative to a nearby boundary.  The surveyor
shall (a) discuss the ramifications of such methodologies (e.g. the potential
precision and completeness of the data gathered thereby) with the insurer,
lender and client prior to the performance of the survey and, (b) place a note
on the face of the survey explaining the source, date, precision and other
relevant qualifications of any such data.

 
 
16.
__X__
Observed evidence of current earth moving work, building construction or
building additions.

 
17.
__X__
Proposed changes in street right of way lines, if information is available from
the controlling jurisdiction. Observed evidence of recent street or sidewalk
construction or repairs.

 
 
18.
__X__
Observed evidence of site use as a solid waste dump, sump or sanitary landfill.

 
 
19.
__X___
Location of wetland areas as delineated by appropriate authorities.

 
 
 

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20.
_____
(a) Locate improvements within any offsite easements or servitudes benefitting
the surveyed property that are disclosed in the Record Documents provided to the
surveyor and that are observed in the process of conducting the survey (client
to obtain necessary permissions).

 
_____
(b) Monuments placed (or a reference monument or witness to the corner) at all
major corners of any offsite easements or servitudes benefitting the surveyed
property and disclosed in Record Documents provided to the surveyor (client to
obtain necessary permissions).

 
21.
__X__
Professional Liability Insurance policy obtained by the surveyor in the minimum
amount of $1,000,000.00 to be in effect throughout the contract
term. Certificate of Insurance to be furnished upon request.

 
22.
__X__
Current zoning classification and building setback requirements, height and
floor space area restrictions as set forth in that classification.

 
23.
_____
________________________________________________________________________

Adopted by the Board of Governors, American Land Title Association, on October
13, 2010.
American Land Title Association, 1828 L St., N.W., Suite 705, Washington, D.C.
20036.

Adopted by the Board of Directors, National Society of Professional Surveyors,
on November 15, 2010.
National Society of Professional Surveyors, Inc., a member organization of the
American Congress on Surveying and Mapping, 6 Montgomery Village Avenue, Suite
403, Gaithersburg, MD 20879
 
 
 

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