Exhibit 10.22

 

AGREEMENT OF PURCHASE AND SALE

 

This Agreement, dated as of April 2, 2014 (the "Effective Date"), is between,
PRAIRIE TOWNE LLC, an Illinois limited liability company ("Seller"), and
AMERICAN REALTY CAPITAL IV, LLC, a Delaware limited liability company ("Buyer").

 

ARTICLE I

PURCHASE AND SALE OF PROPERTY

 

Section 1.1           Sale.

 

Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller,
subject to the terms, covenants and conditions set forth herein, all of Seller's
right, title and interest in and to the following property (collectively, the
"Property"):

 

(a)          Real Property. That certain real property commonly known as
"Prairie Towne Center," located at 2450 West Schaumburg Road, Schaumburg,
Illinois, as more particularly described in Exhibit A attached hereto and made a
part hereof (the "Land"), together with (1) all improvements located thereon
(the "Improvements"), (2) all rights, benefits, privileges, easements,
tenements, hereditaments, rights-of-way and other appurtenances thereon or in
any way appertaining thereto, including all oil, gas and other mineral rights,
development rights, air and water rights, and drilling and irrigation rights,
(3) all strips and gores and any land lying in the bed of any street, road or
alley, open or proposed, adjoining such Land, (4) any award made or to be made
after the Effective Date (as defined in Section 9.14 below), or settlement in
lieu thereof, for the Property by reason of condemnation, eminent domain or
exercise of police power that occurs after the Effective Date, and (5) all of
Seller's right, title and interest in and to all construction, operating and
reciprocal easement agreements affecting the Land or the Improvements (the
"REAs") (collectively, the "Real Property");

 

(b)          Leases. All of the landlord's interest in and to all of the Leases
(as defined in Section 2.1(b) below) of the Real Property, including Leases
entered into after the date of this Agreement as permitted by this Agreement;

 

(c)          Tangible Personal Property. All of the equipment, machinery,
furniture, furnishings, supplies and other tangible personal property, if any,
owned by Seller and now or hereafter located on and used exclusively in the
operation, ownership or maintenance of the Real Property (collectively, the
"Tangible Personal Property"), but specifically excluding from the Tangible
Personal Property (1) any items of personal property owned by tenants of the
Property, (2) any items of personal property in Seller's property management
office, if any, located on the Real Property, (3) any items of personal property
owned by third parties and leased to Seller, and (4) proprietary computer
software, systems and equipment and related licenses used in connection with the
operation or management of the Property; and

 

(d)          Intangible Personal Property. To the extent assignable at no cost
to Seller, all intangible personal property, if any, owned by Seller and related
to the Real Property and the Improvements, including, without limitation: any
trade names, trademarks, service marks, and

 

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logos associated with the Real Property and the Improvements (specifically
including the name "Prairie Towne Center"); any plans and specifications and
other architectural and engineering drawings for the Improvements; any
warranties; any copyrights and intellectual property relating to the Real
Property or Improvements; any Service Contracts (as defined in Section 2.1(b)
below) and other contract rights related to the Property (but only to the extent
Seller's obligations thereunder are expressly assumed by Buyer pursuant to the
Assignment of Leases as defined in Section 8.3(a)(3) below); and any
governmental permits, land use entitlements, variances, waivers, permits,
approvals and licenses (including any pending applications) (collectively, the
"Intangible Personal Property"). To the extent assignable at no material cost to
Seller, Seller agrees that it shall use commercially reasonable efforts to have
all non-expired warranties and guaranties relating to the Property assigned to
Buyer.

 

Section 1.2           Purchase Price.

 

(a)          The purchase price of the Property is Twenty-Five Million Five
Hundred Thousand Dollars ($25,500,000.00) (the "Purchase Price").

 

(b)          The Purchase Price shall be paid as follows:

 

(1)         Within two (2) business days after the execution of this Agreement,
Buyer shall deposit in escrow with Benchmark Title Services, 2000 McKinney
Avenue, 4th Floor, Dallas, Texas 75201, Attention: Brett Poston (the "Title
Company"), cash or other immediately available funds in the amount of Five
Hundred Thousand Dollars ($500,000.00) (the "Initial Deposit"). If Buyer
exercises the Extension Option as provided in Section 8.2 below, Buyer shall
deposit an additional Five Hundred Thousand Dollars ($500,000.00) with the Title
Company within two (2) business days after Buyer's exercise of the Extension
Option (the "Additional Deposit" and together with the Initial Deposit,
collectively, the "Deposit"). The Deposit is non-refundable except as otherwise
explicitly provided herein.

 

The Deposit shall be held in an interest bearing account upon receipt of a W-9
from Buyer and all interest thereon, less investment fees, if any, shall be
deemed a part of the Deposit. If the sale of the Property as contemplated
hereunder is consummated, then the Deposit shall be paid to Seller at the
Closing (as defined in Section 1.2(b)(2) below) and credited against the
Purchase Price. If the sale of the Property is not consummated due to Seller's
default hereunder, OR SELLER OTHERWISE DEFAULTS IN THE PERFORMANCE OF ITS
OBLIGATIONS HEREUNDER, then Buyer may elect, as Buyer's sole and exclusive
remedy, EITHER TO: (1) terminate this Agreement and receive a refund of the
Deposit, AND SELLER SHALL REIMBURSE BUYER FOR ALL REASONABLE OUT-OF-POCKET COSTS
AND EXPENSES INCURRED IN CONNECTION WITH THE PROPERTY AND THIS AGREEMENT, NOT TO
EXCEED SEVENTY FIVE THOUSAND DOLLARS ($75,000.00) in which event neither party
shall have any further rights or obligations hereunder except as provided in
Sections 6.1, 9.3 and 9.9 below, or (2) enforce specific performance of this
Agreement. Notwithstanding anything to the contrary contained herein, Buyer's
recoveries under Sections 1.2(B)(1), 3.2 AND 4.1(d) of this Agreement shall
never

 

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exceed the aggregate amount of SEVENTY FIVE THOUsand Dollars ($75,000.00). Buyer
shall not have any other rights or remedies hereunder as a result of any default
by Seller prior to Closing, and Buyer hereby waives any other such remedy as a
result of a default hereunder by Seller. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IF SELLER INTENTIONALLY DEFAULTS OR FAILS TO CONVEY TITLE TO THE
PROPERTY TO BUYER IN ACCORDANCE WITH THIS AGREEMENT BECAUSE SELLER CONVEYED SUCH
TITLE TO A THIRD PARTY IN INTENTIONAL BREACH OF THE TERMS HEREOF, AND SPECIFIC
PERFORMANCE IS NOT AVAILABLE TO BUYER, BUYER SHALL HAVE THE RIGHT TO SEEK AND
ENFORCE ALL LEGAL AND EQUITABLE REMEDIES; PROVIDED, HOWEVER, THAT SELLER'S
LIABILITY SHALL IN ALL CASES BE SUBJECT TO THE LIMITATIONS CONTAINED IN
SECTION 9.19 HEREOF. IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY BUYER
HEREUNDER, THEN SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AS ITS
SOLE AND EXCLUSIVE REMEDY. THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES,
IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT PRIOR
TO CLOSING, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER
NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES
EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A
REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT. BY
PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF
THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT
BUYER'S OBLIGATIONS UNDER SECTIONS 6.1, 9.3 AND 9.9.

 

INITIALS:                 SELLER ________           BUYER ________

 

(2)         The balance of the Purchase Price (plus or minus the prorations
pursuant to Section 8.5 hereof) shall be paid to Seller in cash or by wire
transfer of other immediately available funds at the consummation of the
purchase and sale contemplated hereunder (the "Closing").

 

(3)         At Buyer's sole election, the Deposit may be invested on behalf of
Buyer; provided that any direction to the Title Company for such investment
shall be expressed in writing, and also provided that the Title Company is in
receipt of the taxpayer's identification number and investment forms as may be
required by the Title Company. The Title Company will, upon request, furnish
information concerning its procedures and fee schedules for investment. In the
event that the Title Company is requested to invest deposits hereunder, the
Title Company is not responsible for any loss of principal or interest, which
may be incurred as a result of making the investments or redeeming said
investment for the purposes of this Agreement.

 

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(4)         Except as to deposits of funds for which the Title Company has
received express written direction concerning investment or other handling, the
parties hereto direct the Title Company NOT to invest any funds deposited by the
parties under the terms of this Agreement. In the absence of an authorized
direction to invest funds, the parties hereto agree that the Title Company shall
be under no duty to invest or reinvest any such funds at any time held by it
hereunder; and, further, that Title Company may commingle such funds with other
deposits or with its own funds and may use any part or all of such funds for its
own benefit without obligation to any party for interest or earnings derived
thereby, if any. Provided, however, nothing herein shall diminish Title
Company's obligation to apply the full amount of such funds in accordance with
the terms of this Agreement.

 

(5)         The parties also hereby authorize and direct the Title Company to
accept, comply with, and obey any and all writs, orders, judgments or decrees
entered or issued by any court with jurisdiction, and in case the Title Company
obeys or complies with any such writ, order, judgment or decree of any court, it
shall not be liable to any of the parties hereto or any other person, by reason
of such compliance, notwithstanding any such writ, order, judgment or decree
being subsequently reversed, modified, annulled, set aside or vacated. In case
the Title Company is made a party defendant to any suit or proceedings regarding
this Agreement, the undersigned, for themselves, their successors, and assigns,
jointly and severally, agree to pay to Title Company, upon written demand, all
out of pocket costs, reasonable attorneys' fees, and expenses incurred with
respect thereto. The Title Company shall have a lien on the Deposit for any and
all such costs, fees and expenses. If said costs, fees and expenses are not
paid, then the Title Company shall have the right to reimburse itself out of the
Deposit.

 

ARTICLE II

CONDITIONS

 

Section 2.1           Buyer's Conditions Precedent.

 

Subject to the provisions of Section 9.3 hereof, Seller has provided and, for so
long as this Agreement remains in effect (but subject to the terms hereof),
shall provide Buyer and its consultants and other agents and representatives
with reasonable access to the Property to perform Buyer's inspections and review
and determine the present condition of the Property. Seller has delivered or
made available to Buyer at Seller's offices or at the Real Property, or shall
within the Delivery Period (as defined below) deliver or make available to Buyer
at Seller's offices or at the Real Property, copies of all Due Diligence
Materials (as defined in Section 2.2 below) in Seller's possession.
Notwithstanding anything to the contrary contained herein, the Due Diligence
Materials shall expressly exclude (i) those portions of the Due Diligence
Materials that would disclose Seller's cost of acquisition of the Real Property,
or any estimates of costs to repair, replace, remediate or maintain the Real
Property (except to the extent publicly available), (ii) any reports,
presentations, summaries and the like prepared for any of Seller’s boards,
committees, partners or investors in connection with its consideration of the
acquisition of the Real Property, construction of the Improvements or sale of
the Property, provided that all environmental reports shall be deemed Due
Diligence Materials, (iii) any proposals, letters of intent, draft contracts or
the like prepared by or for other prospective purchasers of the Property or any
part thereof, (iv) Seller's internal memoranda, attorney-client privileged
materials, or

 

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internal appraisals, structural or physical inspection reports, and (v) any
information which is the subject of a confidentiality agreement between Seller
and a third party other than Leases and Service Contracts (each as defined
below) (the items described in clauses (i), (ii) (iii), (iv) and (v) being
collectively referred to as the "Confidential Information"). In no event shall
third party prepared environmental site assessments or third party prepared
structural or physical inspection reports be deemed to be Confidential
Information. In the event any documents, instruments, agreements or other
information (collectively, the "Excluded Information") are excluded from the Due
Diligence Materials as a result of the application by Seller of the provisions
of clause (v) of Section 2.1 above, Seller hereby represents and warrants that,
to Seller's knowledge, (i) nothing in the Excluded Information does or could
prevent Seller from performing each and all of Seller's obligations under this
Agreement in accordance with the terms of this Agreement and (ii) no document,
instrument or agreement constituting part of the Excluded Information does or
will encumber the Property or create any obligation or restriction that would be
applicable to the Property or the ownership or operation thereof by Buyer. The
"Delivery Period" shall mean the period, which ends ten (10) days after the
Effective Date, except relating to subsection (f) below. Buyer's obligation to
purchase the Property is conditioned upon Buyer's review and approval of the
following, within the applicable time periods described in Sections 2.2 and 4.1
hereof:

 

(a)          Title to the Property and survey matters in accordance with Article
IV below.

 

(b)          The Due Diligence Materials, including, but not limited to, all
tenant leases, any guaranties thereof and any other occupancy agreements, and
all amendments and modifications thereof (collectively, the "Leases") affecting
the Property, including all Leases identified on Exhibit B attached hereto, and
of all contracts pertaining to the operation of the Property, including all
management, leasing, service and maintenance agreements, and equipment leases
(collectively, the "Service Contracts").

 

(c)          The physical condition of the Property.

 

(d)          The zoning, land use, building, environmental and other statutes,
rules, or regulations applicable to the Property and the environmental condition
of the Property.

 

(e)          The tenant correspondence files, operating statements and books and
records pertaining to the operation of the Property in each case for each of the
three (3) most recent years during which the Property has been owned by Seller
and for the current year (to the extent available), current real estate tax
bills, any warranties, licenses, permits, certificates of occupancy, plans and
specifications, and any current rent roll, current accounts receivable schedule
and list of Tangible Personal Property in such form as Seller shall have in its
possession for the Property, and other agreements or documents pertaining to the
Property which will be binding on Buyer after Closing.

 

(f)          Any other matters Buyer deems reasonably relevant to the Property.

 

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Section 2.2           Contingency Period.

 

Buyer shall have until the date that is thirty (30) days after the Effective
Date (such period being referred to herein as the "Contingency Period") to
review and approve only the matters described in Sections 2.1(a)-(f) above
(subject to the provisions of Section 4.1 below as to title and survey matters)
in Buyer's sole discretion. If Buyer determines to proceed with the purchase of
the Property, then Buyer shall, before the end of the Contingency Period, so
notify Seller in writing (the "Approval Notice"), in which case Buyer shall be
deemed to have approved all of the matters described in Sections 2.1(a)-(f)
above (subject to the provisions of Section 4.1 below as to title and survey
matters), including, without limitation, all documents, Service Contracts and
other contracts, agreements, Leases, reports (including all property condition
reports, environmental site assessments, and soils and engineering reports) and
other items and materials related to the Property prepared by or on behalf of
Seller or otherwise in Seller's possession or control (collectively, the "Due
Diligence Materials"), and the Deposit shall become nonrefundable except as
expressly provided herein. If before the end of the Contingency Period Buyer
gives written notice to Seller that Buyer has elected to terminate this
Agreement, or if Buyer fails to give Seller the Approval Notice, then Buyer
shall be deemed to have elected to terminate this Agreement, the Deposit shall
be immediately returned to Buyer, and neither party shall have any further
rights or obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9
below. Concurrently with the execution of this Agreement, Buyer has delivered to
the Title Company the sum of One Hundred and No/100 Dollars ($100.00) (such
$100.00 being referred to herein as the "Independent Consideration"), which
amount shall be delivered to Seller as valuable consideration for the
Contingency Period described above and the execution of this Agreement by
Seller.

 

ARTICLE III

BUYER'S EXAMINATION

 

Section 3.1           Representations and Warranties of Seller.

 

Subject to the disclosures contained in Schedule 1 attached hereto and made a
part hereof (the "Disclosure Items"), and matters contained in the Due Diligence
Materials, Seller hereby makes the following representations and warranties.
Notwithstanding anything to the contrary contained herein or in any document
delivered in connection herewith, Seller shall have no liability with respect to
the Disclosure Items.

 

(a)          Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Seller's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.

 

(b)          Seller is not a "foreign person" as defined in Section 1445 of the
Internal Revenue Code of 1986, as amended (the "Code") and any related
regulations.

 

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(c)          (i) This Agreement has been, and all documents executed by Seller
which are to be delivered to Buyer or the Title Company at Closing will be, duly
authorized, executed and delivered by Seller, and (ii) this Agreement does not
and such other documents will not violate any provision of any agreement or
judicial order to which Seller is a party or to which Seller or, to the best of
Seller's knowledge, the Property is subject.

 

(d)          The only Leases in force for the Property are set forth in the rent
roll (the "Rent Roll") attached hereto as Exhibit B and made a part hereof. To
the best of Seller's knowledge, no default by Seller, as landlord, or any tenant
under a Lease has occurred under any of the Leases which continued beyond the
expiration of any applicable notice and cure period and remains uncured. Seller
has delivered (or will promptly deliver during the Delivery Period) true,
correct, and complete copies of each Lease (including all guarantees,
amendments, letter agreements, addenda and/or assignments thereof) and subleases
of which Seller has knowledge, if any, and any other agreements between Seller
(or any affiliate of Seller) and a tenant under a Lease (or any affiliate of a
tenant under a Lease) described in the Rent Roll. The Rent Roll is true, correct
and complete, and except as expressly set forth on the Rent Roll or otherwise
disclosed in any of the Due Diligence Materials delivered by Seller to Buyer
pursuant to this Agreement:

 

(A)         To Seller's knowledge, no tenant has made any written claim or has
any other claim, whether or not in writing: (i) that Seller has defaulted in
performing any of its obligations under any of the Leases which has not
heretofore been cured, (ii) that any condition currently exists which with the
passage of time or giving of notice, or both, would constitute any such default,
(iii) that such tenant is currently entitled to any reduction in, refund of, or
counterclaim, offset, allowance, credit, rebate, concession or deduction
against, or is otherwise disputing, any rents or other charges paid, payable or
to become payable by such tenant, including, but not limited to, CAM and other
similar charges, or (iv) that such tenant is currently entitled to cancel its
Lease or to be relieved of its operating covenants thereunder. No tenant has
given Seller any written notice of its intention to terminate its Lease or
requesting a reduction or abatement of rent or requesting consent or assign or
terminate its Lease;

 

(B)         to Seller's knowledge, all of the Leases are valid and are in full
force and effect in accordance with their terms. Seller has not sent a notice of
termination with respect to any of the Leases;

 

(C)         the Leases have not been modified, amended or supplemented and there
are no other agreements or commitments (oral or written) between Seller and any
of the tenants;

 

(D)         (i) no construction, alteration, decoration or other work remains to
be performed under any Lease by the landlord thereunder and (ii) all
construction allowances or other sums to be paid to any tenants have been paid.
There are no written promises, understandings or commitments between Seller and
any person or entity with respect to the foregoing which would be binding upon
Buyer other than those contained in the documents comprising the Leases listed
in the Rent Roll;

 

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(E)         all brokerage commissions and other compensation and fees payable by
reason of the Leases which have been earned through the Effective Date of this
Agreement have been fully paid or will be paid by Seller as of or prior to
Closing. There exists no exclusive or continuing leasing or brokerage agreements
as to any premises in the Property, except for the existing listing agreement
with Newmark Midwest Region, LLC (dba Newmark Grubb, Knight and Frank);

 

(F)         no tenant has paid any rent for any period of more than thirty (30)
days in advance;

 

(G)         each tenant is now in possession of the premises leased to it under
its Lease;

 

(H)         to Seller's knowledge, none of the tenants have (1) filed a petition
in bankruptcy in any federal or state court, (2) been the subject of a
bankruptcy petition filed in any federal or state court that has not been
dismissed or (3) made an assignment for the benefit of creditors of all or a
substantial portion of its assets;

 

(I)         no renewal, extension or expansion options have been granted to any
tenant, except as set forth in such tenant's Lease;

 

(J)         Seller has the sole right to collect rent under each Lease and such
right has not been assigned, pledged, hypothecated, or otherwise encumbered in
any manner that will survive the Closing;

 

(K)         except for any security deposits identified on the Rent Roll, there
are no security deposits that have been deposited with Seller or otherwise
chargeable to Seller's account by any party under the Leases; and

 

(L)         no tenant is entitled to any free rent periods or rental abatements,
concessions and other inducements for any period subsequent to Closing.

 

(e)          To the best of Seller's knowledge, the only Service Contracts in
effect for the Property are set forth in a list of Service Contracts attached
hereto as Exhibit G and made a part hereof. All amounts due and payable by
Seller under the REAs and Service Contracts have been paid and Seller has not
received written notice of default under any of the REAs or any of the Service
Contracts.

 

(f)          To the best of Seller's knowledge, there is no litigation or
governmental proceeding (including, but not limited to any condemnation
proceeding) pending or threatened with respect to the Property, except as
disclosed in Schedule 1, or with respect to Seller which impairs Seller's
ability to perform its obligations under this Agreement, except for any personal
injury or property damage action for which there is adequate insurance coverage
and which is disclosed on Schedule 1.

 

(g)          To the best of Seller's knowledge, Seller has received no written
notice from any governmental authority of any violation of any law applicable to
the Property

 

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(including, without limitation, any Environmental Law as defined in Section
3.6(a)(2) below) that has not been corrected.

 

(h)          To the best of Seller's knowledge, all of the Due Diligence
Materials delivered or made available by Seller to Buyer in connection with the
Property are true and complete copies of such items in Seller's possession,
which are used by Seller in the operation of the Property.

 

(i)          Seller has been duly organized, is validly existing, and is in good
standing in the state in which it was formed, and, if so required to, is
qualified to do business in the state in which the Real Property is located.

 

(j)          Seller has not received any written notices of violations of any
applicable ordinances, regulations, or other laws with respect to the Property
(including, without limitation, any Environmental Law), and, to the best of
Seller's knowledge, no such violations currently exist.

 

(k)          Seller is not, and shall not become, a person or entity with whom
U.S. persons or entities are restricted from doing business under regulations of
the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury
(including those named on OFAC's Specially Designated and Blocked Persons list)
or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, threaten to Commit, or Support Terrorism), or other governmental action
(such persons and entities being "Prohibited Persons").

 

(l)          To the best of Seller's knowledge, on the Closing Date, there will
be no contracts for the management of the Premises, or any contracts, collective
bargaining agreements or commitments of any kind with any employees of the
Seller or with any labor organization which will be binding on or create any
obligations upon the Property, or upon Buyer.

 

(m)          Seller is not a "plan" which is subject to nor a "fiduciary" of any
such "plan" nor an entity a holding "plan assets" of any such "plan" (as those
terms are defined under ERISA (as defined below)) nor an entity whose assets are
deemed to be "plan assets" under ERISA. Buyer shall not have any obligation to
close the transaction contemplated by this Agreement if the transaction for any
reason constitutes by Seller a prohibited transaction under ERISA or if Seller's
representation is found to be false or misleading in any respect. As used
herein, the term "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and its applicable regulations as issued by the Department of
Labor and the Internal Revenue Service.

 

(n)          To the best of Seller's knowledge, Seller has not received any
written notice of any governmental action, proceeding, litigation, or
investigation pending or threatened against Seller or the Property, that arises
out of Seller's ownership of the Property.

 

(o)          There are no options to purchase or rights of first refusal
affecting or relating to the Property (other than possible rights of first
refusal for tenant expansion space as may be contained in any Lease).

 

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(p)          Except as may otherwise be disclosed by Seller to Buyer as part of
the Due Diligence Materials to be supplied by Seller to Buyer, and except as
disclosed in Schedule 1, no construction agreements, contracts or plans or any
agreements, contract or plans relating to any capital expenditures or repairs
relating to the Property have been entered into on behalf of Seller that will
not be completed by Closing. Seller has not entered into any undertakings or
commitments with any governmental authority, which require the payment of money
or the performance of any duty in connection with the ownership of the Property,
except as disclosed in Schedule 1. Seller has not received any written notice
from any governmental authority having jurisdiction over the Property, or from
any other person of, and, to Seller's knowledge, there does not exist any other
obligation to any such governmental authority for the performance of any capital
improvements, or other work to be performed by Seller, in or about the Property,
or donations of monies, or land (other than general real estate taxes), which
has not been completely performed and paid for, except as disclosed in Schedule
1.

 

Each of the representations and warranties of Seller contained in this Section
3.1: (1) shall be true in all material respects as of the date of Closing,
subject in each case to (A) any Exception Matters (as defined below), (B) the
Disclosure Items, and (C) other matters expressly permitted in this Agreement or
otherwise specifically approved in writing, and (2) shall survive the Closing as
provided in Section 3.3 below.

 

Section 3.2           No Liability for Exception Matters.

 

As used herein, the term "Exception Matter" shall refer to a matter which would
make a representation or warranty of Seller contained in this Agreement untrue
or incorrect and which is disclosed to Buyer in the Due Diligence Materials, the
Disclosure Items, or is currently a matter of public record, or is otherwise
discovered by Buyer before the Closing, including, without limitation, matters
disclosed in any tenant estoppel certificate or from interviews with tenants,
property managers or any other person. If Buyer first obtains knowledge of any
material Exception Matter after the Effective Date, and prior to Closing, and
such Exception Matter was not contained in the Due Diligence Materials or the
Disclosure Items, Buyer's sole remedy shall be to terminate this Agreement on
the basis thereof, upon written notice to Seller, within the earlier of: (a)
five (5) business days following Buyer's discovery of such Exception Matter, or
(b) the Closing, whichever occurs first, in which event the Deposit shall be
returned to Buyer, unless within five (5) days after receipt of such notice or
by the Closing, as the case may be, Seller notifies Buyer in writing that it
elects to attempt to cure or remedy such Exception Matter; in which event, there
shall be no return of the Deposit unless and until Seller is unable to so cure
or remedy within the time period set forth below. Notwithstanding anything to
the contrary contained herein, if an Exception Matter arises out of an
intentional breach of this Agreement by Seller (including, without limitation,
an intentional breach by Seller of a representation and warranty of Seller set
forth in this Agreement), the Deposit shall be returned to Buyer, and Seller
shall reimburse Buyer for all of Buyer's reasonable, out-of-pocket costs and
expenses, in connection with this Agreement and the Property, not to exceed
Seventy Five Thousand Dollars ($75,000.00). Seller shall be entitled to extend
the Closing Date (as defined in Section 8.2 below) for up to fifteen (15)
business days in order to attempt to cure or remedy any Exception Matter.
Buyer's failure to give notice within five (5) business days after it has
obtained knowledge of an Exception Matter shall be deemed a waiver by Buyer of
such Exception Matter. Seller shall have no obligation to cure, or remedy, any
Exception Matter, even if Seller has

 

10

 

 

notified Buyer of Seller's election to attempt to cure or remedy any Exception
Matter (except as specifically provided in Section 4.1(c) hereof), and, subject
to Buyer's right to terminate this Agreement as set forth above, Seller shall
have no liability whatsoever to Buyer with respect to any Exception Matters.
Upon any termination of this Agreement, neither party shall have any further
rights, nor obligations, hereunder, except as provided in Sections 6.1, 9.3 and
9.9 below. If Buyer obtains knowledge of any Exception Matter before the
Closing, but nonetheless elects to proceed with the acquisition of the Property,
Seller shall have no liability with respect to such Exception Matter,
notwithstanding any contrary provision, covenant, representation or warranty
contained in this Agreement or in any Other Documents (as defined in Section
9.19 below).

  

Section 3.3           Survival of Seller's Representations and Warranties of
Sale.

 

The representations and warranties of Seller contained herein in any Other
Documents shall survive for a period of nine (9) months after the Closing. Any
claim which Buyer may have against Seller for a breach of any such
representation or warranty, whether such breach is known or unknown, which is
not specifically asserted by written notice to Seller within such nine (9) month
period, shall not be valid or effective, and Seller shall have no liability with
respect thereto.

 

Section 3.4           Seller's Knowledge.

 

For purposes of this Agreement and any document delivered at Closing, whenever
the phrase "to the best of Seller's knowledge" or the "knowledge" of Seller or
words of similar import are used, they shall be deemed to mean and are limited
to the current actual knowledge only of Cathy Green and Paul Goodman, at the
times indicated only, and not any implied, imputed or constructive knowledge of
such individual(s) or of Seller or any Seller Related Parties (as defined in
Section 3.7 below), and without any independent investigation or inquiry having
been made or any implied duty to investigate, make any inquiries or review the
Due Diligence Materials. Furthermore, it is understood and agreed that such
individual(s) shall have no personal liability in any manner whatsoever
hereunder or otherwise related to the transactions contemplated hereby. Seller
hereby represents and warrants to Buyer that Cathy Green and Paul Goodman are
individuals within Seller that have day-to-day working knowledge of the Property
and the subject matter of the representations and warranties of Seller set forth
above.

 

Section 3.5           Representations and Warranties of Buyer.

 

Buyer represents and warrants to Seller as follows:

 

(a)          This Agreement and all documents executed by Buyer which are to be
delivered to Seller at Closing do not and at the time of Closing will not
violate any provision of any agreement or judicial order to which Buyer is a
party or to which Buyer is subject.

 

(b)          Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.

 

11

 

 

(c)          Buyer has been duly organized, is validly existing and is in good
standing in the state in which it was formed, and, if required to do so, at
Closing, will be qualified to do business in the state in which the Real
Property is located. This Agreement has been, and all documents executed by
Buyer which are to be delivered to Seller at Closing will be, duly authorized,
executed and delivered by Buyer.

 

(d)          Buyer is purchasing the Property as investment rental property, and
not for Buyer's own operations or use.

 

(e)          Other than Seller's Broker (as defined in Section 6.1 below) and
other than consultants contacted by Buyer ("Buyer's Consultants") (which Buyer
shall be obligated to pay and which Seller shall have no obligation to pay),
Buyer has had no contact with any broker or finder with respect to the Property.

 

(f)          Buyer is not, and shall not become, a person or entity with whom
U.S. persons or entities are restricted from doing business under regulations of
OFAC (including those named on OFAC's Specially Designated and Blocked Persons
list) or under any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, threaten to Commit, or Support Terrorism), or other governmental action
(such persons and entities being "Prohibited Persons").

 

Each of the representations and warranties of Buyer contained in this Section
shall be deemed remade by Buyer as of the Closing and shall survive the Closing
for a period of nine (9) months.

 

Section 3.6           Buyer's Independent Investigation.

 

(a)          By Buyer electing to proceed under Section 2.2, Buyer will be
deemed to have acknowledged and agreed that it has been given a full opportunity
to inspect and investigate each and every aspect of the Property as of the end
of the Contingency Period, either independently or through agents of Buyer's
choosing, including, without limitation:

 

(1)         All matters relating to title and survey, together with all
governmental and other legal requirements such as taxes, assessments, zoning,
use permit requirements and building codes.

 

(2)         The physical condition and aspects of the Property, including,
without limitation, the interior, the exterior, the square footage within the
improvements on the Real Property and within each tenant space therein, the
structure, seismic aspects of the Property, the foundation, roof, paving,
parking facilities, utilities, and all other physical and functional aspects of
the Property. Such examination of the physical condition of the Property shall
include an examination for the presence or absence of Hazardous Materials, as
defined below, which shall be performed or arranged by Buyer (subject to the
provisions of Section 9.3 hereof) at Buyer's sole expense. For purposes of this
Agreement, "Hazardous Materials" shall mean inflammable explosives, radioactive
materials, asbestos, asbestos–containing materials, polychlorinated biphenyls,
lead, lead-based paint, radon, under and/or above ground tanks, hazardous
materials, hazardous wastes, hazardous substances, oil, or related materials,
which are listed or regulated in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 6901, et
seq.), the Resources Conservation and

 

12

 

 

Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.), the Clean Water Act (33
U.S.C. Section 1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section
1401, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801, et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.), and any other applicable federal, state or local laws (collectively,
"Environmental Laws").

 

(3)         Any easements and/or access rights affecting the Property.

 

(4)         The Leases and all matters in connection therewith, including,
without limitation, the ability of the tenants to pay the rent and the economic
viability of the tenants.

 

(5)         The Service Contracts and any other documents or agreements of
significance affecting the Property.

 

(6)         All other matters of material significance affecting the Property,
including, but not limited to, the Due Diligence Materials.

 

(b)          Except as expressly stated in this Agreement and in the documents
to be delivered by Seller to Buyer at the Closing, Seller makes no
representation or warranty as to the truth, accuracy or completeness of any
materials, data or information delivered by Seller to Buyer in connection with
the transaction contemplated hereby. Buyer acknowledges and agrees that all
materials, data and information delivered by Seller to Buyer in connection with
the transaction contemplated hereby are provided to Buyer as a convenience only
and that any reliance on or use of such materials, data or information by Buyer
shall be at the sole risk of Buyer, except as otherwise expressly stated in this
Agreement. Without limiting the generality of the foregoing provisions, Buyer
acknowledges and agrees that (a) any environmental or other report with respect
to the Property which is delivered by Seller to Buyer shall be for general
informational purposes only, (b) Buyer shall not have any right to rely on any
such report delivered by Seller to Buyer, but rather will rely on its own
inspections and investigations of the Property and any reports commissioned by
Buyer with respect thereto, (c) neither Seller, any affiliate of Seller nor the
person or entity which prepared any such report delivered by Seller to Buyer
shall have any liability to Buyer for any inaccuracy in or omission from any
such report and (d) unless explicitly required to be delivered as a Due
Diligence Material pursuant to this Agreement, the failure to deliver any report
as to the environmental or other condition of the Property, including any
proposal for work at the Property which was not performed by Seller, shall not
be actionable by Buyer under this Agreement or otherwise.

  

(c)          EXCEPT AS EXPRESSLY SET FORTH IN SECTION 3.1 ABOVE AND ELSEWHERE IN
THIS AGREEMENT, BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS
SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS
AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ANY SELLER RELATED PARTIES, OR
THEIR AGENTS OR BROKERS, OR ANY OTHER PERSON ACTING OR PURPORTING TO ACT ON
BEHALF OF SELLER AS TO ANY MATTERS CONCERNING THE PROPERTY, INCLUDING WITHOUT
LIMITATION: (i) the quality, nature, adequacy

 

13

 

 

and physical condition and aspects of the Property, including, but not limited
to, the structural elements, seismic aspects of the Property, foundation, roof,
appurtenances, access, landscaping, parking facilities and the electrical,
mechanical, HVAC, plumbing, sewage, and utility systems, facilities and
appliances, the square footage within the improvements on the Real Property and
within each tenant space therein, (ii) the quality, nature, adequacy, and
physical condition of soils, geology and any groundwater, (iii) the existence,
quality, nature, adequacy and physical condition of utilities serving the
Property, (iv) the development potential of the Property, and the Property's
use, habitability, merchantability, or fitness, suitability, value or adequacy
of the Property for any particular purpose, (v) the zoning or other legal status
of the Property or any other public or private restrictions on use of the
Property, (vi) the compliance of the Property or its operation with any
applicable codes, laws, regulations, statutes, ordinances, covenants, conditions
and restrictions of any governmental or quasi-governmental entity or of any
other person or entity, (vii) the presence of Hazardous Materials on, under or
about the Property or the adjoining or neighboring property, (viii) the quality
of any labor and materials used in any improvements on the Real Property,
(ix) the condition of title to the Property, (x) the Leases, Service Contracts,
or other documents or agreements affecting the Property, or any information
contained in any rent roll furnished to Buyer for the Property, (xi) the value,
economics of the operation or income potential of the Property, or (xii) any
other fact or condition which may affect the Property, including without
limitation, the physical condition, value, economics of operation or income
potential of the Property. In addition, Seller shall have no legal obligation to
apprise Buyer regarding any event or other matter involving the Property which
occurs after the Effective Date or to otherwise update the Due Diligence Items,
unless and until an event or other matter occurs which would cause any
representation or warranty of Seller in this Agreement to be untrue or
misleading, or would cause Seller to be unable to remake any of its
representations or warranties contained in this Agreement.

 

Section 3.7           Release.

 

Without limiting the above, and subject to the representations and warranties of
Seller contained in Section 3.1 hereof, and subject to Seller's other express
representations, warranties or covenants in this Agreement and in the documents
to be delivered by Seller to Buyer at the Closing, Buyer on behalf of itself and
its successors and assigns waives its right to recover from, and forever
releases and discharges, Seller, Seller's affiliates, Seller's investment
advisor, the partners, trustees, beneficiaries, shareholders, members, managers,
directors, officers, employees and agents and representatives of each of them,
and their respective heirs, successors, personal representatives and assigns
(collectively, the "Seller Related Parties"), from any and all demands, claims,
legal or administrative proceedings, losses, liabilities, damages, penalties,
fines, liens, judgments, costs or expenses whatsoever (including, without
limitation, court costs and attorneys' fees and disbursements), whether direct
or indirect, known or unknown, foreseen or unforeseen, that may arise on account
of or in any way be connected with (i) the physical condition of the Property
including, without limitation, all structural and seismic elements, all
mechanical, electrical, plumbing, sewage, heating, ventilating, air conditioning
and other systems, the environmental condition of the Property and the presence
of Hazardous Materials on, under or about the Property, or (ii) any law or
regulation applicable to the Property, including, without limitation, any
Environmental Law and any other federal, state or local law.

 

14

 

 

Section 3.8           Survival.

 

The provisions of this Article III shall survive the Closing, subject to the
limitations and qualifications contained in such provisions and in Sections 9.11
and 9.19 hereof.

 

ARTICLE IV

TITLE

 

Section 4.1           Conditions of Title.

 

(a)          Upon execution of this Agreement, Seller shall order an updated
preliminary title report or commitment (the "Title Report") from the Title
Company, which shall be delivered to Buyer, together with copies of all
underlying documents relating to title exceptions referred to therein, promptly
upon Seller's receipt thereof, but in no event later than ten (10) days after
the Effective Date. Seller shall also furnish to Buyer within the Delivery
Period any existing survey of the Property in Seller's possession. Seller has
caused to be prepared and has delivered to Buyer a survey of the Property (the
"Existing Survey") dated March 5, 2014, certified to Seller, and prepared by
Edward J. Molloy and Associates, Ltd., an Illinois Professional Design Firm,
License No. 184-002910. Within ten (10) business days after the Effective Date,
Seller shall cause the Existing Survey to be certified to Buyer and the Title
Company (the Existing Survey, as certified to Buyer and the Title Company being
referred to herein as the "Survey").

 

(b)          Within five (5) business days after Buyer's receipt of the Title
Report and Survey (the "Title Review Date"), Buyer shall furnish Seller with a
written statement of objections, if any, to the title to the Property,
including, without limitation, any objections to any matter shown on the Survey
(collectively, "Objections"). Within two (2) business days after Buyer's receipt
of the Title Report and Survey, Buyer shall give Seller written notice that it
has received such items, and such notice shall state the date that shall be
deemed to be the Title Review Date pursuant to the preceding sentence. In the
event the Title Company amends or updates the Title Report after the Title
Review Date, which includes copies of any new title exceptions, or modifications
to existing title exceptions (each, a "Title Report Update"), Buyer shall
furnish Seller with a written statement of Objections to any material matter
first raised in a Title Report Update within three (3) business days after its
receipt of such Title Report Update (each, a "Title Update Review Period").
Should Buyer fail to notify Seller, in writing, of any Objections in the Title
Report prior to the Title Review Date, or to any matter first disclosed in a
Title Report Update prior to the Title Update Review Period, as applicable,
Buyer shall be deemed to have approved such matters which shall be considered to
be "Conditions of Title" as defined in Section 4.1(e) below.

  

(c)          If Seller receives a timely Objection in accordance with Section
4.1(b) ("Buyer's Notice"), Seller shall have the right, but not the obligation,
within five (5) business days after receipt of Buyer's Notice ("Seller's
Response Period"), to elect to attempt to cure any such matter upon written
notice to Buyer ("Seller's Response"), and may extend the Closing Date for up to
fifteen (15) business days to allow such cure by written notice to Buyer
delivered no later than the date that is ten (10) days prior to the Closing
Date. If Seller does not give any

 

15

 

 

Seller's Response, Seller shall be deemed to have elected not to attempt to cure
any such matters. Notwithstanding the foregoing, Seller shall in any event be
obligated to cure all of the following matters or items on or prior to the
Closing (i)  monetary liens voluntarily placed on the Property by Seller,
including, without limitation, the liens of any deeds of trust or other loan
documents secured by the Property, (ii) real estate tax liens, other than liens
for taxes and assessments not yet delinquent as of the Closing Date, (iii)
matters that have been voluntarily placed against the Property by Seller (and
not tenants of the Property or other third parties) after the date of this
Agreement and that are not otherwise permitted pursuant to the provisions
hereof, and (iv) third-party mechanics' liens encumbering the Property and
arising out of contracts between Seller and a contractor in the aggregate
maximum of $100,000. At the Closing, Seller shall be entitled to apply the
Purchase Price towards the payment or satisfaction of such liens.

 

(d)          If Seller elects (or is deemed to have elected) not to attempt to
cure any Objections raised in any Buyer's Notice timely delivered by Buyer to
Seller pursuant to Section 4.1(b), or if Seller notifies Buyer that it elects to
attempt to cure any such Objection but then does not for any reason effect such
cure on or before the Closing Date as it may be extended hereunder, then Buyer,
as its sole and exclusive remedy, shall have the option of terminating this
Agreement by delivering written notice thereof to Seller on or before the later
to occur of (1) the date of expiration of the Contingency Period and (2) the
date that is three (3) business days after (as applicable) (i) its receipt of
Seller's Response stating that Seller will not attempt to cure any such
Objection or (ii) the expiration of Seller's Response Period if Seller does not
deliver a Seller's Response or (iii) Seller's failure to cure by the Closing
Date (as it may be extended hereunder) any Objection which Seller has previously
elected to attempt to cure pursuant to a Seller's Response. In the event of such
a termination, the Deposit shall be returned to Buyer, and neither party shall
have any further rights or obligations hereunder except as provided in Sections
6.1, 9.3 and 9.9 below. If no such termination notice is timely received by
Seller hereunder, Buyer shall be deemed to have waived all such Objections in
which event those Objections shall become "Conditions of Title" under Section
4.1(e). If the Closing is not consummated for any reason other than (i) Seller's
default hereunder or (ii) a termination of this Agreement by Buyer pursuant to a
right to do so expressly provided in this Agreement, Buyer shall be responsible
for any title or escrow cancellation charges; in the event of a situation under
subsections (i) or (ii) above, Seller shall be responsible for any title or
escrow cancellation charges.

 

(e)          At the Closing, Seller shall convey title to the Property to Buyer
by deed in the form of Exhibit C attached hereto (the "Deed") subject to no
exceptions other than:

 

(1)         Interests of tenants in possession under the Leases;

 

(2)         Matters created by or with the written consent of Buyer;

 

(3)         Non-delinquent liens for real estate taxes and assessments; and

 

(4)         Any exceptions disclosed by the Title Report, any Title Report
Update and/or the Survey which are approved or deemed approved by Buyer in
accordance with this Article IV above.

 

16

 

 

All of the foregoing exceptions shall be referred to collectively as the
"Conditions of Title". Subject to the terms and conditions contained elsewhere
in this Agreement, by acceptance of the Deed and the Closing of the purchase and
sale of the Property, (x) Buyer agrees it is assuming for the benefit of Seller
all of the obligations of Seller with respect to the Conditions of Title from
and after the Closing, and (y) Buyer agrees that, subject to warranties
contained in the Deed and Seller's other representations, warranties and
covenants herein, Seller shall have conclusively satisfied its obligations with
respect to title to the Property. The provisions of this Section shall survive
the Closing.

 

Section 4.2           Evidence of Title.

 

Delivery of title in accordance with the foregoing shall be evidenced by the
willingness of the Title Company to issue to Buyer, at Closing, its Owner's
Policy of Title Insurance in the amount of the Purchase Price showing title to
the Real Property vested in Buyer, subject only to the Conditions of Title (the
"Title Policy"). The Title Policy may contain such endorsements as reasonably
required by Buyer provided that the issuance of such endorsements shall not be a
condition to Buyer's obligations hereunder. Buyer shall pay the costs for all
such endorsements. Seller shall have no obligation to provide any indemnity or
agreement to the Title Company or Buyer to support the issuance of the Title
Policy or any such endorsements other than an affidavit as to the existing
tenants of the Property, parties in possession, debts and liens and any ongoing
construction work at the Property.

 

ARTICLE V

RISK OF LOSS AND INSURANCE PROCEEDS

 

Section 5.1           Minor Loss.

 

Except as set forth in Section 5.2 below, Buyer shall be bound to purchase the
Property for the full Purchase Price as required by the terms hereof, without
regard to the occurrence or effect of any damage to the Property or destruction
of any improvements thereon or condemnation of any portion of the Property
(which includes any conveyance in lieu of condemnation), provided that: (a) the
cost to repair any such damage or destruction does not exceed One Million
Dollars ($1,000,000.00) in the estimate of an architect or contractor selected
by Seller and reasonably acceptable to Buyer and no tenant of the Property shall
have a right to terminate its Lease pursuant to the terms thereof, and in the
case of a condemnation, the diminution in the value of the remaining Property as
a result of a partial condemnation is not material (as defined in Section 5.2
below) and (b) upon the Closing, there shall be a credit against the Purchase
Price due hereunder equal to the amount of any insurance proceeds or
condemnation awards collected by Seller as a result of any such damage or
destruction or condemnation, plus the amount of any insurance deductible, less
any reasonable, out-of-pocket sums expended by Seller toward the collection of
such proceeds or awards and the restoration or repair of the Property (the
nature of which restoration or repairs, but not the right of Seller to effect
such restoration or repairs, shall be subject to the written approval of Buyer,
which approval shall not be unreasonably withheld, conditioned or delayed). If
the insurance proceeds or condemnation awards have not been collected as of the
Closing, then such proceeds or awards shall be assigned to Buyer at the Closing,
except to the extent needed to reimburse Seller for

 

17

 

 

reasonable, out-of-pocket sums expended to collect such proceeds or awards or to
repair or restore the Property (to the extent such repairs and/or restoration
have been approved by Buyer, as provided above), Seller shall credit the
Purchase Price for any insurance deductible, and Seller shall retain the rights
to such proceeds and awards to the extent of any reimbursement to which Seller
is entitled as provided above.

  

Section 5.2           Major Loss.

 

If the cost to repair the damage or destruction as specified above exceeds One
Million Dollars ($1,000,000.00) in the estimate of an architect or contractor
selected by Seller and reasonably acceptable to Buyer, or the diminution in the
value of the remaining Property as a result of a condemnation is material (as
hereinafter defined), then Buyer may, at its option to be exercised within ten
(10) days of Seller's notice of the occurrence of the damage or destruction or
the commencement of condemnation proceedings, either terminate this Agreement or
consummate the purchase for the full Purchase Price as required by the terms
hereof. If Buyer elects to terminate this Agreement by delivering written notice
thereof to Seller within such ten (10) day period, then this Agreement shall
terminate, the Deposit shall be returned to Buyer and neither party shall have
any further rights or obligations hereunder except as provided in Sections 6.1,
9.3 and 9.9 below. If Buyer fails to terminate this Agreement in accordance with
the preceding sentence, Buyer shall be deemed to elect to proceed with the
purchase, then upon the Closing, there shall be a credit against the Purchase
Price due hereunder equal to the amount of any insurance proceeds or
condemnation awards collected by Seller as a result of any such damage or
destruction or condemnation, plus the amount of any insurance deductible, less
any sums expended by Seller toward the collection of such proceeds or awards or
to restoration or repair of the Property (the nature of which restoration or
repairs, but not the right of Seller to effect such restoration or repairs,
shall be subject to the approval of Buyer, which approval shall not be
unreasonably withheld, conditioned or delayed). If the insurance proceeds or
condemnation awards have not been collected as of the Closing, then such
proceeds or awards shall be assigned to Buyer, except to the extent needed to
reimburse Seller for reasonable, out-of-pocket sums expended to collect such
proceeds or awards or to repair or restore the Property (to the extent such
repairs and/or restoration have been approved by Buyer, as provided above),
Seller shall credit Buyer for the insurance deductible at the Closing, and
Seller shall retain the rights to such proceeds and awards to the extent of any
reimbursement to which Seller is entitled as provided above. A condemnation
shall be deemed material if (i) any portion of any net rentable area of the
Property or any parking is taken which would cause the Property to be in
violation of any existing laws or regulations, including but not limited to,
zoning regulations, (ii) the existing access to the Property is materially and
adversely affected, permanently, or (iii) the condemnation is such that one or
more tenants under Leases have the right to terminate their respective Leases.

 

18

 

 

ARTICLE VI

BROKERS AND EXPENSES

 

Section 6.1           Brokers.

 

The parties represent and warrant to each other that no broker or finder was
instrumental in arranging or bringing about this transaction on behalf of the
representing party except for (i) May Center Advisors LLC ("Seller's Broker")
and (ii) Buyer's Consultants. At Closing, Seller shall pay the commission due,
if any, to Seller's Broker, which shall be paid pursuant to a separate agreement
between Seller and Seller's Broker. Buyer shall pay any commissions or fees owed
to Buyer's Consultants pursuant to a separate agreement between Buyer and
Buyer's Consultants. If any other person brings a claim for a commission or
finder's fee based upon any contact, dealings or communication with Buyer or
Seller, then the party through whom such person makes his claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless from any and all
costs, damages, claims, liabilities or expenses (including without limitation,
court costs and reasonable attorneys' fees and disbursements) incurred by the
Indemnified Party in defending against the claim. The provisions of this Section
6.1 shall survive the Closing or, if the purchase and sale is not consummated,
any termination of this Agreement.

 

Section 6.2           Expenses.

 

Except as expressly provided in this Agreement, each party hereto shall pay its
own expenses incurred in connection with this Agreement and the transactions
contemplated hereby.

 

ARTICLE VII

LEASES AND OTHER AGREEMENTS

 

Section 7.1           Buyer's Approval of New Leases and Agreements Affecting
the Property.

 

Between the Effective Date and the Closing, Seller shall not enter into any new
Lease or other agreement affecting the Property, or modify, terminate or renew
any existing Lease or other agreement affecting the Property, or waive any
covenant or other obligation under any existing Lease or other agreement
affecting the Property, which will, in any case, be binding on the Property or
the owner of the Property after Closing, except as required under any Lease,
without first obtaining Buyer's approval of the proposed action which consent
shall not be unreasonably withheld, conditioned or delayed. Between the
Effective Date and the Closing, Seller shall notify Buyer of any request for
consent under any existing Lease, and Seller shall not grant any consent under
any existing Lease, except as required by the applicable Lease without first
obtaining Buyer's approval. In any such case, Buyer shall specify in detail the
reasons for its disapproval of any such proposed action. If Buyer fails to give
Seller notice of its approval or disapproval of any such proposed action
requiring its approval under this Section 7.1 within five (5) business days
after Seller notifies Buyer of Seller's desire to take such action, then Buyer
shall be deemed to have given its approval. Any new Lease or other agreement or
amendment

 

19

 

 

shall be on Seller's standard forms for such documents. Buyer agrees to
cooperate with Seller in enabling Seller to complete any such proposed
transaction requiring Buyer's approval.

 

Section 7.2           Tenant Improvement Costs, Leasing Commissions and
Concessions.

 

With respect to any new Lease or Lease modification entered into by Seller in
accordance with the provisions of Section 7.1 above, between the Effective Date
and the Closing Date, and with respect to any renewal or extension of any Lease,
whether through the exercise of an option or otherwise, occurring between such
date and the Closing Date, all tenant improvement work, leasing commissions, or
grants of any free rent period or other concessions shall be the obligation of
Buyer. In the event the transaction contemplated by this Agreement is
consummated as provided herein, Buyer shall reimburse Seller for all such costs
incurred by Seller to the extent Buyer is obligated therefor pursuant to the
provisions hereof. Pursuant to the Assignment of Leases (as defined below),
Buyer shall assume any then outstanding obligations with respect to such tenant
improvements, leasing commissions and concessions. To the extent at Closing
there are any unpaid tenant improvement allowances or brokers' commissions for
Leases entered into prior to the Effective Date ("Unpaid TI/LC"), Seller shall
credit Buyer the estimated amount of Unpaid TI/LC at Closing, and Buyer shall
thereafter be obligated to pay directly to the applicable parties the applicable
amounts from the Unpaid TI/LC credited to Buyer. To the extent the credit
provided to Buyer at Closing for any Unpaid TI/LC shall be less than the actual
amount of such Unpaid TI/LC, Seller shall be obligated to pay Buyer the
difference promptly following the final determination of the Unpaid TI/LC. To
the extent the credit provided to Buyer at Closing for any Unpaid TI/LC is more
than the actual amount of such Unpaid TI/LC, Buyer shall be obligated to pay
Seller the difference promptly following the final determination of the Unpaid
TI/LC. The provisions of this Section shall survive the Closing.

 

Section 7.3           Tenant Notices.

 

At the Closing, Seller shall furnish Buyer with a signed, "form" notice letter
to be given to each tenant of the Property. The notice shall disclose that the
Property has been sold to Buyer, that, from and after the Closing, all rents
should be paid to Buyer and that Buyer shall be responsible for all the tenant's
security deposit. The form of the notice shall be otherwise reasonably
acceptable to the parties. Buyer covenants to deliver said notices to each
tenant as soon as reasonably possible after Closing. This provision shall
expressly survive Closing.

 

Section 7.4           Maintenance of Improvements and Operation of Property;
Removal of Tangible Personal Property.

 

Seller agrees to keep its customary property insurance covering the Property in
effect until the Closing (provided, however, that the terms of any such coverage
maintained in blanket form may be modified as Seller reasonably deems
necessary). Seller shall maintain all Improvements substantially in their
present condition (ordinary wear and tear, casualty and condemnation excepted),
and shall operate and manage the Property in a manner consistent with Seller's
practices in effect prior to the Effective Date. Seller shall not remove any
Tangible Personal Property, except as may be required for necessary repair or
replacement, and replacement shall be of approximately equal quality and
quantity as the removed item of Tangible Personal Property. In addition, from
the Effective Date until the Closing or sooner

 

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termination of this Agreement, Seller covenants as follows: (a) Seller will
continue to maintain the Property in its present order and condition, making all
necessary repairs thereto required to be made by Seller (including curing any
governmental violations issued prior to the Effective Date ("Existing
Violations") by any governmental authority) so as to deliver the Property at the
Closing in substantially the same condition as existed on the Effective Date,
reasonable wear and tear and damage by fire or other casualty excepted, except
as otherwise set forth in this Agreement; (b) Seller will give prompt written
notice to Buyer of any fire or other casualty affecting the Property after the
Effective Date; (c) Seller will deliver to Buyer, promptly after receipt by
Seller, a copy of (i) all current written default and other material notices to
and from tenants; (ii) all current written default and other material notices
from the service providers under any Service Contracts; and (iii) all written
notices of any violations issued to Seller by governmental authorities with
respect to the Property and any other material notices received from any
governmental authority with respect to the Property; (d) Seller shall use
commercially reasonable efforts to maintain in full force and effect the
existing governmental and other permits, approvals, waivers, consents and land
use entitlements, and timely apply for renewals of all such permits, approvals,
waivers, consents and land use entitlements which will expire before the
Closing; (e) Seller shall perform its obligations under all Leases, REAs and
Service Contracts; and (f) Seller shall promptly notify Buyer if Seller receives
notice or knowledge of any information that would result in a misrepresentation
under Section 3.1 above.

 

Section 7.5           Service Contracts.

 

Within three (3) business days prior to the expiration of the Contingency
Period, Buyer will advise Seller in writing which Service Contracts Buyer will
assume and which Service Contracts Buyer requests be terminated at Closing,
provided Seller shall have no obligation to terminate, and Buyer shall be
obligated to assume, any Service Contracts which by their terms cannot be
terminated without penalty or payment of a fee or other cost to Seller. Seller
shall deliver at Closing notices of termination of all Service Contracts that
are not so assumed and Buyer shall be responsible for any charges applicable to
periods commencing with the Closing. Notwithstanding the foregoing, Seller shall
terminate, as of the Closing Date, all existing management and leasing
agreements with respect to the Property. Seller shall not enter into any new
Service Contracts after the date hereof that cannot be terminated, without
penalty or cost, on thirty (30) days' notice.

 

ARTICLE VIII

CLOSING AND ESCROW

 

Section 8.1           Escrow Instructions.

 

Upon execution of this Agreement, the parties hereto shall deposit an executed
counterpart of this Agreement with the Title Company, and this instrument shall
serve as the instructions to the Title Company as the escrow holder for
consummation of the purchase and sale contemplated hereby. Seller and Buyer
agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Title Company to comply with
the terms of this Agreement; provided, however, that in the event of any
conflict between

 

21

 

 

the provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control.

 

Section 8.2           Closing.

 

The Closing hereunder shall be held and delivery of all items to be made at the
Closing under the terms of this Agreement shall be made at the offices of the
Title Company or as otherwise mutually agreed on the date that is thirty (30)
days after the date of expiration of the Contingency Period, and before 2:30
p.m. local time, or such other earlier date and time as Buyer and Seller may
mutually agree upon in writing (the "Initial Closing Date"); provided, however,
that Buyer may extend the date for Closing for an additional thirty (30)
calendar days the "Extension Option") upon the satisfaction of each of the
following conditions: (i) Seller shall have received, not less than two (2)
business days prior to the Initial Closing Date, Buyer's written notice to
Seller of such intention to extend the date for Closing, and (ii) not less than
one day prior to the Initial Closing Date, the Title Company shall have received
the Additional Deposit (each an "Extension Option Condition"). If any Extension
Option Condition is not satisfied as of date upon which the performance of such
condition is required, Closing shall occur on the Initial Closing Date. Except
as expressly provided herein, such date and time may not be further extended
without the prior written approval of both Seller and Buyer. The date upon which
the Closing hereunder is to occur (as determined pursuant to the terms of this
Section 8.2) shall be referred to in this Agreement as the "Closing Date".

 

Section 8.3           Deposit of Documents.

 

(a)          At or before the Closing, Seller shall deposit into escrow the
following items:

 

(1)         the duly executed and acknowledged Deed in the form attached hereto
as Exhibit C conveying the Real Property to Buyer subject only to the Conditions
of Title. Buyer may elect to cause Seller to deliver multiple deeds to one or
more nominees as elected by Buyer;

 

(2)         four (4) duly executed counterparts of the Bill of Sale in the form
attached hereto as Exhibit D (the "Bill of Sale") conveying the Tangible
Personal Property to Buyer;

 

(3)         four (4) duly executed counterparts of an Assignment and Assumption
of Leases, Service Contracts, Warranties and Other Intangible Property in the
form attached hereto as Exhibit E pursuant to the terms of which Seller shall
assign and Buyer shall assume all of Seller's obligations under the Leases and
Service Contracts (the "Assignment of Leases"), and;

 

(4)         an updated copy of the Rent Roll, current as of the Closing Date,
and certified by Seller to be true, correct and complete as of the Closing Date;

 

(5)         an affidavit pursuant to Section 1445(b)(2) of the Code, and on
which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.

 

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(b)          At or before Closing, Buyer shall deposit into escrow the following
items:

 

(1)         immediately available funds necessary to close this transaction,
including, without limitation, the Purchase Price (less the Deposit and interest
thereon net of investment fees, if any, and subject to the adjustments and
prorations set forth in this Agreement) and funds sufficient to pay Buyer's
closing costs and share of prorations hereunder;

 

(2)         four (4) duly executed counterparts of the Bill of Sale; and

 

(3)         four (4) duly executed counterparts of the Assignment of Leases.

 

(c)          Seller and Buyer shall each execute and deposit a separate closing
statement, such transfer tax declarations and such other instruments as are
reasonably required by the Title Company or otherwise required to close the
escrow and consummate the acquisition of the Property in accordance with the
terms hereof. Seller and Buyer hereby designate Title Company as the "Reporting
Person" for the transaction pursuant to Section 6045(e) of the Code and the
regulations promulgated thereunder and agree to execute such documentation as is
reasonably necessary to effectuate such designation.

 

(d)          On or prior to the Closing Date, Seller shall deliver or make
available at the Property to Buyer: originals of the Leases to the extent in
Seller's possession, or copies of any Leases not in Seller's possession together
with an affidavit from Seller as to such copies being true and complete copies
of the applicable Lease(s), copies of the tenant correspondence files (for the
three (3) most recent years of Seller's ownership of the Property only and the
current year), and originals of any other items which Seller was required to
furnish Buyer copies of or make available at the Property pursuant to Sections
2.1(b) or (e) above, to the extent in Seller's possession, except for Seller's
general ledger and other internal books or records which shall be retained by
Seller. Seller shall deliver possession of the Property to Buyer as required
hereunder, subject to the rights of the Tenants, and shall deliver to Buyer or
make available at the Property a set of keys to the Property on the Closing
Date.

 

Section 8.4           Estoppel Certificates.

 

(a)          Seller shall use commercially reasonable efforts to obtain estoppel
certificates from each tenant of the Property substantially in the form attached
hereto as Exhibit F or, if a tenant's lease requires a different form, in the
form required by the tenant's lease. Estoppel certificates that are (1) dated
not more than thirty (30) days prior to the Closing Date, (2) materially
complete and (3) do not indicate any material and adverse claim or landlord or
tenant default (items (1)-(3) being collectively referred to as the "Estoppel
Requirements") are herein referred to as the "Tenant Executed Estoppels". It
shall be a condition to Buyer's obligation to close the sale and purchase of the
Property that on or before the date that is three (3) business days prior to the
Closing Date, Seller provides to Buyer Tenant Executed Estoppels from tenants
occupying at least ninety percent (90%) of the area of the Property actually
rented to Tenants, including Tenant Executed Estoppels from all of the Major
Tenants (as defined below) (collectively, the "Estoppel Threshold"). "Major
Tenants" shall be deemed to mean and refer to Kohl’s Illinois Inc. and Lowe’s
Home Centers, Inc. Seller shall provide to Buyer true and correct copies of all
estoppel certificates received by Seller as and when received by

 

23

 

 

Seller. If any estoppel certificate discloses any Lease documents (including
amendments to a Lease) not previously delivered to Buyer or available to Buyer
in the diligence datasite for the transaction as of the Effective Date (each an
"Undelivered Document"), and such Undelivered Document creates a material
adverse change in the term, revenue or substantive tenant rights under such
Lease, Buyer shall have the right, within five (5) business days after receipt
of such Undelivered Document to object to such provision by written notice to
Seller. Seller may, upon written notice to Buyer within five (5) business days
following receipt of such written objection from Buyer, elect to cure such
objection and may extend the Closing Date for up to fifteen (15) business days
to allow such cure. If Seller does not give any such written notice, Seller
shall be deemed to have elected not to attempt to cure any such matters. If
Seller elects (or is deemed to have elected) not to attempt to cure any
objections raised in any Buyer's notice timely delivered by Buyer to Seller, or
if Seller notifies Buyer that it elects to attempt to cure any such objection
but then does not for any reason effect such cure on or before the Closing Date
as it may be extended hereunder, then Buyer, as its sole and exclusive remedy,
shall have the option of terminating this Agreement by delivering written notice
thereof to Seller within three (3) business days after (as applicable) (i) its
receipt of Seller's response stating that Seller will not attempt to cure any
such objection or (ii) the expiration of Seller's response period if Seller does
not deliver a response to Buyer within five business days, or (iii) Seller's
failure to cure by the Closing Date (as it may be extended hereunder) any
objection which Seller has previously elected to attempt to cure pursuant to
Seller's written response. In the event of such a termination, the Deposit shall
be returned to Buyer, and neither party shall have any further rights or
obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9 below.

 

(b)          If Seller is unable to obtain and deliver sufficient tenant
estoppel certificates as required under Section 8.4(a), then Seller will not be
in default by reason thereof, and Seller may elect to extend the Closing Date by
up to thirty (30) days in order to satisfy the requirement. If Seller still
cannot satisfy the requirement at the end of such extended period, then Buyer
may, by written notice given to Seller before the Closing, elect to terminate
this Agreement and receive a refund of the Deposit or waive said condition. If
Buyer so elects to terminate this Agreement, neither party shall have any
further rights or obligations hereunder except as provided in Section 6.1 above
and Sections 9.3 and 9.9 below. If no such notice is delivered by Buyer, Buyer
shall be deemed to have waived such condition.

 

(c)          In addition to the foregoing, Buyer will prepare and send to Seller
completed subordination, non-disturbance and attornment agreements (the
"SNDAs"). Seller agrees to deliver the completed SNDAs to the tenants under the
Leases upon receipt thereof from Buyer. Further, Seller agrees that Buyer and
Buyer's lender shall have the right to deal directly with the tenants under the
Leases in negotiating and obtaining the execution of the SNDAs. Buyer agrees
that receipt of the SNDAs shall not be a condition to Closing.

 

(d)          Seller shall use commercially reasonable efforts to obtain and
deliver to Buyer estoppel certificates from all parties to any REAs confirming
there are no defaults by any party under the REAs and further confirming the
amount of any assessments payable under the REAs and the dates to which such
assessments have been paid. Buyer agrees that receipt of such estoppel
certificates shall not be a condition to Closing.

 

24

 

 

Section 8.5           Prorations.

 

(a)          Rents, including, without limitation, base rents, minimum
guaranteed rents, percentage rents, if any, and any additional charges and
expenses payable by tenants under Leases, all as and when actually collected;
real property taxes and assessments; water, sewer and utility charges (if not
separately metered and paid by tenants); amounts payable under any Service
Contracts that survive Closing or other agreements or documents that survive
Closing; annual permits and/or inspection fees (calculated on the basis of the
period covered); and any other expenses of the operation and maintenance of the
Property, shall all be prorated as of 11:59 p.m. on the day immediately prior to
Closing (i.e., Buyer is entitled to the income and responsible for the expenses
of the day of Closing), on the basis of a 365-day year. Buyer shall reimburse
Seller for the tenant improvement costs, leasing commissions, and other
expenses, and free rent and other concessions, as and to the extent provided in
Section 7.2. Delinquent rents or other delinquent sums that are due pursuant to
the terms of the Leases shall not be prorated. Any prepaid rents attributable to
periods from and after the Closing Date shall be transferred to Buyer either
directly or by way of a credit against the Purchase Price in favor of Buyer.
Buyer shall receive a credit against the Purchase Price for the amount of all
"free rent" or abated rent to which any tenant may be entitled under a Lease, to
the extent relating to periods occurring from and after the Closing Date.

 

All rents collected after the Closing shall be applied and paid as provided in
this Section 8.5(a). If a tenant shall specifically designate a payment as being
attributable to, or if it is readily ascertainable that a payment received from
a tenant is attributable to, a specific period of time or for a specific
purpose, including, without limitation, for operating expenses or real estate
tax payments which were not paid or were underpaid by such tenant or for
reimbursement for work performed by Seller on the tenant's premises, such
payment shall be so applied. If there is no such designation or if not so
readily ascertainable, any payment received from a tenant after Closing shall be
deemed a payment of rent and other sums due after the Closing until the tenant
is current on rents and sums due under the applicable Lease on or after the
Closing, and then such payments shall be applied to rents and other sums owing
for the month in which the Closing occurs, and then such payments shall be paid
to Seller to the extent of any rent or other sums owing to Seller for periods
prior to Closing. Buyer shall use reasonable efforts to collect such rents and
other sums owing to Seller for a period of six (6) months after Closing. Seller
retains the right to collect any such rents and other sums from tenants after
Closing; provided, however, that Seller shall have no right to terminate a
Lease, cause any such tenant to be evicted or to exercise any other landlord
remedy against such tenant. Without limiting the generality of the immediately
preceding sentence, in no event shall Seller commence any legal proceedings
against any tenant after the Closing with respect to any matter relating to a
Lease.

  

Reconciliations of taxes, insurance charges and other expenses owed by tenants
under Leases for the calendar year (or fiscal year if different from the
calendar year) in which the Closing occurs shall be prepared by Buyer with the
cooperation of Seller within one hundred eighty (180) days following the end of
such year in accordance with the requirements set forth in the Leases and as
provided in this Section 8.5(a). For those Leases in which tenants pay a
proportionate share of taxes, insurance charges or other expenses over a base
year amount or expense stop, the proration between the parties of the income
received from tenants over such base year amount or expense stop shall be
calculated based on the total amount of such expenses

 

25

 

 

for the Property incurred by both Seller and Buyer for the entire calendar (or,
if applicable, fiscal) year, rather than on the amount of such expenses actually
incurred by each party for such year, in order to enable the parties to
determine if the base year amount or expense stop for such year is exceeded.
Such income as so calculated shall be prorated between the parties based on the
number of days each party owned the Property during such year and otherwise in
accordance with this Section 8.5(a). By way of illustration but without limiting
the foregoing, if: (i) the Closing occurred on June 1, 2013, (ii) during
Seller's period of ownership of the Property during the year 2013 (151 days),
Seller incurred expenses of $450,000, (iii) during Buyer's period of ownership
of the Property during the year 2013 (214 days), Buyer incurred expenses of
$500,000, (iv) total expenses for such year recovered from tenants under Leases
is $400,000 (e.g., $950,000 total expenses minus a total base year amount of
$550,000), then Seller would be entitled to $165,479.45 of such income
($400,000/365 days = $1,095.89 per diem multiplied by 151 days) and Buyer would
be entitled to $234,520.55 of such income ($1,095.89 per diem multiplied by 214
days), regardless of the actual amount of expenses actually incurred by each
party (which would have instead resulted in Seller receiving $189,473.68 of such
income and Buyer receiving $210,526.32 of such income). For Leases which do not
have a base year amount or expense stop, the proration between the parties of
income received from tenants from reconciliations of expenses under the Leases
shall be calculated based on the expenses actually incurred by each party for
such year and each party's period of ownership of the Property, and otherwise in
accordance with this Section 8.5(a).

 

The amount of any cash security deposits received by Seller under Leases (and
not otherwise forfeited by a tenant in accordance with the terms of a Lease)
shall be credited against the Purchase Price (and Seller shall be entitled to
retain such cash security deposits). Seller shall receive credits at Closing for
the amount of any utility or other deposits with respect to the Property to the
extent Buyer receives the benefit of such deposits. Buyer shall cause all
utilities to be transferred into Buyer's name and account at the time of
Closing. Seller shall use reasonable efforts to cause all non-cash security
deposits in the form of letters of credit to be transferred to Buyer at the time
of Closing.

 

Seller and Buyer hereby agree that if any of the aforesaid prorations and
credits cannot be calculated accurately on the Closing Date or in the case of
rents or other charges received from tenants, such amounts have not been
collected, then the same shall be calculated as soon as reasonably practicable
after the Closing Date or the date such amounts have been collected, and either
party owing the other party a sum of money based on such subsequent proration(s)
or credits shall pay said sum to the other party within thirty (30) days
thereafter. Any amounts not paid within such thirty (30) day period shall bear
interest from the date actually received by the payor until paid at the greater
of (i) the rate of ten percent (10%) per annum or (ii) the prime rate (or base
rate) reported from time to time in the "Money Rates" column or section of The
Wall Street Journal as being the base rate on corporate loans at larger United
States money center commercial banks plus two (2) percent. Upon request of
either party, the parties shall provide a detailed and accurate written
statement signed by such party certifying as to the payments received by such
party from tenants from and after Closing and to the manner in which such
payments were applied, and shall make their books and records available for
inspection by the other party during ordinary business hours upon reasonable
advance notice.

 

26

 

 

(b)          Seller shall pay the base premium for the Title Policy and Buyer
shall pay the costs for all endorsements to the Title Policy requested by Buyer
(including but not limited to any extended coverage, whether by endorsement or
deletion of exception), and the costs of deleting any "Survey Exception" from
the Title Policy. The costs of the Survey with the Approved Table A Items,
ordered in accordance with Section 4.1(a) hereof, shall be paid by Seller upon
Closing. The costs of any additional Table A items that are requested by Buyer
or Buyer's lender and are not Approved Table A Items shall be the responsibility
of Buyer. One-half of all escrow and closing fees shall be paid by Seller at
Closing. Buyer shall pay: (i) one-half of all escrow or closing fees; and (ii)
all recording charges incident to the recording of the deed for the Real
Property at Closing. Transfer taxes imposed upon the transfer of the Property by
applicable law shall be shared equally by Seller and Buyer. The parties will
execute and deliver any required transfer or other similar tax declarations to
the appropriate governmental entity at Closing.

 

(c)          Any percentage rent for the rental periods including Closing shall
be prorated upon receipt, based upon the tenant's sales for the portion of the
lease year allocable to Seller's and Buyer's respective ownership of the
Property.

 

(d)          The provisions of this Section 8.5 shall survive the Closing.

 

Section 8.6           Conditions to Buyer's Obligation to Close. The obligations
of Buyer to consummate the transactions contemplated herein shall be subject to
the fulfillment of the following conditions ("Buyer's Conditions"), any of which
may be waived by Buyer in its sole and absolute discretion:

 

(a)          The representations and warranties of Seller made herein shall be
true and correct in all material respects, Seller shall have performed all
covenants and agreements made herein and Seller shall have delivered to Buyer or
deposited into escrow all of the closing documents required pursuant to
Section 8.3 hereof.

 

(b)          Buyer's receipt of the required Tenant Executed Estoppels.

 

(c)          An unconditional and irrevocable agreement by the Title Company to
issue the Title Policy (subject to payment of required title premiums).

 

(d)          Delivery of possession of the Property to Buyer on the Closing Date
subject only to the Conditions of Title and to the rights of the tenants under
the Leases, as tenants only.

 

(e)          As of the Closing Date, no Major Tenant shall have (a) filed a
petition in bankruptcy, (b) been adjudicated insolvent or bankrupt, (c)
petitioned a court for the appointment of any receiver of or trustee for it or
any substantial part of its property, (d) commenced any proceeding under any
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect, (e)
become the subject of an involuntary bankruptcy petition, (f) vacated its leased
premises (other than Lowe's Home Centers, Inc.), or (g) had its Lease
terminated. There shall not have been commenced and be pending against any Major
Tenant any proceeding of the nature described in the first sentence

 

27

 

 

of this subparagraph. No order for relief shall have been entered with respect
to any Major Tenant under the Federal Bankruptcy Code.

 

(f)          Delivery to Buyer of evidence that any existing management
agreement and/or leasing agreement entered into by Seller with respect to the
Property has been terminated or will be terminated as of the Closing Date. In
the event any of the Buyer's Conditions shall not be satisfied as of the Closing
Date, Buyer shall have the right to terminate this Agreement by giving written
notice to Seller and receive a return of the Deposit and any amount owing under
Section 16.2 hereof, whereupon neither party shall have any further rights or
obligations hereunder except for any provisions of this Agreement that expressly
survive termination. If Buyer fails to terminate this Agreement on the Closing
Date, all of the Buyer's Conditions shall be deemed satisfied or waived by
Buyer, and Buyer shall be obligated to perform its obligations under this
Agreement or shall be deemed to be in default hereunder.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.1           Notices.

 

Any notices required or permitted to be given hereunder shall be given in
writing and shall be delivered (a) in person, (b) by certified mail, postage
prepaid, return receipt requested, (c) by facsimile with confirmation of
receipt, or (d) by a commercial overnight courier that guarantees next day
delivery and provides a receipt, and such notices shall be addressed as follows:

 

To Buyer: American Realty Capital IV, LLC   405 Park Avenue, 15th Floor   New
York, New York 10022   Attention: Michael Weil   Fax No.:  (857) 207-3397    
with a copy to: American Realty Capital IV, LLC   405 Park Avenue, 15th Floor  
New York, New York  10022   Attention: Jesse Galloway and Jeremy Eichel   Fax
No.:  (646) 861-7751   E-mail: jgalloway@arlcap.com  
E-mail:  jeichel@arlcap.com     with a copy to: Retail Centers of America   2000
McKinney Avenue, Suite 1000   Dallas, Texas 75201   Attention: Robert Dozier and
Steve Seitz   Fax No.: (214) 740-3313

 

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  E-mail: rdozier@lpc.com   E-mail: sseitz@lpc.com     with a copy to: Condon
Thornton Sladek Harrell PLLC   8080 Park Lane, Suite 700   Dallas, Texas  75231
  Attention: William L. Sladek   Fax No.:  (214) 691-6311   E-mail:
bsladek@ctshlaw.com     To Seller: Prairie Towne LLC   c/o Allied District
Properties, LLC   180 N. Stetson Ave, Two Prudential Plaza   Suite 3240  
Chicago, Illinois  60601   Attention: Cathy Green and Paul Goodman   Fax No.:
(312) 565-9968   Email: cgreen@allied-dp.com;  pgoodman@allied-dp.com     with a
copy to: Levenfeld Pearlstein, LLC   Two N. LaSalle Street, Suite 1300  
Chicago, Illinois  60602   Attention:  Marc S. Joseph   Fax No.:  (312) 346-8434
  Email: mjoseph@lplegal.com

 

or to such other address as either party may from time to time specify in
writing to the other party. Any notice or other communication sent as
hereinabove provided shall be deemed effectively given (a) on the date of
delivery, if delivered in person; (b) on the date mailed if sent by certified
mail, postage prepaid, return receipt requested or by a commercial overnight
courier; or (c) on the date of transmission, if sent by facsimile with
confirmation of receipt. Such notices shall be deemed received (a) on the date
of delivery, if delivered by hand or overnight express delivery service; (b) on
the date indicated on the return receipt if mailed; or (c) on the date of
transmission, if sent by facsimile. If any notice mailed is properly addressed
but returned for any reason, such notice shall be deemed to be effective notice
and to be given on the date of mailing. Any notice send by the attorney
representing a party, shall qualify as notice under this Agreement.

 

Section 9.2           Entire Agreement.

 

This Agreement, together with the Exhibits and schedules hereto, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Agreement together with the Exhibits and schedules
hereto.

 

29

 

 

Section 9.3           Entry and Indemnity.

 

In connection with any entry by Buyer, or its agents, employees or contractors
onto the Property, Buyer shall give Seller reasonable advance notice of such
entry and shall conduct such entry and any inspections in connection therewith
(a) during normal business hours, (b) so as to minimize, to the greatest extent
possible, interference with Seller's business and the business of Seller's
tenants, (c) in compliance with all applicable laws, and (d) otherwise in a
manner reasonably acceptable to Seller. Without limiting the foregoing, prior to
any entry to perform any on-site invasive testing, including but not limited to
any borings, drillings or samplings, Buyer shall give Seller written notice
thereof, including the identity of the company or persons who will perform such
testing and the proposed scope and methodology of the testing. Seller shall
approve or disapprove, in Seller's reasonable discretion, the proposed testing
within two (2) business days after receipt of such notice. If Seller fails to
respond within such two (2) business day period, Seller shall be deemed to have
approved the proposed testing. If Buyer or its agents, employees or contractors
take any sample from the Property in connection with any such approved testing,
Buyer shall provide to Seller a portion of such sample being tested to allow
Seller, if it so chooses, to perform its own testing. Buyer shall permit Seller
or its representative to be present to observe any testing or other inspection
or due diligence review performed on or at the Property, provided that the lack
of availability of a representative of Seller shall not prevent or delay any
testing, inspection or review by Buyer. Upon the request of Seller, Buyer shall
promptly deliver to Seller copies of any third-party prepared reports relating
to any testing or other inspection of the Property performed by Buyer or its
agents, representatives, employees, contractors or consultants. Notwithstanding
anything to the contrary contained herein, Buyer shall not contact any
governmental authority (other than with respect to obtaining confirmation of
current factual information, such as zoning verification) without first
obtaining the prior written consent of Seller thereto in Seller's reasonable
discretion, and Seller, at Seller's election, shall be entitled to have a
representative participate in any telephone or other contact made by Buyer to a
governmental authority and present at any meeting by Buyer with a governmental
authority. From and after the Effective Date, Buyer shall have the right to
conduct tenant interviews. Buyer shall notify Seller of those tenants which
Buyer intends to interview prior to actually conducting the interview(s). Buyer
shall permit Seller or its representative to be present to observe any tenant
interview, provided that the lack of availability of a representative of Seller
shall not prevent or delay any tenant interview. Buyer shall maintain, and shall
assure that its contractors maintain, public liability and property damage
insurance in amounts and in form and substance adequate to insure against all
liability of Buyer and its agents, employees or contractors, arising out of any
entry or inspections of the Property pursuant to the provisions hereof, and
Buyer shall provide Seller with evidence of such insurance coverage upon request
by Seller. Buyer shall indemnify and hold Seller harmless from and against any
costs, damages, liabilities, losses, expenses, liens or claims (including,
without limitation, court costs and reasonable attorneys' fees and
disbursements) arising out of or relating to the negligence or willful
misconduct of Buyer or any of Buyer's agent, employees or contractors during any
entry on the Property by Buyer, its agents, employees or contractors in the
course of performing the inspections, testings, or inquiries provided for in
this Agreement, including, without limitation, any release of Hazardous
Materials or any damage to the Property arising out of or related to the
negligence or willful misconduct of Buyer or Buyer's agents, employees or
contractors; provided that Buyer shall not be liable to Seller solely as a
result of the discovery by Buyer of a pre-existing condition on the Property to
the extent the activities of Buyer, its agents, representatives,

 

30

 

 

employees, contractors or consultants do not exacerbate the condition, and
further provided that Buyer shall not be liable to Seller for any costs,
damages, liabilities, losses, expenses, liens or claims arising directly as a
result of the negligence or willful misconduct of Seller or Seller's agents,
employees or contractors. The provisions of this Section 9.3 shall be in
addition to any access or indemnity agreement previously executed by Buyer in
connection with the Property; provided that in the event of any inconsistency
between this Section 9.3 and such other agreement, the provisions of this
Section 9.3 shall govern. The foregoing indemnity shall survive beyond the
Closing, or, if the sale is not consummated, beyond the termination of this
Agreement. Buyer's right of entry, as provided in this Section 9.3, shall
continue up through the date of Closing.

  

Section 9.4           Time.

 

Time is of the essence in the performance of each of the parties' respective
obligations contained herein.

 

Section 9.5           Attorneys' Fees.

 

If either party hereto fails to perform any of its obligations under this
Agreement or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Agreement, whether prior to
or after Closing, or if any party defaults in payment of its post-Closing
financial obligations under this Agreement, then the defaulting party or the
party not prevailing in such dispute, as the case may be, shall pay any and all
costs and expenses incurred by the other party on account of such default and/or
in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys' fees and disbursements.

 

Section 9.6           Assignment.

 

Buyer's rights and obligations hereunder shall not be assignable without the
prior written consent of Seller in Seller's sole discretion. Notwithstanding the
foregoing, Buyer shall have the right, without the necessity of obtaining
Seller's consent but with prior written notice to Seller, to assign its rights
and obligations under this Agreement to any entity or entities that is or are
controlled by, controlling or under common control with Buyer (a "Buyer
Affiliate"). Further, Buyer is entering into this Agreement for and on behalf of
ARC PTSCHIL001, LLC (collectively, "Approved Assignee") and intends, and shall
have the right, to assign its rights under this Agreement to Approved Assignee
prior to Closing. Buyer shall in no event be released from any of its
obligations or liabilities hereunder in connection with any assignment,
including, without limitation any assignment to a Buyer Affiliate. Without
limiting and notwithstanding the above, in no event shall Buyer have the right
to assign its rights or obligations hereunder to any party which could not make
the representation and warranty contained in subsection 3.5(e) above, and in
connection with any assignment pursuant to the terms hereof, the assignee shall
reconfirm in a written instrument reasonably acceptable to Seller and delivered
to Seller prior to the effective date of the assignment said representation and
warranty as applied to the assignee and that all other terms and conditions of
this Agreement shall apply to such assignee. Subject to the provisions of this
Section, this Agreement shall inure

 

31

 

 

to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.

 

Section 9.7           Counterparts.

 

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

 

Section 9.8           Governing Law.

 

This Agreement shall be governed by and construed in accordance with the laws of
the State in which the Real Property is located.

 

Section 9.9           Confidentiality and Return of Documents.

 

Buyer and Seller shall each maintain as confidential any and all material
obtained about the other or, in the case of Buyer, about the Property, this
Agreement or the transactions contemplated hereby, and shall not disclose such
information to any third party except as specifically permitted herein. Except
as may be required by law, Buyer will not divulge any such information to other
persons or entities including, without limitation, appraisers, real estate
brokers, or competitors of Seller. Notwithstanding the foregoing, Buyer shall
have the right to disclose information with respect to the Property (i) to its
officers, directors, employees, attorneys, accountants, environmental auditors,
engineers, potential lenders, and permitted assignees under this Agreement and
other consultants to the extent necessary for Buyer in connection with its
acquisition of the Property provided that all such persons are told that such
information is confidential and agree (in writing for any third party engineers,
environmental auditors or other consultants) to keep such information
confidential, (ii) to the extent Buyer is required to disclose the same pursuant
to a court order, applicable laws (including making such public statements or
filings as may be required under any regulations of the U.S. Securities and
Exchange Commission applicable to Buyer or its affiliates or as may be otherwise
advised by counsel to Buyer), and (iii) to the extent necessary to disclose in
the context of a legal dispute between Purchaser and Seller. If Buyer acquires
the Property from Seller, both Seller and Buyer shall have the right, subsequent
to the Closing of such acquisition, to publicize the transaction (other than the
parties to or any of the economics of the transaction) in whatever manner it
deems appropriate; provided that any press release or other public disclosure
regarding this Agreement or the transactions contemplated herein, and the
wording of same, must be approved in advance by both parties. The provisions of
this paragraph shall survive the Closing or any termination of this Agreement.
In the event the transaction contemplated by this Agreement does not close as
provided herein, upon the request of Seller, Buyer shall promptly return to
Seller all Due Diligence Materials and other non-proprietary and non-privileged
documents and copies delivered to Buyer by or on behalf of Seller in connection
with the purchase of the Property hereunder.

 

Section 9.10         Interpretation of Agreement.

 

The article, section and other headings of this Agreement are for convenience of
reference only and shall not be construed to affect the meaning of any provision
contained herein. Where the context so requires, the use of the singular shall
include the plural and vice

 

32

 

 

versa and the use of the masculine shall include the feminine and the neuter.
The term "person" shall include any individual, partnership, joint venture,
corporation, trust, unincorporated association, any other entity and any
government or any department or agency thereof, whether acting in an individual,
fiduciary or other capacity.

  

Section 9.11         Limited Liability.

 

The obligations of Seller under this Agreement and under all of the Other
Documents are intended to be binding only on the property and assets of Seller
and shall not be personally binding upon, nor shall any resort be had to, the
private properties of any Seller Related Parties other than Seller.

 

Section 9.12         Amendments.

 

This Agreement may be amended or modified only by a written instrument signed by
Buyer and Seller.

 

Section 9.13         No Recording.

 

Neither this Agreement or any memorandum or short form thereof may be recorded
by Buyer.

 

Section 9.14         Drafts Not an Offer to Enter Into a Legally Binding
Contract.

 

The parties hereto agree that the submission of a draft of this Agreement by one
party to another is not intended by either party to be an offer to enter into a
legally binding contract with respect to the purchase and sale of the Property.
The parties shall be legally bound with respect to the purchase and sale of the
Property pursuant to the terms of this Agreement only if and when the parties
have been able to negotiate all of the terms and provisions of this Agreement in
a manner acceptable to each of the parties in their respective sole discretion,
and both Seller and Buyer have fully executed and delivered to each other a
counterpart of this Agreement (or a copy by facsimile transmission) (the
"Effective Date").

 

Section 9.15         Tax Deferred Exchange. In the event Seller elects to effect
a tax deferred exchange with respect to the sale of the Property, Buyer shall
reasonably cooperate with Seller; however, in no event shall Buyer have any
obligation to incur any expense or undertake any obligations in connection with
such efforts, and in no event shall Seller's obligations under this Agreement in
any way be subject to or conditioned upon the efficacy of any such tax deferred
exchange transaction.

 

Section 9.16         No Partnership.

 

The relationship of the parties hereto is solely that of Seller and Buyer with
respect to the Property and no joint venture or other partnership exists between
the parties hereto. Neither party has any fiduciary relationship hereunder to
the other.

 

33

 

 

Section 9.17         No Third Party Beneficiary.

 

The provisions of this Agreement are not intended to benefit any third parties.

 

Section 9.18         SEC S-X 3-14 Audit.

 

Seller understands that Buyer is subject to the reporting requirements of the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder and Rule 3-14 of Regulation S-X. In order to enable Buyer to comply
with such reporting requirements, Seller agrees to provide Buyer and its
representatives all information required for Buyer to comply with Rule 3-14 (as
reasonably determined by Buyer's counsel) including, but not limited to, if
applicable, Seller's most current financial statements (including income
statements and balance sheets) relating to the financial operation of the
Project for the current fiscal year and the most recent pre-acquisition fiscal
year, and upon request and, to the extent required under such Rule 3-14, support
for certain operating revenues and expenses specific to the Property, including
general ledger detail, accounts receivable analysis, budget to actual analysis
and copies of bills and invoices. Within five (5) business days following a
written request from Buyer, Seller shall provide a letter to Buyer’s auditors in
substantially the form attached hereto as Exhibit H. Seller understands that
certain of such financial information may be included in filings required to be
made by Buyer with the U.S. Securities and Exchange Commission. This
Section 9.18 shall survive Closing.

 

Section 9.19         Limitation on Liability.

 

Notwithstanding anything to the contrary contained herein, after the Closing:
(a) the maximum aggregate liability of Seller, and the maximum aggregate amount
which may be awarded to and collected by Buyer (including, without limitation,
for any breach of any representation, warranty and/or covenant by Seller) under
this Agreement or any documents executed pursuant hereto or in connection
herewith, including, without limitation, the Deed, the Bill of Sale and the
Assignment of Leases (collectively, the "Other Documents", shall under no
circumstances whatsoever exceed an amount equal to One Million Dollars
($1,000,000.00); and (b) no claim by Buyer alleging a breach by Seller of any
representation, warranty and/or covenant of Seller contained herein or in any of
the Other Documents may be made, and Seller shall not be liable for any judgment
in any action based upon any such claim, unless and until such claim, either
alone or together with any other claims by Buyer alleging a breach by Seller of
any such representation, warranty and/or covenant is for an aggregate amount in
excess of Twenty-Five Thousand Dollars ($25,000.00) (the "Floor Amount"), in
which event Seller's liability respecting any final judgment concerning such
claim or claims shall be for the entire amount thereof, subject to the
limitation set forth in clause (a) above; provided, however, that if any such
final judgment is for an amount that is less than or equal to the Floor Amount,
then Seller shall have no liability with respect thereto.

 

Section 9.20         Survival.

 

Except as expressly set forth to the contrary herein, no representations,
warranties, covenants or agreements of Seller contained herein shall survive the
Closing.

 

34

 

 

Section 9.21         Survival of Article IX.

 

The provisions of this Article IX shall survive the Closing.

 

[signature page follows]

 

35

 

 

The parties hereto have executed this Agreement as of the date set forth in the
first paragraph of this Agreement.

 

  Seller: PRAIRIE TOWNE LLC,     an Illinois limited liability company          
      By: Allied District Properties, LP       its sole member                  
By: Allied District Properties Corp.,         Its general partner              
      By: /s/ Cathy Green         Name: Cathy Green         Its: Vice President

 

(additional signatures follow)

 

36

 

 

  Buyer: AMERICAN REALTY CAPITAL IV, LLC,     a Delaware limited liability
company             By: /s/ Edward M. Weil, Jr.     Name: Edward M. Weil, Jr.  
  Title: President

 

37

 

 

The undersigned Title Company hereby (a) accepts the foregoing Agreement and
agrees to act as the Title Company under this Agreement in strict accordance
with its terms, and (b) acknowledges receipt of the Earnest Money and one (1)
executed counterpart of this Agreement from Seller and Buyer.

 

  Title Company: BENCHMARK TITLE SERVICES             By: /s/ Brett Poston    
Name: Brett Poston     Title: Attorney/Closer

 

38

 

 

LIST OF EXHIBITS AND SCHEDULES

Exhibits

 

Exhibit A Real Property Description     Exhibit B Rent Roll     Exhibit C Deed  
  Exhibit D Bill of Sale     Exhibit E Assignment of Leases, Service Contracts,
Warranties and Other Intangible Property     Exhibit F Estoppel Certificate    
Exhibit G List of Service Contracts     Exhibit H Form of Audit Letter

 

Schedules

 

Schedule 1 Disclosure Items

 

39

 

 

Exhibit A

Real Property Description

 

 

[ex1022pg40.jpg]

 

A-1

 

 

Exhibit B

Rent Roll

 

[ex1022pg41.jpg]

 

B-1

 

 

[ex1022pg42.jpg]

 

B-2

 

 

Exhibit C

Deed

 

PREPARED BY:          , Esq.   Levenfeld Pearlstein, LLC   2 North LaSalle
Street   Suite 1300   Chicago, Illinois 60602       WHEN RECORDED RETURN TO:    
  SEND FUTURE TAX BILLS TO: (Above Space for Recorder’s use only)

 

Special WARRANTY DEED

 

This Special Warranty Deed is made as of the ___ day of _____, 20____ by the
GRANTOR,      , whose address is      , for and in consideration of TEN AND
00/100 DOLLARS, and other good and valuable consideration in hand paid, GRANTS,
BARGAINS AND SELLS [verify this language vs. CONVEYS and TRANSFERS] to       ,
whose address is       , all interest in the real estate legally described on
Exhibit A attached hereto, hereby releasing and waiving all rights under and by
virtue of the Homestead Exemption Laws of the State of Illinois.

 

The Grantor will warrant and defend the real estate described above against all
persons lawfully claiming by, through or under Grantor, subject however to the
matters set forth on Exhibit B.

 

THE PROPERTY CONVEYED HEREBY IS SOLD IN ITS “AS IS”, “WHERE IS” CONDITION
WITHOUT ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY OF ANY KIND
WHATSOEVER, EXCEPT AS SPECIFICALLY PROVIDED ABOVE, AND EXCEPT FOR THE WARRANTIES
OF GRANTOR EXPRESSLY SET FORTH IN THAT CERTAIN [DESCRIBE FINAL EXECUTED PSA].

 

PINs and Common Address(es): See Exhibit A

 

[Signatures begin on next page]

 

C-1

 

 

IN WITNESS WHEREOF, Grantor has executed this Special Warranty Deed as of the
date first set forth above.

 

  GRANTOR:       By:     Name:     Title:  

 

STATE OF )     ) ss. COUNTY OF )  

 

I,      , a Notary Public in and for said County, in the State aforesaid, do
hereby certify that , the MANAGER of a(n) _______________________, limited
liability company, who is personally known to me to be the same person whose
name is subscribed to the foregoing instrument in such capacity, appeared before
me this day in person and acknowledged that he/she signed and delivered the said
instrument as his/her own free and voluntary act and as the free and voluntary
act of said entity, for the uses and purposes therein set forth.

 

GIVEN under my hand and notarial seal, this       day of      , 20     

 

      Notary Public           My Commission Expires:            (Seal)        

 

C-2

 

 

Exhibit A

 

Legal Description

 

Common Address:

 

PIN:

 

A-1

 

 

EXHIBIT B

 

PERMITTED EXCEPTIONS

 

B-1

 

 

Exhibit D

Bill of Sale

 

This Bill of Sale (the "Bill of Sale") is made and entered into ____________,
2014, by and between ____________________ ("Assignor"), and __________________
("Assignee").

 

In consideration of the sum of Ten Dollars ($10) and other good and valuable
consideration paid by Assignee to Assignor, the receipt and sufficiency of which
are hereby acknowledged, Assignor does hereby assign, transfer, convey and
deliver to Assignee, its successors and assigns, all items of Tangible Personal
Property (as defined in the Agreement referred to below), if any, owned by
Assignor and situated upon and used exclusively in connection with the Real
Property (as defined in the Agreement) and more particularly described on
Exhibit A attached hereto and made a part hereof for all purposes, including,
without limitation, the Tangible Personal Property identified in Exhibit B, if
any, attached hereto and made a part hereof for all purposes (the "Personal
Property").

 

This Bill of Sale is made subject, subordinate and inferior to the easements,
covenants and other matters and exceptions set forth on Exhibit C, if any,
attached hereto and made a part hereof for all purposes.

 

Assignee acknowledges and agrees that, except as expressly provided in, and
subject to the limitations contained in, that certain agreement of purchase and
Sale dated April __, 2014, by and between Assignor and Assignee (the
"agreement"), Assignor has not made, does not make and specifically disclaims
any representations, warranties, promises, covenants, agreements or guaranties
of any kind or character whatsoever, whether express or implied, oral or
written, past, present or future, of, as to, concerning or with respect to (a)
the nature, quality or conditions of the personal property, (b) the income to be
derived from the personal property, (c) the suitability of the personal property
for any and all activities and uses which assignee may conduct thereon, (d) the
compliance of or by the personal property or its operation with any laws, rules,
ordinances or regulations of any applicable governmental authority or body, (e)
the quality, habitability, merchantability or fitness for a particular purpose
of any of the personal property, or (f) any other matter with respect to the
personal property. Assignee further acknowledges and agrees that, having been
given the opportunity to inspect the personal property, Assignee is relying
solely on its own investigation of the personal property and not on any
information provided or to be provided by Assignor, except as specifically
provided in the Agreement. Assignee further acknowledges and agrees that any
information provided or to be provided with respect to the personal property was
obtained from a variety of sources and that Assignor has not made any
independent investigation or verification of such information. Assignee further
acknowledges and agrees that the sale of the personal property as provided for
herein is made on an "as is, where is" condition and basis "with all faults,"
except as specifically provided in, and subject to the limitations contained in,
the Agreement.

  

D-1

 

 

The obligations of Assignor are intended to be binding only on the property and
assets of Assignor and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any Seller Related Parties (as
defined in the Agreement) other than Assignor.

 

IN WITNESS WHEREOF, Assignor and Assignee have caused this Bill of Sale to be
executed on the date and year first above written.

 

  Assignor:   ,     a                       By:         Its:                    
        By:           Its:  

 

  Assignee:   ,     a                       By:         Its:                    
        By:           Its:  

 

D-2

 

 

Exhibit E

Assignment of Leases, Service Contracts,
Warranties and Other Intangible Property

 

This Assignment of Leases, Service Contracts, Warranties and Other Intangible
Property (this "Assignment") is made and entered into _______________, 2014, by
and between _____________________________ ("Assignor"),
____________________________________
_____________________________________________ ("Assignee").

 

For good and valuable consideration paid by Assignee to Assignor, the receipt
and sufficiency of which are hereby acknowledged, Assignor does hereby assign,
transfer, set over and deliver unto Assignee all of Assignor's right, title, and
interest in and to the following (collectively, the "Assigned Items"): (i) those
certain leases and any guaranties thereof and security deposits thereunder (the
"Leases") listed on Exhibit A attached hereto and made a part hereof for all
purposes except for Seller's right to receive delinquent rent and other
delinquent sums owing under such Leases for the period prior to the date hereof
in accordance with the Agreement (as defined below), (ii) those certain service
contracts, equipment leases, tenant improvement agreements and leasing
agreements (the "Service Contracts") listed on Exhibit B, if any, attached
hereto and made a part hereof for all purposes, and (iii) all assignable
warranties and guaranties relating to the Real Property (as defined in the
Agreement), including, without limitation, those certain warranties held by
Assignor (the "Warranties") listed on Exhibit C, if any, attached hereto and
made a part hereof for all purposes, and (iv) all zoning, use, occupancy and
operating permits, and other permits, licenses, approvals, waivers, land use
entitlements, and certificates, maps, plans, specifications, and all other
Intangible Personal Property (as defined in the Agreement) owned by Assignor and
used exclusively in the use or operation of the Real Property and Personal
Property (as defined in the Agreement), including, without limitation, any right
of Assignor to use the name "Prairie Towne Center" and any other trade name
owned by Assignor now used exclusively in connection with the Real Property and
any utility contracts or other agreements or rights relating to the use and
operation of the Real Property and Personal Property.

 

This Assignment is made subject, subordinate and inferior to the easements,
covenants and other matters and exceptions set forth on Exhibit D, if any,
attached hereto and made a part hereof for all purposes.

 

Assignee acknowledges and agrees, by its acceptance hereof, that, except as
expressly provided in, and subject to the limitations contained in, that certain
Agreement of Purchase and Sale, dated as of April ___, 2014, by and between
Assignor and Assignee (the "Agreement"), the assigned items are conveyed "as is,
where is" and in their present condition with all faults, and that assignor has
not made, does not make and specifically disclaims any representations,
warranties, promises, covenants, agreements or guaranties of any kind or
character whatsoever, whether express or implied, oral or written, past, present
or future, of, as to, concerning or with respect to the nature, quality or
condition of the assigned items, the income to be derived therefrom, or the
enforceability, merchantability or fitness for any particular purpose of the
assigned items.

 

E-1

 

 

Except as otherwise expressly provided in the Agreement, by accepting this
Assignment and by its execution hereof, Assignee assumes the payment and
performance of, and agrees to pay, perform and discharge, all the debts, duties
and obligations to be paid, performed or discharged from and after the Closing
Date (as defined in the Agreement) by (a) the "landlord" or the "lessor" under
the terms, covenants and conditions of the Leases, including, without
limitation, brokerage commissions and compliance with the terms of the Leases
relating to tenant improvements and security deposits, and (b) the owner under
the Service Contracts, the Warranties and/or the Other Intangible Property.
Except as otherwise expressly provided in the Agreement, Assignee agrees to
indemnify, hold harmless and defend Assignor from and against any and all
claims, losses, liabilities, damages, costs and expenses (including, without
limitation, court costs and reasonable attorneys' fees and disbursements)
resulting by reason of the failure of Assignee to pay, perform or discharge any
of the debts, duties or obligations assumed or agreed to be assumed by Assignee
hereunder arising out of or relating to, directly or indirectly, in whole or in
part, the Assigned Items, from and after the Closing Date. Except as otherwise
expressly provided in the Agreement, and subject to the provisions of Sections
3.2 and 9.19 of the Agreement (which provisions are not modified in any way by
the following indemnity), Assignor agrees to protect, indemnify, defend and hold
Assignee harmless from and against all claims, losses, damages, costs, expenses,
obligations and liabilities (including, without limitation, court costs and
reasonable attorneys' fees and disbursements) (collectively, "Claims") arising
out of or relating to, directly or indirectly, in whole or in part, the Leases
or Service Contracts prior to the Closing Date, including, without limitation,
defaults under the Leases by Assignor as landlord; provided, however, that the
foregoing indemnity shall not apply to any Claims relating in any way to the
physical, environmental or other condition of the Property (as defined in the
Agreement) or the compliance or non-compliance of the Property with any legal
requirements; and provided further that the foregoing indemnity shall apply
solely to Claims first raised after the Closing Date and shall survive only for
a period of nine (9) months after the Closing Date. Any such Claim which
Assignee may have at any time against Assignor, whether known or unknown, which
is not specifically asserted by written notice to Assignor within such nine (9)
months period shall not be valid or effective, and neither Assignor nor any
Seller Related Parties (as defined in the Agreement) shall have any liability
with respect thereto.

 

The obligations of Assignor are intended to be binding only on the property and
assets of Assignor and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any Seller Related Parties other
than Assignor.

 

All of the covenants, terms and conditions set forth herein shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.

 

[signature page follows]

 

E-2

 

 

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed on the day and year first above written.

 

  Assignor:   ,     a                       By:         Its:                    
        By:           Its:  

 

  Assignee:   ,     a                       By:         Its:                    
        By:           Its:  

  

E-3

 

 

Exhibit F

Tenant Estoppel

 

The undersigned ("Tenant") hereby certifies to _____________________ ("Seller")
and to American Realty Capital IV, LLC, ARC PTSCHIL001, LLC, and its successors
and assigns (collectively, "Buyer"), and Buyer's lender [INSERT NAME OF LENDER,
IF KNOWN], and its successors and assigns ("Buyer's Lender"), in connection with
Buyer's proposed purchase of that certain project commonly known as "Prairie
Towne Center" located at _______________________________, _________________ (the
"Project") that:

 

1.          Tenant is the lessee of certain space (the "Premises") in the
Project, containing approximately _________ square feet and known as Suite No.
____, under a lease dated __________, ______ (the "Lease") entered into between
Tenant and ___________________________, as lessor ("Lessor").

 

2.          The Lease is presently in full force and effect and Tenant is not in
default thereunder.

 

3.          The Lease, a true, correct and complete copy of which is attached
hereto as Exhibit A, constitutes the entire agreement between Lessor and Tenant,
and there has been no amendment, written or oral, to the Lease except as
included in Exhibit A. Tenant neither expects nor has been promised any
inducement, concession or consideration for entering into the Lease, except as
stated therein, and there are no side agreements or understandings between
Lessor and Tenant.

 

4.          Tenant has accepted the Premises and is paying rent under the Lease.

 

5.          The term of the Lease commenced on _______________, ____, and will
end on ____________, with ___________ (__) options to extend of successive
periods of _______ years each. The monthly rental for lease year _____ - _____
is _____________________________ Dollars ($__________).

 

6.          Tenant is required to pay its pro rata share of operating
expenses/common area maintenance expenses of the Project and its pro rata share
of the Project's real property taxes and insurance costs. Tenant's percentage
share of operating expenses/common area maintenance expenses, insurance and real
property taxes is _____%, which is currently being paid on an estimated basis in
advance at the rate of $__________ per month.

 

7.           Tenant is obligated to pay percentage rent equal to ____% of annual
gross sales in excess of $__________. Percentage rent has been paid through
__________, 201[].

 

8.          As of the date of this certificate, to the knowledge of Tenant,
Lessor is not in default under the Lease, nor does any condition exist which
with the giving of notice of the passage of time, or both, would constitute a
default by Lessor under the Lease. Neither Lessor nor Tenant has commenced any
action to terminate the Lease or has given or received any notice of default
with respect to the Lease.

 

F-1

 

 

9.          The amount of the security deposit paid under the terms of the Lease
is ___________________________ Dollars ($__________). No rent under the Lease
has been paid more than one month in advance, and no other sums have been
deposited with Lessor.

 

10.         The undersigned has not entered into any sublease, assignment or any
other agreement transferring any of its interest in the Lease or the Premises
except as follows: _________________________________.

 

11.         Tenant has unconditionally accepted possession of the Premises and
is now occupying the Premises and open for business. Any improvements to be made
by Lessor have been completed to the satisfaction of Tenant. Tenant has received
payment in full of any tenant improvement allowance or build-out allowance or
any other payment to be provided by Lessor under the terms of the Lease. Tenant
is not aware of any defect in the Premises.

 

12.         There is no remaining free rent period or any unexpired concession
or abatement of rent. The lease term has commenced and full rental is now
accruing thereunder. Lessor is not reimbursing Tenant or paying Tenant's rent
obligations under any other lease, and Tenant has not advanced any funds for or
on behalf of Lessor for which Tenant has a right of deduction from, or set off
against, future rent payments. Tenant has no present right to any credit,
offset, deduction or defense against any rents, additional rents or other sums
due or to become due under the Lease.

 

13.         The Lease does not contain and Tenant does not otherwise have any
(1) option to purchase the Premises or the Project, (2) right of first refusal
with respect to the Premises or the Project, (3) any right to lease additional
space in the Project, or (4) right to terminate or cancel the Lease in whole or
in part (except as expressly set forth in the Lease).

 

14.         All exhibits attached hereto are by this reference incorporated
fully herein. The terms "this certificate" shall be considered to include all
such exhibits. The undersigned makes this statement for the Buyer's, Buyer's
Lender's and Seller's benefit and protection with the understanding that Buyer
(and any assignee of Buyer's right to purchase the Premises) and Buyer's Lender
intend to rely upon this statement in connection with Buyer's or its assignee's
intended purchase (and Buyer's Lender's financing of the purchase) of the above
described Project from Seller. The undersigned agrees that it will, upon receipt
of written notice from Seller, commence to pay all rents to the Buyer (or its
assignee) or to any agent acting on behalf of the Buyer or its assignee.

 

EXECUTED:  _______________ , 2014.   TENANT:                       By:          
    Its:  

 

F-2

 

 

Exhibit G

List of Service Contracts

 

1.Service Agreement dated November 14, 2013, by and between Tim’s Snowplowing,
Inc. and Prairie Towne LLC.

 

2.Fire Radio Inspection and Test Agreement dated January 1, 2013, by and between
Micr-Eye Security Systems Inc. and Prairie Towne Center Building.

 

3.Service Contract dated June 1, 2011, by and between Prairie Towne LLC, Acadia
D.R. Management, LLC and L.A. Daniels, Inc.

 

4.Service Contract dated April 3, 2012, by and between Prairie Towne LLC, Acadia
Realty Limited Partnership, Acadia Realty Trust, ACRS II LLC, Acadia D.R.
Management, LLC and Professional Cleaning Company.

 

5.Service Contract dated February 2, 2012, by and between Prairie Towne LLC,
Acadia D.R. Management, LLC and Simplex Grinnel LP.

 

6.Unsigned Tree Maintenance Agreement dated March 17, 2014, by and between
M&JWilkow and Green Horizon, Inc.

 

7.Access Agreement dated February 1, 2013, by and between Comcast Cable
Communications Management, LLC and Prairie Towne, LLC.

 

8.Retail Electricity Supply Agreement dated May 1, 2012, by and between Allied
District Properties Corp. and MC Squared Energy Services, LLC.

 

9.Attorney Contingent Fee Contract dated March 25, 2013, by and between Prairie
Towne, LLC and Flanagan Bilton, LLC.

 

G-1

 

 

Exhibit H

 

Form of Audit Letter

 

[Date]

 

[Address of Buyer's Auditor]

 

We are providing this letter as an informational accommodation in connection
with your audit of the statement of revenues and certain expenses (the
"Statement") of Prairie Towne Center, Schaumburg, Illinois (the "Property") for
the period from _______________ to _______________.

 

We confirm, to our actual, current knowledge, without any duty of inquiry or
investigation, the following representation made to you during your audit:

 

1.          The Statement referred to above was prepared in material conformity
with sound accounting principles, consistently applied.

 

2.          We have no actual, current knowledge of any fraud affecting the
operations of the Property that had a material effect on the accuracy of the
Statement.

 

  SELLER:                 ,   a    

 

  By:     Name:     Title:  

 

H-1

 

 

Schedule I

Disclosure Items

 

1.In 2011, the Illinois Department of Transportation (IDOT) began planning for a
road improvement project at the intersection of Schaumburg and Barrington Roads
in Schaumburg, IL (“Roadwork”). The Roadwork required the takings of .053 acres
(2,309 sf) of land as fee simple and .339 (14,767 square feet) of temporary
construction easements for the earlier of (a) five (5) years or (b) completion
of construction at Prairie Towne Shopping Center. Both the takings and temporary
easements are reflective in the survey provided as part of the Due Diligence
Items. The Roadwork began in 2013 and is expected to be fully complete by late
summer 2014. Seller is currently working with Neal & Leroy, L.L.C to negotiate
and finalize a compensation award for the value provided by Seller. Buyer shall
not have any rights to the final compensation award. Further, Buyer will
cooperate with Seller, if necessary, with the process to release the award from
the Treasurer of Cook County if a disclaimer or waiver of interest from Buyer is
required.

 

2.In connection with the Roadwork described above, Seller is responsible for
replacing five light poles, landscaping around the temporary construction
easement areas and repair of the sprinkler system (“IDOT Repair Work”). Seller
has entered into an Agreement for Contract Services dated September 23, 2013
with CLC Electric, Inc. in the amount of $22,500 for a portion of the IDOT
Repair Work. Seller will use its best efforts to have the IDOT repair work
completed by Closing. If Seller cannot complete by Closing, it will use its best
efforts to complete the IDOT Repair Work as soon as possible after Closing.

 

3.A slip and fall personal injury lawsuit, Case No. 2012-L-004065, has been
brought by Josephine Moore against Seller relating to an incident that allegedly
occurred on November 26, 2010 in the Kohl’s parking lot.

  

Schedule I-1