Exhibit
10.17


 


PURCHASE OPTION AGREEMENT


 


THIS PURCHASE OPTION AGREEMENT  (the
“Agreement”) is made as of the        
day of [            
    , 2010], by STAG INVESTMENTS III, LLC,
a Delaware limited liability company (the “Fund”), in
favor of STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership (the “Operating Partnership”).


 


BACKGROUND:


 


A.                                    STAG
Industrial, Inc., a Maryland corporation (the “REIT”),
which is the sole member of STAG Industrial GP, LLC, a Delaware limited
liability company (the “General Partner”),
which in turn is the sole general partner of the Operating Partnership, and the
Operating Partnership are engaging in various related transactions, including
the initial public offering of the REIT’s common stock (the “IPO”), the net proceeds of which will be contributed to the
Operating Partnership, and the Contribution Transaction (defined below), to
consolidate the ownership of a portfolio of primarily single tenant real estate
assets.


 


B.                                    On or
about the date hereof, the Fund (i) created a new, wholly owned
subsidiary, STAG III Properties, LLC, a Delaware limited liability company (“Retained Holdings”), (ii) caused STAG Investments
Holdings III, LLC, a Delaware limited liability company (“Holdings”),
to create a new, wholly-owned subsidiary, STAG III Mason 2, LLC, a Delaware
limited liability company (“Mason 2”), (iii) through
Holdings, caused STAG III Mason, LLC to convey the property described on Exhibit C-1
to Mason 2, and (iv) caused Holdings to transfer 100% of the ownership
interests in Mason 2 and each of the special purpose entities listed on Exhibit A
attached hereto and incorporated herein (collectively, the “Property Entities” and each, a “Property
Entity”) to Retained Holdings.


 


C.                                    Each
Property Entity holds title to the real estate asset listed to the right of its
name on Exhibit A (collectively, the “Real Estate
Assets” and each, a “Real Estate Asset”),
which Real Estate Assets (i) are located on the parcels of land described
in Exhibits C-1 through C-3 (such tracts or parcels of land, together
with the rights and appurtenances pertaining to each parcel or tract of land,
including any right, title and interest in and to adjacent streets, alleys or
rights-of-way, the “Land”), (ii) include
the buildings, structures, fixtures and other improvements on the Land (the “Improvements”) and the tangible and intangible personal
property owned by the Property Entities used or useful in connection with the
businesses being carried out on the Land and in the Improvements (the “Personal Property”), and (iii) are affected by each
lease and other occupancy agreement for any portion of the Land or the
Improvements (the “Leases”),
including all deposits and escrows held in connection therewith, and each other
contract relating to the operation or use of the Land and Improvements [(other
than any property management agreements)] (the “Other
Contracts”).  The Land, Improvements,
Personal Property, Leases and Other Contracts related to a given Real Estate
Asset shall be referred to herein collectively as a “Property”.


 


D.                                    On or
about the date hereof, the Fund will contribute 100% of the membership  interests in Holdings to the Operating
Partnership (the “Contribution Transaction”)
in


 

















 


exchange for common units of limited partnership interests
in the Operating Partnership (“OP Units”)
pursuant to that certain Contribution Agreement (the “Contribution
Agreement”), dated as of [            
   , 2010], by and among the Fund, the Operating Partnership and
the REIT.


 


E.                                     In
connection with the transfer of the ownership interests in the Property
Entities to Retained Holdings and the Contribution Transaction,                             
(the “Lender”) has made a loan to Retained
Holdings and the Property Entities in the principal amount of $                       
(the “Loan”), which is secured by first
mortgages on the Properties and which has been allocated among the Properties
as shown on Exhibit B attached hereto and incorporated herein (the
applicable amount with respect to each Property, the “Allocated
Loan Amount”).  The proceeds
of the Loan were used to repay a portion of a loan made by Lender to Holdings,
the Property Entities and others that was secured in part by the Properties and
to obtain the release of the Properties from mortgages securing said loan.(1)


 


F.                                      The
Fund desires to grant the Operating Partnership (or its designee) an option to
acquire 100% of the ownership interests in each of the Property Entities, on
the terms and conditions set forth herein.


 


A G R E E M E N T:


 


Now, therefore, in consideration of the execution and
delivery of the Contribution Agreement and the payment by the Operating
Partnership of Ten and 00/100 Dollars ($10.00) and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:


 


1.                                      Definitions.  The following capitalized terms used in this
Agreement but not otherwise defined in this Agreement have the meanings set
forth below:


 


“Affiliate”
means, with respect to any specified person, a person that directly or
indirectly through one or more intermediaries Controls, is Controlled by or is
under common Control with the specified person.


 


“Appraisal”
means an Approved Appraiser’s determination of a given Property’s fair market
value at the time of such determination.


 


“Approved Appraiser”
means a Qualified Appraiser selected by the Fund (the “Proposed
Appraiser”) and approved by the Operating Partnership, which
approval shall not be unreasonably withheld, conditioned or delayed.  If, within five (5) business days of
receiving written notice of a Proposed Appraiser from the Fund, the Operating
Partnership has not  responded to
such notice with specific concerns about the Proposed Appraiser, the Proposed


 






(1)  Modify this reference if the releases are
obtained through a cash pay down of the STAG III debt from the STAG owners.


 


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Appraiser shall be deemed an Approved Appraiser.  For purposes of the exercise of an Option in
connection with the liquidation or dissolution of the Fund, a Qualified
Appraiser who prepared the last appraisal shall be deemed an Approved
Appraiser.


 


“Control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities, by contract or
otherwise.


 


“Encumbrances”
means any pledge, claim, lien, option, charge, security interest, restriction,
mortgage, deed of trust, encumbrance, right of assignment, purchase right,
license or other rights of any nature whatsoever of any third party.


 


“Offer” means a
bona fide offer from a User for the purchase of any Property or the ownership
interests in any Property Entity that the Fund would be willing to accept,
which bona fide offer sets forth the purchase price and all other material
terms of the transaction.


 


“Offer Property”
means a Property that is the subject of an Offer.


 


“Option Exercise Notice”
means a Stabilization Option Exercise Notice, User Sale Option Exercise Notice
or a Liquidation Option Exercise Notice, as applicable.


 


“Option Notice”
means a Stabilization Notice, a User Sale Notice or a Liquidation Notice, as
applicable.


 


“Permitted Encumbrance”
means (i) any lien securing taxes, the payment of which is not
delinquent or the payment of which is actively being contested in good faith by
appropriate proceedings diligently pursued; (ii) zoning laws and
ordinances generally applicable to the district in which a Property is located;
(iii) liens imposed by laws, such as carriers’, warehousemen’s, carriers’
and mechanics’ liens, and other similar liens arising in the ordinary course of
business that secure payment of obligations not more than 93 days past due or
that are being contested in good faith by appropriate proceedings diligently
pursued; (iv) easements for public utilities and other access and use
easements that do not have a material adverse effect upon a Property; (iv) the
Leases; (v) any exceptions listed on Exhibit D attached hereto
and incorporated herein; and (vi) any mortgage or deed of trust securing
the Loan (if the Operating Partnership (or its designee) will assume all or a
portion of the Loan).


 


“Purchase and Sale Agreement” means, with respect to any
Property, a Purchase and Sale Agreement in the form attached hereto as Exhibit E
modified to include specific information regarding said Property (e.g., address
and legal description) and to reflect other changes that are customary or
necessary for the jurisdiction in which the Property is located.  Nothing in this Agreement shall preclude a
Purchase and Sale Agreement from addressing more than one Property.


 


“Qualified Appraiser”
means an appraiser, who is not Affiliated with the Fund or its


 


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Affiliates, who has at least ten (10) years of
commercial real estate appraising experience in the geographic area of the
applicable Property and with respect to properties of a similar type as the
Property and who is MAI certified.


 


“Stabilization”
means, with respect to any Property, that eighty-five percent (85%) of the
rentable square feet of the building(s) on said Property is subject to one
or more leases, each with a term of no less than two (2) years then
remaining.


 


“User” means a
person or entity that is not an Affiliate of the Fund that submits a written
offer to purchase a Property and intends that it or its Affiliates will occupy
substantially all of the Property once any existing leases have expired.


 


2.                                      Grant of Option.  Subject to the terms and conditions contained
herein, the Fund hereby grants to the Operating Partnership (or its designee)
the right and option (the “Option”) to
purchase each Property (via the transfer of ownership interests in the
applicable Property Entity) (each, an “Option
Property” and collectively, the “Option
Properties”), in its “as-is”, condition free and clear of any
Encumbrances, except the Permitted Encumbrances, for the Option Price (defined
below).  Except as otherwise provided in
this Agreement, upon the Operating Partnership’s exercise of the Option in
accordance with Section 3, the Fund shall be unconditionally obligated to
cause Retained Holdings to sell the ownership interests in the applicable
Property Entity to the Operating Partnership (or its designee) for the Option
Price.  The closing of such sale (the “Closing”) shall occur on the date that is seventy-five (75)
days after the Fund’s receipt of an Option Exercise Notice or if such date is
not a business day, the next business day (the “Closing Date”);
provided, however, that the parties may agree in writing upon an earlier
date.  If the Fund fails to cause
Retained Holdings to sell the ownership interests in the applicable Property
Entity to the Operating Partnership (or its designee) as and when required by
this Agreement, then, in addition to its other remedies, the Operating
Partnership shall be entitled to specific performance of the Fund’s obligations
hereunder.  If not previously exercised,
the Option granted hereunder shall automatically terminate on the date that is
five (5) years after the Effective Date (the “Expiration
Date”); provided however that if, as of the Expiration Date there
shall be an outstanding Stabilization Notice, User Sale Notice or Liquidation
Notice and the Operating Partnership’s applicable election period thereunder
(as set forth in Section 3(b) below) shall not have expired,
the Expiration Date shall be extended until the business day after the
expiration of such election period and provided further that if the Operating
Partnership timely delivers an Option Exercise Notice within such election
period, the Expiration Date shall be further extended until the date that is the
earlier of (a) ninety (90) days after the delivery of the Option Exercise
Notice or (b) the scheduled Closing Date.


 


3.                                      Method and Terms of Exercise.


 


(a)                                 Notice.


 


(i)                                     Within
thirty (30) days of a Property achieving Stabilization, the Fund shall send written
notice to the Operating Partnership of such Stabilization (the “Stabilization  Notice”), which notice
shall include the name of the Proposed Appraiser and a copy of the


 


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Purchase and Sale Agreement.  Upon the Operating Partnership’s approval or
deemed approval of the Proposed Appraiser, the Fund shall, at its sole cost and
expense, engage the Approved Appraiser to prepare an Appraisal for said
Property.  The Fund shall, within ten (10) days
of receipt of the Appraisal, send a copy of the Appraisal to the Operating
Partnership.


 


(ii)                                  Within
ten (10) days of receipt of an Offer, the Fund shall provide written
notice to the Operating Partnership of said Offer (the “User
Sale Notice”), which notice shall include
a copy of the Offer and a copy of the Purchase and Sale Agreement.


 


(iii)                               If the
Fund’s member(s) elect to terminate and dissolve the Fund while the Fund
still owns any Property that is subject to the provisions of this Agreement,
the Fund shall provide written notice to the Operating Partnership of its
decision to terminate and dissolve (the “Liquidation Notice”),
which notice shall include evidence of the termination or liquidation election,
a list of the Properties still subject to this Agreement, a copy of the most
recent Appraisal for any Property that remains subject to this Agreement and a
copy of the Purchase and Sale Agreement.


 


(b)                                 Exercise
of Option.  Upon receipt of an Option Notice, the
Operating Partnership shall have ninety (90) days from receipt of a
Stabilization Notice and thirty (30) days from receipt of a User Sale Notice or
a Liquidation Notice to send written notice to the Fund of its intention to
exercise the Option with respect to the ownership interests in any Property
Entity owning a Property that is the subject to said notice (any such notice
sent by the Operating Partnership to the Fund being referred to herein as a “Stabilization Option Exercise Notice”, a “User Sale Option Exercise Notice”, or a “Liquidation Option Exercise Notice”, as applicable and each,
an “Option Exercise Notice”), a signed
counterpart of the Purchase and Sale Agreement and a non-refundable earnest
money deposit equal to five percent (5%) of the Option Price (the “Deposit’).  The Fund
shall deliver a signed counterpart of the Purchase and Sale Agreement to the
Operating Partnership upon confirmation from the escrow agent identified in the
Purchase and Sale Agreement that the Deposit has been received.  The parties agree that if the Option Price is
not known at the time of delivery of a Liquidation Option Exercise Notice, the
purchase price set forth in the Purchase and Sale Agreement shall be the
Operating Partnership’s reasonable estimate of the fair market value of the
applicable Property and the Deposit shall be five percent (5%) of said
estimated fair market value, provided that once the Appraisals for the
applicable Properties are received, the parties shall promptly enter into an
amendment to the Purchase and Sale Agreement that changes the purchase price to
an amount equal to the fair market value of the Properties as set forth in the
Appraisals.


 


(d)                                 No
Exercise of Option.  If the Fund does not receive a Stabilization
Option Exercise Notice or a User Sale Option Exercise Notice, as applicable,
within the applicable election period, the Option with respect to the ownership
interests in the Property Entity owning the Stabilized Property or the Offer
Property, as applicable, shall automatically terminate.  If the Fund does not receive a Liquidation
Option Exercise Notice within the thirty (30) day election period, this
Agreement shall automatically terminate. 
If the Fund receives a Liquidation Option Exercise Notice with respect
to some but not all of the Properties that remain subject to this Agreement, the
Option with respect to the ownership interests in the Property Entities that
are


 


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not indentified in the Liquidation Option Exercise
Notice shall automatically terminate. 
Notwithstanding the foregoing, in the event that the Fund does not
receive a User Sale Option Exercise Notice within the thirty (30) day election
period, the Fund shall have the right, during the period commencing on the
expiration of said thirty (30) day election period and ending on the later of: (i) sixty
(60) days after the closing date set forth in the Offer or (ii) one
hundred eighty (180) days after the date of said Offer (the “Offer Property Sale Period”), to sell the Offer Property to
the User or any other person on terms that are no more favorable to the buyer
than those set forth in the Offer, except the purchase price can be as low as
ninety percent (90%) of the purchase price set forth in the Offer; provided
that if the Fund is unable to sell the Offer Property during the Offer Property
Sale Period on terms no more favorable to the buyer than those set forth in the
Offer (other than purchase price), the Option with respect to the ownership
interests in the Property Entity owning said Offer Property shall automatically
revive and thereafter be subject to the terms and conditions of this
Agreement.  If the sale of the Offer
Property happens as set forth in the Offer, the Operating Partnership or its
designee shall receive from the Fund, in cancellation of such Option, twenty-five
percent (25%) of the portion of the sale price that exceeds the sum of the Fund’s
undepreciated cost of the Property and the sale closing costs (e.g., attorneys’
fees, recording fees, escrow fees and other closing costs incurred by the
Fund).


 


(d)                                 Inspection.  So long as the Operating
Partnership has an Option with respect to a Property, the Fund shall permit the
Operating Partnership and its agents, on at least forty-eight (48) hours
advance notice, to enter upon said Property, subject to the rights of any
tenants, during regular business hours, to make such surveys, inspections and
tests as may reasonably be reasonably necessary in connection with its
examination of the Property.  The
Operating Partnership shall repair any damage it or its agents may cause to the
Property as a result of any such inspections or tests or any other related
damage caused by the Operating Partnership or its agents, and further shall
indemnify, defend and hold the Fund, Retained Holdings and the applicable
Property Entity and their respective owners, managers, directors, officers,
employees, licensees and invitees harmless from and against any and all claims,
losses, damages and expenses, including, without limitation, reasonable
attorneys’ fees, suffered by the Fund, Retained Holdings, the applicable
Property Entity or their respective owners, managers, directors, officers,
employees, licensees or invitees (collectively, the “Fund
Indemnified Parties”) as a direct result of the entry by the
Operating Partnership or its agents upon, or acts upon, any Property in
connection with any such inspections or tests or any other related damage to
the Property caused by the Operating Partnership or its agents; provided,
however, in no event shall the Operating Partnership be liable for punitive
damages resulting from its inspections, tests or entry or for any damages
solely attributable to the willful misconduct or gross negligence of any Fund
Indemnified Party.  Notwithstanding the
foregoing, upon the effectiveness of a Purchase and Sale Agreement, the
Operating Partnership’s (or its designee’s) right to inspect the applicable
Property shall be governed by the terms of the Purchase and Sale Agreement.


 


(e)                                  Information.  So long as the Operating
Partnership has an Option with respect to the ownership interests in a Property
Entity, the Fund (i) shall permit (and shall cause Retained Holdings and
the applicable Property Entity to permit) the Operating Partnership and its
agents to review all books, records, leases, service contracts, environmental
reports, soil reports,


 


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engineering reports, surveys and other documentation
with respect to said Property that are in the  possession and control of the Fund, Retained Holdings or the applicable
Property Entity and reasonably requested by the Operating Partnership, [and (ii) shall
provide (or cause to be provided), upon written request from the Operating
Partnership, a report regarding the status of said Property, on a quarterly
basis, which report shall include unaudited financial statements and such other
information and data as the Operating Partnership may reasonably request
regarding said Property (to the extent such information and data is in the
possession and control of the Fund, Retained Holdings or the applicable
Property Entity).  The parties agree that
to the extent the Operating Partnership or any of its Affiliates is providing
administrative or management services to the Fund, Retained Holdings or a Property
Entity with respect to any Property, the Fund shall be deemed to have satisfied
its obligation under this Section 3(e) to the extent that the
information requested under this Section 3(e) is available to the
Operating Partnership or its Affiliates in connection with the performance of
such administrative or management services, and such information shall be
deemed to have been delivered by the Fund to the Operating Partnership pursuant
to this Section 3(e).] 
Notwithstanding the foregoing, upon the effectiveness of a Purchase and
Sale Agreement, the Operating Partnership’s (or its designee’s) rights to
review books, records, leases, service contracts, environmental reports, soil
reports, engineering reports, surveys and other documentation with respect to
the applicable Property and to receive reports regarding the status of the
applicable Property shall be governed by the terms of the Purchase and Sale
Agreement.


 


(f)                                   [Revocation.  Notwithstanding anything to the contrary
contained in this Agreement or the applicable Purchase and Sale Agreement, the
Operating Partnership may decide at any time after delivery of an Option
Exercise Notice, but before the Closing Date for the Option Property, not to
proceed with the acquisition of said Option Property by delivering written
notice to the Fund prior to the Closing Date. 
If the Operating Partnership revokes its Option Exercise Notice in
accordance with this Section 3(f), the Option with respect to the Option
Property specified in such Option Exercise Notice shall terminate and the Fund
shall be entitled to retain the Deposit.]


 


4.                                      Option Price; Payment of Option Price; Taxes;
Closing Costs; Prorations.


 


(a)                                 Option
Price.  The
purchase price (the “Option Price”)
for the Option Property shall be: (a) with respect to a Property being
purchased under a Stabilization Option Exercise Notice, the fair market value
set forth in the Appraisal for the applicable Property; (b) with respect
to a Property being purchased under a User Sale Option Exercise Notice, the
purchase price set forth in the Offer; and (c) with respect to a Property
being purchased under a Liquidation Option Exercise Notice, the fair market
value as set forth in the Appraisal for the applicable Property; provided,
however, for purposes of this clause (c), if the Appraisal for said Property is
more than six (6) months old as of the date the Fund receives the
Liquidation Option Exercise Notice, then, within forty-five (45) days of
receiving the Liquidation Option Exercise Notice, the Fund shall, at its sole
cost and expense, have the fair market value of such Property determined by a
Qualified Appraiser and deliver a copy of such Appraisal to the Operating
Partnership promptly (but in no event later than three (3) business days)
after receiving the same.


 


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(b)                                 Payment
of Option Price.  On the Closing Date, the Option Price shall
be payable by the Operating Partnership (or its designee) in accordance with
the terms of the  Purchase and
Sale Agreement.


 


(c)                                  Taxes.  If the transactions contemplated
by this Agreement are consummated, then the following regarding taxes shall
apply:


 


(i)                                     If the
Option Price consists all or in part of OP Units, the transfer, assignment and
exchange contemplated by this Agreement shall constitute a “Capital
Contribution” to the Operating Partnership under the Operating Partnership
Agreement and is intended to be governed by Section 721(a) of the
Code to the extent the Option Price consists of OP Units, and the Fund and the
Operating Partnership shall report this transaction consistent with such
treatment.


 


(ii)                                  The
Fund, on the one hand, and the Operating Partnership, on the other hand, shall
provide each other with such cooperation and information relating to an Option
Property as the parties reasonably may request in (A) filing any tax
return, amended tax return or claim for tax refund, (B) determining any
liability for taxes or a right to a tax refund, or (C) conducting or
defending any proceeding in respect of taxes. 
From the date hereof and subsequent to the Closing, the Fund agrees to
provide the Operating Partnership with such tax information relating to the
Properties and the Property Entities that is in the Fund’s possession or
control and that is reasonably requested by the Operating Partnership and to
cooperate with the Operating Partnership with respect to the filing of its tax
returns, including, without limitation, the depreciation and amortization
schedules for Properties, as kept for both book and tax purposes, showing
original basis and accumulated depreciation or amortization as of the Closing
Date and basis information as of the Closing Date (computed for both book and
tax purposes, if different) for all non-depreciable, non amortizable assets
held by any of the Property Entities. 
The Fund further agrees to notify the Operating Partnership, in writing,
of any audits that could affect the amounts shown on the returns of the
Operating Partnership for any taxable period. 
The provisions of this section shall survive the Closing.  Any time after the Closing Date, the
Operating Partnership shall promptly notify the Fund in writing upon receipt by
the Operating Partnership or any of its Affiliates of notice of (y) any
pending or threatened tax audits or assessments with respect to an Option
Property, and (z) any pending or threatened federal, state, local or
foreign tax audits or assessments of the Operating Partnership or any of its
Affiliates, in each case which may affect the liabilities for taxes of the Fund
with respect to any tax period ending on or before the Closing Date.  The Fund shall promptly notify the Operating
Partnership in writing upon receipt by the Fund of notice of any pending or
threatened federal, state, local or foreign tax audits or assessments relating to
the income, properties or operations of the Fund.  The Operating Partnership, on the one hand,
and the Fund, on the other hand, may participate at its own expense in the
prosecution of any claim or audit with respect to taxes attributable to any
taxable period ending on or before the Closing Date, provided, that the Fund
shall have the right to control the conduct of any such audit or proceeding or
portion thereof for which the Fund has acknowledged liability for the payment
of additional tax liability, and the Operating Partnership shall have the right
to control any other audits and proceedings. 
Notwithstanding the foregoing, neither the Operating Partnership, on the
one hand, nor the Fund, on the other hand, may settle or


 


8

















 


otherwise resolve any such claim, suit or proceeding
which could have an adverse tax effect on the other party or its direct or
indirect owners without the written consent of the other party, such written
consent not to be unreasonably withheld or delayed.  The Operating Partnership and the  Fund shall retain all tax returns, schedules and
work papers, and all material records and other documents relating thereto,
until the expiration of the statute of limitations (and, to the extent notified
by any party, any extensions thereof) of the taxable years to which such tax
returns and other documents relate and until the final determination of any tax
in respect of such years.


 


(iii)                               With
respect to an Option Property that is, in whole or in part, directly or
indirectly contributed to the Operating Partnership as provided in Section 4(c)(i),
the Operating Partnership shall use the “traditional method”, as described in
Treasury Regulation Section 1.704-3(b), to make allocations of taxable
income and loss among the partners of the Operating Partnership.


 


(iv)                              The
Operating Partnership shall pay the cost of all documentary transfer taxes or
other transfer or recording taxes arising from the sale of an Option Property
pursuant to the exercise by the Operating Partnership of the Option.


 


(d)                                 Closing
Costs.  Any
recording fees, escrow fees, transfer taxes and other closing costs shall be
allocated between the parties in accordance with the terms of this Agreement
and the Purchase and Sale Agreement.


 


(e)                                  Prorations.  To the extent not paid directly
by the tenants of the Properties, real property taxes and all other items
customarily apportioned in connection with sales of similar properties
similarly located shall be adjusted and apportioned at the Closing in
accordance with the terms of the Purchase and Sale Agreement.


 


5.                                    Representations
and Warranties.  As a material inducement to the Operating
Partnership entering into this Agreement, the Fund hereby makes for the benefit
of the Operating Partnership each of the representations and warranties set
forth in this Section 5, which representations and warranties are true and
correct as of the date hereof, and hereby covenants as follows:


 


(a)                                 Organization;
Authority.  The Fund is duly formed, validly existing and
in good standing (to the extent applicable) under the laws of its jurisdiction
of formation.  The Fund has full right,
authority, power and capacity: (a) to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by or on behalf
of the Fund pursuant to this Agreement, and (b) to carry out the
transactions contemplated hereby and thereby. 
This Agreement and each agreement, document and instrument executed and
delivered by or on behalf of the Fund pursuant to this Agreement constitutes,
or when executed and delivered will constitute, the legal, valid and binding
obligation of the Fund, each enforceable in accordance with its respective
terms.  The execution, delivery and
performance of this Agreement and each such agreement, document and instrument
by or on behalf of the Fund: (i) does not and will not violate any
foreign, federal, state, local or other laws


 


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applicable to the Fund or require the Fund to obtain any
approval, consent or waiver of, or foreign, federal, state, local or other laws
applicable to the Fund or require the Fund to obtain any approval, consent or
waiver of, or make any filing with, any person or authority (governmental or
otherwise) that has not been obtained or made prior to the date hereof, and (ii) does
not and will not violate any term, conditions or  provisions of, or constitute a default under, any bond, note or other
evidence of indebtedness or any contract, lease or other instrument to which
the Fund is a party or by which the property of the Fund is bound or affected.


 


(b)                                 Title
to the Option Property; No Agreements to Sell.  The Fund directly owns or will own at the
Closing Date, free and clear of any Encumbrances (other than Permitted
Encumbrances), all of the membership interests in Retained Holdings, and the
Fund indirectly owns or will own at the Closing Date, free and clear of any
Encumbrances (other than Permitted Encumbrances), all of the membership
interests in each Property Entity and therefore each Option Property.  The Fund has or will have at the Closing Date
full power and authority to convey (or cause to be conveyed), free and clear of
any Encumbrances (other than Permitted Encumbrances), all of the membership
interests in each Property Entity and therefore each Option Property to the
Operating Partnership (or its designee), who will acquire good and valid title
thereto, free and clear of any Encumbrance (other than Permitted
Encumbrances).  Other than this Agreement,
none of the Fund, Retained Holdings or the Property Entities are currently a
party to any agreement to sell, transfer or otherwise encumber or dispose of,
and none has any obligation (absolute or contingent) to sell, any membership
interests in any Property Entity or any Option Property.


 


(c)                                  Status
as a United States Person.  The Fund is not a foreign person within the
meaning of Section 1445 of the Internal Revenue Code (“Section 1445”). 
The Fund’s U.S. taxpayer identification number that has previously been
provided to the Operating Partnership is correct.  The Fund’s office address is the address set
forth in this Agreement.


 


(d)                                 No
Insolvency Proceedings.  No attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending or, to the Fund’s knowledge,
threatened against the Fund, nor are any such proceedings contemplated by the
Fund.


 


6.                                      Conditions to Closing.  The obligations of the Operating
Partnership and the Fund to consummate any Closing is subject to the
fulfillment, at or prior to the Closing Date, of the conditions set forth in
the Purchase and Sale Agreement.


 


7.                                      Effectiveness.  Notwithstanding anything to the contrary
contained in this Agreement, this Agreement shall not be effective until the
Contribution Transaction has closed.


 


8.                                      Entire Agreement; Assignment.  This Agreement sets forth the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior negotiations and agreements, written or oral, except as
expressly set forth herein. Neither the benefits nor the burdens hereof shall
be assigned by any party, by operation of law or otherwise, without the prior
written consent of the other parties, except as expressly set forth herein.    Notwithstanding the foregoing, the
Operating Partnership shall have the right to assign any of its rights and


 


10














 


obligations under this Agreement and/or with respect to
each Property to STAG Industrial, TRS, Inc. or another wholly-owned
subsidiary of the Operating Partnership.


 


9.                                      Notices. Any
notice, demand or other communication under this Agreement shall be in writing
and shall be sent by United States Postal Service, postage prepaid or certified
mail, return receipt requested, by any nationally known overnight delivery
service, by facsimile, by courier, or in person.  All notices shall be deemed to have been given
upon actual delivery or refusal to accept delivery or in the case of faxes,
upon confirmed delivery, with a copy sent by another acceptable means.  All notices shall be addressed to the party
at the address below:


 


	
  To the Fund:

  	
   

  	
  STAG Investments III, LLC

  
	
   

  	
   

  	
  c/o STAG Industrial, Inc.

  
	
   

  	
   

  	
  99 Chauncy Street

  
	
   

  	
   

  	
  Boston, Massachusetts 02111

  
	
   

  	
   

  	
  Attn: Benjamin S. Butcher

  
	
   

  	
   

  	
   

  
	
  with a copy to

  	
   

  	
  DLA Piper LLP (US)

  
	
   

  	
   

  	
  33 Arch Street, 26th Floor

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Attn: John L. Sullivan, Esq.

  
	
   

  	
   

  	
  Fax No. 617-406-6100

  
	
   

  	
   

  	
   

  
	
  To the Operating Partnership

  	
   

  	
  STAG Industrial Operating Partnership, L.P.

  
	
   

  	
   

  	
  c/o STAG Industrial, Inc.

  
	
   

  	
   

  	
  99 Chauncy Street

  
	
   

  	
   

  	
  Boston, Massachusetts 02111

  
	
   

  	
   

  	
  Attn: Benjamin S. Butcher

  
	
   

  	
   

  	
   

  
	
  and with a copy to:

  	
   

  	
  DLA Piper LLP (US)

  
	
   

  	
   

  	
  33 Arch Street, 26th Floor

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Attn: John L. Sullivan, Esq.

  
	
   

  	
   

  	
  Fax
  No. 617-406-6100

  



 


Any party may, by written notice to the other, change
its address for the purposes of this Section 9.


 


10.                               Prohibition
on Sales.  For so long as this Agreement is in force and
effect with respect to a given Property, the Fund shall not, without the
Operating Partnership’s prior written consent, cause or permit any sale,
transfer or other disposition of (a) such Property or (b) any of the
membership interests in the Property Entity owning such Property; provided,
however, that such prohibition shall not apply to (y) any transfer
resulting from the exercise of remedies by the Lender following an event of
default under the Loan, or (z) any space lease entered into in the
ordinary course of business.


 


11

















 


11.                               Governing
Law.


 


(a)                                           THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL IN ALL RESPECTS BE
GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS).


 


(b)                                           WITH RESPECT TO ANY CLAIM OR ACTION ARISING UNDER THIS AGREEMENT, EACH PARTY:
(A) IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT LOCATED IN
SUFFOLK COUNTY, MASSACHUSETTS, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLY
WAIVE ANY OBJECTION WHICH IT HAVE AT ANY TIME TO THE LAYING ON VENUE OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT BROUGHT
IN ANY SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.


 


12.                               Further Instruments.  The
Fund from time to time shall execute and deliver to
the Operating Partnership such further instruments reasonably requested or
appropriate to evidence or give effect to the provisions of this Agreement and
which are consistent with the provisions of this Agreement.


 


13.                               Time of Essence.  It is agreed that time is of the essence of
this Agreement.


 


14.                               No Recording; Notice of Termination.  It is understood and agreed that
this Agreement shall not be recorded. 
The Operating Partnership may record a notice or memorandum of this
Agreement in form reasonably acceptable to the Fund.  The Operating Partnership agrees to execute,
acknowledge and deliver to the Fund, promptly upon the Fund’s request, at such
time as an Option with respect to any Property or this Agreement, as
applicable, has terminated, a notice of termination in form suitable for
recording at the applicable registry of deeds.


 


15.                               No Brokers.  Each party represents and warrants to the
other that it has not dealt with any broker or agent with respect to this
transaction or with respect to the Option Property to which a commission may be
owed.  Each party agrees to indemnify the
other and hold the other harmless from any claim by a broker coming through it.


 


16.                               Miscellaneous.  This Agreement shall be binding upon and
inure to the benefit of the Fund and the Operating Partnership and their
respective permitted successors and assigns. 
Signatures to this Agreement, any amendment hereof and any notice given
hereunder, transmitted by telecopy shall be valid and effective to bind the
party so signing.  This Agreement may be
executed in any number of counterparts and it shall be sufficient that the
signature of each party appear on one or more such counterparts.  All counterparts shall collectively


 


12

















 


constitute a single agreement.  No modification of this Agreement shall be
deemed effective unless in writing and signed by both the Fund and the
Operating Partnership.


 


[SIGNATURES BEGIN ON FOLLOWING
PAGE]


 


13

















 


IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed
under seal in its name and on its behalf, each by its duly authorized officer
or manager, all as of this day and year first above written.


 


 


	
   

  	
  STAG INVESTMENTS III LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STAG Manager III LLC, a Delaware limited

  
	
   

  	
   

  	
  liability company, its manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Benjamin S. Butcher

  
	
   

  	
   

  	
  Executive Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STAG INDUSTRIAL LIMITED PARTNERSHIP, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STAG Industrial GP, LLC, a Delaware limited

  
	
   

  	
   

  	
  liability company, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


Signature Page to Purchase Option


 

















 


Exhibit A


 


Property Entities and Properties


 


	
  Property Entities

  	
   

  	
  Properties

  
	
  STAG III Mason 2, LLC

  	
   

  	
  (“Mason”)

  
	
  STAG III Pomfret, LLC

  	
   

  	
  (“Pomfret”)

  
	
  STAG III Streamwood, LLC

  	
   

  	
  (“Streamwood”)

  



 

















 


Exhibit B


 


Loan Allocation


 


	
  Properties

  	
   

  	
  Loan Allocation

  
	
  Mason

  	
   

  	
   

  
	
  Pomfret

  	
   

  	
   

  
	
  Streamwood

  	
   

  	
   

  



 














 


Exhibit C-1


 


Mason Land Description


 


PARCEL ONE


 


SITUATED IN
UNION TOWNSHIP, WARREN COUNTY, OHIO, AND BEING A PART OF SECTION 19,
TOWN 4, RANGE 3, AND BOUNDED AND DESCRIBED AS FOLLOWS:


 


BEGINGING AT
AN IRON SPIKE IN THE CENTERLINE OF STATE ROUTE NO. 741 AT THE NORTHWEST CORNER
OF SECTION 19; RUNNING THENCE, WITH THE NORTHERLY LINE OF SAID SECTION, SOUTH
84° 59’ 20” EAST, 789.64 FEET TO AN IRON ROD AND THE REAL POINT OF BEGINNING OF
THIS CONVEYANCE;


 


FROM SAID REAL
POINT OF BEGINNING, RUNNING THENCE, WITH THE NORTHERLY LINE OF SAID SECTION,
SOUTH 85° 12’ 10” EAST 1890.64 FEET TO AN IRON ROD; RUNNING THENCE, SOUTH 4°45’40”
WEST, (PASSING AN IRON ROD AT 247.32 FEET), A DISTANCE OF 291.73 FEET TO A
POINT IN THE CENTERLINE OF U.S. ROUTE NO. 42; RUNNING THENCE, WITH THE
CENTERLINE OF SAID HIGHWAY, SOUTH 68° 36’ 40” WEST, 792.63 FEET TO A POINT,
WITNESS A CONCRETE HIGHWAY RIGHT-OF-WAY MARKER BEARS, NORTH 21°23’ 20” WEST,
40.00 FEET; THENCE STILL WITH SAID HIGHWAY CENTERLINE ON A 2864.79 FOOT RADIUS
CURVE TO THE LEFT, WHOSE CHORD BEARS, SOUTH 67°47’ 45” WEST, 81.57 FEET, AN ARC
DISTANCE OF 81.57 FEET TO A POINT AT THE INTERSECTION OF THE CENTERLINE OF SAID
HIGHWAY WITH THE CENTERLINE OF BETHANY ROAD, (COUNTY ROAD NO. 59); RUNNING
THENCE, WITH THE CENTERLINE OF BETHANY ROAD NORTH 86° 32’ 20” WEST, 1110.17
FEET TO AN IRON SPIKE; RUNNING THENCE, NORTH 5° 02’ 30” EAST (PASSING AN IRON
ROD AT 25.00 FEET), A DISTANCE OF 704.41 FOOT TO THE POINT OF BEGINNING,
CONTAINING 26.313 ACRES, SUBJECT TO ALL LEGAL HIGHWAYS, SUBJECT TO A 150 FOOT
WIDE POWER LINE EASEMENT GRANTED TO CINCINNATI GAS AND ELECTRIC COMPANY, AS
RECORDED IN DEED BOOK 318, PAGE 181, SUBJECT TO A 150 FOOT WIDE POWER LINE
EASEMENT GRANTED TO DAYTON POWER AND LIGHT COMPANY, AS RECORDED IN DEED BOOK
318, PAGE 179, AND SUBJECT TO ALL OTHER EASEMENTS OF RECORD.


 


SAVE AND
EXCEPT THE FOLLOWING-DESCRIBED REAL ESTATE:


 


BEGINNING AT
AN IRON SPIKE IN THE CENTERLINE OF STATE ROUTE NO. 741, AT THE NORTHWESTERLY
CORNER OF SAID SECTION 19; THENCE, WITH THE NORTHERLY LINE OF SAID
SECTION 19, ON THE FOLLOWING COURSES: (1) S.84° 59’ 20” E. 789.64
FEET TO THE NORTHWESTERLY CORNER OF A 26.313 ACRE TRACT RECORDED IN DEED BOOK
401, PAGE 621, OF THE DEED RECORDS OF SAID COUNTY: (2) WITH THE NORTHLY
LINE OF SAID 26.313 ACRE TRACT, S. 85° 12’ 10” E. 1524.49 FEET TO THE REAL
POINT OF BEGINNING FOR THE HEREIN DESCRIBED TRACT:


 

















 


RUNNING
THENCE, FROM SAID REAL POINT OF BEGINNING, WITH THE LINES OF SAID 26.313 ACRE
TRACT, ON THE FOLLOWING COURSES: (1) WITH THE NORTHERLY LINE OF
SECTION 19, S. 85° 12’ 10” E. 366.15 FEET TO A POINT; (2) S 4° 45’
40” W 291.73 FEET TO A POINT IN THE CENTERLINE OF U.S. ROUTE NO. 42;
(3) WITH THE CENTERLINE OF U.S. ROUTE 42, S. 68° 36’ 40” W.200.00 FEET TO
A POINT; THENCE, BY A NEW DIVISION LINE, N. 21° 23° 20” W. 423.44 FEET TO THE
POINT OF BEGINNING, CONTAINING TWO AND ONE HUNDRED NINETY-EIGHT THOUSANDTHS (2.198)
ACRES, SUBJECT TO ALL LEGAL HIGHWAYS AND EASEMENTS OF RECORD.


 


PARCEL TWO


 


SITUATED IN
UNION TOWNSHIP, WARREN COUNTY, OHIO, AND BEING A PART OF SECTION 20,
TOWN 4, RANGE 3, AND BOUNDED AND DESCRIBED AS FOLLOWS:


 


BEINNING AT AN
IRON SPIKE IN THE CENTERLINE OF STATE ROUTE NO. 741 AT THE SOUTHWESTERLY CORNER
OF SAID SECTION 20; THENCE, WITH THE SOUTHERLY LINE OF SAID
SECTION 20, SOUTH 84° 59’ 20” EAST, 538.41 FEET TO A POINT IN THE EASTERLY
RIGHT-OF-WAY LINE OF THE PENN CENTRAL RAILROAD, AND BEING THE REAL POINT OF
BEGINNING FOR THE HEREIN DESCRIBED TRACT;


 


RUNNING
THENCE, FROM SAID REAL POINT OF BEGINNING, WITH SAID EASTERLY RIGHT-OF-WAY LINE,
NORTH 50° 10’ 08” EAST, 247.77 FEET TO A POINT; THENCE BY NEW DIVISION LINES,
ON THE FOLLOWING COURSES: (1) SOUTH 85° 12’ 10” EAST, 366.10 FEET TO A
POINT; (2) SOUTH 21° 04’ 36” EAST, 27.79 FEET TO A POINT; (3) SOUTH 85°
12’ 10” EAST, 1147.39 FEET TO A POINT; (4) SOUTH 21°23’ 20’ EAST, 167.16
FEET TO A POINT IN THE SOUTHERLY LINE OF SAID SECTION 20 AND IN THE NORTHERLY
LINE OF 26.313 ACRE TRACT RECORDED IN DEED BOOK 401, PAGE 621, OF THE DEED RECORDS
OF SAID COUNTY; THENCE, WITH THE SECTION LINE AND WITH THE NORTHERLY LINE OF
SAID 26.313 ACRE TRACT, NORTH 85° 12’ 10” WEST, 1524.49 FEET TO A POINT; THENCE
WITH SAID SECTION LINE, NORTH 84° 59’ 20” WEST, 251.23 FEET TO TH POINT OF
BEGINNING, CONTAINING 5.948 ACRES.


 

















 


Exhibit C-2


 


Pomfret Land Description


 


	
  FEE PARCEL

  	
   

  	
  All that certain piece or parcel of land, with the buildings and Improvements thereon, situated in the Town of Pomfret, County of Windham and State of Connecticut, on the
  easterly side of Searies Road, and being shown on a certain survey entitled
  “Perimeter Survey Prepared For The Steak-umm Company, LLC Searles Road
  Pomfret, Connecticut Scale: 1” = 60’ Date: 3/18/2004 Sheet: 1 of 1 Proj
  #01065 Dwn: JES Chk: AW”, revised 3/19/2004, made by KWP Associates, and on file in the Office of the
  Town Clerk of the said Town of Pomfret. Said premises are more particularly
  bounded and described as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Beginning at
  a point on the easterly sideline of Searles Road at the northwesterly corner
  of the Parcel to be described, said point being S 73° 38’ 26” E and 6.77 feet from an iron
  pipe at the southwesterly corner of land now or formerly of Robert E. Erskin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence S 73°
  38’ 26” E along land now or formerly of Robert E. Erskin for a distance of
  572.89 feet to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence S 85°
  55’ 22” E along land now or formerly of Peter T. Sheldon & Heather P. Sheldon for a distance
  of 584.00 feet to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence S 17°
  05’ 48” W, along land now or formerly of Brian N. Sheldon & Marie C. Sheldon for a distance of
  1,053.03 feel to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 72°
  46’ 55” W, along land now or formerly of said Sheldon for a  distance
  of 350.00 feet to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence S 17°
  05’ 48” W, along land now or formerly of said Brian N. Sheldon &
  Marie C. Sheldon for a distance of 100.00 feet to a point in a stonewall;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 72°
  46’ 55” W, partly along a stonewall along land now or formerly of said Brian
  N. Sheldon & Marie
  C. Sheldon for a distance of 90.00 feet to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 72°
  29’ 44” W, along land now or formerly of said Brian N. Sheldon & Marie Sheldon for a distance
  of 68.39 feet to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence S 17°
  30’ 16” W, along land now or formerly of said Brian N. Sheldon &
  Marie Sheldon for a distance of 100 feet to a point;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 72°
  29 44” W, along land now or
  formerly of said Brian N. Sheldon & Marie Sheldon for a distance of
  350.00 feet to a point;

  



 

















 


	
   

  	
   

  	
  Thence N 17° 30’ 16” E, along land now or formerly of said Brian N.
  Sheldon & Marie Sheldon for a distance of 100 feet to a point in a
  stonewall;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 02° 57” 47” W along land now or formerly of Theodore F.
  Piecyk and Rosemarie M. Piecyk for a distance of 432.35 feet to an iron pin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 41° 48’ 35” E along land now or formerly of Theodore F,
  Piecyk and Rosemarie M. Piecyk for a distance of 75.02 feet to an iron pin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 43° 13’ 24” E along land now or formerly of Theodore F.
  Piecyk and Rosemarie M. Piecyk for a distance of 81.42 feet to an iron pin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 20° 20’ 16” E along land now or formerly of Theodore F.
  Piecyk sad Rosemarie M. Piecyk for a distance of 43.21 feet to an iron pin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 09° 44’ 53” E along land now or formerly of Theodore F.
  Piecyk and Rosemarie M. Piecyk for a distance of 33.75 feet to an iron pin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 22° 36’ 30” E along land now or formerly of Theodore F.
  Piecyk and Rosemarie N. Piecyk for a distance of 95.89 feet to a utility
  pole;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 58° 59’ 12” W along land now or formerly of Theodore F,
  Piecyk and Rosemarie M. Piecyk for a distance of 295.15 feet to an iron pin;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thence N 36° 21’ 14” E along the easterly sideline of Searles Road
  for a distance of 232.79 feet to the point of beginning.

  
	
   

  	
   

  	
   

  
	
  EASEMENT PARCELS

  	
   

  	
  Together with a
  twenty-five foot right of way located over land formerly of John A. Osborne
  as recorded in Volume 48 at Page 479 of the Pomfret Land Records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Together with the restrictive benefits more particularly set forth in
  a Special Warranty Deed from The Steak-umm Company, LLC. to Brian N. Sheldon
  and Marie C. Sheldon dated October 9, 2001 and recorded in Volume 176 at
  Page 39 of the Pomfret Land Records.

  



 

















 


Exhibit C-3


 


Streamwood Land Description


 


Parcel 1:


That part of
the East 1⁄2 of the Southeast 1⁄4 of Section 35 and that part of the West 1⁄2 of
the Southwest 1⁄4  of
Section 36, Township 41 North, Range 9 East of the Third Principal
Meridian described as follows:


 


Commencing at
the point of intersection of the East line of the West 1⁄2 of said Southwest 1⁄4 of
said Section 36 with a line that is 30 feet Southerly of (measured at
right angle thereto) and parallel with the original centerline of U.S. Route
20, which said point of intersection is 794.78 feet, more or less, North of the
Northerly right of way line of the Chicago, Milwaukee, St. Paul and Pacific
Railroad Company, as measured on the East line of the West 1⁄2 of said Southwest 1⁄4
of said Section 36; thence Northwesterly along said line that is 30 feet
Southerly of (measured at right angle thereto) and parallel with the original
centerline of U.S. Route 20, a distance of 1,184.69 feet to a point on a line
that is 953.44 feet West of (measured at right angle thereto) and parallel with
the East line of the West 1⁄2  of
said Southwest 1⁄4  of said
Section 36 for a point of beginning; thence South along said last
described parallel line, a distance of 1,342.26 feet to the Northerly right of
way line of the Chicago, Milwaukee, St. Paul and Pacific Railroad Company;
thence Northwesterly along said Northerly right of way line, a distance of
550.53 feet to a point on a line that is 1,496.44 feet West of (measured at
right angle thereto) and parallel with the East line of the West 1⁄2  of said Southwest 1⁄4 of said Section 36; thence
North along said last described parallel line, a distance of 1,478.19 feet to a
point that is 140 feet Southwesterly of (measured at right angle thereto), a
line that is 30 feet Southerly of (measured at right angle thereto) and
parallel with the original centerline of U.S. Route 20; thence Northeasterly at
right angles to the last described parallel line, a distance of 140 feet to
said last described parallel line; thence Southeasterly along said last
described parallel line, a distance of 571.54 feet to the point of beginning;


 


(Excepting
from the foregoing described parcel of land all that part thereof conveyed to
the State of Illinois by Deed dated November 19, 1969 and recorded
April 8, 1970 as document number 21130297), (Except that part taken for
Lake Street), (Also except that part falling in of the West 1⁄2  of the Southwest 1⁄4 of Section 36, Township 41 North, Range 9 East of the
Third Principal Meridian, in Cook County), Illinois, more particularly
described as follows:


 














 


Beginning at
the intersection of the East line of the West 1⁄2 of the Southwest 1⁄4 of said Section 36 with the Southerly
right of way line of U.S. Route 20 (Lake Street); thence North 53°46’42” West, along
said Southerly right of way line of US 20 (Lake Street), 1,248.00 feet; thence
North 59°30’00” West, continuing along said Southerly right of way line, 100.39
feet; thence North 57°37’ 56”  West, continuing along said Southerly
right of way, 148.67 feet; thence South 53°46’42” East, 952.55 feet; thence
South 36°13’18” West, 10.00 feet; thence South 53°46’42” East, 100.00 feet;
thence North 36°13’18” East, 10.00 feet; thence South 53°46’42” East, 458.46
feet to a point on the East line of said West 1⁄2
of the Southwest 1⁄4 of Section 36; thence North 00°16’34” West along
said East line, 24.88 feet to the point of beginning), all in Cook County, Illinois.


 


Parcel 2:


That part of
the West 1⁄2,  of the Southwest 1⁄4
of Section 36, Township 41 North, Range 9 East of the Third
Principal Meridian, described as follows:


 


Commencing at
the intersection of the East line of the West 1⁄2 of said Southwest 1⁄4 with the
Southerly right of way line of U.S. Route 20; thence Northwesterly along said
Southerly right of way line, a distance of 496.95 feet to a point on a line
that is 400 feet West of (measured at right angle thereto) and parallel with
the East line of the West 1⁄2 of
said Southwest 1⁄4 for the point
of beginning; thence South along said parallel line for a distance of 1022.7
feet to the Northerly right of way line of Chicago, Milwaukee, St. Paul and
Pacific Railroad; thence Northwesterly along said Northerly right of way line,
a distance of 561.11 feet to a point on a line that is 953.44 feet West of
(measured at right angle thereto) and parallel with the East line of the West 1⁄2
of the Southwest 1⁄4; thence North along said parallel line, a distance of
1,338.54 feet to the Southerly right of way line of U.S. Route 20; thence
Southeasterly along said Southerly right of way line, a distance of 687.74 feet
to the point of beginning, (Except that part falling in of the West 1⁄2 of the
Southwest 1⁄4  of Section 36,
Township 41 North, Range 9 East of the Third Principal Meridian, in Cook
County, Illinois, more particularly described as follows:


 


Beginning at
the intersection of the East line of the West 1⁄2 of the Southwest 1⁄4  of
said Section 36 with the Southerly right of way line of U.S. Route 20
(Lake Street); thence North 53°46’42” West, along said Southerly right of way
line of US 20 (Lake Street), 1,248.00 feet; thence North 59°30’00” West, continuing
along said Southerly right of way line, 100.39 feet; thence North 57°37’56”
West continuing along said Southerly right of way, 148.67 feet; thence South
53°46’ 42” East, 952.55 feet; thence South 36°13’18” West, 10.00 feet; thence
South 53°46’ 42” East, 100.00 feet; thence North 36°13’18” East, 10.00 feet;
thence South 53°46’42” East, 458.46 feet to a point on the East line of said West 1⁄2 of the Southwest 1⁄4 of
Section 36; thence North 00° 16’34” West along said East line, 24.88 feet to
the point of beginning), all in Cook County Illinois.


 


Shown for
Informational purposes only:


 


Address:
1107-1109 East Lake Street Streamwood, Cook County, Illinois


 




	
  Tax Parcel ID:

  	
  a) 06-35-400-012-0000

  
	
   

  	
  b) 06-36-310-039-0000

  
	
   

  	
  c)
  06-36-310-045-0000

  






 

















 


Exhibit D


 


Title Exceptions


 


Mason


 


	
  1.

  	
  Warren
  County Taxes: Assessed to Worthington Custom Plastics, Inc.: Tax Parcel
  # 12-19-100-013

  
	
   

  	
  Valuation; Land $202,570.00 Improvements; $1,992,760.00 Total:
  $2,195,330.00 

  
	
   

  	
  2005 County
  Taxes in the amount of $71,489.11 per half and are paid for the year of 2005,
  

  
	
   

  	
  2006 County
  Taxes are not yet due and payable but constitute a lien.

  
	
   

  	
   

  
	
  2.

  	
  Warren
  County Taxes: Assessed to Worthington Custom Plastics, Inc.: Tax Parcel
  # 12-20-300-007

  
	
   

  	
  Valuation: Land $49,960.00 Improvements; $0 Total: $49,690.00

  
	
   

  	
  2005 County
  Taxes in the amount of $1,626.91 per half and are paid for the year of 2005,

  
	
   

  	
  2006 County
  Taxes are not yet due and payable but constitute a lien.

  
	
   

  	
   

  
	
  3.

  	
  A reading of
  the survey entitled “ALTA/ACSM Land Title Survey for Blackhawk Automotive”
  prepared Bock and Clark, Project No. 20061027-2 certified on
  July 25, 2006, results in the following exceptions to-wit:

  
	
   

  	
  a)

  	
  Third Party
  rights if any to use of the railroad spur that encroaches upon the northwest
  corner of property. “NOTE: The Company hereby insures against the loss or
  damage which the insured may sustain, up to the face amount of the policy, by
  reason of the utilization of the spur tracks now located upon the land, or
  any replacement tracks, for purposes other serving improvements located on
  the land or by reason of any third party claim of an easement as a result of
  the existences of said spur tracks or any replacement tracks.

  
	
   

  	
   

  
	
  4.

  	
  Certificate
  of Amendment to change name of Worthington Custom Plastics, Inc. to
  Blackhawk Automotive Plastics, Inc., recorded 6/12/00 in O.R. Book 1959,
  Page 793 of the Warren County, Ohio Recorder’s Office.

  
	
   

  	
   

  
	
  5.

  	
  Easement to
  Cincinnati Gas and Electric Company as set forth in the instrument recorded
  in Deed Book 318, Page 181; Deed Book 503, Page 21; Deed Book 410,
  Page 389, partial release of record in Deed Book 504, Page 582,
  Deed Book 503, Page 21; and Volume 1700, Page 309 of the Warren
  County, Ohio Recorder’s Office. “NOTE: The Company hereby insures against the
  loss or damage which the insured shall sustain by reason of the entry of any
  court order or judgment which constitutes a final determination and denies
  the right to maintain the existing improvements on the land because of the
  encroachment or encroachments thereof specifically set forth in this
  exception number 5.

  
	
   

  	
   

  
	
  6.

  	
  Easement to
  Dayton Power and Light Company for electric transmission and/or distribution
  of lines or record in Deed Book 318, Page 179 of the Warren County, Ohio
  Recorder’s Office.

  
	
   

  	
   

  
	
  7.

  	
  Easement
  reserved in favor Louam, Corp. in General Warranty Deed from
  Louam, Corp. to Buckeye International, Inc. in Volume 499,
  Page 884 of the Warren County, Ohio Recorder’s Office,

  
	
   

  	
   

  
	
  8.

  	
  Easement
  dated October 30,1961 from Edgar Spears and Elfrieda Spears to The
  Cincinnati Gas and Electric Company for electric transmission/distribution
  lines, filed for record November 9,1961 at 9:55 a.m. in Volume 318,
  Page 177, Warren County Mortgage Records. Said easement was assigned by
  a separate instrument dated December 8, 1964 from Cincinnati Gas and
  Electric Company to Tri-State Improvement Company, filed for record
  December 31, 1964 at 9:20 a.m. in Volume 359, Page 190, Warren
  County Deeds Records.

  



 

















 


Pomfret


 


Special
Exceptions:


1.              Taxes of the Town of Pomfret, not yet due
and payable.


2.              Sewer and water use charges, not yet due
and payable.


3.              Fire District Taxes, not yet due and
payable.


4.              Permanent Easement in favor of The
Connecticut Light and Power Company dated December 20, 1965 and recorded
in Volume 41 at Page 82 of the Pomfret Land Records.


5.              Boundary Line Agreement by and between
John Burke and Farm Acquisition Corp. dated January 25, 1990 and recorded
in Volume 85 at Page 143 of the Pomfret Land Records.


6.              Sanitary Sewer and Water Easement in
favor of the Town of Pomfret dated August 25, 1992 and recorded in Volume
101 at Page 242 of the Pomfret Land Records.


7.              Terms and provisions of a Fence
Installation and Maintenance Agreement dated January 25, 1992 and recorded
in Volume 112 at Page 266 of the Pomfret Land Records.


8.              Survey entitled “ALTA/ASCM Land Title
Survey Prepared for STAG III Pomfret, LLLC, #153 Searles Road, Pomfret,
Connecticut” Scale: 1” = 60’, Date: 1/14/06. Sheet: 1 of 1, Proj # 01065, drawn
by KWP Associates, 250 Killing Road, Pomfret Center, CT 06259-0106, shows the
following: Multi-level wood frame, concrete block and corrugated metal office
building encroaching within current setback requirements along western boundary
line; Two separate concrete block buildings; Open concrete pool; Lagoon; Sand
filter beds; Fenced-in gas tank; Pond; Wood frame building; Boundary line
agreement (exception 5 herein) along northern boundary line of premises; 30’
Sanitary sewer and water easement in favor of the Town of Pomfret (exception 6
herein) intersecting eastern boundary line of premises; Gravel drive
intersecting southeastern boundary line of premises; 25’ Right of Way begins at
south westerly portion of premises traveling in a westerly direction to Searles
Road through land now or formerly of Debra A. Osborne in favor of the insured
premises: Pea stone turnaround encroaches onto neighboring property at western
boundary line of premises; Fence traverses western boundary line of premises
(pursuant to exception 7 herein); and Connecticut Light and Power Company easement
(exception 4 herein) intersects western boundary line of premises.


9.              Mortgage from STAG III Pomfret, LLC to
Anglo Irish Bank Corporation plc, a banking corporation organized under the
laws of he Republic of Ireland dated November 28, 2006 and recorded
December 1, 2006 at 1:00 P.M. in Volume 263 at Page 336 in the Pomfret
Land Records to secure a loan in the original principal amount of $4,600,000.00.


10.       An Assignment of Leases and Rents from STAG III
Pomfret, LLC, Assignor, to Anglo Irish Bank Corporation plc, a banking corporation
organized under the laws of the Republic of Ireland, Assignee, dated
November 28, 2006 and recorded December 1, 2006 at 1:00 P.M. in
Volume 264 at Page 1 in the Pomfret Land Records.


 


The following
endorsements are attached hereto and made part of this policy:


 


Comprehensive
Endorsement;


Access Endorsement;


Zoning
Endorsement with reference to “Number of Parking Spaces;”


Same as Survey
Endorsement;


Tax Parcel
Endorsement;


Subdivision
Endorsement;


Creditors’
Rights Endorsement;


 

















 


Streamwood


 


STANDARD
EXCEPTIONS:


 


	
  1.

  	
  (a)

  	
  Rights or
  claims of parties in possession not shown by the public records.

  
	
   

  	
  (b)

  	
  Easements,
  or claims of easements, not shown by the public records.

  
	
   

  	
  (c)

  	
  Encroachments,
  overlaps, boundary line disputes, or other matters which would be disclosed
  by a accurate survey and inspection of the premises.

  
	
   

  	
  (d)

  	
  Any lien, or
  right to a lien, for services, labor, or material hereto or hereafter
  furnished, impose by law and not shown by the public records.

  
	
   

  	
  (e)

  	
  Taxes or special
  assessments which are not shown as existing liens by the public records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Standard
  Exceptions (a) through (e) are hereby waived.

  



 


ADDITIONAL
EXCEPTIONS:


 


1.  General real estate taxes for the year(s) 2006, 2007
and subsequent years.


Permanent
Index Number: 06-35-400-012-0000    (Volume number 061)    (Affects
part of Parcel 1)


Note: The
first estimated installment of the 2006 taxes is paid.


Note: The
second final installment of the 2006 taxes has not been determined.


Note: The
taxes for the year(s) 2007 are not yet due and payable.


 


2.  General real estate taxes for the year(s) 2006, 2007
and subsequent years.


Permanent
Index Number: 06-36-310-039-0000    (Volume number 061)    (Affects
part of Parcel 2)


Note: The
first estimated installment of the 2006 taxes is paid.


Note: The
second final installment of the 2006 taxes has not been determined.


Note: The
taxes for the year(s) 2007 are not yet due and payable.


 


3.  General real estate taxes for the year(s) 2006, 2007
and subsequent years.


Permanent
Index Number: 06-36-310-045-0000    (Volume number 061)    (Affects
part of Parcel 1)


Note: The
first estimated installment of the 2006 taxes is paid.


 

















 


Note: The
second final installment of the 2006 taxes has not been determined.


Note: The
taxes for the year(s) 2007 are not yet due and payable.


 


4.  Lease made by Duraco Products, Inc. to Chicago SMSA
limited partnership, an Illinois limited partnership, dated September 19,
1994, a memorandum of which was recorded December 5, 2994 as document
No. 04015568. demising the land for a term of years beginning
November 01, 1994 and ending October 31, 1999, and options to extend,
and all rights thereunder of, and all acts done or suffered thereunder by, said
lessee or by any party claiming by, through or under said Lessee.


 


Assignment and
Assumption Agreement dated September 1, 2000 by and between Chicago SMSA
limited Partnership, an Illinois Limited Partnership and Crown Castle GT
Company LLC, a Delaware limited liability company recorded April 18, 2001
as document number 0010315158.


 


Assignment and
Assumption Agreement dated February 28, 2007 by and between Duraco
Products, Inc. and STAG III Streamwood, LLC recorded March 29, 2007
as document number 0708805163.


 


5.  Right of way for railroads, switch tracks or spur tracks,
as delineated on the survey executed by Webster, McGrath and Ahlberg LTD. Dated
January 15, 2007 job number 37825 and right of the railroad company to the
use, operation, maintenance and repair of same.


 


6.  The rights of Duraco Products, Inc. as tenant only,
under that lease dated February 28, 2007 with STAG III Streamwood, LLC.


 


7.  Mortgage and Security Agreement dated March 13, 2007
and recorded March 29, 2007 as document number 0708805159, made by STAG
III Streamwood, LLC, a Delaware limited liability company, to Anglo Irish Bank
Corporation plc, a banking corporation organized under the laws of the Republic
of Ireland, to secure an indebtedness of $22,800,000.00 and such other sums as
provided therein.


 


8.  Collateral Assignment of Leases and dated March 13,
2007 and recorded March 29, 2007 as document number 0708805160, made by
STAG III Streamwood, LLC, a Delaware limited liability company, to Anglo Irish
Bank Corporation plc, a banking corporation organized under the laws of the
Republic of Ireland.


 


9.  Security interest of Anglo Irish Bank corporation plc, a
banking corporation organized under the laws of the Republic of Ireland, under
a financing statement executed by STAG III Streamwood LLC, a Delaware limited
liability company, and filed as document number 0708805161.


 


10.  Right to maintain and have access to the sanitary sewer
and sanitary manholes and transformers and underground electric line along the
northerly ine of subject property as delineated on the survey executed by Webster,
McGrath and Ahlberg LTD. Dated January 15, 2007 job number 37825


 


11.  Right of adjoining property to the East to Outflow storm
water onto the subject property as delineated on the survey executed by
Webster, McGrath and Ahlberg LTD. Dated January 15, 2007 job number


 














 


Exhibit E


 


Form of Purchase and Sale Agreement


 


See attached


 


E-1

















 


PURCHASE
AND SALE AGREEMENT


 


BETWEEN


 


STAG III
PROPERTIES, LLC


 


(as Seller)


 


AND


 


[                                                 ]

(as Purchaser)


 


CONCERNING
CERTAIN PROPERTY KNOWN AS


 


[                                                 ]


 


AND LOCATED
AT


 


[                                                                                  ]


 

















 


Schedules
and Exhibits


 


	
  Schedule 1.1

  	
  -

  	
  Defined Terms

  
	
  Schedule 3.1

  	
  -

  	
  Deposit Escrow Provisions

  
	
  Schedule 5.1

  	
  -

  	
  Seller Deliveries

  
	
  Exhibit A

  	
  -

  	
  Land

  
	
  Exhibit B

  	
  -

  	
  Form of Lease Estoppel Certificate

  
	
  Exhibit C

  	
  -

  	
  Lease Related Disclosures

  
	
  Exhibit D

  	
  -

  	
  Exceptions to Seller Representations

  
	
  Exhibit E

  	
  -

  	
  Form of Assignment and Assumption of
  Membership Interests

  
	
  Exhibit F

  	
  -

  	
  Form of Updated Representation Certificate

  
	
  Exhibit G

  	
  -

  	
  List of Contracts

  
	
  Exhibit H

  	
  -

  	
  List of Personal Property

  
	
  Exhibit I

  	
  -

  	
  List of Warranties

  
	
  Exhibit J

  	
  -

  	
  Additional Representations and Warranties

  
	
  [Exhibit H

  	
  -

  	
  List of Loan Documents, Escrows and Reserves](2)

  
	
  Exhibit I

  	
  -

  	
  Form of FIRPTA Certificate

  



 






(2)  Use bracketed
text if Loan is to be assumed.


 


E-1

















 


PURCHASE
AND SALE AGREEMENT


 


THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into as of the Effective Date
(defined below) by and between STAG III PROPERTIES, LLC,
a Delaware limited liability company (the “Seller”), and [                                            ],
a [                                                             ],
its nominee or assignee (the “Purchaser”), and is joined in by the Title
Company (defined below) in accordance with Schedule 3.1.


 


Background


 


A.            Seller
is the owner of one hundred percent (100%) of the membership interests in [                                        ],
a [                                                                        ]
(the “Company”);


 


B.            The
Company owns the Property commonly known as [                                                   ],
which is located at [                                                               ],
and is the landlord under the Lease; and


 


C.            Seller
has agreed to sell, and Purchaser has agreed to purchase, all of Seller’s
right, title and interest in the Company (collectively, the “Membership
Interests”) , as hereinafter provided.


 


Agreement


 


In consideration of the mutual promises
hereinafter set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:


 


ARTICLE 1


 


Definitions


 


Section 1.1.  Definitions.   For purposes of this Agreement,
capitalized terms not otherwise defined herein have the meaning set forth in Schedule
1.1.


 


ARTICLE 2


 


Agreement;
Purchase Price; Closing Date


 


Section 2.1.  Agreement to Sell and
Purchase.  Subject to the terms and provisions hereof,
Seller agrees to sell the Membership Interests to Purchaser, and Purchaser
agrees to purchase the Membership Interests from Seller.


 


Section 2.2.  Purchase Price.  The Purchase Price for the
Membership Interests shall be [                                                  ]
($                                     ).  Subject to the adjustments and apportionments
as hereinafter set forth, the Purchase Price shall be paid on the Closing Date
[as follows: (a) a portion of the Purchase Price, in an amount equal to
the then outstanding principal


 


1

















 


balance of the Loan as of the Closing, shall be paid
by assumption of the Loan by Purchaser at the Closing, and (b) the balance
of the Purchase Price shall be paid](3) by either (i) wire transfer of immediately available federal funds
or (ii) a combination of OP Units and cash, in the sole and absolute discretion
of Purchaser[; provided, however, that the cash consideration portion of the
Purchase Price shall in no event be less than the applicable amount of the
existing loan attributable for the Property (“Allocated Loan Amount”).  Notwithstanding the foregoing, if the
Allocated Loan Amount for the Property is greater than the Purchase Price, then
the full amount of the Purchase Price shall be paid as set forth in clause (i) of
the immediately preceding sentence.](4)  The value of the OP Units shall be their Market Value as of the day
immediately preceding the Closing Date and the number of OP Units shall be
rounded to the nearest whole number of OP Units to avoid the issuance of
fractional OP Units.


 


Section 2.3.  Closing Date.  The
transaction contemplated hereby shall close on                                     ,
2010 [the date that is seventy-five (75) days following
Seller’s receipt of an option exercise notice, or if such date is not a
business day, the next business day; provided the parties may agree upon an
earlier date; actual date to be inserted in execution version]
(the “Closing Date”), subject to extension as provided herein.


 


ARTICLE 3


 


Deposit


 


Section 3.1.  Deposit.  Purchaser has deposited [                                     ]
($                                     )
[5% of the Purchase Price] with the Title Company.  All deposits made pursuant to this Section 3.1,
together with all interest and earnings thereon, are referred to collectively
in this Agreement as the “Deposit.” 
The Deposit shall be held in a segregated account in accordance with the
provisions of  Schedule 3.1  hereto.  The Deposit
shall be applied to the Purchase Price if the Closing occurs.  If the Closing does not occur or if this
Agreement otherwise terminates, the Deposit shall be disbursed as provided
herein.


 


ARTICLE 4


 


Title and
Survey


 


Section 4.1.  Title and Survey.  Promptly upon execution of this
Agreement, (a) Seller shall provide Purchaser with a copy of the most
recent owner’s and lender’s title insurance policies issued in connection with
the Real Property, legible copies of all documents listed as exception
documents in such title insurance policies and all existing surveys of the Real
Property, to the extent that the same are in Seller’s or the Company’s possession
or control; and (b) Purchaser shall order a title commitment or pro forma
title policy (the “Title Commitment”) and, at its election, an ALTA
survey of the Real Property (the “Survey”).  Notwithstanding anything in this Agreement to
the contrary, all Voluntary Liens will be satisfied by Seller or the


 






(3)  Use bracketed text
if Loan is to be assumed.


(4)  Use bracketed text
if Loan is not to be assumed.


 


2

















 


Company on or prior to the Closing Date or, if
not so satisfied, shall be satisfied at Closing out of the proceeds otherwise
payable to Seller.


 


ARTICLE 5


 


Inspection
and Audit


 


Section 5.1.  Due Diligence Materials;
Access.


 


(a)           Within
three (3) Business Days from the Effective Date, Seller shall provide to
Purchaser complete copies of the documents and materials listed on Schedule
5.1, to the extent in Seller’s possession and control; provided that, to
the extent Purchaser or any of its affiliates is providing administrative or
management services to Seller or the Company with respect to the Property,
Seller shall be deemed to have satisfied its obligation under this Section 5.1(a) if
the documents and materials listed on Schedule 5.1 are available to
Purchaser or its affiliates in connection with the performance of such
administrative or management services, and such documents and materials shall
be deemed to have been delivered by Seller to Purchaser pursuant to this Section 5.1(a).


 


(b)           During
the term of this Agreement, Purchaser, personally or through its authorized
agents or representatives, shall be entitled to interview the Tenant and any
subtenants and, upon reasonable advance notice to Seller, to enter upon the
Property during normal business hours, and shall have the right to make such investigations,
including appraisals, engineering studies, soil tests, environmental studies,
inquiry of governmental officials, and underwriting analyses, as Purchaser
deems necessary or advisable, subject to the following limitations:  (i) Purchaser shall give Seller written
or telephonic notice at least one (1) Business Day before conducting any
inspections on the Property, and a representative of Seller or the Company
shall have the right to be present when Purchaser or its representatives
conducts its or their investigations on the Property; (ii) neither
Purchaser nor its representatives shall materially interfere with the use,
occupancy or enjoyment of the Property by the Tenant; (iii) neither
Purchaser nor its agents shall damage the Property or any portion thereof,
except for any immaterial damage caused by environmental or geotechnical tests,
all of which shall promptly be repaired by Purchaser; and (iv) Purchaser
shall indemnify, hold harmless and defend Seller against all costs (including
reasonable attorneys’ fees) and damage to the Property caused by the activities
of Purchaser or its agents under this paragraph, provided; however, that such
indemnity shall not include any costs or damages caused by (x) the acts of
the Company, Seller or their agents or representatives, (y) any claims of
diminution in the value of the Property as a consequence of the results
revealed by such tests and inspections or (z) any pre-existing condition
of the Property.  The foregoing
indemnification obligation shall survive the Closing or termination of this
Agreement for a period of three (3) months.


 


Section 5.2.  Intentionally Omitted.


 


Section 5.3.  Confidentiality. Purchaser shall use the Confidential Information only for purposes of
evaluating the Property and the Membership Interests in connection with its
potential purchase of the Membership Interests in accordance with the terms of
this Agreement (and, if the Closing occurs, in connection with its ownership of
the Company and indirectly, the Property).


 


3

















 


Notwithstanding the foregoing, (a) Purchaser
may disclose the Confidential Information to its owners, legal counsel,
accountants, actual and potential lenders, actual and potential investors,
regulatory authorities and similar third parties that need to review the
Confidential Information in connection with Purchaser’s purchase of the
Membership Interests in accordance with the terms of this Agreement, and
(b) Purchaser may disclose the Confidential Information to the extent that
such disclosure is required by law or court order or by discovery rules in
any legal proceeding, provided that Purchaser first shall provide written
notice thereof to Seller.  If this
Agreement is terminated before the Closing, Purchaser promptly shall return the
Confidential Information to Seller and shall not retain copies thereof.  Except as otherwise provided in Subsection
(b) of this Section 5.3, prior to Closing neither Seller
nor Purchaser shall disclose this Agreement or make any public announcements
concerning the sale of the Membership Interests pursuant to this Agreement
without first obtaining the prior written consent of the other, which consent
may be given or withheld in the sole discretion of either party.  In addition, and notwithstanding the
foregoing restrictions, Seller and Purchaser authorize each other and their
respective representatives to disclose to any persons, without limitation of
any kind, the tax treatment and tax structure of the transaction contemplated
hereby and all materials of any kind, including tax analyses or opinions,
relating to such tax treatment and tax structure.  The provisions of this paragraph shall
survive the Closing or termination of this Agreement.


 


Section 5.4.  Intentionally Omitted.


 


Section 5.5.  Cooperation.  During
the term of this Agreement, Seller shall direct its property manager, agents
and employees to cooperate with the reasonable requests of Purchaser to obtain
information concerning the Property and the Membership Interests, including information
supplementary to the information described in Schedule 5.1.


 


Section 5.6.  [Revocation.  Purchaser
may decide at any time before the Closing Date, not to proceed with the
acquisition of the Membership Interests by delivering written notice to Seller
prior to the Closing Date.  If Purchaser
elects not to acquire the Membership Interests in accordance with this Section 5.6,
this Agreement shall terminate and Seller shall be entitled to retain the
Deposit.]


 


ARTICLE 6


 


Conditions
Precedent, Casualty Damage or Condemnation


 


Section 6.1.  Conditions Precedent
Favoring Purchaser. In addition to any
other conditions precedent in favor of Purchaser set forth elsewhere in this
Agreement, Purchaser’s obligations under this Agreement are subject to the
timely fulfillment of the conditions set forth in this Section 6.1
on or before the Closing Date, or such earlier date as is set forth below.  Each condition may be waived in whole or in
part only by written notice of such waiver from Purchaser to Seller.


 


(a)           Seller
shall have performed and complied and shall have caused the Company to have
performed and complied in all material respects with all of the terms of this
Agreement to be performed and complied with by Seller or the Company, as
applicable, prior to or at the Closing;


 


4

















 


(b)           On
the Closing Date, the Seller Representations set forth in Section 7.3
shall be true, complete and accurate;


 


(c)           Purchaser
shall have received an estoppel certificate from the Tenant dated no earlier
than thirty (30) days prior to the Closing Date reflecting the terms of the
Lease and otherwise substantially in the form attached hereto as Exhibit B.  This condition shall not be satisfied if any
Tenant estoppel certificate discloses: 
(i) any default by landlord or Tenant; (ii) any amendment,
modification or supplement to the Lease that was not provided to Purchaser
before the commencement of the Restricted Period; or (iii) any other
information that is inconsistent in any material respect with the Lease or
related information as provided to Purchaser before the commencement of the
Restricted Period.  Seller shall cause
the Company to use good faith, commercially reasonable efforts to obtain such
estoppel certificate from the Tenant, and shall deliver a copy of such estoppel
to Purchaser promptly upon receipt thereof by Seller or the Company.  Seller shall allow Purchaser to review the
estoppel certificate before presenting it to the Tenant;


 


(d)           Purchaser
shall have received a subordination, non-disturbance and attornment agreement (“SNDA”),
subordinating the Lease to the loan of Purchaser’s mortgage lender, if any, in
a form that is recordable in the land records of the Property and is reasonably
acceptable to Purchaser and such lender. 
Seller shall use good faith, commercially reasonable efforts to obtain
such SNDA, and shall deliver the original of such SNDA in recordable form
promptly upon receipt thereof by Seller;


 


(e)           On
the Closing Date, title to the Property shall be vested in the Company subject
only to the Permitted Exceptions and the Title Company shall issue to the
Company an extended coverage owner’s title insurance policy (on the current
ALTA Form B) in the amount of the Purchase Price, together with the
Required Endorsements, insuring good and indefeasible fee simple title to the
Real Property in the Company, subject only to the Permitted Exceptions and the
standard printed exceptions, except that: 
(i) the exceptions for mechanic’s liens, unrecorded easements and
sovereign lands shall be deleted; (ii)  the survey exception shall be
limited to Permitted Exceptions; (iii) the exception relating to ad
valorem taxes shall relate only to taxes owing for the year of closing and
subsequent years; (iv) the parties-in-possession exception shall be
deleted except as to the Tenant, as tenant only, as provided for in the Lease;
and (v) the exclusion relating to creditor’s rights shall be deleted;


 


(f)            On
the Closing Date, (i) the Property shall be in the same condition that it
is in now, reasonable wear and tear excepted, and free from tenants and
occupants, except for the Tenant pursuant to the Lease; (ii) Seller shall
own one hundred percent (100%) of the Membership Interests in the Company, free
from all liens and encumbrances, (iii) there shall be no judicial or
administrative or condemnation proceeding pending or threatened concerning the
Property nor shall there be any judicial or administrative proceeding pending
or threatened against the Company that was not disclosed in writing to
Purchaser before the commencement of the Restricted Period; (iv) the
Property and the use and operation thereof shall comply in all material
respects with all Legal Requirements; (v) the Lease shall be in full force
and effect and free from default, except for any default that was disclosed in
writing to Purchaser before the Closing Date; and (vi) there shall be no
bankruptcy proceeding pending or threatened in writing with respect to the
Tenant or the Company;


 


5

















 


(g)           On
the Closing Date, there shall be no Hazardous Materials at the Property that
have not been fully remediated in accordance with all applicable laws, and
Purchaser shall have received a third party environmental report satisfactory
to Purchaser confirming the same;


 


(h)           Purchaser
shall have received a certificate of insurance evidencing the various insurance
coverages required to be maintained by the Tenant pursuant to the terms of the
Lease;


 


(i)            Seller
shall provide to Purchaser a final, non-appealable certificate of occupancy for
all of the Improvements and any certificates or approvals necessary to permit
the use of any parking facilities at the Property (collectively, the “Certificate
of Occupancy”);


 


(j)            No
action or proceeding by or before any governmental authority (as they relate to
the Property subject to the Closing) shall have been instituted that is
reasonably expected to restrain, prohibit or invalidate the transactions
contemplated by this Agreement, other than an action or proceeding instituted
by Seller;


 


(k)           All
necessary consents of governmental and private parties (as they relate to the
Property subject to the Closing) to effect the transactions contemplated by
this Agreement[, including, without limitation, consents of lenders,](5) shall have been obtained; [and](6)


 


(l)            If
OP Units are to be issued as part of the consideration to be paid for
Membership Interests, Purchaser shall, based on advice of its counsel, be
reasonably satisfied that such issuance and the contemplated distribution of OP
Units to Seller may be made without registration under the Securities Act in
reliance upon Regulation D[; and


 


(m)          Purchaser
shall have received (1) the Lender Approval in accordance with Section 6.6;
(2) an estoppel certificate from Lender or other evidence reasonably
acceptable to Purchaser (which may be contained within an assignment and
assumption agreement executed by Lender, Seller and Purchaser) (the “Lender
Estoppel”):  (i) confirming the
identity of the Loan Documents and any modifications or supplements thereto, (ii) confirming
the identity and current balances of any and all escrows and reserve accounts
being held with respect to the Loan, (iii) acknowledging that all
principal, interest and other amounts then due and payable has been paid in
full, (iv) stating the outstanding principal balance of the Loan, (v) stating
that, to the best of the Lender’s knowledge, there is no default under the Loan
or condition that, with the giving of notice, the passage of time, or both,
would become a default; and (3) the assumption documents relating to
Lender’s consent to the acquisition shall be reasonably satisfactory to
Purchaser in form and substance and shall be fully executed and delivered by
Lender](7).


 


Section 6.2.  Conditions Precedent
Favoring Seller.   In addition to any other condition


 






(5)  Use bracketed text
if Loan is not to be assumed.


(6)  Use bracketed text
if Loan is not to be assumed.


(7)  Use bracketed text
if Loan is to be assumed.


 


6

















 


precedent in favor of Seller set forth elsewhere
in this Agreement, Seller’s obligations under this Agreement are expressly
subject to the timely fulfillment of the conditions set forth in this Section 6.2
on or before the Closing Date, or such earlier date as is set forth below.  Each condition may be waived in whole or part
only by written notice of such waiver from Seller to Purchaser.


 


(a)           Purchaser
shall have performed and complied in all material respects with all of the
terms of this Agreement to be performed and complied with by Purchaser prior to
or at the Closing;


 


(b)           On
the Closing Date, the representations of Purchaser set forth in Section 7.2
shall be true, accurate and complete;


 


(c)           No
action or proceeding by or before any governmental authority (as they relate to
the Property subject to the Closing) shall have been instituted that is
reasonably expected to restrain, prohibit or invalidate the transactions
contemplated by this Agreement, other than an action or proceeding instituted
by Purchaser; provided, that the foregoing condition shall be deemed to have
been satisfied if Purchaser shall have agreed to fully indemnify Seller from
any loss, liability, claim, damage or expense arising out of Seller’s
proceeding to close under this Agreement in the face of any such action or
proceeding; [and](8)


 


(d)           All
necessary consents of governmental authorities, if any, (as they relate to the
Property subject to the Closing) to effect the transactions contemplated by
this Agreement shall have been obtained; provided, that the foregoing condition
shall be deemed to have been satisfied if Purchaser shall have agreed to fully
indemnify Seller from any loss, liability, claim, damage or expense arising out
of Seller’s proceeding to close under this Agreement without having obtained a
necessary consent[; and


 


(e)           Lender
shall have approved the sale](9).


 


Section 6.3.  Risk of Loss.  Unless and until the Closing is
completed, the risk of loss to the Property from casualty or condemnation shall
be borne by Seller.  If all or a portion
of the Property is damaged or destroyed by fire or other casualty prior to
Closing such that: (1) Purchaser’s reasonable estimate of the cost to
repair the same exceeds $                  
[insert 2% of the Purchase Price]; (2) the
Tenant has the right to terminate the Lease or abate or offset rent under the
Lease on account of such casualty; or (3) access to or egress from the
Property is materially impaired (any such fire or other casualty, a “Material
Casualty”), Purchaser may, at Purchaser’s sole option, elect to either:


 


(a)           terminate
this Agreement and receive back the Deposit; or


 


(b)           purchase
the Membership Interests subject to and in accordance with the terms of


 






(8)  Use bracketed text if Loan is not to be assumed.


(9)  Use bracketed text if Loan is to be assumed.


 


7

















 


this Agreement.


 


In the event of a fire or other casualty that is
not a Material Casualty, and in connection with any Material Casualty as to
which Purchaser elects to proceed pursuant to Section 6.3(b),
(i) Purchaser shall purchase the Membership Interests in accordance with
the terms hereof without reduction in the Purchase Price (except for any
applicable deductible that will reduce the insurance proceeds assigned to
Purchaser at Closing) and (ii) Seller shall assign or cause the Company to
assign to Purchaser at Closing all insurance proceeds paid or payable to the
Company on account of such damage, including any rental or business
interruption insurance (and the amount of any deductible shall be credited
against the Purchase Price).  Purchaser
shall be deemed to have elected to terminate this Agreement under Section 6.3(a) unless,
within fifteen (15) Business Days from reasonably detailed written notice to
Purchaser of such casualty, Purchaser provides Seller with written notice that
Purchaser elects to proceed pursuant to Section 6.3(b).  If the Closing Date
would otherwise occur sooner, it shall automatically be extended to the date
that is twenty (20) Business Days after written notice to Purchaser of the
casualty.  If any insurance proceeds paid
or payable on account of a fire or other casualty are to be assigned to
Purchaser in accordance with the provisions of this Agreement, Seller shall
cooperate as reasonably requested by Purchaser to effectuate such assignment
(including, if necessary, prosecuting claims in Purchaser’s names or for
Purchaser’s benefit), and Seller’s obligation to so cooperate shall survive the
Closing.  Notwithstanding anything to the
contrary in this Section 6.3, if the Company fails to maintain full
replacement cost insurance or rental interruption insurance as required herein,
and if there is a fire or other casualty that is not a Material Casualty, or if
there is a Material Casualty as to which Purchaser elects to proceed under Section 6.3(b),
Purchaser shall have the right, in lieu of an assignment of insurance proceeds,
to receive a credit against the Purchase Price in an amount equal to the cost
to repair the damage caused by such fire or other casualty as estimated by a
third party consultant selected by Purchaser and the amount of any lost rents
that would have been covered by insurance if the Company had maintained the
rental insurance required above.


 


Section 6.4.  Condemnation.            If,
at any time before completion of the Closing, a taking or condemnation (or
proceeding in lieu thereof) is commenced or threatened in writing: (i) of
all or substantially all of the Property; or (ii) of less than all or
substantially all of the Property that: (1) results in the Tenant having
the right to terminate its Lease or abate or offset rent under the Lease; (2) causes
the Property to fail to comply with Legal Requirements; (3) materially
impairs access to or egress from the Property; (4) causes the loss of any
parking that benefits the Property; or (5) otherwise, in Purchaser’s
reasonable business judgment, results in a loss of value in excess of $                    
[insert 2% of the Purchase Price] (any
of the foregoing, a “Material Taking”), Purchaser may, at Purchaser’s
sole option, elect either to:


 


(a)           terminate
this Agreement and receive back the Deposit; or


 


(b)           purchase
the Membership Interests subject to and in accordance with this Agreement.


 


In the event of condemnation or taking that does
not constitute a Material Taking, or if there is a Material Taking but
Purchaser elects to proceed under Section 6.4(b), (1) Purchaser
shall purchase the Membership Interests in accordance with the terms hereof
(without reduction


 


8














 


in the Purchase Price), (2) Seller shall assign or
cause the Company to assign to Purchaser at Closing all condemnation proceeds
and rental interruption insurance paid or payable to the Company as a result of
such condemnation, (3) Purchaser shall have the right to be present with
Seller at any hearings or negotiations with respect thereto, and (4) Seller
shall not settle or compromise any such matter without Purchaser’s prior
written consent.  Purchaser shall be
deemed to have elected to terminate this Agreement under Section 6.4(a) unless,
within fifteen (15) Business Days from written notice to Purchaser of the
condemnation, Purchaser provides Seller with written notice that Purchaser
elects to proceed pursuant to Section 6.4(b).  If the Closing Date would otherwise occur
sooner, it shall automatically be extended to the date that is twenty (20)
Business Days after written notice to Purchaser of the Material Taking.


 


Section 6.5.  Leasing and Other
Activities Prior to Closing.


 


(a)           During
the term of this Agreement, Seller shall not permit the Company to enter into
any Lease Transaction without Purchaser’s prior written consent, which consent
may be given or withheld in Purchaser’s sole discretion.


 


(b)           During
the Restricted Period, Seller shall not permit the Company to enter into any
new Contracts or material modifications, renewals or terminations of any
existing Contracts that would impose any obligations on Purchaser or on the
Property after Closing, without the written consent of Purchaser, which consent
may be granted or denied in Purchaser’s sole discretion.  In its request for Purchaser’s approval under
this Section 6.5(b), Seller shall include the following notice: “NOTE:
FAILURE TO RESPOND WITHIN THE TIME PERIOD SET FORTH IN SECTION 6.5(b) WILL
RESULT IN A DEEMED APPROVAL”.  If Seller
so requests Purchaser’s approval and Purchaser does not notify Seller in
writing of its consent or disapproval within ten (10) Business Days
after notice thereof from Seller, Purchaser shall be deemed to have consented
to such requested action.  Without
limiting the foregoing approval rights, Seller shall provide Purchaser with
prompt notice of any new Contracts or material modifications, renewals or
terminations of any such contracts, together with complete copies of the
documents relating thereto.


 


(c)           During
the Restricted Period, Seller shall not permit the Company, without Purchaser’s
prior written approval, (i) to make any material alterations or additions to
the Property, except as may be required by law or the Lease or as may
reasonably be required for the prudent repair and maintenance of the Property, (ii) to
change or attempt to change (or consent to any change in) the zoning or other
Legal Requirements applicable to the Property, or (iii) to cancel, amend
or modify in any material respect any Permit.


 


(d)           At
all times prior to Closing, Seller shall, or shall cause the Company to, (i) maintain
the Property in good condition and repair; (ii) use commercially
reasonable efforts to maintain its relations with the Tenant and otherwise
conduct business with respect to the Property in a commercially reasonable
manner; (iii) perform its obligations under the Lease, the Contracts and
the Permitted Exceptions (and, as applicable, enforce the obligations of any
other parties to such documents); (iv) insure the Improvements at 100% of
replacement cost, maintain at least one year’s worth of rental interruption
insurance, and maintain liability and other insurance in accordance with
generally prevailing industry standards or as otherwise required by the Lease;
(v) not sell or further encumber the Property or any direct or indirect
interest therein


 


9

















 


or sell, pledge or otherwise encumber the
Membership Interests or enter into any agreement relating thereto, and (vi) promptly
give Purchaser a reasonably detailed written notice of: (1) any fire,
flood or other material adverse change with respect to the Property of which
Seller or the Company obtains actual knowledge; (2) any actual or proposed
condemnation (or proceeding in lieu thereof) of which Seller or the Company
obtains actual knowledge; (3) any written notice received by Seller or the
Company claiming that the Property or the use and operation thereof fails to
comply with any Legal Requirements; (4) any written notice given or
received by Seller or the Company claiming that the Company or the Tenant is in
default under the Lease; and (5) any written notice received by Seller or
the Company concerning any pending or threatened litigation or administrative
proceeding affecting the Property.  If
Seller becomes aware during the term of this Agreement of any matters that
render any of its representations or warranties untrue, Seller shall promptly
disclose such matters to Purchaser in writing.


 


[(e)        Seller
shall: (i) not enter into any amendment or modification of the Loan
Documents, assign any of its rights under the Loan Documents or prepay all or
any portion of the Loan; (ii) perform all of its monetary and other
material obligations under the Loan Documents; and (iii) promptly give
Purchaser a copy of all material notices given or received by Seller under the
Loan Documents.](10)


 


[Section 6.6.  Assumption of the Loan.


 


(a)           Promptly
upon execution of this Agreement, Seller shall introduce Purchaser to the
Lender (and/or any servicer of the Loan) and request in writing that Lender
(or, if applicable, the servicer of the Loan) consent to the sale and the
assumption by Purchaser of the Loan. 
Seller shall cooperate in all reasonable respects with such request for
consent, and shall use its commercially reasonable efforts to cause the Lender
(or, if applicable, the servicer of the Loan) to deliver the Loan Approval as
quickly as possible.


 


(b)           Purchaser
shall use commercially reasonable efforts to satisfy the Lender’s (or, if
applicable, the servicer’s) reasonable requirements in order to obtain the
consent of the Lender (or, if applicable, the servicer) to the sale and the
assumption by Purchaser of the Loan on terms and conditions reasonably
acceptable to Purchaser (such consent, the “Lender Approval”).  Without limiting the generality of the
foregoing, Purchaser shall: (i) promptly submit all information with
respect to Purchaser as the Lender (or, if applicable, the servicer of the
Loan) may reasonably request to the extent that the same is in Purchaser’s
possession or control, and (ii) provide such customary authority,
enforceability and substantive non-consolidation opinions with respect to the
loan assumption documents and the Lender (or, if applicable, the servicer of
the Loan) may reasonably request, provided, however, that notwithstanding
anything to the contrary contained herein, in no event shall Purchaser be
obligated to enter into any agreements in connection with the assumption of the
Loan that would:  (A) modify the
economic or other material terms of the Loan, (B) increase the obligations
of the borrower or require Purchaser or any of its affiliates to provide any
collateral for the Loan other


 






(10)  Use bracketed text
if Loan is to be assumed.


 


10

















 


than the Property, or (C) cause any person or
entity other than the single purpose entity that Purchaser will use to acquire
title to the Property to have any liabilities or obligations (contingent or
otherwise) in connection with the Loan, whether under any guaranty,
environmental indemnity or otherwise. 
Purchaser shall have the right to communicate directly with Lender, any
servicer for the Loan, and any relevant rating agencies and their respective
representatives in connection with the proposed assumption of the Loan.


 


(c)           Purchaser
shall pay all Loan Assumption Costs at the Closing or at such earlier time as
the same may be due under the terms of the Loan Documents.  Purchaser’s obligation to pay such costs
shall survive the Closing or termination of this Agreement.](11)


 


ARTICLE 7


 


As-Is Sale;
Limited Representations and Warranties


 


Section 7.1.  As-Is Sale.


 


(a)           Purchaser
acknowledges that it is an experienced and sophisticated purchaser of
commercial real estate projects such as the Property and that, prior to the
Closing, it will have a full and complete opportunity to conduct such
investigations, examinations, inspections and analysis of the Company, the
Membership Interests, the Property and market conditions as Purchaser, in its
absolute discretion, may deem appropriate. 
Purchaser further acknowledges that, except for Seller Representations,
Purchaser has not relied upon any statements, representations or warranties by
Seller or any agent of Seller.


 


(b)           Except
for the Seller Representations, Purchaser specifically acknowledges and agrees
that (i) Seller shall sell and Purchaser shall purchase the Membership
Interests and thereby become the owner of the Property “AS IS, WHERE IS AND
WITH ALL FAULTS AND ALL LATENT AND PATENT DEFECTS”, and (ii) except with
respect to Seller’s Representations, Purchaser is not relying on any other
representations or warranties of any kind whatsoever, whether oral or written,
express or implied, statutory or otherwise, from Seller, or any Seller
representative as to any matter concerning the Membership Interests or the
Property.  Without limiting the
generality of the foregoing, but excepting Seller’s Representations, Purchaser
expressly acknowledges and agrees that Purchaser is not relying on any
representation or warranty of any broker or representative of Seller, whether
implied, presumed or expressly provided at law or otherwise, arising by virtue
of any statue, common law or other legally binding right or remedy in favor
Purchaser.  This Section shall
survive the Closing or, if the Closing does not occur, shall survive the
termination of this Agreement.


 


Section 7.2.  Purchaser Representations.  Purchaser hereby represents and
warrants to Seller as follows:


 






(11)  Use bracketed text if Loan is to be assumed.


 


11

















 


(a)           Purchaser
is a limited liability company, duly formed, validly existing and in good
standing under the laws of the State of Delaware.  This Agreement constitutes the valid and
legally binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.


 


(b)           There
are no actions, suits or proceedings pending or, to the knowledge of Purchaser,
threatened, against or affecting Purchaser which, if determined adversely to
Purchaser, would adversely affect its ability to perform its obligations
hereunder. Purchaser has not (i) made a general assignment for the benefit
of creditors, (ii) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition of Purchaser’s creditors,
(iii) suffered the appointment of a receiver to take possession of all, or
substantially all, of Purchaser’s assets, (iv) suffered the attachment or
other judicial seizure of all, or substantially all, of Purchaser’s assets,
(v) admitted in writing it inability to pay its debts as they come due or
(vi) made an offer of settlement, extension or composition to its
creditors generally. Purchaser has full right, power and authority and is duly
authorized to enter into this Agreement, to perform each of the covenants on
its part to be performed hereunder and to execute and deliver, and to perform
its obligations under all documents required to be executed and delivered by it
pursuant to this Agreement.


 


(c)           Neither
the execution, delivery or performance of this Agreement nor compliance
herewith (i) conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default under (1) the
organizational documents of Purchaser, (2) to the best of Purchaser’s
knowledge, any law or any order, writ, injunction or decree of any court or
governmental authority, or (3) any agreement or instrument to which
Purchaser is a party or by which it is bound or (ii) results in the
creation or imposition of any lien, charge or encumbrance upon its property
pursuant to any such agreement or instrument.


 


(d)           No
authorization, consent, or approval of any governmental authority (including
courts) is required for the execution and delivery by Purchaser of this
Agreement or the performance of its obligations hereunder.


 


(e)           Purchaser
acknowledges that its purchase of the Membership Interests has not been
solicited by any general means of advertising and that the purchase of the
Membership Interests has been privately negotiated.


 


Section 7.3.  Seller’s Representations.  Seller
warrants and represents to Purchaser as follows:


 


(a)           Representations Concerning Seller.


 


(i)            Seller
is a [corporation] [limited partnership] [limited liability company], duly
formed, validly existing and in good standing under the laws of                                          .  This Agreement constitutes the valid and
legally binding obligation of Seller, enforceable against Seller in accordance
with its terms;


 


(ii)           There
are no actions, suits or proceedings pending or, to the knowledge of Seller,
threatened, against or affecting Seller or the Company which, if determined
adversely to Seller or the Company, would adversely affect its ability to
perform its obligations hereunder.


 


12

















 


Neither Seller nor the Company has (a) made
a general assignment for the benefit of creditors, (b) filed any voluntary
petition in bankruptcy or suffered the filing of an involuntary petition of its
creditors, (c) suffered the appointment of a receiver to take possession
of all, or substantially all, of its assets, (d) suffered the attachment
or other judicial seizure of all, or substantially all, of its assets,
(e) admitted in writing it inability to pay its debts as they come due or
(f) made an offer of settlement, extension or composition to its creditors
generally.  Seller has full right, power
and authority and is duly authorized to enter into this Agreement, to perform
each of the covenants on its part to be performed hereunder to cause the
Company to take the actions required to be taken by the Company hereunder and
to execute and deliver, and to perform its obligations under all documents
required to be executed and delivered by it pursuant to this Agreement;


 


(iii)          Neither
the execution, delivery or performance of this Agreement nor compliance
herewith (a) conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default under (1) the
organizational documents of Seller or the Company’s Organizational Documents,
(2) to the best of Seller’s knowledge, any law or any order, writ,
injunction or decree of any court or governmental authority, or (3) any
agreement or instrument to which Seller or the Company is a party or by which
it is bound or (b) results in the creation or imposition of any lien,
charge or encumbrance upon its or the Company’s property pursuant to any such
agreement or instrument;


 


(iv)          No
authorization, consent, or approval of any governmental authority (including
courts) is required for the execution and delivery by Seller of this Agreement
or the performance of its or the Company’s obligations hereunder;


 


(v)           Seller
is not a “foreign person” as defined in Section 1445 of the Code or a “disregarded
entity” as defined in Treasury Regulations Section 1.1445-2(b)(2)(iii);
Seller’s taxpayer identification number is                                               ;


 


(vi)          (A) All
Tax Returns required to be filed by, on behalf of, or with respect to, the
Company have been duly and timely filed with the appropriate taxing authorities
in all jurisdictions in which such Tax Returns are required to be filed (after
giving effect to any valid extensions of time in which to make such filings),
and all such Tax Returns were true, complete and correct in all material
respects; (B) all Taxes due and payable by, on behalf of, or with respect
to the Company, either directly or otherwise, have been fully and timely paid,
except (1) to the extent adequately reserved for in accordance with
generally accepted accounting principles consistently applied on the balance
sheet of the Company, and adequate reserves or accruals for Taxes have been
provided in the balance sheet of the Company with respect to any period through
the date hereof for which Tax Returns have not yet been filed or for which
Taxes are not yet due and owing and (2) with respect to real estate taxes
and assessments for the Property that are paid directly by the Tenant under the
Lease and pursuant to such Lease, as to which Seller has no knowledge of Tenant’s
material failure to pay such Taxes and Seller covenants to use commercially
reasonable efforts to enforce the provisions of such Lease with respect to the
payment of such Taxes; (C) no agreement, waiver or other document or
arrangement extending or having the effect of extending the period for
assessment or collection of Taxes (including, but not limited to, any
applicable statute of limitations) has been executed or filed with any taxing
authority by or on behalf of the Company, and (D) the Company is, and at
all times during its


 


13

















 


existence has been, a limited liability company
that is taxable as a “disregarded entity” (rather  than being taxable as an association or a publicly-traded partnership
taxable as a corporation);


 


(vii)         The
Company has complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes and has duly and
timely withheld from employees’ salaries, wages and other compensation and has
paid over to the appropriate taxing authorities all amounts required to be so
withheld and paid over for all periods under all applicable laws;


 


(viii)        The
Company (or Seller on behalf of the Company) has made available to Purchaser,
its agents and underwriters complete copies of (A) any audit report,
revenue agent report or other written assertions issued within the last three (3)
years relating to any material Taxes due from or with respect to the Company
with respect to its income, assets or operations, (B) all Tax Returns filed by
or on behalf of the Company for all periods for which the applicable statute of
limitations has yet to lapse and (C) all Tax rulings, requests for rulings, or
closing agreements specifically relating to the Company;


 


(ix)          No
claim has been made by a taxing authority in a jurisdiction where the Company
does not file an income or franchise Tax Return that the Company is or may be
subject to taxation by, or required to file an income or franchise Tax Return
in, that jurisdiction;


 


(x)           (A) There
are no deficiencies asserted or assessments made as a result of any
examinations by any taxing authority of the Tax Returns of or covering or
including the Company, or such deficiencies or assessments have been fully
paid, and there are no other audits or investigations by any taxing authority
in progress, nor has the Company received any notice from any taxing authority
that it intends to conduct such an audit or investigation; (B) no requests
for a ruling or a determination letter are pending with any taxing authority
by, or with respect to, the Company; and (C) no issue has been raised in
writing by any taxing authority in any current or prior examination which, by
application of the same or similar principles, could reasonably be expected to
result in a proposed deficiency against or with respect to the Company for any
subsequent taxable period that could be material;


 


(xi)          Neither
the Company nor any other Person on behalf of the Company has executed or
entered into a closing agreement pursuant to Section 7121 of the Code or
any predecessor provision thereof or any similar provision of state, local or
foreign law with respect to the Company. 
No amount will be required to be included as an item of income in, or
excluded as an item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Closing Date with respect to the Company
as a result of any:  (A) change in
method of accounting for a taxable period ending on or prior to the Closing
Date; (B) “closing agreement” as described in Code Section 7121 (or
any corresponding or similar provision of applicable state, local or foreign
Law) executed on or prior to the Closing Date; (C) election with respect
to income from the discharge of indebtedness under Code Section 108(i); (D)
prepaid amount received on or prior to the Closing Date; (E) sale reported
on the installment method that occurred prior to the Closing Date, or (F) any
similar election, action or agreement that would have the effect of deferring
any liability for Taxes with respect to the Company from any period ending on
or before the Closing Date to any period ending after the Closing Date;


 


14

















 


(xii)         Seller
is a United States person within the meaning of Section 7701(a)(30)  of the Code;


 


(xiii)        The
Company has never constituted or been taxable as a “corporation” or an “association”
(within the meaning of the Code);


 


(xiv)        The
Company has never engaged in a “reportable transaction” within the meaning of
Treasury Regulations Section 1.6011-4;


 


(xv)         The
transactions contemplated hereby will not result in any income Tax liability to
Purchaser or the Company;


 


(xvi)        The
Company has no subsidiaries, and the Company has no investments or other
interests in any other firm, person or venture other than the Property.  The Company has no assets other than cash (if
any) and the Property.  Owner is not subject
to any obligation or requirement to provide funds to or to make any investment
(in the form of a loan, capital contribution or otherwise) in or to any person
or venture.  Seller has not pledged or
otherwise encumbered its Membership Interests in the Company;


 


(xvii)       The
Company is a single member, single purpose entity disregarded for federal
income tax purposes and established for the sole purpose of owning and
operating the Property and the Company does not own or operate any property
other than the Property; and


 


(xviii)      The
Company does not have any employees employed in the management, ownership or
operation of the Property.  Purchaser and
Seller agree that Purchaser shall not assume, shall not take subject to and
shall not be liable for, any liabilities or obligations of any kind or nature,
whether absolute, contingent, accrued, known or unknown, to former or current
employees of the Company, (i) which arise or accrue prior to the Closing
including, without limitation, any liabilities or obligations of the Company in
connection with any employee benefit plans or collective bargaining agreements,
employment agreements or other similar arrangement, any liabilities or
obligations with respect to employment arising under any federal, state or
municipal statute or common law, or any liabilities or obligations in respect
of retiree health benefits, and (ii) with respect to severance payments or
other termination payments owing by Seller or the Company to any of the Company’s
former or current employees (collectively, “Employee Claims”).  No portion of any liability respecting the
Employee Claims listed in clause (ii) immediately above shall be
passed through or charged to the Tenant by the Company.  Seller shall indemnify Purchaser and defend
and hold Purchaser harmless from and against all claims arising under any
Employee Claims.  The provisions of this
paragraph shall survive the Closing.


 


(b)           Representations Concerning the Property.


 


(i)                                     The
Lease:


 


(A)          Seller has delivered to Purchaser a
true, correct and complete copy of the Lease;


 


(B)          The
Lease is in full force and effect, has not been amended,


 


15

















 


modified
or supplemented, and constitutes the entire agreement between the Company and
the Tenant concerning the Property;


 


(C)          There
is no default by the Company or Tenant under the Lease or, to the best of
Seller’s knowledge, there is no condition or event that, with the passage of
time or giving of notice, or both, would constitute such a default.  The Tenant is not entitled to any reduction
in or refund of, and has no counterclaim or offset against, and is not
otherwise disputing, any rents or other charges paid, payable or to become
payable by the Tenant under the Lease or any of the Tenant’s other obligations
under the Lease. There are no options or rights to renew, extend or terminate
the Lease, except as expressly set forth in the Lease.  The Tenant has not indicated to Company or
Seller its intent to terminate or attempt to renegotiate its Lease prior to
expiration of the term of such Lease.  To
the knowledge of Seller, the Tenant has not entered into any assignment or
sublease with respect to the Lease;


 


(D)          Except
as disclosed on Exhibit C, Tenant has not provided any security
deposit in connection with the Lease;


 


(E)           There
are no free rent, operating expense abatements, incomplete tenant improvements,
rebates, allowances, or other unexpired concessions or landlord obligations
under the Lease;


 


(F)           Other
than the Lease, the Company has not entered into any leases or other occupancy
agreements affecting all or any portion of the Property, and there are no
tenants or other occupants of all or any part of the Property other than the
Tenant under the Lease;


 


(G)          To
the knowledge of Seller, the Tenant is not the subject of any bankruptcy,
reorganization, insolvency or similar proceedings;


 


(H)          (a) The
commencement date of the Lease was                                              ;
the rent commencement date of the Lease was                                           ;
and the expiration date of the initial term of the Lease is                        ;
(b) there are no options remaining unexercised on the part of the Tenant to
renew the Lease except as follows (if none, so state):                                                    ;
and (c) monthly basic rent is payable as and when set forth in the Lease;


 


(I)            (a) Tenant
has unconditionally taken possession of and is occupying all of the Property
(to the extent that the Property is to be delivered to the Tenant pursuant to
the Lease); (b) Landlord has completed all work to be performed by
Landlord under the Lease in a good and workmanlike manner and in accordance
with the Lease; (c) Landlord has not received any notice from Tenant of any
defects in the Property or any related improvements or facilities; (d) Tenant
has not delivered any notice alleging any defect or deficiency in the work
relating to the Property or any related improvements or facilities; and (e) Landlord
has satisfied any and all commitments made to induce Tenant to enter in to the
Lease;


 


(ii)           Lease
Brokerage.  There are no lease
brokerage agreements, leasing


 


16

















 


commission agreements or other agreements
providing for payments of any amounts for leasing  activities or procuring tenants with respect to the Property, whether now
or in the future.  No brokerage or
similar fee is due or unpaid by Seller or the Company with respect to the Lease
or the Property.  No brokerage or similar
fee shall be due or payable on account of the exercise of any renewal,
extension or expansion options arising under the Lease;


 


(iii)          Contracts.  Exhibit I sets forth a complete
and accurate list of the Contracts. 
Seller has given Purchaser true and complete copies of the Contracts.  The Contracts are in full force and effect
and neither the Company nor, to the best of Seller’s knowledge, any other
party, is in default in any material respect under any Contract;


 


(iv)          Warranties,
Permits and Related Matters.


 


(A)          Attached
hereto as Exhibit K is a true, complete, correct and complete list
of all warranties or guaranties issued in connection with the development,
construction, operation, maintenance or repair of the Property, and all
amendments and modifications thereto (collectively, the “Warranties”).  True and correct copies of all of the
Warranties have been delivered to Purchaser. 
The Warranties are in full force and effect and shall be duly assigned
to Purchaser at Closing at Seller’s sole expense;


 


(B)          To the
best of Seller’s knowledge, the Property is in compliance in all material
respects with all Legal Requirements, and Seller has no actual knowledge of any
claim of violation of any Legal Requirement.


 


(C)          To the
best of Seller’s knowledge, the Company has obtained all licenses, permits,
variances, approvals, and authorizations required from all governmental
authorities having jurisdiction over the Property or from private parties for
the intended development, construction, use, operation and occupancy of the
Property and to insure vehicular and pedestrian ingress to and egress from the
Property (collectively, the “Permits”), and all of the Permits are, and
will at Closing be, in full force and effect and properly vested in the name of
the Company.  All appeal periods with
respect to the Permits have expired and no appeals have been filed;


 


(D)          Neither
Seller nor the Company has received any written notice from any insurance
company, insurance rating organization or Board of Fire Underwriters requiring
any alterations, improvements or changes at the Property, or any portion
thereof;


 


(E)           To
the best of Seller’s knowledge, other than general real estate taxes, the
Company has no obligations to any governmental authority, adjacent property
owner or other Person for the payment (or for any donations in lieu of payment)
or performance of any infrastructure, capital improvements or other work in
connection with the development or ownership of the Property;


 


(v)           Litigation
and Other Proceedings.


 


(A)          No
condemnation or eminent domain proceedings are pending or, to Seller’s
knowledge, threatened against the Property or any part thereof, and neither
Seller nor the Company has made any commitments to or received any written
notice of the desire of any


 


17














 


public authority or other entity to take or use the
Property or any part thereof whether temporarily or permanently, for easements,
rights-of-way, or other public or quasi-public purposes;


 


(B)          There
are no pending, or to Seller’s knowledge, threatened, judicial or
administrative proceedings or investigations affecting or relating to the
development, construction, use, operation or ownership of the Property;


 


(vi)                              Taxes.  Seller has delivered true and correct copies
of tax bills issued by any applicable federal, state or local governmental
authority to the Company or Seller with respect to the Property for the most
recent past and current tax years, and any new assessment received by the
Company or Seller with respect to a current or future tax year.  No portion of the Property comprises part of
a tax parcel which includes property other than property comprising all or a
portion of the Property.  No application
or proceeding is pending with respect to a reduction or an increase of such
taxes.  There are no tax refund
proceedings relating to the Property which are currently pending.  There are no special taxes or assessments to
be levied against the Property nor is Seller aware of any change in the tax
assessment of the Property;


 


(vii)                           Personal Property.  The Company has good title to the Personal
Property free and clear of all liens and encumbrances;


 


(viii)                        Hazardous Materials.  Except as disclosed in writing to Purchaser
before the date hereof, neither Seller nor the Company has received any written
notice that any Hazardous Material are present at the Property or that the
Property is in violation of any Environmental Law.  The Company has not used (except as is
customary in the course of the operation of the Property and in compliance with
all applicable laws), manufactured, generated, treated, stored, disposed of, or
released any material amounts of Hazardous Material on, under or about the
Property or transported any material amounts of Hazardous Material over the
Property or installed, used or removed any storage tank on, from or in
connection with the Property.  Except as
disclosed in writing to Purchaser before the date hereof, to Seller’s
knowledge, there are no storage tanks or wells (whether existing or abandoned)
located on, under or about the Property;


 


(ix)                              No Preemptive Rights.  The Company has not granted any option or
right of first refusal or first opportunity to any party to acquire any
interest in the Property and Seller has not granted any option or right of
first refusal or first opportunity to any party to acquire any interest in the
Company;


 


(x)                                 Reports and Other Information.


 


(A)          Seller
has delivered or made available to Purchaser (without representation or
warranty, express or implied, as to the completeness or accuracy thereof) true
and complete copies of all Reports;


 


(B)          The
plans and specifications for the Improvements, Lease, Permits, Warranties,
operating statements, income and expense reports, and all other agreements,
books and records relating to the Property delivered or made available by
Seller to Purchaser in connection with this Agreement are and at the time of
Closing will be copies of such documents


 


18

















 


that are true, complete and correct in all material
respects.  The operating statements
furnished by Seller to Purchaser relative to the Property are true and correct
in all material respects and fairly reflect the financial condition, the
financial results or other subject matter thereof as of the dates thereof, and
there have been no material adverse changes since the date of such statements;


 


(C)          To
Seller’s knowledge, Seller has not failed to deliver to Purchaser a true and
complete copy of any written report or document in Seller’s or the Company’s
possession or control that materially affects the development, ownership,
leasing, value or use of the Property;


 


(xi)                              Seller Representative.  The Designated Seller Representatives have
been actively involved in, and are familiar with, the ownership, development,
construction, leasing and operation of the Property.


 


[(xii)                       Loan Documents.  Exhibit H sets forth a complete and
accurate list of the Loan Documents and all escrow funds and reserve accounts
being held in connection with the Loan. 
Seller has delivered to Purchaser true and complete copies of the Loan
Documents.  The Loan Documents as
delivered or made available to Purchaser are in full force and effect, have not
been amended, modified or supplemented and constitute the entire agreement with
Lender with respect to the Loan and the Property.  The Company has made all principal, interest
and escrow and reserve payments due under the Loan Documents.  Neither Seller nor the Company has received
any written notice of default under the Loan Documents and, to Seller’s
knowledge, there is no default under the Loan and no condition or state of
facts exists that with the giving of notice, the passage of time, or both,
would become a default under the Loan Documents.](12)


 


(c)                                  Representations Concerning the Membership
Interests.


 


(i)                                     Seller has
provided Purchaser with copies of the Company’s Organizational Documents that
are true, correct and complete and have not been amended or modified;


 


(ii)                                  Seller owns
100% of the membership interests in the Company free and clear of any liens or
encumbrances;


 


(iii)                               The Membership
Interests are not evidenced by share certificates;


 


(iv)                              Other than this
Agreement, Seller is not a party to any option, warrant, purchase right or
other contract or commitment requiring Seller to sell, transfer or otherwise
dispose of the Membership Interests. 
Seller is not a party to any voting trust, proxy or other agreement with
respect to the Membership Interests other than the Company’s Organizational
Documents;


 


(v)                                 To Seller’s
knowledge, there is no litigation or material claims or causes of action, or
any government proceeding or inquiry, whether pending or threatened, concerning


 






(12)  Use bracketed text if Loan is to be assumed.


 


19

















 


the Company or the Membership Interests.  To Seller’s knowledge, the Company is not in
default with respect to any judgment. 
order, writ, injunction, decree, assessment or similar command of any
court or federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, affecting the Company or the
Membership Interests, nor to Seller’s knowledge is any such instrument or other
action of the nature indicated above outstanding.  To Seller’s knowledge, Seller has not
committed any act which would give rise to any material legal action or other
proceeding before any court or administrative agency affecting the Company or
the Membership Interests; and


 


(vi)          In
the event any portion of the Purchase Price is paid in OP Units, Seller makes
the representations and warranties contained in Exhibit J attached hereto and
incorporated herein.


 


Section 7.4.  Seller’s Knowledge.  Whenever a representation is
qualified by the phrase “to the best of Seller’s knowledge”, or by words of
similar import, the accuracy of such representation shall be based solely on
the actual (as opposed to constructive or imputed) knowledge of                                 
and                                      
(collectively, the “Designated Seller Representatives”), without
independent investigation or inquiry other than review of Seller’s and the
Company’s files and reasonable inquiry of Seller’s and the Company’s agents
(including property managers and leasing agents), officers and employees who
are familiar with the development, ownership, operation and leasing of the
Property.


 


ARTICLE 8


 


Closing


 


Section 8.1.  Closing Date.  The Closing shall take place at
1:00 p.m. on the Closing Date.  Unless
the parties otherwise agree in writing, the Closing shall be conducted at the
principal office of the Seller at such time and, on or before the Closing Date,
Seller shall deliver to Purchaser the documents listed in Section 8.2
and Purchaser shall deliver to Seller the documents and funds described in Section
8.3.


 


Notwithstanding anything to the contrary in this
Agreement, if, on the Closing Date, Purchaser is unable to bind property and
casualty insurance for the Real Property solely because of the existence of a
named hurricane threatening the area in which the Real Property is located,
Purchaser may, by written notice to Seller, adjourn the Closing until the date
that is three (3) Business Days after the date that such condition no longer
exists.


 


Section 8.2.  Seller’s Deliveries.  At the Closing, Seller shall
deliver or cause to be delivered to Purchaser (or its nominee), at Seller’s
sole expense, each of the following items:


 


(a)           (i)
An Assignment and Assumption Agreement in the form attached hereto as Exhibit
E, (ii) the Representation Update Certificate in the form attached hereto
as Exhibit F, (iii) the Closing Statement, and (iv) a non-foreign person
affidavit in the form attached hereto as Exhibit I, all duly executed
(and, when required, acknowledged) by Seller;


 


(b)           Customary
affidavits and certificates as to facts within the knowledge of Seller or the
Company relevant to the determination by the Title Company as to the condition
of


 


20

















 


title (including, without limitation, a gap
indemnity affidavit);


 


(c)           At
least two original Tenant estoppel certificates;


 


(d)           At
least two original SNDAs;


 


(e)   All
instruments necessary to dissolve the                                 
effective as of the Closing Date;


 


(f)            such
other documents and certificates as the Purchaser may reasonably request to
establish the authority of the parties executing any documents in connection
with the Closing; and


 


(g)           Such
other documents as are consistent with the terms of this Agreement and
reasonably required to close the transaction contemplated hereby.


 


Section 8.3.  Purchaser’s Deliveries.  At the Closing, Purchaser shall
deliver the following items:


 


(a)           Immediately
available federal funds sufficient to pay the Purchase Price (less the Deposit)
and Purchaser’s share of all escrow costs and closing expenses;


 


(b)           Duly
executed and acknowledged originals of the  Assignment and
Assumption  Agreement  and
the Closing Statement;


 


(c)           Such
evidence or documents as may reasonably be required by Seller or the Title
Company evidencing the status and capacity of Purchaser and the authority of
the Person or Persons who are executing the various documents on behalf of
Purchaser in connection with the purchase of the Membership Interests and
ownership of the Property; and


 


(d)           Such
other documents as are consistent with the terms of this Agreement and
reasonably required to close the transaction contemplated hereby.


 


Section 8.4.  Costs and Prorations.


 


(a)           General.  To the extent not paid directly by Tenant in
accordance with the terms of the Lease, real estate taxes and assessments
allocable to the payment period that includes the Closing Date, personal
property taxes, if any, rental income and all other items of income and expense
with respect to the Property shall be prorated between Seller and Purchaser as
of the Closing Date in accordance with this Section 8.4.  Except as otherwise provided in this Section 8.4,
income and expenses shall be prorated on the basis of a 30-day month and on the
basis of the accrual method of accounting. 
All such items attributable to the period prior to the Closing Date
shall be credited or charged to Seller, and all such items attributable to the
period commencing on the Closing Date shall be credited to Purchaser.


 


(b)           Rents.  The fixed and minimum rents and all
additional rents, escalation


 


21

















 


charges, common area maintenance charges, imposition
charges, heating and cooling charges, insurance charges, charges for utilities,
percentage rent, and all other rents, charges and commissions (collectively,
the “Rents”) payable by the Tenant, to the extent collected by Seller or
the Company on or prior to the Closing Date and which represent payments of
Rents applicable to a period of time on or subsequent to the Closing Date,
shall be prorated between Seller and Purchaser at Closing.  The Company shall retain at Closing
(i) all security or other deposits paid by the Tenant with respect to the
Property; (ii) rent prepaid beyond the Closing Date; and (iii) any
interest on rental agreement or security deposits or prepaid rent held by or on
behalf of the Company and refundable to the Tenant, all of which shall continue
to be in the operating account of the Company and shall not be removed by
Seller.


 


(c)           Arrears.  Any of the Rents which are due and payable by
the Tenant with respect to the period prior to the Closing Date, but which have
not been collected by the Company on or prior to the Closing Date, or payment
of which has been deferred until after the Closing Date (the “Arrearage
Rents”) shall not be prorated at Closing. 
Any Arrearage Rents that are paid after the Closing Date shall, subject
to the terms below, be paid to Seller, and if the Arrearage Rents are received
by the Company or Purchaser, Purchaser shall pay or shall cause the Company to
pay the Arrearage Rents to Seller promptly after collection by Purchaser or the
Company, as applicable.  After Closing,
neither Purchaser nor the Company shall have any obligation to collect any
Arrearage Rents or to commence any action to enforce the obligation of Tenant
to pay the Arrearage Rents.  In the event
Purchaser elects to commence, or to cause the Company to commence any action or
proceeding against Tenant and as a result thereof collects any Arrearage Rents
which Purchaser is required to remit to Seller, Purchaser shall be entitled to
deduct and retain a portion of the amount collected which is equal to the Pro
Rata Share (as hereinafter defined) of the reasonable, third party expenses
incurred by Purchaser in connection with the collection of the Arrearage Rents.


 


(d)           Unknown Rents.  As used herein, the term “Unknown Rents”
means any Rents that have accrued as of the Closing but are not due and payable
on the Closing Date: (i) because the lease year or other fiscal period for
which such Rents are to be computed has not yet expired (including, by way of
example only, escalation charges and percentage rents), or (ii) because for any
other reason the amount of such Rents cannot be calculated on the Closing
Date.  Unknown Rents shall not be prorated
at Closing but shall be apportioned promptly after expiration of the applicable
lease year or other fiscal period and collection of the Unknown Rents.  Purchaser shall make reasonable efforts or
shall cause the Company to make reasonable efforts to ascertain the amount of
the Unknown Rents (but shall not be obligated to commence any action or
proceeding to collect Unknown Rents), and when the amounts of the Unknown Rents
are ascertained and collected by Purchaser or the Company, Purchaser shall
promptly pay (or cause the Company to pay) to Seller a portion (the “Pro
Rata Share”) of the Unknown Rents determined by multiplying the Unknown
Rents collected by a fraction, the numerator of which is the number of days in
the applicable lease year or other fiscal period up to but excluding the
Closing Date and the denominator of which is the number of days in the lease
year or other fiscal period, less any monies Seller has previously received on
account of the Unknown Rents and Seller’s Pro Rata Share of the third party
expenses incurred by Purchaser in the collection of the Unknown Rents.  In the event it is determined after Closing
that the amount of the Unknown Rents received by Seller exceeds the Seller’s
Pro Rata Share, Seller shall promptly pay such excess to Purchaser upon demand.


 


22

















 


(e)           Taxes. 
To the extent not paid directly by Tenant in accordance with the terms
of the Lease, all real estate taxes assessed against the Property shall be
prorated between Seller and Purchaser on an accrual basis based upon the actual
current tax bill.  If the most recent tax
bill received by the Company before the Closing Date is not the actual current
tax bill, then Seller and Purchaser shall initially prorate the taxes at the
Closing by applying 100% of the tax rate for the period covered by the most
current available tax bill to the latest assessed valuation, and shall
reprorate the taxes retroactively when the actual current tax bill is then
available.  All real estate taxes
accruing before the Closing Date shall be the obligation of Seller and all such
taxes accruing on and after the Closing Date shall be the obligation of
Purchaser.


 


(f)            Assessment Installments.  If as of the Closing Date the Property is
encumbered or otherwise affected by any assessment (whether or not a lien)
which is or may become payable in installments (which the Tenant is not
required to pay under the provisions of the Lease), then for the purposes of
this Agreement, all unpaid installments of such assessments shall be deemed to
have become due and payable prior to the Closing Date and Purchaser shall be
entitled to receive a credit against the Purchase Price in an amount equal to
all unpaid installments of such assessments, and in such event Purchaser shall
take title to the Membership Interests (and indirectly, the Property) subject
to the unpaid installments not yet due and payable.


 


(g)           Utilities.  To the extent not payable directly by the
Tenant in accordance with the terms of the Lease, the actual or estimated
charges for utilities accrued and payable by the Company shall be prorated
between Seller and Purchaser.  Deposits
for utilities (the “Utility Deposits”), plus any interest on the Utility
Deposits to which the Company has paid to the utility company, shall be
credited to Seller for the full amount thereof at Closing.  With respect to water, sewer, electric and
gas charges, to the extent not paid by the Tenant under the Lease, Seller shall
cause the Company to make reasonable efforts to obtain a reading of the meter
or other consumption measuring device as of the Closing Date.  If the Company is unable to obtain such a
reading, Seller shall furnish a reading as of a date not more than thirty (30)
days prior to the Closing Date and the unknown charges shall be apportioned on
the basis of an estimate computed by utilizing such reading and the most recent
bill from the utility provider.


 


(h)           Continuing Contracts.  Prepaid charges, payments and accrued charges
under any Continuing Contracts shall be prorated at Closing in a manner
reasonably acceptable to Seller and Purchaser.


 


(i)            Closing Costs.  Purchaser and Seller shall each pay their own
legal fees related to the preparation of this Agreement and all documents
required to settle the transaction contemplated hereby.  Purchaser shall pay all costs associated with
its due diligence, including, without limitation the cost of any surveys,
zoning reports and title policies and all assumption costs, including legal
fees, for or in connection with the assumption of any loan or any properties or
costs arising out of the prepayment of any loan.  Any recording fees, escrow fees and other
closing costs (except documentary transfer taxes or other transfer or recording
taxes) shall be all allocated according to the custom and practice of the
jurisdiction in which the Property is located. 
To the extent any recording taxes, transfer taxes or documentary stamps
are due or become due in connection with the transaction contemplated by this
Agreement, such costs shall be paid by Purchaser.


 


23

















 


(j)            Closing Statement.  Purchaser and Seller shall cooperate to
produce prior to the Closing Date a schedule of prorations to be made as of the
Closing Date in accordance with the terms of this Agreement (the “Closing
Statement”).  Any adjustments to
estimated figures on the Closing Statement shall be made by the parties with
due diligence and cooperation within ninety (90) days following the Closing
Date, or such later time as may be required to obtain necessary information for
proration, by prompt cash payment to the party yielding a net credit from such
prorations from the other party.


 


[(k)          Loan Escrows and Reserves.  At the Closing, all escrows and reserves held
with respect to the Loan shall be credited or transferred to Purchaser at no
cost to Purchaser.  Interest for the
month in which the Closing occurs shall be pro rated at Closing based on the
number of days in such month.  Purchaser
shall be responsible for all Loan Assumption Costs.](13)


 


Section 8.5.  Possession.  Possession of the Property shall
be retained by the Company at the Closing, subject only to the Lease, rights
arising under any Contracts, and the Permitted Exceptions.


 


ARTICLE 9


 


Real Estate
Commission


 


Section 9.1.  Commissions.


 


(a)           Seller
represents, warrants and covenants to Purchaser that Seller has not dealt with
any real estate agent or broker in connection with the transaction contemplated
hereby.  Seller shall indemnify Purchaser
against all claims, costs and liability (including reasonable attorneys’ fees)
arising from or relating to any claims by any other broker or other Person
claiming any commission or similar compensation by, through or under Seller.


 


(b)           Purchaser
represents, warrants and covenants with Seller that Purchaser has not dealt
with any real estate agent or broker in connection with the transaction
contemplated hereby. Purchaser shall indemnify Seller against all claims, costs
and liability (including reasonable attorneys’ fees) arising from or relating
to any claims by any broker or other Person claiming any commission or similar
compensation by, through or under Purchaser.


 


The provisions of this Section 9.1
shall survive the Closing.


 


ARTICLE 10


 


Termination
and Default


 


Section 10.1.  Termination without Default. If the sale of the Membership Interests is not consummated because of
the failure of any condition precedent to Purchaser’s obligations expressly set
forth in this Agreement or for any other reason except a default by Purchaser
in its


 






(13)  Use bracketed text if Loan is to be assumed.


 


24

















 


obligation to purchase the Membership Interests
in accordance with the provisions of this Agreement (which shall be governed by
Section 10.2) or any default by Seller of its obligations under this
Agreement (which shall be governed by Section 10.3), the Deposit shall
promptly be returned to Purchaser and neither Party shall have any further
obligations hereunder.


 


Section 10.2.  Purchaser’s Default. If the sale contemplated hereby is not consummated because of a default
by Purchaser in its obligation to purchase the Membership Interests in
accordance with the terms of this Agreement, and if such default is not cured
within ten (10) days from written notice thereof from Seller to Purchaser,
then: (a) this Agreement shall terminate; (b) the Deposit shall be paid to
and retained by Seller as liquidated damages; and (c) Seller and Purchaser
shall have no further obligations to each other. PURCHASER AND SELLER
ACKNOWLEDGE THAT THE DAMAGES TO SELLER IN THE EVENT OF A BREACH OF THIS
AGREEMENT BY PURCHASER WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT THE
AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES’ BEST AND MOST ACCURATE ESTIMATE
OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER IF THE TRANSACTION SHOULD FAIL
TO CLOSE AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING
AS OF THE DATE OF THIS AGREEMENT AND UNDER THE CIRCUMSTANCES THAT SELLER AND
PURCHASER REASONABLY ANTICIPATE WOULD EXIST AT THE TIME OF SUCH BREACH.
PURCHASER AND SELLER AGREE THAT SELLER’S RIGHT TO RETAIN THE DEPOSIT SHALL BE
SELLER’S SOLE REMEDY, AT LAW AND IN EQUITY, FOR PURCHASER’S FAILURE TO PURCHASE
THE MEMBERSHIP INTERESTS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.


 


Section 10.3.  Seller’s Default.  If Seller defaults in its
obligation to sell the Membership Interests to Purchaser in accordance with the
terms of this Agreement, and if such default is not cured within ten (10) days
from written notice thereof from Purchaser to Seller, then Purchaser may, as
its sole and exclusive remedy at law or in equity: (a) terminate this Agreement
by giving written notice thereof to Seller, in which event the Deposit will
promptly be returned to Purchaser, and the parties shall have no further
obligation to each other; (b) waive such default and consummate the
transactions contemplated hereby in accordance with the terms of this
Agreement; or (c) specifically enforce this Agreement. Purchaser hereby
irrevocably waives any other right or remedy for such default.  If Purchaser brings an action for specific
performance, the Deposit shall be returned to Purchaser pending the outcome of
such action.


 


Section 10.4.  Breach of Representations. The representations and warranties of Seller and Purchaser set forth in
this Agreement or in any document or certificate delivered by Seller or
Purchaser in connection herewith shall survive the Closing for a period of
twelve (12) months (the “Survival Period”), and no action or proceeding
thereon shall be valid or enforceable, at law or in equity, unless within such
time, written notice thereof is given to the other party; provided, however,
that following the closing: (i) the total liability of Seller for all breaches
shall not, in the aggregate, exceed [                ]
[2% of the Purchase Price] (the “Claim
Cap”); and (ii) the total liability of Purchaser for all such breaches shall
not, in the aggregate, exceed the Claim Cap. 
Purchaser further agrees that no claim may or shall be made for any
alleged breach of any representations or warranties made by Seller under this
Agreement and any document delivered in connection with this Agreement unless
the amount of such claim or claims, individually or in


 


25

















 


the aggregate, exceeds [                   ]
(at which point, subject to the above provisions, Seller shall be responsible
for all such damages caused thereby relating back to the first dollar of loss).


 


Section 10.5.  Mutual Indemnifications.


 


(a)           From
and after the Closing until expiration of the Survival Period, Seller shall
indemnify Purchaser and defend and hold Purchaser harmless from and against any
and all claims, demands, liabilities, costs, expenses, penalties, damages and
losses, including reasonable attorneys’ fees, resulting from any
misrepresentation or breach of warranty by Seller in this Agreement or in any
document, certificate, or exhibit given or delivered by Seller pursuant to or
in connection with this Agreement; provided however, that Seller’s liability
following the Closing for any misrepresentation or breach of warranty by Seller
in this Agreement or in any document, certificate, or exhibit given or
delivered by Seller pursuant to or in connection with this Agreement shall not
exceed the Claim Cap; provided, further, that in no event shall Seller have any
liability for any such breach regarding which Purchaser had actual knowledge
prior to the Closing).


 


(b)           From
and after the Closing until expiration of the Survival Period, Purchaser shall
indemnify Seller and defend and hold Seller harmless from and against any and
all claims, demands, liabilities, costs, expenses, penalties, damages and
losses, including reasonable attorneys’ fees, resulting from any
misrepresentation or breach of warranty made by Purchaser in this Agreement or
in any document, certificate, or exhibit given or delivered by Purchaser
pursuant to or in connection with this Agreement; provided, however, that
Purchaser’s liability following the Closing for any misrepresentation or breach
of warranty by Purchaser in this Agreement or in any document, certificate, or
exhibit given or delivered by Purchaser pursuant to or in connection with this
Agreement shall not exceed the Claim Cap.


 


(c)           Seller
shall indemnify Purchaser and defend and hold Purchaser harmless from and
against any and all claims, demands, liabilities, costs, expenses, penalties,
damages and losses, including reasonable attorneys’ fees, asserted against,
incurred or suffered by Purchaser and related to its ownership of the
Membership Interests (including, without limitation, those resulting from any
personal injury or property damage occurring in, on or about the Property or
relating thereto) and occurring during any period in which Seller or its
affiliates owned the Company, from any cause whatsoever other than as a
consequence of the acts or omissions of Purchaser, its agents, employees or
contractors; provided, however, that any claim against Seller under this Section
10.5(c) must be made in writing before the end of the Survival Period.


 


(d)           Purchaser
shall indemnify Seller and defend and hold Seller harmless from and against any
and all claims, demands, liabilities, costs, expenses, penalties, damages and
losses, including reasonable attorneys’ fees, asserted against, incurred or
suffered by Seller and related to its ownership of the Membership Interests
(including, without limitation, those resulting from any personal injury or
property damage occurring in, on or about the Property or relating thereto) and
occurring during any period in which Purchaser or its affiliates owns the
Company, from any cause whatsoever other than as a consequence of the acts or
omissions of Seller, its agents, employees or contractors; provided, however,
that any claim against Purchaser under this Section 10.5(d) must be made
in writing before the end of the Survival Period.


 


26

















 


(e)           In
the event either party hereto receives notice of a claim or demand which
results or may result in indemnification pursuant to this Section 10.5,
such party shall promptly give notice thereof to the other party to this
Agreement.  The party receiving such
notice shall promptly take such measures as may be reasonably required to
properly and effectively defend such claim, and may defend same with counsel of
its own choosing.  In the event the party
receiving such notice fails to properly and effectively defend such claim, and
in the event such party is liable therefor, then the party so giving such
notice may defend such claim at the expense of the party receiving such notice.
The provisions of this Section 10.5 shall survive the Closing until the
end of the Survival Period (and thereafter with respect to any written claims
made before the end of the Survival Period).


 


(f)            In
no event shall a party be liable to the other for consequential or punitive
damages resulting from any breach of its representations or warranties and/or
covenants contained in this Agreement or any agreement delivered in connection
with this Agreement (unless such incidental, special or consequential (but not
punitive) damages are incurred by as a result of a third party claim for
losses).


 


ARTICLE 11


 


Miscellaneous


 


Section 11.1.  Entire
Agreement; Successors and Assigns; Miscellaneous Provisions.
This Agreement constitutes the entire agreement between the parties hereto with
respect to the transactions contemplated herein, and it supersedes all prior
discussions, understandings or agreements. 
All Exhibits and Schedules attached hereto are a part of this Agreement
and are incorporated herein by reference. 
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.  This Agreement may be executed in any number
of counterparts and it shall be sufficient that the signature of each party
appear on one or more such counterparts, and all counterparts shall
collectively constitute a single agreement. A party may deliver executed
signature pages to this Agreement by facsimile transmission or via electronic
mail to the other party, which facsimile or electronic copies shall be deemed
to be an original executed signature page binding on the party that so
delivered the executed signature page by facsimile or electronic mail. No
modification of this Agreement shall be deemed effective unless in writing and
signed by both Seller and Purchaser.  In
the event the time for performance of any obligation hereunder expires on a day
that is not a Business Day, the time for performance shall be extended to the
next Business Day.  The descriptive
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any provisions
of this Agreement. Words such as “herein”, “hereinafter”, “hereof” and “hereunder”
when used in reference to this Agreement, refer to this Agreement as a whole
and not merely to a subdivision in which such words appear, unless the context
otherwise requires.  The singular shall
include the plural and the masculine gender shall include the feminine and
neuter, and vice versa, unless the context otherwise requires.  The word “including” shall not be restrictive
and shall be interpreted as if followed by the words “without limitation.”  This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the fact
that it may have been prepared primarily by counsel for one of the parties, it
being recognized that both Purchaser and Seller have contributed substantially
and materially to the preparation of this Agreement.


 


27














 


Section 11.2.  Waiver;
Governing Law. The excuse or waiver of the performance by a
party of any obligation of the other party under this Agreement shall only be
effective if evidenced by a written statement signed by the party so excusing
or waiving.  No delay in exercising any
right or remedy shall constitute a waiver thereof, and no waiver by Seller or
Purchaser of the breach of any covenant of this Agreement shall be construed as
a waiver of any preceding or succeeding breach of the same or any other covenant
or condition of this Agreement.  This
Agreement shall be construed and the rights and obligations of Seller and
Purchaser hereunder determined in accordance with the internal laws of the
State of                                                      ,
without regard to the principles of conflict of laws.


 


Section 11.3.  Notices. All notices or other communications required or provided to be sent by
either party shall be in writing and shall be sent by: (i) by United States
Postal Service, certified mail, return receipt requested, (ii) by any
nationally known overnight delivery service for next day delivery, (iii)
delivered in person or (iv) sent by telecopier or facsimile machine which
automatically generates a transmission report that states the date and time of
the transmission, the length of the document transmitted and the telephone
number of the recipient’s telecopier or facsimile machine (with a copy thereof
sent thereafter in accordance with clause (i), (ii) or (iii) above).  All notices shall be deemed to have been
given upon receipt. All notices shall be addressed to the parties at the
addresses below:


 


	
  To Seller:

  	
  STAG III Properties, LLC

  c/o STAG Industrial, Inc.

  99 Chauncy Street

  Boston, Massachusetts 02111

  Attn: 
  Benjamin S. Butcher

  
	
   

  	
   

  
	
  With a copy to:

  	
  DLA Piper LLP (US)

  33 Arch Street, 26th Floor

  Boston, Massachusetts 02110

  Attn: 
  John L. Sullivan, Esq.

  Fax No. 617-406-6100

  
	
   

  	
   

  
	
  To Purchaser:

  	
  [                                             ]

  c/o STAG Industrial, Inc.

  99 Chauncy Street

  Boston, Massachusetts 02111

  Attn: 
  Benjamin S. Butcher

  
	
   

  	
   

  
	
  With a copy to:

  	
  DLA Piper LLP (US)

  33 Arch Street, 26th Floor

  Boston, Massachusetts 02110

  Attn: 
  John L. Sullivan, Esq.

  Fax No. 617-406-6100

  



 


28

















 


Any address or name specified above may be
changed by notice given to the addressee by the other party in accordance with
this Section 11.3.  The inability
to deliver notice because of a changed address of which no notice was given as
provided above, or because of rejection or other refusal to accept any notice,
shall be deemed to be the receipt of the notice as of the date of such
inability to deliver or rejection or refusal to accept.  Any notice to be given by any party hereto
may be given by the counsel for such party.


 


Section 11.4.  Attorneys’ Fees. In the event of a judicial or administrative proceeding or action by
one party against the other party with respect to the interpretation or
enforcement of this Agreement, the prevailing party shall be entitled to recover
reasonable costs and expenses including reasonable attorneys’ fees and
expenses, whether at the investigative, pretrial, trial or appellate
level.  The prevailing party shall be
determined by the court based upon an assessment of which party’s major
arguments or position prevailed.


 


Section 11.5.  IRS Real Estate Sales
Reporting.  Purchaser and Seller hereby agree that the
Title Company shall act as “the person responsible for closing” the transaction
which is the subject of this Agreement pursuant to Section 6045(e) of the
Code and shall prepare and file all informational returns, including IRS
Form 1099-S, and shall otherwise comply with the provisions of
Section 6045(e) of the Code.


 


Section 11.6.  Further Instruments. Each party, promptly upon the request of the other, shall execute and
have acknowledged and delivered to the other or to Title Company, as may be
appropriate, any and all further instruments reasonably requested or
appropriate to evidence or give effect to the provisions of this Agreement and
which are consistent with the provisions of this Agreement.


 


Section 11.7.  Severability. The parties hereto intend and believe that each provision in this
Agreement comports with all applicable local, state and federal laws and
judicial decisions.  If, however, any
provision in this Agreement is found by a court of law to be in violation of
any applicable local, state, or federal law, statute, ordinance, administrative
or judicial decision, or public policy, or if in any other respect such a court
declares any such provision to be illegal, invalid, unlawful, void or
unenforceable as written, then it is the intent of all parties hereto that,
consistent with and with a view towards preserving the economic and legal
arrangements among the parties hereto as expressed in this Agreement, such
provision shall be given force and effect to the fullest possible extent, and
that the remainder of this Agreement shall be construed as if such illegal,
invalid, unlawful, void, or unenforceable provision were not contained herein,
and that the rights, obligations, and interests of the parties under the
remainder of this Agreement shall continue in full force and effect.


 


Section 11.8.  Exclusivity.  In
consideration of the significant time and expense to be devoted by Purchaser to
its potential acquisition of the Membership Interests, Seller agrees that,
during the term of this Agreement, it will negotiate exclusively with Purchaser
concerning a potential sale of the Property and/or the Membership Interests, it
will not market the Membership Interests or the Property for sale or allow
other potential purchasers to inspect and/or tour the Property or the
Membership Interests, as applicable, and it has not and will not enter into any
agreement to sell the Property or the Membership Interests to any party other
than Purchaser.  If Seller breaches its
obligations under this Section, Purchaser shall have the right to damages and, 


 


29

















 


at Purchaser’s election, injunctive or other
equitable relief.


 


[The
balance of this page has intentionally been left blank.  Signature pages follow.]


 


30

















 


IN WITNESS WHEREOF, Seller and Purchaser hereto have executed this Agreement as of the
Effective Date.


 


	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  STAG III PROPERTIES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Benjamin S. Butcher

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  [                                                                ]

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule
1.1


 


Defined
Terms


 


“Agreement” has the meaning set forth in the
first paragraph of this document.


 


“Arrearage Rents” has the meaning set forth in Section
8.4(c).


 


“Business Day” shall mean any day of the week
other than (i) Saturday and Sunday, (ii) a day on which banking institutions in
Boston, Massachusetts or                                            ,
                                
are obligated or authorized by law or executive action to be closed to the
transaction of normal banking business, or (iii) a day on which governmental
functions in the Boston, Massachusetts or                                    ,
                                 
area are interrupted because of extraordinary events such as hurricanes, power
outages or acts of terrorism.


 


“Certificate of Occupancy has the meaning set
forth in Section 6.1(i).


 


“Closing” shall mean the consummation of the
purchase and sale of the Membership Interests pursuant to the terms of this
Agreement.


 


“Closing Statement” has the meaning set forth in Section
8.4(j).


 


“Code” shall mean the Internal Revenue Code of
1986, and all amendments thereto and all regulations issued thereunder.


 


“Company” shall have the meaning set forth in the
Recitals of this Agreement.


 


“Company’s Organizational Documents” shall mean
collectively, (a) the Certificate of Formation of the Company filed with the                                        
on                      ,
and any amendments thereto, and (b) the [Operating Agreement]
of the Company dated as of                                               ,
and any amendments thereto.


 


“Confidential Information” shall mean any
proprietary information concerning the Property provided to Purchaser by
Seller, excluding information that is available to the general public or from
sources other than Seller.


 


“Contracts” shall mean all development,
construction, service, management, leasing, operation, maintenance, repair and
other contracts (other than the Lease) affecting the Land or Improvements and
all amendments and modifications thereto.


 


“Deposit” has the meaning set forth in Section
3.1.


 


“Designated Seller Representatives” has the
meaning set forth in Section 7.4.


 


“Effective Date” shall mean the later of the date
below the signature of Purchaser or Seller on this Agreement or, if such dates
are the same, the date below each of such signatures.


 

















 


“Environmental Law” shall mean any federal,
state, local or administrative agency ordinance, law, rule, regulation, order
or requirement relating to environmental conditions, human health or Hazardous
Material, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. §9601 et seq), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. §1251 et seq.), the Clean
Air Act (42 U.S.C. §7401 et seq.), the Emergency Planning and Community
Right-To-Know Act (42 U.S.C. §1101 et seq.), The Endangered Species Act
(16 U.S.C. §1531 et seq.), the Toxic Substances Control Act (15 U.S.C.
§2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. §651 et
seq.) and the Hazardous Materials Transportation Act (49 U.S.C. §1801 et
seq.), and the regulations promulgated pursuant to such laws, all as
amended from time to time.


 


“Hazardous Materials” shall mean any substance or
material which is or contains: 
(i) any substance, waste or material now or hereafter defined in
and/or regulated under any Environmental Law; (ii)  gasoline, diesel
fuel or other petroleum hydrocarbons; (iii) asbestos and asbestos containing
materials, in any form, whether friable or nonfriable;
(iv) polychlorinated biphenyls; (v) radon gas; or (vi) mold, mildew
or other biological agents.


 


“Improvements” shall mean that certain building
containing approximately            
net rentable square feet and commonly known as [                                           ]
located at [                                          ],
and all other buildings, structures and other improvements situated upon the
Land and any fixtures, systems and facilities owned by Company and located on
the Land.


 


“Intangible Property” shall mean all of the
Company’s right, title and interest, if any, in all intangible assets relating
to the Land, Improvements or Personal Property, including all of the Company’s
right, title and interest, if any, in all (a) warranties and guaranties
relating to the Land, Improvements or Personal Property, (b) all licenses,
permits and approvals relating to the Land, Improvements or Personal Property,
(c) all contract rights (including, without limitation, all letters of
credit held as security for any Tenant’s obligations, and (d) all plans
and specifications relating to the Land, Improvements or Personal Property.


 


“Land” shall mean the land described on Exhibit A
attached hereto, together with all privileges, rights, easements and
appurtenances belonging to such land and all right, title and interest (if any)
of the Company in and to any streets, alleys, passages or other rights-of-way
or appurtenances included in, adjacent to or used in connection with such land
and all right, title and interest (if any) of the Company in all mineral rights
appurtenant to such land.


 


“Lease” shall mean the lease dated                             
between the Company, as Landlord and [                                              ],
as Tenant, as amended by (list all amendments with dates).


 


“Lease Transaction” shall mean any of the
following:  (a) the execution of any
new lease or other occupancy agreement for any portion of the Property;
(b) any modification of the Lease or any other occupancy agreement
affecting the Property; (c) the consent to any assignment of or subletting
under the Lease; or (d) the termination of the Lease.


 


“Legal Requirements”  means all applicable zoning, building, health
and safety,


 

















 


environmental and all other laws, legislation, rules,
codes, by-laws, ordinances, resolutions, regulations, orders and decrees and
all requirements of the Board of Fire Underwriters and any other insurance
underwriters relating in any way to the Property or the development,
construction, ownership, use and occupancy thereof.


 


[“Lender” shall mean                                      ,
and its successors and assigns as holder of the Loan.


 


“Lender Consent Condition” shall have the meaning
set forth in Section 6.1(m).


 


“Lender Estoppel” shall have the meaning
set forth in Section 6.1(m).


 


“Loan shall mean the loan in the original
principal amount of $                            
made by Lender to the Company which encumbers the Property and its evidenced by
the Loan Documents.


 


“Loan Assumption Costs” shall mean all
application and review fees, transfer and assumption fees, lender’s attorneys’
fees, title insurance costs and other costs and expenses payable to or for the
benefit of the Lender or its servicers or other agents in connection with the
Purchaser’s proposed or actual assumption of the Loan.


 


“Loan Documents” means the loan documents
executed and delivered by the Company and any guarantor or indemnitor in
connection with the Loan, as more particularly set forth on Exhibit H
attached hereto.] (14)


 


“Market Value” “means the average of the daily
market price of the REIT’s common stock (the “REIT Shares”)
for the ten (10) consecutive trading days immediately preceding the date on
which the market value of the REIT Shares is being determined.  The daily market price for each such trading
day shall be the last sale price for such REIT Shares, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices for
such REIT Shares, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such REIT Shares are not listed
or admitted to trading on the New York Stock Exchange, as reported on the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such REIT Shares
are listed or admitted to trading or, if such REIT Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System or, if such system is no longer in use, the
principal other automated quotation system that may then be in use or, if such
REIT Shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in such REIT Shares selected by the REIT’s board of directors or, in the
event that no trading price is available for such REIT Shares, the fair 


 






(14)  Use bracketed text if Loan is to be assumed.


 

















 


market value of the REIT Shares, as determined in good
faith by the REIT ‘s board of directors. 
For purposes of determining Market Value, one OP Unit shall equal one
REIT Share, subject to any adjustments required under Purchaser’s Amended and
Restated Agreement of Limited Partnership, as the same may be amended and/or
restated from time to time (the “Operating  Partnership Agreement”), or to reflect stock splits,
reclassifications, dividends in-kind and the like.


 


“Material Casualty” has the meaning set forth in Section
6.3.


 


“Material Taking” has the meaning set forth in Section
6.4.


 


“OP Units” means the common units of limited
partnership interests in STAG Industrial Operating Partnership, L.P., a
Delaware limited partnership.


 


“Permitted Exceptions” shall mean all matters
shown on the Title Commitment (other than Voluntary Liens) or the Survey.  In no event shall any Voluntary Lien
constitute a Permitted Exception, and all Voluntary Liens shall be paid in full
at or before the Closing or out of the proceeds otherwise due to Seller.


 


“Permits” has the meaning set forth in Section
7.3(b)(iv)(C).


 


“Person” shall mean any individual, estate,
trust, partnership, limited liability company, limited liability partnership,
corporation, governmental agency or other legal entity.


 


“Personal Property” shall mean all furniture,
equipment, machinery, inventories, supplies, signs and other tangible personal
property, if any, owned by Seller and installed, located or situated on or used
in connection with the operation of the Improvements, including those items, if
any, listed on Exhibit J.


 


“Property” shall mean, collectively, the Real
Property, the Personal Property, the Company’s interest in the Lease, and the
Intangible Property.


 


“Purchase Price” shall mean the purchase price
for the Membership Interests as specified in Section 2.2.


 


“Purchaser” means the Person named as Purchaser
in the first paragraph of this Agreement, together with any assignee of the
originally named Purchaser.


 


“Real Property” shall mean the Company’s interest
in and to Land and the Improvements.


 


“Reports” shall have the meaning set forth in Schedule
5.1.


 


“Required Endorsements” shall mean the
following ALTA endorsements (to the extent legally available in the
jurisdiction in which the Real Property is located):  (a) Form 9 - Comprehensive
(modified as appropriate for an owner’s policy); (b) Form 3.1 Zoning
(including parking and loading); (c) survey endorsement; (d) access
endorsement; (e) if the land on which the Property is located consists of
more than one parcel, a contiguity endorsement; and (f) a tax parcel
endorsement.


 

















 


“Restricted Period” shall mean the period
commencing on the Effective Date and ending on the earlier of the Closing or
the termination of this Agreement.


 


“Seller” has the meaning set forth in the first
paragraph of this Agreement.


 


“Seller Representations” shall mean the
representations and warranties of Seller expressly set forth in Section 7.3.


 


“SNDA” has the meaning set forth in Section
6.1(d).


 


“Survey” has the meaning set forth in Section
4.1.


 


“Taxes” shall mean any (i) federal, state or
local or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental, customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, escheat,
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated or other tax, assessment or governmental charge of any kind whatever
imposed by any taxing authority, including any interest, penalty or addition
thereto, whether disputed or not, and (ii) liability for the payment of any
amount of the type described in clause (i) above as a result of any express or
implied obligation to indemnify or otherwise assume or succeed to the liability
of any other Person.


 


“Tax Return” shall mean any return, declaration,
report, estimate, information return and statement (including any attachment or
schedule thereto) required to be filed in respect of any Taxes.


 


“Tenant” shall mean                                                               .


 


“Title Commitment” has the meaning set forth in Section
4.1.


 


“Title Company” shall mean [                                               ].


 


“Unknown Rents” has the meaning set forth in Section
8.4(d).


 


“Utility Deposits” has the meaning set forth in Section
8.4(g).


 


“Voluntary Liens” shall mean any of the following
encumbrances on the Property or the Membership Interests or any portion
thereof: (a) any mortgage or deed of trust granted or assumed by Seller or
the Company [(other than the Loan)](15);
(b) any mechanic’s or materialmen’s lien; (c) any lien for unpaid taxes,
assessments, utility, water, sewer or other governmental charges; and (d) any
other lien or encumbrance granted, assumed or suffered by Seller or the Company
and securing the repayment of money or other claims made against Seller or the
Company.


 






(15)  Use bracketed text if Loan is to be assumed.


 

















 


Schedule
3.1


 


Deposit
Escrow Provisions


 


[Attached
to and a Part of Real Estate Purchase and Sale Agreement]


 


(a)        Title
Company shall hold the Deposit in separate, segregated, interest bearing
account(s) approved by Purchaser and Seller. 
If the Closing occurs, the Deposit shall be credited against the
Purchase Price.  The Deposit shall be
held and disbursed by Title Company in the following manner:


 


(i)            to
Seller upon consummation of the Closing [or the exercise of Purchaser’s
revocation right under Section 5.5]; or


 


(ii)           to
Seller upon receipt of written demand therefor, stating that Purchaser has
defaulted in the performance of Purchaser’s obligations under this Agreement
and the facts and circumstances underlying such default; provided, however,
that Title Company shall not honor such demand until at least ten (10) Business
Days after it has sent a copy of such demand to Purchaser, nor thereafter if
Title Company shall have received written notice of objection from Purchaser in
accordance with paragraph (b) below; or


 


(iii)          to
Purchaser upon receipt of written demand therefor, stating that either (x) this
Agreement has been terminated pursuant to a provision hereof [(other than
Section 5.5)] and certifying the basis for such termination, or (y) Seller has
defaulted in performance of Seller’s obligations under this Agreement and the
facts and circumstances underlying such default or that Purchaser is otherwise
entitled to the Deposit under the provisions of this Agreement; provided,
however, that Title Company shall not honor such demand until at least ten (10)
Business Days after it has sent a copy of such demand to Seller, nor thereafter
if Title Company shall have received written notice of objection from Seller in
accordance with paragraph (b) below.


 


(b)           Upon
receipt of written demand for the Deposit by Purchaser or Seller pursuant to
clause (a)(ii) or (a)(iii) above, Title Company shall promptly send a copy
thereof to the other party.  The other
party shall have the right to object to the delivery of the Deposit by sending
written notice of such objection to Title Company within ten (10) Business Days
after Title Company sends a copy of the written demand to the objecting
party.  Upon receipt of such notice,
Title Company shall promptly send a copy thereof to the party who made the
written demand.


 


(c)           In
the event of any dispute between the parties, Title Company shall disregard all
instructions received and may hold the Deposit until the dispute is mutually
resolved and Title Company is advised of this fact in writing by both Seller
and Purchaser, or Title Company is otherwise instructed by a final judgment of
a court of competent jurisdiction.


 


(d)           In
the event Title Company shall be uncertain as to its duties or rights hereunder
or shall receive conflicting instructions, claims or demands from the parties
hereto, or instructions which conflict with any of the provisions of this
Agreement, Title Company shall be entitled to refrain from taking any action
other than to keep safely the Deposit until Title Company shall be instructed
otherwise in writing signed by both Seller and Purchaser, or by final judgment
of


 














 


a court of competent jurisdiction.


 


(e)                                   Title Company may rely upon, and shall be protected in acting or
refraining from acting upon, any written notice, instruction or request
furnished to it hereunder and believed by it to be genuine and to have been signed
or presented by the proper party or parties, provided that any modification of
this Schedule 3.1 shall be signed by Title Company, Purchaser and Seller.


 


(f)                                    Seller and Purchaser shall jointly and severally hold Title Company
harmless against any loss, damage, liability or expense incurred by Title
Company not caused by its willful misconduct, gross negligence or breach of
these escrow provisions, arising out of or in connection with its entering into
this Agreement and the carrying out of its duties hereunder, including the
reasonable costs and expenses of defending itself against any claim of
liability or participating in any legal proceeding.


 


(g)                                        Title Company may receive certain benefits from the financial institution
where the funds are deposited.  Based
upon the deposit of escrow funds in demand deposit accounts and other
relationships with the financial institution, Title Company is eligible to
participate in a program whereby it may (i) receive favorable loan terms
and earn income from the investment of loan proceeds and (ii) receive
other benefits offered by the financial institution, but any such benefits
derived by Title Company shall in no way limit the rights of Seller or
Purchaser to the Deposit as set forth herein.


 


(h)                                             The Title Company may at its sole discretion resign from its duties as
escrow agent by giving (30) days written notice thereof to the parties
hereto.  The parties shall furnish to the Title Company written
instructions for the release of the Deposit and escrow documents.  If the
Title Company shall not have received such written instructions within the
thirty (30) days, the Title Company may petition any court of competent
jurisdiction for the appointment of a successor escrow agent and upon such
appointment deliver the Deposit and escrow documents to such successor. 
Costs and fees incurred by the Title Company may, at the option of the Title
Company, be deducted from any funds held pursuant hereto.


 


Seller and Purchaser do hereby certify that they are
aware that the Federal Deposit Insurance Corporation (“FDIC”) coverages apply
only to a cumulative maximum amount of $100,000 for each individual deposit for
all of the depositor’s accounts at the same or related institution.  The
parties hereto further understand that certain banking instruments such as, but
not limited to, repurchase agreements and letters of credit are not covered at
all by FDIC insurance.


 


Further the parties hereto understand that Title Company
assumes no responsibility for, nor will the parties hereto hold Title Company
liable for, a loss occurring which arises from the  fact that the amount of the above account may cause the
aggregate amount of any individual  depositor’s
accounts to exceed $100,000 and that the excess amount is not insured by the
Federal Deposit Insurance Corporation or that FDIC insurance is  not available on certain types of bank
instruments.


 


JOINDER BY
THE TITLE COMPANY


 


By its execution hereof, the Title Company hereby (i) covenants
and agrees to hold the Deposit in accordance with the above provisions, and
(ii) acknowledges receipt of a copy of the


 

















 


Real Estate Purchase and Sale Agreement to which this Schedule 3.1
is attached.


 


 


	
   

  	
  [                                                 ]

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 

















 


Schedule
5.1


 


(1)                                 the Lease, and all notices, material
correspondence or other material written communications or agreements between
the Company and the Tenant (or their respective agents or representatives)
relating to the Lease and/or the Real Property, including any pending or
proposed amendments to the Lease;


 


(2)                                 any tenant estoppel certificates or
subordination, nondisturbance and attornment agreements previously provided by
the Tenant;


 


(3)                                 copies of any documents relating to any
proposed or actual sublease or assignment of the Tenant’s interest under the
Lease, to the extent in Seller’s or the Company’s possession or control;


 


(4)                                 copies of all financial, profile and background
information concerning the Tenant that is in Seller’s or the Company’s possession
or control;


 


(5)                                 a summary of all security deposits paid under
the Lease;


 


(6)                                 a copy of the Tenant’s current insurance
certificate;


 


(7)                                 copies of Tenant billings and reconciliations
for the three (3) calendar years preceding the Effective Date and for the
current year;


 


(8)                                 a copy of all leasing and management agreements
relating to the Property;


 


(9)                                 a schedule of any leasing commissions that are
due under the Lease or will become due upon and extension, expansion or renewal
of the Lease;


 


(10)                          all Warranties in Seller’s or the Company’s
possession or control;


 


(11)                          all Contracts;


 


(12)                          as-built plans and specifications for the
Improvements;


 


(13)                          a certificate of occupancy for the Improvements
and all other Permits in Seller’s or the Company’s possession or control;


 


(14)                          all engineering, geotechnical, environmental,
and other similar studies, reports or correspondence relating thereto in the
possession or control of Seller or the Company relating to the Property (the “Reports”);
it being understood and agreed by the parties hereto that Seller is in no way
warranting or representing, express or implied, the accuracy or completeness of
anything contained in the Reports;


 


(15)                          copies of all tax bills and statements for the
Property for the three (3) calendar years preceding the Effective Date and
for the current year, and copies of any notices of actual or proposed
reassessments of the Property;


 

















 


(16)                          copies of all utility bills and statements for
the Property for the three (3) calendar years preceding the Effective Date
and for the current year;


 


(17)                          copies of monthly and annual operating
statements for the Property for the three (3) calendar years preceding the
Effective Date and year-to-date statements for the current year;


 


(18)                          a
report of material maintenance and capital improvements conducted by the
Company at the Property for the three (3) calendar years preceding the
Effective Date and during the current year, and a description of any capital
improvements or material maintenance scheduled to occur within the two (2) year
period following the Effective Date;


 


(19)                          copies
of any notices received in connection with any purported or actual violation at
the property of any Legal Requirement;


 


(20)                          copies
of any Reciprocal Easement Agreements and agreements with any governmental
agencies relating to the development, construction, ownership or operation of
the Property;


 


(21)                        copies
of the existing insurance policies for the Property as required under the Lease
together with recent invoices with respect thereto; and


 


(22)                          copies
of the Company’s Organizational Documents.


 

















 


EXHIBIT A


 


DESCRIPTION OF LAND


 

















 


EXHIBIT B


 


FORM OF

LEASE ESTOPPEL CERTIFICATE


 


Landlord:


 


Tenant:


 


Tenant Trade Name:


 


Lender:
Connecticut General Life Insurance Company


 


New Landlord:


 


Premises:


 


	
  Area:                                             Sq.Ft.

  	
   

  	
  Lease Date:

  	
   

  	
   

  



 


The undersigned Tenant of the above-referenced lease
(the “Lease”) hereby ratifies the Lease and certifies to Landlord, to
Lender as mortgagee of the Real Property of which the premises demised under
the Lease (the “Premises”) is a part and to New Landlord, as purchaser
of the Premises and any other purchaser or potential purchaser, as follows:


 


1.                                      That the term of the Lease commenced on                         ,
20    and the Tenant is in full and complete possession of the
Premises and has commenced full occupancy and use of the Premises, such
possession having been delivered by the original landlord and having been
accepted by the Tenant.


 


2.                                      That the Lease calls for monthly rent installments of $                    
to date and that the Tenant is paying monthly installments of rent of $                     
which commenced to accrue on the                            
day of                     ,
20  .


 


3.                                      That no advance rental or other payment has been made in connection with
the Lease, except rental for the current month, there is no “free rent” or
other concession under the remaining term of the lease and the rent has been
paid to and including                                  ,
20  .


 


4.                                      That a security deposit in the amount $                       
is being held by Landlord, which amount is not subject to any set-off or
reduction or to any increase for interest or other credit due to Tenant.


 


5.                                      That all obligations and conditions under said Lease to be performed to
date by Landlord or Tenant have been satisfied, free of defenses and set-offs
including all construction work in the Premises.


 


6.                                      That the Lease is a valid lease and in full force and effect and
represents the entire agreement between the parties; that there is no existing
default on the part of the 


 

















 


Landlord or the Tenant in any of the terms and
conditions thereof and no event has occurred which, with the passing of time or
giving of notice or both, would constitute an event of default; and that said
Lease has:  (initial one)


 


o not
been amended, modified, supplemented, extended, renewed or assigned.


 


o been
amended, modified, supplemented, extended, renewed or assigned as follows by
the following described agreements:


 


 


7.                                      That the Lease provides for a primary term of                months;
the term of the Lease expires on the                
day of           
20  ; and that:


 


(initial all applicable
subparagraphs)


 


o
neither the Lease nor any of the documents listed above in Paragraph 6, if any,
contain an option for any additional term or terms or an option to terminate
the Lease prior to the expiration date set forth above.


 


o the Lease and/or the documents listed above in Paragraph 6 contain an
option for            additional
term(s) of         year(s) and           months(s) (each)
at a rent to be determined as follows:    



 


 


o the
Lease and/or the documents listed above in Paragraph 6 contain an option to
terminate the lease prior to the date set forth above as follows:


 


 


8.                                      That Landlord has not rebated, reduced or waived any amounts due from
Tenant under the Lease, either orally or in writing, nor has Landlord provided
financing for, made loans or advances to, or invested in the business of
Tenant.


 

















 


9.                                      That, to the best of Tenant’s knowledge, there is no apparent or likely
contamination of the Real Property or the Premises by Hazardous Materials, and
Tenant does not use, nor has Tenant disposed of Hazardous Materials in
violation of Environmental Laws on the Real Property or the Premises.


 


10.                               That there are no actions, voluntary or involuntary, pending against the
Tenant under the bankruptcy laws of the United States or any state thereof.


 


11.                               That this certification is made knowing that Lender, Landlord and New
Landlord are relying upon the representations herein made.


 


 


Tenant:


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


 


The undersigned New Landlord hereby ratifies the
Lease and, certifies to Lender that, to the best of its knowledge, the foregoing
is true, correct and complete in all material respects.


 


 


New Landlord:


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 

















 


EXHIBIT C


 


LEASE RELATED DISCLOSURES


 

















 


EXHIBIT D


 


EXCEPTIONS TO SELLER
REPRESENTATIONS


 














 


EXHIBIT E


 


ASSIGNMENT AND ASSUMPTION OF
MEMBERSHIP INTERESTS


 


THIS ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS
(this “Assignment”) is made as of             ,
20  , by and between STAG III Properties, LLC, a Delaware limited
liability company (“Assignor”), and                      
(“Assignee”).


 


Background


 


A.            Assignor
is the owner of 100% of the total membership interests in [PROPERTY ENTITY],
LLC, a Delaware limited liability company (the “Company”); and


 


B.            Assignor
desires to assign, and Assignee desires to assume, all of Assignor’s right,
title and interest in the Company (the “Membership Interests”) as
hereinafter provided.


 


Agreement


 


NOW, THEREFORE,  in
consideration of the payment of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt of which are hereby acknowledged by
Assignor, the parties hereto agree as follows:


 


1.             Recitals.  The recitals set forth above are incorporated
herein by reference.


 


2.             Assignment
and Assumption of Membership Interest. 
Assignor hereby assigns, transfers and sets over unto Assignee, and
Assignee hereby accepts and assumes, the Membership Interests, including, but
not limited to, all right, title and interest in and to all distributions,
capital account, capital, income, gain, loss and deductions of the Company,
relating to or allocable to the Membership Interests arising from and after the
date hereof and Assignee agrees to be bound as a member of the Company.  Assignor hereby expressly assigns, transfers
and sets over unto Assignee all of the management, control and authority rights
held by Assignor in the Company.


 


3.             Effective
Date.  The assignment herein made is
effective as of the date hereof, and from and after such date that portion of
the capital, distributions, income, gain, loss and deductions of the Company
allocable to the Membership Interests shall be credited, charged distributed,
as the case may be, to the Assignee and not to the Assignor.


 


4.             Representations
and Warranties by Assignor.  The
Assignor hereby represents and warrants that (i) the execution, delivery
and performance by Assignor of this Assignment are within its limited liability
company powers and have been duly authorized by all necessary company action on
its part; and (ii)  the Assignor is the owner of the Membership Interests
free and clear of all liens, claims, security interests, transfer restrictions
and other encumbrances.


 


5.             Representations
and Warranties by Assignee.  The
Assignee hereby represents and warrants that the execution, delivery and
performance by Assignee of this Assignment are within its limited liability
company powers and have been duly authorized by all necessary company action on
its part.


 

















 


6.             Indemnity.  Assignor agrees to indemnify Assignee
against, and hold Assignee harmless from, any and all costs, liabilities,
losses, damages and expenses caused, directly or indirectly, by any action
taken or failure to act by Assignor with respect to the Membership Interests
arising prior to the date hereof and arising, directly or indirectly, from Assignor’s
obligations as a member of the Company. 
Assignee agrees to indemnify Assignor against, and hold Assignor
harmless from, any and all costs, liabilities, losses, damages and expenses
caused, directly or indirectly, by any action taken or failure to act by
Assignee with respect to the Membership Interests arising on or subsequent to
the date hereof and arising, directly or indirectly, from Assignee’s
obligations as a member of the Company.


 


7.             Further
Instruments.  Assignor and Assignee
from time to time shall each execute and deliver to the other such further
instruments reasonably requested or appropriate to evidence or give effect to
the provisions of this Assignment and which are consistent with the provisions
of this Assignment.


 


8.             Successors
and Assigns.  This Assignment shall
be binding upon and inure to the benefit of Assignor and Assignee and their
respective heirs, legal representatives, successors and assigns.


 


9.             Modification.  No supplement, modification, waiver or
termination of this Assignment or any provision hereof shall be binding unless
executed in writing by the parties hereto.


 


10.          Counterparts.  This Assignment may be executed in any number
of counterparts each of which shall be considered an original for all purposes.


 


[Signature Page Follows]


 

















 


Executed as a sealed instrument as of the date and year
first written above.


 


	
   

  	
  Assignor:

  
	
   

  	
   

  
	
   

  	
  STAG III Properties, LLC, a Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Assignee:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT F


 


UPDATED REPRESENTATION
CERTIFICATE


 


The undersigned, as Seller under a Purchase and
Sale Agreement (“Purchase Agreement”) dated as of                      ,
20   between                 (“Seller”)
and                       
(“Purchaser”), does hereby certify to Purchaser that the representations
and warranties set forth in Section 7.3 of the Purchase Agreement
are hereby reaffirmed as of the date hereof.


 


Seller’s liability hereunder shall be subject to
the limitations set forth in the Purchase Agreement.


 


Dated as of this       day
of           , 20  .


 


 


	
   

  	
  SELLER

  
	
   

  	
   

  
	
   

  	
  [                                            ]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT G


 


LIST OF CONTRACTS


 


	
   

  	
   

  	
  DATE OF CONTRACT

  	
   

  	
   

  	
   

  	
   

  
	
  VENDOR

  	
   

  	
  AND ALL AMENDMENTS

  	
   

  	
  SERVICE

  	
   

  	
  ADDRESS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


EXHIBIT H


 


LIST OF PERSONAL PROPERTY


 

















 


EXHIBIT I


 


LIST OF WARRANTIES


 

















 


EXHIBIT J


 


ADDITIONAL REPRESENTATIONS AND
WARRANTIES


 


(a)           Seller
acknowledges that Purchaser intends the offer and issuance of any OP Units
pursuant to this Agreement to be exempt from registration under the Securities
Act of 1933, as amended (the “Securities Act”)
and applicable state securities laws by virtue of (i) the status of Seller
as an “accredited investor” within the meaning of the federal securities laws,
and (ii) Regulation D promulgated under Section 4(2) of the
Securities Act (“Regulation D”), and that Purchaser will rely in part upon
the representations and warranties made by Seller in this Agreement in making
the determination that the offer and issuance of the OP Units qualify for
exemption under Rule 506 of Regulation D as an offer and sale only to “accredited
investors.”


 


(b)           Seller
is an “accredited investor” within the meaning of the federal securities laws.


 


(c)           Seller
will acquire the OP Units for its own account and not with a view to, or for
sale in connection with, any “distribution” thereof within the meaning of the
Securities Act.  Seller does not intend
or anticipate that Seller will rely on this investment as a principal source of
income.


 


(d)           Seller
has sufficient knowledge and experience in financial, tax and business matters
to enable him to evaluate the merits and risks of investment in the OP
Units.  Seller has the ability to bear
the economic risk of acquiring the OP Units. 
Seller acknowledges that (i) the transactions contemplated by this
Agreement involve complex tax consequences for Seller, and Seller is relying
solely on the advice of Seller’s own tax advisors in evaluating such
consequences, (ii) Purchaser has not made (nor shall it be deemed to have
made) any representations or warranties as to the tax consequences of such
transaction to Seller, and (iii) references in this Agreement to the
intended tax effect of the transactions contemplated hereby shall not be deemed
to imply any representation by Purchaser as to a particular tax effect that may
be obtained by Seller.  Seller remains
solely responsible for all tax matters relating to Seller.


 


(e)           Seller
has been supplied with, or had access to, information to which a reasonable
investor would attach significance in making an investment decision to acquire
the OP Units and any other information Seller has requested.  Seller has had an opportunity to ask
questions of, and receive information and answers from, Purchaser and its
affiliates concerning Purchaser , its affiliates, the OP Units, the IPO and the
REIT Shares into which the OP Units may be redeemed, and to assess and evaluate
any information supplied to Seller by Purchaser or its affiliates, and all such
questions have been answered, and all such information has been provided to the
full satisfaction of Seller.


 


(f)            Seller
acknowledges that it is aware that there are substantial restrictions on the
transferability of the OP Units and that the OP Units will not be registered
under the Securities Act or any state securities laws, and Seller has no right
to require that they be so registered. 
Seller agrees that any OP Units it acquires will not be sold in the
absence of registration unless such sale is exempt from registration under the
Securities Act and applicable state securities


 

















 


laws.  Seller
acknowledges that Seller shall be responsible for compliance with all
conditions on transfer imposed by any securities authority and for any expenses
incurred by Purchaser for legal or accounting services in connection with
reviewing such a proposed transfer or issuing opinions in connection therewith.


 


(g)           Seller
understands that no federal agency (including the Securities and Exchange
Commission) or state agency has made or will make any finding or determination
as to the fairness of an investment in the OP Units.


 


(h)           Seller
understands that there is no established public, private or other market for
the OP Units acquired by Seller hereunder and it is not anticipated that there
will be any public, private or other market for such OP Units in the
foreseeable future.


 


(i)            Seller
understands that Rule 144 promulgated under the Securities Act is not
currently available with respect to the sale of OP Units.


 

















 


EXHIBIT H


 


LIST OF LOAN DOCUMENTS, ESCROW
BALANCES AND RESERVE BALANCES


 

















 


EXHIBIT I


 


FORM OF FIRPTA CERTIFICATE


 


FIRPTA Certificate


 


Section 1445
of the Internal Revenue Code of 1986, as amended (the “Code”), provides
that a transferee of a U.S. real property interest must withhold tax if the
transferor is a foreign person.  To
inform the transferee that withholding of tax is not required upon the transfer
of membership interests of a limited liability company owning a U.S. real
property interest by STAG III Properties,
LLC, a Delaware limited liability company, which is a wholly-owned
subsidiary of STAG Investments III, LLC, a
Delaware limited liability company (“Transferor”), the undersigned, the
Transferor’s manager, hereby certifies the following on behalf of the
Transferor:


 


i)              The Transferor is not a foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the
Code and the Treasury Regulations promulgated thereunder);


 


ii)             The Transferor is not a disregarded entity as defined in
Treasury Regulations Section 1.1445-2(b)(2)(iii).


 


iii)            The Transferor’s employer identification number is                                                         ;
and


 


iv)           The Transferor’s address is:


 


c/o STAG Capital Partners, LLC

99 Chauncy Street, 10th Floor

Boston, MA  02111


 


The
undersigned understands that this certification may be disclosed to the
Internal Revenue Service by the transferee and that any false statement
contained herein could be punishable by fine, imprisonment or both.


 


Under
penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct and complete,
and I further declare that I have authority to sign this document on behalf of
the Transferor.


 


	
  Dated:

  	
  By:

  	
  STAG Manager III, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
  Date:               ,
  20