Exhibit 10.6





Exhibit 10.6




PURCHASE AND SALE AGREEMENT




THIS PURCHASE AND SALE AGREEMENT (this “Agreement”), dated as of January 6, 2009,
between SERIES B, LLC, an Arizona limited liability company (“Seller”) having an address at
2555 East Camelback Road, Suite 400, Phoenix, AZ 85016, and COLE REIT III OPERATING PARTNERSHIP,
LP, a Delaware limited partnership (“Purchaser”), having an address at 2555 East Camelback
Road, Suite 400, Phoenix, AZ 85016.



RECITALS:





	 	A.	 	Seller owns 100% of the membership interest (“Sale Assets”) in
Cole CV Fredericksburg VA, LLC, a Delaware limited liability company (“CV
Fredericksburg VA”).

	 
	 	B.	 	Purchaser desires to acquire from Seller, and Seller desires to sell to
Purchaser, the Sale Assets in accordance with and subject to the terms and
conditions of this Agreement.






NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, Seller and Purchaser agree as follows:



ARTICLE I

Definitions




The following capitalized terms used in this Agreement shall have the meanings ascribed to
them below:




“Assignment” shall have the meaning set forth in Section 2.03(b) of this Agreement.




“Cash Portion” shall have the meaning set forth in Section 2.02 of this Agreement.




“Closing” shall have the meaning set forth in Section 2.03(a) of this Agreement.




“Closing Date” shall have the meaning set forth in Section 2.03(a) of this Agreement.



“CV Fredericksburg VA” shall have the meaning set forth in the Recitals of this
Agreement.




“Lease” shall mean the lease agreement with Lessee relating to the Property.



“Lessee” shall mean Virginia CVS Pharmacy, L.L.C., a Virginia limited liability
company.



“Material Organizational Documents” shall mean, collectively, the following documents,
as the same may hereafter be amended: (i) Certificate of Formation of CV
Fredericksburg VA, and (ii) limited liability company agreement of CV Fredericksburg VA,
together with any amendments thereto.


 


 









 





“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, estate, trust, unincorporated association, any federal, state, county or
municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.



“Property” shall mean the right, title and interest of CV Fredericksburg VA in the
property located at 1000 Jefferson Davis Highway, Fredericksburg, Virginia and all improvements
situated thereon, together with all right, title and interest, if any, of CV Fredericksburg VA in
and to all hereditaments, easements, rights-of-way, drives, alleys, parking areas and appurtenances
thereunto belonging, or in any way appertaining to such real property.



“Purchase Price” shall have the meaning given such term in Section 2.02 of this
Agreement.




“Purchaser” shall have the meaning given such term in the Preamble of this Agreement.



“Purchaser’s Closing Costs” shall have the meaning given such term in Section 2.04(b)
of this Agreement.



“Purchaser Closing Documents” shall have the meaning given such term in Section
3.02(b) of this Agreement.



“Sale Assets” shall have the meaning given such term in the Recitals of this
Agreement.




“Seller” shall have the meaning given such term in the Preamble of this Agreement.



“Seller Closing Documents” shall have the meaning given such term in Section 3.01(b)
of this Agreement.



“Seller’s Closing Costs” shall have the meaning given such term in Section 2.04(a) of
this Agreement.



“Seller’s Parties” shall have the meaning given such term in Section 2.05(b) of this
Agreement.



ARTICLE II

Agreement to Sell and Purchase;

Terms of Sale and Purchase




2.01 Agreement to Sell and Purchase. In consideration of the mutual covenants and
agreements set forth herein and upon and subject to the terms, provisions and conditions of this
Agreement, Seller agrees to sell, assign, transfer and convey to Purchaser, and Purchaser agrees to
purchase and acquire from Seller, the Sale Assets, in accordance with and subject to the terms and
conditions of this Agreement.


 


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2.02 Purchase Price; Prorations.



(a) The purchase price payable by Purchaser to Seller for the Sale Assets shall be Six Million
One Hundred Sixteen Thousand Five Hundred Thirty and 00/100 Dollars ($6,116,530.00) (the
“Purchase Price”) payable by wire transfer of immediately available United States federal
funds or other method acceptable to Seller to the account or accounts designated by Seller.



(b) Purchaser acknowledges that the Property is leased to the Lessee pursuant to the Lease and
that Lessee pays base rent on a monthly basis pursuant thereto. On the Closing Date, Seller and
Purchaser shall prorate the base rent paid under the Lease for the month in which the Closing Date
occurs, such that there shall be an adjustment in favor of Purchaser in an amount determined by
multiplying such base rent for the month in question by a fraction, the numerator of which is the
number of days from and after the Closing Date through the last day of the month in which the
Closing occurs and the denominator of which is the total number of days in the month in which the
Closing occurs. It is the intention of the parties to adjust only the base rent for the month in
which the Closing occurs. Notwithstanding the foregoing, in the event an adjustment for real
property taxes is sought by Purchaser due to the fact that current tax bills with respect to the
Property had not yet been issued as of Closing Date, the Purchaser shall be entitled to seek an
adjustment with respect to any closing proration of real property taxes until thirty (30) days
after Purchaser’s receipt of tax bills for the period of time during which the Closing Date
occurred. There shall be no other prorations or adjustments.




2.03 The Closing.



(a) The consummation of the sale and purchase of the Sale Assets contemplated by this
Agreement (the “Closing”) shall take place on January 6, 2009 (the “Closing
Date”).



(b) On the Closing Date, Seller shall sell, assign, transfer and convey to Purchaser all of
Seller’s right, title and interest in and to the Sale Assets by delivery to Purchaser of an
instrument of assignment in the form annexed hereto as Schedule A (the
“Assignment”), and Purchaser shall pay to Seller the Purchase Price therefor as
contemplated by Section 2.02 hereof.




2.04 Closing Costs.



(a) In connection with the conveyance of the Sale Assets by Seller to Purchaser, Seller shall
pay the (“Seller’s Closing Costs”) fees and expenses of Seller’s legal counsel.



(b) In connection with the conveyance of the Sale Assets by Seller to Purchaser, Purchaser
shall pay the following (“Purchaser’s Closing Costs”): (i) the fees and expenses of
Purchaser’s legal counsel, (ii) any transfer taxes, if applicable, arising in connection with the
transaction contemplated by this Agreement, (iii) the cost of Purchaser’s due diligence
investigation, and (iv) all other costs and expenses arising in connection with the transaction
contemplated herein, other than the costs that are Seller’s responsibility pursuant to Section
2.04(a) hereof.



(c) The provisions of this Section 2.04 shall survive the Closing.



 


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2.05 Non-Recourse.



(a) With respect to a violation of a representation by Seller contained herein or made
pursuant hereto discovered by Purchaser after the Closing, subject to the limitation of survival of
a representation set forth in Section 3.01 hereof, Purchaser shall be entitled to commence an
action to obtain actual damages against Seller; provided, however, that Seller’s liability
hereunder shall in no event exceed an amount equal to the Purchase Price actually received by
Seller; provided, further, however, in no event shall Purchaser have the right to collect any
consequential or indirect damages from Seller and Purchaser waives any and all such rights.



(b) Anything contained in this Agreement to the contrary notwithstanding, no recourse shall be
had for the payment of any sum due under this Agreement, or for any claim based hereon or otherwise
in respect hereof against any members, directors, officers, employees, shareholders, policyholders,
partners, affiliates, trustees, administrators or agents of Seller or of any of the foregoing or
the legal representative, heir, estate, successor or assignee of any of the foregoing or against
any other person, partnership, corporation or trust, as principal of Seller, whether disclosed or
undisclosed (collectively, “Seller’s Parties”). It is understood and agreed by the parties
that all of the obligations of Seller under or with respect to this Agreement may not be enforced
against Seller’s Parties.



ARTICLE III

Representations and Warranties




3.01 Seller Representations and Warranties. Seller represents and warrants to
Purchaser that as of the date hereof:



(a) Seller is a limited liability company, duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation.



(b) Seller has all requisite power and authority to execute and deliver this Agreement and all
documents, certificates, agreements, instruments and writings it is required to deliver hereunder
(collectively, the “Seller Closing Documents”), and to perform, carry out and consummate
the transactions contemplated to be consummated by it hereby and thereby, including the power and
authority to sell, transfer and convey the interest in the Sale Assets to be sold by it, subject to
the satisfaction of the conditions precedent to Seller’s obligations hereinafter provided. The
execution, delivery and performance of this Agreement and the other Seller Closing Documents have
been duly authorized by all necessary action of Seller, including any required approval of the
members of Seller. This Agreement does, and when executed by Seller, the other Seller Closing
Documents shall, constitute the legal, valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency or similar laws and by equitable principles.


 


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(c) There is no action, suit or proceeding before any court or governmental or other
regulatory or administrative agency, commission or tribunal pending or, to the actual knowledge of
Seller, threatened against Seller or the interest in the Sale Assets to be sold by Seller which, if
determined adversely to Seller would reasonably be expected to interfere in any material respect
with the ability of Seller to perform its obligations under this Agreement or materially and
adversely affect the value of the interest in the Sale Assets to be sold by Seller.




(d) Seller has not entered into any leases for the Property other than the Lease.



(e) To Seller’s actual knowledge, the Lease is in full force and effect and the obligation to
pay rent thereunder has commenced. Seller has not received written notice of any uncured default
from Lessee under the Lease.



(f) At Closing, the Sale Assets to be sold by Seller shall be free and clear of any lien,
security interest or encumbrance thereon. There are no rights, options or other agreements of any
kind to purchase, acquire, receive or issue any interest of Seller in and to the Sale Assets to be
sold by it.



(g) CV Fredericksburg VA has legal title to the Property, subject to the existing state of
title of the Property.



(h) CV Fredericksburg VA has not incurred any liabilities, except for (i) its obligations
under the Material Organizational Documents, (ii) obligations arising from or relating to the
ownership of its interests in the Property, (iii) its obligations relating to the maintenance of
its status as a Delaware limited liability company and the maintenance of such company’s
qualifications to do business in such other jurisdictions where it has qualified to do business,
(iv) obligations arising under any matter appearing of record against the Property, (v) customary
unsecured trade debt which will not exceed $1,000.00 as of the Closing Date, and (vi) the
obligation to pay fees to The Corporation Trust Company for acting as its registered agent. CV
Fredericksburg VA does not own any assets, except (1) relating to the ownership of its interest in
the Property, and (2) bank accounts.



(i) CV Fredericksburg VA has been duly formed as a limited liability company and is validly
existing in good standing under the laws of the State of Delaware and has the power and authority
to own the Property.




The provisions of this Section 3.01 shall survive the Closing.



3.02 Purchaser Representations and Warranties. Purchaser represents and warrants to
Seller that as of the date hereof:



(a) Purchaser is a limited partnership, duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation.



(b) Purchaser has all requisite power and authority to execute and deliver this Agreement and
all documents, certificates, agreements, instruments and writings it is required to deliver
hereunder, if any (collectively, the “Purchaser Closing Documents”), and to perform, carry
out and consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the other Purchaser Closing Documents have been
duly authorized by all necessary company action on the part of Purchaser. This Agreement does, and
when executed by Purchaser, the other Purchaser Closing Documents shall, constitute the legal,
valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy, insolvency or similar
laws and by equitable principles.


 


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(c) There is no action, suit or proceeding before any court or governmental or other
regulatory or administrative agency, commission or tribunal pending or, to the actual knowledge of
Purchaser (without any duty to investigate), threatened against Purchaser which, if determined
adversely to Purchaser, could reasonably be expected to interfere in any material respect with the
ability of Purchaser to perform its obligations under this Agreement.




The provisions of this Section 3.02 shall survive the Closing.



ARTICLE IV

Conditions




4.01 Seller’s Conditions. The obligation of Seller under this Agreement to consummate
the transactions contemplated hereby shall be subject to the satisfaction of all the following
conditions, any one or more of which may be waived in writing by Seller:



(a) Seller shall have received payment of the Purchase Price in accordance with Section 2.02
of this Agreement.



(b) Purchaser shall have delivered all of the documents and other items described in Section
5.01.



(c) The representations and warranties of Purchaser set forth in Section 3.02 above shall be
true and correct in all material respects.



4.02 Purchaser’s Conditions. The obligation of Purchaser under this Agreement to
consummate the transactions contemplated hereby shall be subject to the satisfaction of all of the
following conditions, any one or more of which may be waived in writing by Purchaser:



(a) Seller shall have delivered all of the documents and other items described in Section
5.02.



(b) The representations and warranties of Seller set forth in Section 3.01 above shall be true
and correct in all material respects, except for any matters pertaining to the Property that are
Lessee’s responsibility under the Lease.



ARTICLE V

Closing Deliveries




5.01 Purchaser’s Closing Deliveries. At or prior to the Closing, Purchaser shall make
or cause to be made the following deliveries:


(a) Purchaser shall have executed and delivered to Seller the Assignment.



(b) Purchaser shall have delivered to Seller evidence as to the authority of the person or
persons executing documents on behalf of Purchaser.



 


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5.02 Seller’s Closing Deliveries. At or prior to the Closing, Seller shall make or
cause to be made the following deliveries:




(a) Seller shall have executed and delivered to Purchaser the Assignment.



(b) Seller shall have executed and delivered to Purchaser a certificate of “non- foreign
person” status that meets the requirements of Section 1445 of the Internal Revenue Code of 1986, as
amended.



(c) Seller shall have delivered to Purchaser the original or certified copies of the Material
Organizational Documents.



(d) Seller shall have delivered to Purchaser evidence as to the authority of the person or
persons executing the Seller Closing Documents on behalf of Seller.



ARTICLE VI

Miscellaneous




6.01 Broker.



 (a) Seller represents and warrants that neither Seller nor any of its
respective affiliates or any of its respective directors, officers, partners, managers or members
has dealt with anyone acting as broker, finder, financial advisor or in any similar capacity in
connection with this Agreement or any of the transactions contemplated hereby. Seller shall
indemnify, defend and hold harmless Purchaser from any and all claims, actions, liabilities,
losses, damages and expenses, including reasonable attorneys’ fees and disbursements, which may be
asserted against or incurred by Purchaser arising from a breach of Seller’s representation
contained in this Section 6.01(a).



(b) Purchaser represents and warrants that neither Purchaser nor any of its affiliates or any
of their respective directors, officers, partners, managers or members has dealt with anyone acting
as broker, finder, financial advisor or in any similar capacity in connection with this Agreement
or any of the transactions contemplated hereby. Purchaser shall indemnify, defend and hold
harmless Seller from any and all claims, actions, liabilities, losses, damages and expenses,
including reasonable attorneys’ fees and disbursements, which may be asserted against or incurred
by Seller arising from a breach of Purchaser’s representation contained in this Section 6.01(b).



6.02 Entire Agreement. This Agreement, including all schedules and exhibits hereto,
the Seller Closing Documents and the Purchaser Closing Documents supersede all prior discussions
and agreements between the parties with respect to the subject matter hereof and thereof, and
contain the sole and entire agreement between the parties hereto with respect to the subject matter
hereof and thereof.



6.03 Waiver. Any term or condition of this Agreement may be waived at any time by
the party that is entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in written instrument duly executed by or on behalf of the party waiving such term
or condition. No waiver by any party of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under this Agreement or
by applicable law or otherwise afforded, will be cumulative and not alternative.


 


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6.04 Modification. This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each party hereto.



6.05 Successors and Assigns. The terms and provisions of this Agreement are intended
solely for the benefit of each party hereto and their respective successors or permitted assigns,
and it is not the intention of the parties to confer third-party beneficiary rights upon any other
person. Subject to the terms of Section 6.10 hereof, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective successors and assigns.



6.06 Interpretation. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future law, and if the rights or obligations of any
party hereto under this Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining
provisions of this Agreement will remain in full force and effect and will not be affected by the
illegal, valid or unenforceable provision or by its severance herefrom and (d) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.



6.07 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Arizona applicable to a contract executed and performed in such
State, without giving effect to the conflicts of laws principles thereof.



6.08 Counterparts. This Agreement may be executed in any number of counterparts, and
by facsimile signature, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.



6.09 Assignment. Purchaser shall not assign or transfer its rights or obligations
under this Agreement without the prior written consent of Seller, which consent may be granted or
denied in Seller’s reasonable discretion. Notwithstanding the foregoing, Purchaser shall have the
right, without Seller’s consent, to assign this Agreement to any affiliate of Purchaser controlled
by Purchaser, provided such assignee agrees to assume, pursuant to an instrument reasonably
acceptable to Seller, the obligations of Purchaser hereunder. No assignment of this Agreement by
Purchaser shall relieve the Purchaser named herein of its obligations hereunder and, subsequent to
any such assignment, the liability of such named Purchaser hereunder shall continue notwithstanding
any subsequent modification or amendment hereof or the release of any subsequent purchaser
hereunder from any liability, to all of which Purchaser consents in advance. No further assignment
or transfer shall be permitted.


 


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IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this Agreement as of
the day and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 
	 
	 	 	 	 	 	 	 	 
	 	 	SERIES B, LLC, an Arizona limited liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Todd J. Weiss	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Todd J. Weiss

Authorized Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 
	 
	 	 	 	 	 	 	 	 
	 	 	COLE REIT III OPERATING PARTNERSHIP, LP,

a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Cole Credit
Property Trust III, Inc., 

Maryland corporation, its
General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ D. Kirk McAllaster, Jr.	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	D. Kirk McAllaster, Jr.

Executive Vice President	 	 





 


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SCHEDULE A



INSTRUMENT OF ASSIGNMENT AND ASSUMPTION




INSTRUMENT
OF ASSIGNMENT AND ASSUMPTION (this “Agreement”),
dated this
6th day of
January, 2009, between SERIES B, LLC, an Arizona limited liability company (“Assignor”), as
assignor, having an address 2555 East Camelback Road, Suite 400, Phoenix, AZ 85016, and COLE REIT
III OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Assignee”), as assignee,
having an address at 2555 East Camelback Road, Suite 400, Phoenix, AZ 85016.



W I T N E S S E T H:




WHEREAS, Assignor owns 100% of the membership interests (the “Interests”) in Cole CV
Fredericksburg VA, LLC, a Delaware limited liability company (“CV Fredericksburg VA”); and



WHEREAS, Assignor and Assignee are entering into this Agreement to evidence and confirm the
transfer and assignment of the Interests from Assignor to Assignee, and the assumption by Assignee
of the obligations and responsibilities attendant thereto, all from and after the date hereof.



NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor hereby transfers, assigns and conveys to Assignee, its successors and
assigns forever, the Interests from and after the date hereof.




TO HAVE AND TO HOLD, unto Assignee, its successors and assigns, forever.



Assignor makes no representation or warranty, express or implied, in fact or by law, with
respect to the assets being conveyed hereunder, except as represented and warranted by Assignor in
the Purchase and Sale Agreement, dated as of January
6th, 2009, between Assignor and Assignee
(the Purchase Agreement”), subject to the conditions and limitations set forth therein.



Assignee hereby accepts such transfer, assignment and conveyance and assumes all of the
obligations of Assignor under the Material Organizational Documents (as defined in the Purchase
Agreement) arising from and after the date hereof, and agrees to be bound by the terms contained in
the Material Organizational Documents.



From and after the date of this Agreement, Assignor withdraws, and relinquishes any and all of
its right, title and interest as a member and as manager of CV Fredericksburg VA. Assignee
unconditionally and irrevocably consents to such withdrawal.



Assignor shall indemnify, defend and hold harmless Assignee from all liabilities and losses
incurred by Assignee that both (i) arise under the Material Organizational Documents or otherwise
relate to ownership of the Interests; and (ii) occurred before the date of this Agreement.


 


 









 





Assignee shall indemnify, defend and hold harmless Assignor from all liabilities and losses
incurred by Assignor that both (i) arise under the Material Organizational Documents or otherwise
relate to ownership of the Interests; and (ii) occurred on or after the date of this Agreement.



This Agreement shall be binding upon, inure to the benefit of, and be enforceable by Assignor
and Assignee, and their respective successors and assigns.



Whenever possible, each provision hereof shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision hereof shall be prohibited by or
invalid under such law, then such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the remaining provisions of
this Agreement. This Agreement may not be modified, amended, altered or changed, nor any provision
hereof waived, except in writing with the mutual consent of all parties hereto.



This Agreement shall be governed by and construed in accordance with the laws of the State of
Arizona (without reference to conflicts of laws principles).



This Agreement may be executed in any number of counterparts, each of which shall be an
original, but all of which when taken together shall constitute a single original.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




 


 









 







IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement on the date first set
forth above.



	 	 	 	 	 	 	 	 	 
	 	 	ASSIGNOR:	 
	 
	 	 	 	 	 	 	 	 
	 	 	SERIES B, LLC, an Arizona limited liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Todd J. Weiss	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Todd J. Weiss

Authorized Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ASSIGNEE:	 
	 
	 	 	 	 	 	 	 	 
	 	 	COLE REIT III OPERATING PARTNERSHIP, LP,

a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Cole Credit
Property Trust III, Inc.,

Maryland corporation, its
General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ D. Kirk McAllaster, Jr.	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	D. Kirk McAllaster, Jr.

Executive Vice President