Document:

EX-10.1

 Exhibit 10.1 
  

REAL ESTATE PURCHASE AND SALE AGREEMENT (“Agreement”) 

Vacant Land 
 Montgomery,
Illinois 
  

	 	1.	PARTIES: MONTGOMERY STERLING, L.L.C., an Illinois limited liability company, (“Seller”) agrees to sell and convey to:         S.R. JACOBSON
DEVELOPMENT CORP., a Michigan corporation on behalf of an entity to be named (“Purchaser”) and Purchaser agrees to buy from Seller the Property (as defined in Section 2 below) for the consideration and upon and subject
to the terms, provisions, and conditions hereinafter set forth. 

  

	 	2.	PROPERTY: The real estate per surveyed acre estimated at 30 acres, property identification numbers attached Exhibit A as located within the Village of Montgomery, County of Kendall, State of Illinois
legally described on the Title Commitment to be provided; together with all improvements, and property attached thereto and made a part thereof owned by the Seller located in, on, attached to, or used in connection with the Property; all oil, gas
and mineral rights, and all privileges and appurtenances pertaining thereto including any right, title and interest, if any, of Seller in and to adjacent streets, alleys, or rights-of-way, Seller’s interest in and to any, licenses, and permits
with respect to the Property, improvements, fixtures, and property attached thereto and made a part thereof owned by the Seller located in, on, attached to, or used in connection with the real estate; all privileges and appurtenances pertaining
thereto including any right, title and interest, if any, of Seller in and to adjacent streets, alleys, or rights-of-way; Seller’s interest in and to any, licenses, and permits with respect to the Property; all of the above herein collectively
called “Property”. 

  

	 	3.	PURCHASE PRICE 

  

	 	A.	PURCHASE PRICE:
                            $2,800,000.00           
                  

 Payable in U.S.
dollars by Purchaser as follows: 
  

	 	B.	EARNEST MONEY: Within three (3) business days after mutual execution of this Agreement Purchaser shall deposit with Chicago Title Insurance Company (“Title Company”) a sum equal to
Twenty Five Thousand Dollars ($25,000.00) (“Earnest Money”). The Earnest Money shall be non-refundable after the expiration of the Inspection Period (except under Sections 4, 11 and15) and applicable to the Purchase Price at
Closing. At the expiration of the Initial Approval Period (as herein defined) Purchaser shall deposit the additional sum of Fifty Thousand Dollars ($50,000.00) with the Title Company, which sum shall be non-refundable (except under Sections 4, 11
and15) and applicable to the Purchase Price at Closing. The parties shall execute Title Company’s escrow instructions, which shall be in a form that is mutually acceptable to the parties. 

 

	 	C.	BALANCE OF PURCHASE PRICE: The balance of the Purchase Price plus or minus prorations and closing adjustments, if any, is due at the closing of this transaction (“Closing”) and must be paid by wire
transfer to the bank account of the Title Company as designated by its closing escrow officer. 

  

	 	D.	 INSPECTION PERIOD: Purchaser and its duly authorized representatives shall have until ninety
(90) days from the Effective Date (the “Inspection Period”) at reasonable times and upon reasonable notice to Seller, to conduct noninvasive inspections and studies, to make a physical inspection of the Property, to examine
documents of record encumbering the Property and conduct a phase one environmental audit and an architectural and engineering 

  

			
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 Exhibit 10.1 
  

	 	evaluation of the Property, all at Purchaser’s sole expense. Within five (5) days from the Effective Date, Seller shall provide to Purchaser copies of all third party surveys, reports, studies and plans
relating to the Property in Seller’s possession or control (collectively, the “Property Information”). No invasive inspection may be conducted without the Seller’s express written consent, not to be unreasonably withheld
or delayed; provided however that Purchaser may conduct soil boring tests on the Property after providing written evidence of insurance to Seller. Seller shall provide access to the Property during business hours and with twenty four (24) hours
prior notice. Purchaser shall save, indemnify, defend and hold harmless Seller from the acts and/or omissions of Purchaser and its representatives, agents and contractors arising from such inspections, except to the extent caused by mere discovery
by Purchaser of pre-existing conditions at the Property or by the gross negligence or willful misconduct of Seller. The provisions of this Section shall survive the termination of this Agreement or Closing. If Purchaser in its sole discretion elects
not to proceed with its purchase of the Property for any reason or no reason at all, Purchaser shall, on or before the end of the Inspection Period, serve Seller with written notice of its election to terminate this Agreement (which notice is
hereinafter referred to as “Termination Notice”) and the Title Company shall return the Earnest Money to Purchaser and thereafter this Agreement shall terminate and be null and void and of no further force and effect, and neither
Purchaser nor Seller shall have any further rights, duties, liabilities or obligations to the other by reason hereof expect for those matters that specifically survive such termination. If Purchaser fails to send the Termination Notice on or before
the end of the Inspection Period, this Agreement shall remain in full force and effect, and the Earnest Money shall be non-refundable (except under Sections 4, 11 and15) and applicable to the Purchase Price at Closing. 

 

	 	    	In the event Purchaser provides Seller with a Termination Notice, at Seller’s request, Purchaser shall, within a reasonable period of time, deliver to Seller complete copies of any final reports, surveys,
assessments, tests, and studies obtained by Purchaser (the “Reports”) in the course of Purchaser’s investigation of the Property which concern the physical condition of the Property. Seller acknowledges that any Reports
supplied or made available by Purchaser shall be delivered to Seller on an “as-is/where-is/with all faults” basis solely as a courtesy and Purchaser has no obligation to verify the accuracy of any statements or other information therein
contained, nor any method used to compile the reports or information contained therein, or the qualification of the person(s) preparing the Reports and Purchaser makes no representations, express or implied, or arising by operation of law, as to the
accuracy, completeness or any other aspect of the Reports. 

  

	 	4.	 TITLE INSURANCE: Within fifteen (15) business days from the Effective Date, Seller will cause the
Title Company to deliver to Purchaser a Title Insurance Commitment (“Commitment”) issued by the Title Company, dated within twenty (20) days of the Effective Date, together with legible copies of all instruments identified as
exceptions in the Commitment. Purchaser shall have until the expiration of the Inspection Period to object in writing to the condition of title or any matters identified in the Survey referenced below. If Purchaser or its counsel do not object in
writing to the condition of title prior to the expiration of the Inspection Period, Purchaser shall be deemed satisfied with the condition of title identified in the Commitment. If Purchaser or its counsel timely objects in writing to the condition
of title or matters identified in the Survey, Seller shall have five (5) business days from its receipt of Purchaser’s title objection(s) to advise Purchaser whether or not Seller will attempt to cure Purchaser’s title objections. If
Seller elects to cure Purchaser’s title objections, Seller shall have thirty (30) days from its receipt of Purchaser’s title objections to attempt to cure the objections or to provide evidence satisfactory to Purchaser that the
objections will be cured or insured over to Purchaser’s satisfaction on or before the Closing Date. If Seller is unwilling or unable to remedy Purchaser’s objection(s) to Purchaser’s satisfaction then Purchaser, at its option, may
either waive the objection(s) and the parties shall continue to perform their obligations, subject to the terms and conditions of this Agreement; or Purchaser may terminate this Agreement, in which event the Earnest Money shall be immediately
returned to Purchaser and the parties shall have no further rights or obligations under this 

  

			
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 Exhibit 10.1 
  

	 	Agreement. If Purchaser does not raise a title or Survey objection within the foregoing time period or in the event Seller cures (or Purchaser waives) Purchaser’s objection(s), the exceptions of record identified
in the Commitment which are not objected to, or which have been waived by Purchaser, shall be deemed accepted by Purchaser and shall be “Permitted Encumbrances” to the condition of title conveyed at Closing. Notwithstanding the
foregoing, any mortgage liens and security interests of any mortgage holder or any other monetary liens or encumbrances shall not constitute Permitted Encumbrances and shall be discharged by Seller on or before Closing. 

 

	 	5.	SURVEY: Seller will provide an ALTA Survey of the Property prepared by Spaceco, Inc. dated January 27, 2016 identified as Project No. 9012 (“Survey”). Purchaser, at its cost, may have
the Survey updated, certified to Purchaser and to Purchaser’s lender or upgraded to current ALTA/NSPS survey standards or inclusive of additional Optional Table A items. 

 

	 	6.	APPROVALS: Purchaser shall have a period of one hundred twenty (120) days from the expiration of the Inspection Period (the “Approval Period”) to obtain from the Village of Montgomery and
all other governmental agencies having jurisdiction, site plan and such other governmental approvals and permits necessary for the development of the Property as a multi-family project containing garden-style units (the
“Approvals”). If, despite Purchaser’s diligent efforts, Purchaser has not obtained the Approvals within the Approval Period, Purchaser shall have the right to extend the Approval Period for up to two (2) additional sixty
(60) day periods (each an “Extension Period”). For the first sixty (60) day Extension Period, Purchaser shall deposit the additional sum of Twelve Thousand Five Hundred and 00/100 ($12,500) Dollars with the Title
Company prior to expiration of the initial Approval Period and for the second sixty (60) day Extension Period, Purchaser shall deposit an additional Twelve Thousand Five Hundred and 00/100 ($12,500) Dollars with the Title Company prior to
expiration of the first Extension Period. The foregoing extension payments shall be non-refundable, except as expressly provided in this Agreement, and applicable to the Purchase Price at Closing. If Purchaser does not obtain the Approvals within
the Approval Period or any applicable Extension Period, Purchaser shall have the right to either terminate this Agreement by providing Seller with written notice of termination, in which event the Earnest Money and any extension payments made by
Purchaser shall be released to Seller and the parties shall have no further rights or obligations under this Agreement; or Purchaser may elect to waive the foregoing condition, in which event this Agreement shall remain in effect. 

 

	 	7.	CLOSING: The Closing of the sale shall be accomplished by means of a “New York” style closing and take place at the offices of the Title Company, Nancy Castro, BP/Escrow Manager, #10 S. LaSalle Street,
Suite 3100, Chicago, Illinois 60603 thirty (30) days after the expiration of the Approval Period, as the same may be extended (“Closing Date”), unless Seller and Purchaser change such date in writing; provided, however, that
the Closing Date shall not be later than December 31, 2017. 

  

	 	A.	At the Closing, Seller shall deliver to Purchaser, at Seller’s sole cost and expense, the following: 

  

	 	(1)	Duly executed and acknowledged Special Warranty Deed, conveying title in fee simple to all of the Property, free and clear of any and all liens, encumbrances, conditions, easements, assessments, reservations and
restrictions, except for Permitted Exceptions. The special warranty deed shall be accompanied by an Illinois real estate transfer tax valuation affidavit (“PTAX-203”), as the purchase price is not to be reflected on the warranty deed.
Seller shall be responsible for preparation of the PTAX-203. 

  

	 	(2)	The Survey; 

  

			
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 Exhibit 10.1 
  

 

	 	(3)	Internal Revenue Code Affidavit pursuant to Section 1445 stating that Seller is not a foreign entity within the meaning of the Internal Revenue Code (FIRPTA); 

 

	 	(4)	A Seller’s “GAP” undertaking; 

  

	 	(5)	Seller shall cause the Title Company to issue an Owner’s Policy of Title Insurance (the “Title Policy”) or a pro forma Title Policy signed by the Title Company in the full amount of the Purchase
Price, dated as of Closing, insuring Purchaser’s fee simple title to the Property subject only to the Permitted Encumbrances, with extended coverage (subject to Purchaser providing any survey required by the Title Company to issue extended
coverage), and provide to the Title Company such documents that may reasonably be requested by the Title Company to satisfy any of the Schedule B-I requirements applicable to Seller; 

 

	 	(6)	State, county and local real estate transfer declarations, to the extent applicable (the “Transfer Declarations”); 

  

	 	(7)	A signed closing statement setting forth the Purchase Price and all debits and credits to Purchaser and Seller in connection with this sale; 

 

	 	(8)	An Assignment of all of Seller’s rights and interest in the Property Information, to the extent assignable; 

  

	 	(9)	All other documents customarily required to close this type of transaction as required by the Title Company or as reasonably requested by Purchaser. 

 

	 	B.	At the Closing, Purchaser shall deliver to Seller, at Purchaser’s sole cost and expense, the following: 

  

	 	(1)	The balance of the Purchase Price including prorations and adjustments, if any; 

  

	 	(2)	Such organizational documents and resolutions as to Purchaser as reasonably required by the Title Company to issue its Title Policy; 

 

	 	(3)	A signed counterpart of the closing statement; 

  

	 	(4)	Signed counterparts of the Transfer Declarations; 

  

	 	(5)	Execute such other and further documents necessary to close this transaction as required by the Title Company or reasonably requested by Seller; and 

 

	 	(6)	A Purchaser’s GAP undertaking, if required by the Title Company. 

  

	 	8.	POSSESSION: Possession of the Property shall be delivered to Purchaser at Closing free and clear of the rights of Seller or any third party, except for the Permitted Encumbrances. 

 

	 	9.	SALES EXPENSES TO BE PAID IN CASH AT OR PRIOR TO CLOSING: 

  

	 	A.	 SELLER’S EXPENSES: All costs of releasing and recording any release of mortgage, lien or other
monetary encumbrance required by the terms of this Agreement; one-half ( 1⁄2) of any escrow fee (except any money lender’s escrow fee, which shall be paid
by Purchaser); state, and county transfer taxes or documentary stamps; transfer taxes or documentary stamps imposed by the Village which are customarily paid by sellers of real property in that jurisdiction, special assessments on the Property which
have been confirmed prior to the Closing (regardless of whether such special assessments may be paid in installments subsequent to Closing), real estate brokerage fees pursuant to the written agreement

  

			
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 Exhibit 10.1 
  

	 	between Inland Real Estate Advisors, Inc. and Seller; all costs of the Owner’s Title Policy; Seller’s attorneys’ fees and other expenses stipulated to be paid by Seller under the provisions of this
Agreement. 

  

	 	B.	PURCHASER’S EXPENSES: All recording costs of the Purchaser’s mortgage, the Deed, and the collateral documents; the full amount of any money lender’s escrow fee; expense of ALTA Mortgage Title
Policy; one-half ( 1⁄2) of any escrow fee; the cost of any special endorsements (excluding extended coverage) or additional insurance required by the Purchaser
or Purchaser’s lender; Purchaser’s real estate brokerage fee, if any, if not provided for in this Agreement; transfer taxes or documentary stamps imposed by the Village which are customarily paid by buyers of real property in that
jurisdiction, and Purchaser’s attorney’s fee and expenses stipulated to be paid by Purchaser under other provisions of this Agreement. 

  

	 	10.	PRORATIONS AND ADJUSTMENTS: The following shall be prorated and adjusted between Seller and Purchaser as of the time of Closing, except as otherwise expressly provided herein: 

 

	 	A.	Real estate tax proration shall be based upon one hundred two percent (102%) the most recent ascertainable tax bill, prorated as of 11:59 p.m. on the day immediately prior to the Closing Date; 

 

	 	B.	Such other items that are customarily prorated in transactions of this nature shall be ratably prorated as of 11:59 p.m. on the day immediately prior to the Closing Date. 

 

	 	C.	All prorations shall be final. 

  

	 	11.	DEFAULT / REMEDIES: 

  

	 	A.	Unless otherwise provided for herein, if Purchaser breaches or defaults under this Agreement which is not cured within five (5) days from Purchaser’s receipt of written notice of default from Seller, Seller
may, as its sole remedy, terminate this Agreement, in which event the Earnest Money and any extension payments made, plus accrued interest, if any, shall be due and payable to Seller as its sole liquidated damages. The parties agree that actual
damages in the event of default are difficult to ascertain and further agree that the amount set forth as liquidated damages is a reasonable estimate of the damages to Seller in the event of Purchaser’s default. Such sum is intended to be
liquidated damages, and not a penalty. 

  

	 	B.	If Seller breaches or defaults under this Agreement which is not cured within five (5) days from Seller’s receipt of written notice of default from Purchaser, Purchaser shall be entitled to either:
(i) terminate this Agreement and receive a refund of the Earnest Money and all extension payments, in which event the parties shall have no further rights or obligations hereunder; or (ii) to specifically enforce this Agreement. Purchaser
acknowledges and agrees that under no circumstances shall Seller be liable for Purchaser’s damages that are consequential, actual, punitive, speculative or otherwise. 

 

	 	12.	PERSONAL PROPERTY. Seller shall remove from the Property prior to Closing all debris and Seller’s personal property not conveyed by bill of sale to Buyer, if any. 

 

	 	13.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER: 

  

	 	A.	Seller hereby represents and warrants to Purchaser, which representations and warranties shall be deemed made by Seller to Purchaser as of the Effective Date and as of the Closing Date that: 

  

			
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 Exhibit 10.1 
  

 

	 	(1)	There are no parties in possession of any portion of the Property; 

  

	 	(2)	Seller is the owner of the Property and is duly authorized and empowered to sell the Property. 

  

	 	(3)	All obligations of Seller arising from the ownership and operation of the Property which accrue prior to the Closing Date, have been paid as they became due or will be paid at or prior to Closing. Except for obligations
for which provisions are herein made for proration or other adjustments at Closing, there will be no obligations of Seller with respect to the Property outstanding as of the Closing Date. 

 

	 	(4)	As of the Closing Date there will be no recorded or unrecorded land leases affecting the Property. 

  

	 	(5)	This Agreement when executed and delivered by Purchaser and Seller will constitute the valid and binding agreement of Seller enforceable against Seller in accordance with its terms; 

 

	 	(6)	Neither the execution and delivery of this Agreement nor the consummation of the transaction contemplated hereby will violate or be in conflict with; (i) any applicable provisions of law; (ii) any order of any
court or government agency having jurisdiction over the Seller; or (iii) any agreement or instrument to which Seller is a party or which Seller is bound. 

  

	 	(7)	that there are no actions, suits, claims or other proceedings pending or, to the best of Seller’s knowledge, contemplated or threatened against Seller that could affect Seller’s ability to perform its
obligations under this Agreement. 

  

	 	(8)	Seller has not performed or permitted any third party to perform any alterations or improvements to the Property. 

  

	 	(9)	Seller has not received written notice that the Property is in violation of any laws, ordinances, rules or regulations of the Village of Montgomery or any other governmental agency having jurisdiction over the Property.

 Notwithstanding anything contained in this Agreement to the contrary, all of the representations, warranties
and certifications (the “Representations”) which are made by Seller and set forth herein or in any of the documents or instruments required to be delivered by Seller hereunder, shall be subject to the following conditions and limitations:
(i) there shall no liability on the part of Seller for breaches of Representations of which Purchaser had actual knowledge at Closing; and (ii) Purchaser shall not have the right to bring any lawsuit or other legal action against Seller,
nor pursue any other remedies against Seller, as a result of the breach of the Representation of which Purchaser had actual knowledge at the Closing, but Purchaser’s sole right shall be to terminate this Agreement in which event, the Earnest
Money all extension payments made and all interest accrued thereon shall be returned to Purchaser and Seller shall reimburse Purchaser for its out of pocket costs incurred in connection with the Property, up to the amount of $25,000. 

 

	 	B.	From the effective date of this Agreement until the Closing Date or earlier termination of this Agreement, Seller covenants to: 

  

	 	(1)	to advise Purchaser promptly of any litigation, arbitration or administrative hearing before any governmental body or agency of which Seller is notified, concerning or affecting the Property which is instituted after
the date hereof; 

  

			
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 Exhibit 10.1 
  

 

	 	(2)	to not take, or omit to take any action that would have the effect of violating any of the material representations, warranties, covenants, and agreements of Seller contained in this Agreement; and 

 

	 	(3)	not, without Purchaser’s written consent, transfer any interest in the Property, grant any easements, enter into any licenses, leases, options or other agreements that would be binding on Purchaser or the Property
after Closing or otherwise encumber any portion of the Property. 

  

	 	14.	REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER: 

 A. Purchaser represents,
warrants and covenants to Seller now and as of the Closing as follows: 
  

	 	(1)	As further set forth below, Purchaser is purchasing the Property in its “AS IS, WHERE IS” and “WITH ALL FAULTS” condition with no warranties by Seller as to merchantability, suitability or fitness
for any particular use, it being understood and agreed that Purchaser is relying solely on its own inspections, engineering studies and reports, economic and feasibility studies and examinations of the Property and Purchaser’s own determination
of the condition of the Property. 

  

	 	(2)	Purchaser has all requisite power and authority to consummate the transaction contemplated by this Agreement and has by proper proceedings duly authorized the execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby. 

  

	 	(3)	This Agreement when executed and delivered by Purchaser and Seller will constitute the valid and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms. 

 

	 	(4)	To Purchaser’s current, actual knowledge, neither the execution and delivery of this Agreement nor consummation of the transaction contemplated hereby will violate or be in conflict with; (i) any applicable
provisions of law; (ii) any order of any court or government agency having jurisdiction over the Purchaser; or (iii) any agreement or instrument to which Purchaser is a party or which Purchaser is bound. 

 

	 	(5)	There are no actions, suits, claims or other proceedings pending or, to the best of Purchaser’s knowledge, contemplated or threatened against Purchaser that could affect Purchaser’s ability to perform its
obligations under this Agreement. 

  

	 	(6)	If Purchaser or any agent or representative of Purchaser has entered upon or prior to Closing shall enter upon the Property for inspection thereof, that he, she or it has done so or shall do so at their sole risk and
shall indemnify, defend and hold Seller harmless from all risk of injury and loss and shall make any claim therefore solely against their personal liability carrier and that no such claim shall be made against Seller, any and all such claims against
Seller being barred and any and all subrogation rights of such liability carrier against Seller hereby being hereby waived. 

  

	 	(7)	That, prior to obtaining Seller’s written consent, Purchaser shall not conduct, contract for or authorize any agent of representative of Purchaser to conduct any invasive testing or other procedures on or in the
Property. 

  

	 	(8)	Purchaser is a sophisticated and experienced purchaser of properties such as the Property and has been duly represented by counsel in connection with the negotiation of this Agreement. 

  

			
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 Exhibit 10.1 
  

 

	 	15.	CONDEMNATION: If, prior to the Closing Date, condemnation proceedings are commenced against any portion of the Property (except for road widening which does not result in the loss of parking or otherwise cause
Purchaser’s project to become non-conforming with the all dimensional requirements under the Village’s zoning ordinance), Purchaser may, at its option, terminate this Agreement by written notice to Seller within ten (10) business days
after Purchaser is advised of the commencement of such condemnation proceedings and the Earnest Money and all extension payments shall be refunded to Purchaser, or if Purchaser fails to give said notice of termination, Purchaser shall have the right
to proceed to consummate the purchase of the Property, in which event Purchaser may appear and defend any such condemnation proceedings, and any award in condemnation shall become the Property of Purchaser and assigned to Purchaser at Closing and
the Purchase Price shall not be reduced. 

  

	 	16.	 AS-IS DELIVERY: Seller has not made and does not and is unwilling to make any representations or
warranties as to the physical or any other condition of the Property or to any matter affecting or related to the Seller or the Property whatsoever, express or implied, including but not limited to matters relating to zoning and environmental
compliance (except as expressly provided in this Agreement), and Purchaser agrees to purchase the Property on and “AS-IS, WHERE IS” and “WITH ALL FAULTS” basis as of the date of Closing. IN PARTICULAR, EXCEPT AS
EXPRESSLY PROVIDED IN SECTION 13, SELLER HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY, OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, OF, AS TO, OR CONCERNING (I) THE NATURE AND CONDITION OF THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF, FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY ELECT TO CONDUCT THEREON, (II) THE NATURE AND EXTENT OF ANY RIGHT-OF-WAY, ENCUMBRANCE, RESERVATION, CONDITION OR
OTHERWISE, (III) THE COMPLIANCE OF THE PROPERTY OR THE OPERATION THEREOF WITH ANY LAWS, RULES, ORDINANCES, OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY, INCLUDING WITHOUT LIMITATION, ZONING REGULATIONS AND ORDINANCES, (IV) ANY AND ALL
ENVIRONMENTAL CONDITIONS WHICH MAY EXIST ON, UNDER OR ADJACENT TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE EXISTENCE OR NONEXISTENCE OF “HAZARDOUS SUBSTANCES,” “HAZARDOUS MATERIALS,” “TOXIC SUBSTANCES,” OR
“SOLID WASTE” AS SUCH TERMS ARE DEFINED IN THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980M AS AMENDED BY SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT OF 1986, THE RESOURCE CONSERVATION AND RECOVERY ACT OF
1976, AND THE HAZARDOUS MATERIALS TRANSPORTATION ACT, AND ANY OTHER FEDERAL, STATE OR LOCAL STATUTE, ORDINANCE, CODE, RULE, REGULATION, ORDER OR DECREE REGULATING, RELATING TO OR IMPOSING LIABILITY OR STANDARDS OF CONDUCT CONCERNING ANY HAZARDOUS,
TOXIC OR DANGEROUS WASTE, SUBSTANCE, CHEMICAL OR MATERIAL NOW OR HEREAFTER IN EFFECT, AND IN THE REGULATIONS PROMULGATED PURSUANT TO SUCH LAWS, ALL AS AMENDED, AND (V) THE FINANCIAL EARNING CAPACITY, EXPENSE HISTORY OR THE OPERATION OF THE
PROPERTY. THE CONVEYANCE OF THE PROPERTY IS MADE ON AN “AS-IS/WHERE-IS/WITH ALL FAULTS” BASIS AND IN ITS PRESENT CONDITION. PURCHASER EXPRESSLY ACKNOWLEDGES, IN CONSIDERATION OF THE AGREEMENTS OF SELLER HEREIN, THAT SELLER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED OT, ANY WARRANTY OR CONDITION, HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY. PURCHASER
ACKNOWLEDGES, WARRANTS AND REPRESENTS TO SELLER THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NO REPRESENTATIONS HAVE BEEN MADE BY SELLER, ITS AGENTS, BROKERS, OR EMPLOYEES IN ORDER TO INDUCE PURCHASER TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS 

  

			
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 Exhibit 10.1 
  

	 	CONTEMPLATED HEREIN OTHER THAN AS MAY BE EXPRESSLY STATED HEREIN. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, PURCHASER ACKNOWLEDGES, WARRANTS AND REPRESENTS TO SELLER THAT NEITHER SELLER NOR ANY OF
SELLER’S AGENTS, BROKERS OR EMPLOYEES HAVE MADE ANY REPRESENTATIONS OR STATEMENTS TO PURCHASER CONCERNING THE PROPERTY’S INVESTMENT POTENTIAL OR RESALE AT ANY FUTURE DATE, AT A PROFIT OR OTHERWISE, NOR HAS SELLER OR ANY OF SELLER’S
AGENTS, BROKERS, OR EMPLOYEES RENDERED ANY ADVICE OR EXPRESSED ANY OPINION TO PURCHASER REGARDING ANY INCOME TAX CONSEQUENCES OF OWNERSHIP OF THE PROPERTY. PURCHASER ACKNOWLEDGES THAT PURCHASER HAD THE OPPORTUNITY TO CONDUCT A DILIGENT INVESTIGATION
OF THE PROPERTY WITH REGARD TO ITS CONDITION, PERMITTED USE AND SUITABILITY FOR PURCHASER’S INTENDED USE THEREOF, AS WELL AS TO ALL OTHER FACTORS DEEMED MATERIAL TO PURCHASER. PURCHASER IS NOT RELYING UPON ANY REPRESENTATIONS OF ANY KIND OR
NATURE MADE BY SELLER, OR ANY OF SELLER’S AGENTS, BROKERS OR EMPLOYEES WITH RESPECT TO THE PROPERTY, AND THAT, IN FACT, NO SUCH REPRESENTATIONS WERE MADE, EXCEPT AS MAY BE OTHERWISE EXPRESSLY PROVIDED HEREIN. 

 

	 	  	PURCHASER FURTHER ACKNOWLEDGES ANY AND ALL REPORTS SUPPLIED OR MADE AVAILABLE BY SELLER, WHETHER WRITTEN OR ORAL, OR IN THE FORM OF MAPS, SURVEYS, PLATS, SOIL REPORTS, ENGINEERING STUDIES, ENVIRONMENTAL STUDIES, OR
OTHER INSPECTION REPORTS PERTAINING TO THE PROPERTY (“REPORTS”) WERE OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND AMES NO REPRESENTATIONS OR
WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION AND THAT SUCH REPORTS WERE DELIVERED TO PURCHASER ON AN “AS-IS/WHERE-IS/WITH ALL FAULTS” BASIS SOLELY AS A COURTESY TO PURCHASER AND THAT SELLER HAS NEITHER VERIFIED THE
ACCURACY OF ANY STATEMENTS OR OTHER INFORMATION THEREIN CONTAINED, NOR ANY METHOD USED TO COMPILE THE REPORTS OR DETERMINED THE QUALIFICATIONS OF THE PERSON(S) PREPARING THE REPORTS AND SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, AS TO THE ACCURACY, COMPLETENESS OR ANY OTHER ASPECT OF THE REPORTS. 

  

	 	  	ANY FACTUAL INFORMATION SUCH AS PROPERTY DIMENSIONS, SQUARE FOOTAGE, OR SKETCHES SHOWN TO PURCHASER OR SET FORTH HEREIN ARE OR MAY BE APPROXIMATE AND PURCHASER REPRESENTS TO SELLER THAT IT HAS INSPECTED AND VERIFIED
SUCH FACTUAL INFORMATION PRIOR TO THE EXECUTION OF THIS AGREEMENT. THE SELLER, THE BROKER OR OTHER AGENTS OF SELLER ASSUME NO LIABILITY FOR ANY INACCURACIES, ERRORS OR OMISSIONS THEREIN CONTAINED. 

 

	 	17.	BROKER’S COMMISSION: Seller shall cause to be paid a broker’s commission to Inland Real Estate Brokerage & Consulting, Inc. and Flanagan Realty LLC (collectively, “Broker”)
upon and in accordance with the terms and conditions set forth in the separate listing agreement between Seller and Broker. Seller and Purchaser agree that all Brokers’ commissions shall be paid simultaneously with, and as a condition precedent
to, any disbursements made at Closing. This paragraph and disbursement instructions may not be amended or revoked without the prior written consent of Broker. Each party hereto agrees to indemnify the other party and all those parties claiming
through them from and against any claims by any other broker other than with whom the indemnifying party may have dealt. 

  

	 	18.	 AGENCY DISCLOSURE. The listing broker, Inland Real Estate Brokerage & Consulting, Inc. and its
sales agents (“Listing Company”) represent Seller. The Listing Company owes duties of 

  

			
		  	9

 Exhibit 10.1 
  

	 	trust, loyalty and confidence to Seller only. While the Listing Company has a duty to treat Purchaser honestly, the Listing Company is Seller’s auctioneer and is acting on behalf of Seller and not Purchaser. Any
cooperating broker will be recognized as a Purchaser’s agent. BY SIGNING BELOW, PURCHASER ACKNOWLEDGES PRIOR TIMELY NOTICE BY LISTING COMPANY THAT LISTING COMPANY IS SELLER’S AUCTIONEER. 

 

	 	19.	CONSULT YOUR ATTORNEY: THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT. READ IT CAREFULLY. NO REPRESENTATION OR RECOMMENDATION IS MADE BY SELLER, BROKER, THEIR AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS DOCUMENT OR THE TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR YOUR ATTORNEY. CONSULT YOUR ATTORNEY BEFORE SIGNING. NEITHER THE SELLER NOR THE BROKER CAN GIVE YOU ANY LEGAL ADVICE.

  

	 	20.	Survival. The representations, warranties and covenants contained in this Agreement shall survive Closing for a period of three (3) months and shall not merge upon the delivery of the deed for all or
any portion of the Property. 

  

	 	21.	NOTICES: Any notice to be given or served upon any party to this Agreement must be in writing and shall be deemed to have been given: (a) upon receipt in the event of personal service by actual delivery;
(b) the first business day after posting if deposited in the United States mail with proper postage and dispatched by certified mail, return receipt requested; (c) upon receipt of telecopy or email if a copy of such notice is also sent by
regular mail or overnight delivery service; or (d) upon receipt if notice is given other than by personal service or by certified mail. All notices shall be given to the parties at the addresses set forth at the beginning of this Agreement. Any
party to this Agreement may at any time change the address for notices to that party by giving notice in this manner. 

  

	 	22.	COOPERATION IN A TAX DEFERRED EXCHANGE: Purchaser and Seller herein reserve the right to consummate this transaction as part of a deferred exchange of like kind property as provided by Section 1031 of the
Internal Revenue Code, but in all events Seller shall receive cash at Closing. Both Purchaser and Seller agree to cooperate with each other in this regard at or prior to Closing and execute necessary documents as appropriate provided that the
non-exchanging party shall have no liability in connection with the execution of such exchange documents. Should there be any additional costs associated with this deferred exchange they will be borne solely by the party effectuating the exchange.
Purchaser hereby indemnifies and holds Seller harmless in connection with any matter concerning or arising out of such exchange or deferred exchange which indemnification shall survive the Closing. 

 

	 	23.	NO RECORDING: Neither this Agreement nor any type of memorandum thereof shall be recorded with the office of the Recorder of Deeds or with any other governmental agency, and any purported recordation or filing
hereof by Purchaser shall be deemed invalid and shall constitute a default on the part of Purchaser. 

  

	 	24.	ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the parties as to the subject matter hereof and supersedes all prior understandings and agreements. There are no representations,
agreements arrangements or understandings oral or written between the parties, including the Broker, relating to the subject matter contained in this Agreement that is not fully expressed or referred to herein. 

 

	 	25.	 SUCCESSORS AND ASSIGNS: The provisions of this Agreement shall bind and inure to the benefit of Purchaser
and Purchaser’s heirs, legal representatives, successors and permitted assigns and shall bind and inure to the benefit of the Seller and Seller’s heirs, legal representatives, its successors and assigns. Purchaser may not assign this
Agreement without 

  

			
		  	10

 Exhibit 10.1 
  

	 	prior written consent of Seller, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Purchaser may assign this Agreement to an affiliated entity, without requiring Seller’s consent.

  

	 	26.	JOINT PURCHASERS: The term “Purchaser” shall be read as “Purchasers” if more than one person is the Purchaser of the Property, in which case their obligations shall be joint and several.

  

	 	27.	FURTHER ASSURANCES: Either party shall execute, acknowledge and deliver to the other party such instruments and take such other actions, in addition to the instruments and actions specifically provided for herein
at any time and from time to time after execution of this Agreement whether before or after the Closing, as such other party may reasonably request in order to effectuate the provisions of this Agreement or the transaction contemplated herein or to
confirm or perfect any right to be created or transferred hereunder or pursuant to this transaction, provided that neither party shall be required to incur any material expense in connection therewith. 

 

	 	28.	SEVERABILITY: If any clause or provision of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction as against any person or under any circumstances, the remainder of this
Agreement and the applicability of any such clause or provision to other persons or circumstances shall not be affected thereby. All other clauses or provisions of this Agreement, not found invalid or unenforceable shall be and remain valid and
enforceable. 

  

	 	29.	TIME: Time is of the essence of this Agreement. 

  

	 	30.	STRICT COMPLIANCE / WAIVER: Any failure by either party to insist upon strict performance by the other party of any of the provisions of this Agreement shall not be deemed a waiver of any of the provisions
hereof, irrespective of the number of violations or breaches that may occur, and each party, notwithstanding any such failure, shall have the right thereafter to insist upon strict performance by the other of any and all of the provisions of this
Agreement. 

  

	 	31.	GOVERNING LAW: The provisions of this Agreement and all questions with respect to the construction and enforcement thereof and the rights and liabilities of the parties hereto shall be governed by, and construed
and enforced in accordance with, the laws of the State of Illinois. 

  

	 	32.	WAIVER OF JURY TRIAL: EXCEPT AS PROHIBITED BY LAW, THE PARTIES SHALL, AND THEY HEREBY DO, EXPRESSLY WAIVE TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF, CONNECTED WITH, OR RELATING TO THIS AGREEMENT OR THE
RELATIONSHIP CREATED HEREBY. WITH RESPECT TO ANY MATTER FOR WHICH A JURY TRIAL CANNOT BE WAIVED, THE PARTIES AGREE NOT TO ASSERT ANY SUCH CLAIM AS A COUNTERCLAIM IN, NOR MOVE TO CONSOLIDATE SUCH CLAIM WITH, ANY ACTION OR PROCEEDING IN WHICH A JURY
TRIAL IS WAIVED. 

  

	 	33.	ATTORNEYS FEES: A party to this Agreement who is the prevailing party in any legal proceeding against any other party brought under or with respect to this Agreement or the transaction contemplated hereby shall
be additionally entitled to recover court costs and reasonable attorneys’ fees from the non-prevailing party. 

  

	 	34.	GENDER: A reference in this Agreement to any one gender, masculine, feminine or neuter, includes the other two, and the singular includes the plural, and vice versa, unless the context requires otherwise.

  

	 	35.	 CERTAIN REFERENCES: The term “herein”, “hereof” or “hereunder” or similar
terms used in this Agreement refer to this entire Agreement and not to the particular provision in which the term 

  

			
		  	11

 Exhibit 10.1 
  

	 	is used. Unless otherwise stated, all references herein to paragraphs, subparagraphs or other provisions are references to paragraphs, subparagraphs or other provisions of this Agreement. 

 

	 	36.	CAPTIONS: The captions in this Agreement are for convenience and reference only and in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof. 

 

	 	37.	NO ORAL CHANGES: This Agreement cannot be changed or any provision waived orally. ANY CHANGES OR ADDITIONAL PROVISIONS OR WAIVERS MUST BE SET FORTH IN A RIDER ATTACHED HERETO OR IN A SEPARATE WRITTEN AGREEMENT
SIGNED BY THE PARTIES. 

  

	 	38.	EXHIBITS: All Exhibits described herein and attached hereto are incorporated herein by this reference for all purposes. 

  

	 	39.	DAYS: Whenever this Agreement requires that something be done within a specified period of days, that period shall (a) not include the day from which the period commences, (b) include the day upon which
the period expires, (c) expire at 5:00 p.m. local time on the day upon which the period expires, and (d) except as otherwise provided for herein, be construed to mean calendar days; provided, that if the final day of the period falls on a
Saturday, Sunday or legal holiday, the period shall extend to the first business day thereafter. 

  

	 	40.	COUNTERPARTS: This Agreement may be executed in multiple counterparts all of which when taken together shall constitute one Agreement. 

 

	 	41.	COUNTERPART FACSIMILE EXECUTION: For purposes of executing this Agreement, a document signed and transmitted by facsimile machine shall be treated as an original document. The signature of any party thereon shall
be considered as an original signature, and the document transmitted shall be considered to have the same binding legal effect as an original signature on an original document. At the request of either party, any facsimile document shall be
re-executed by both parties in original form. No party hereto may raise the use of a facsimile machine or the fact that any signature was transmitted through the use of a facsimile machine as a defense to the enforcement of this Agreement or any
amendment executed in compliance with this paragraph. This paragraph does not supersede the requirements of Section 21, Notices, of this Agreement. 

  

	 	42.	EFFECTIVE DATE: The Effective Date of this Agreement shall be the last date on which both Seller and Purchaser have executed this Agreement. 

 

	 	43.	LIMITATION ON LIABILITY: Notwithstanding any provision contained in this contract or any of the documents to be executed by Seller at Closing (collectively, the “Sale Document”) the
representations, warranties, indemnities, undertakings, covenants and agreements of Seller (collective, “Seller’s Undertakings”) under the Sales documents shall not constitute personal obligations of the officers,
directors, employees, agents, trustee, partners (direct or indirect), members (direct or indirect), representatives, stockholders, or other principals or representatives of Seller, and no personal liability or personal responsibility of any sort
with respect to any of Seller’s Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against any of the officers, directors, employees, agents, trustees, partners, members, representatives,
stockholders or other principals or representatives of Seller. 

  

	 	  	 Notwithstanding any provision contained in this Agreement or any of the documents to be executed by Purchaser at
Closing (collectively, the “Purchase Documents”) the representations, warranties, indemnities, undertakings, covenants and agreements of Purchaser (collectively, “Purchaser’s Undertakings”) under
the Purchase Documents shall not constitute personal obligations of the officers, directors, employees, agents, trustee, partners (direct or indirect), 

  

			
		  	12

 Exhibit 10.1 
  

	 	members (direct or indirect), representatives, stockholders, or other principals or representatives of Purchaser, and no personal liability or personal responsibility of any sort with respect to any of Purchaser’s
Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against any of the officers, directors, employees, agents, trustees, partners, members, representatives, stockholders or other principals or
representatives of Purchaser. 

  

			
		  	13

 Exhibit 10.1 
  

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Real Estate Purchase and Sale Agreement on the
dates listed below, to be effective as of the date signed by the Seller. 
  

			
	PURCHASER: S.R. Jacobson Development Corp., a Michigan corporation on behalf of an entity to be named
		
	              /s/ Scott R.
Jacobson                                        
	  	
		  	
	              Scott R.
Jacobson                                        
    	  	
	                  (Print Name)	  	
		
	PURCHASER’S ADDRESS:	  	PURCHASER’S PHONE:
		
	32400 Telegraph Road, Suite 100                              	  	Phone:        248-642-4700                          
      
		
	Bingham Farms, MI
48025                                        
  	  	Fax:            248-642-1586                      
          

 DATE PURCHASER SIGNS THIS AGREEMENT:
                                January 5,
2017                             

PURCHASER’S ATTORNEY:
                        Mark Cohn, Seyburn
Kahn                                         
            

			
		
	ATTORNEY’S ADDRESS:	  	ATTORNEY’S PHONE:
		
	2000 Town Center, Suite
1500                                    	  	Phone:        248-353-7620               
             
		
	Southfield. MI
48075                                        
            	  	Fax:            248-353-3727           
                 

 SELLER: Montgomery Sterling, L.L.C., an Illinois limited liability company 

              By:        Inland Land
Appreciation Fund II, L.P., a Delaware limited partnership, its sole member 

              By:        Inland Real Estate
Investment Corporation, a Delaware corporation, its general partner 
  

	
	
	              By:             /s/ Guadalupe
Griffin                                        
        
	              Name:               Guadalupe
Griffin                                        
    
	              Its:                 Senior Vice
President                                        
    

  

			
	SELLER’S ADDRESS:	  	SELLER’S PHONE:
	  2901 Butterfield Road                             	  	     Phone:   630.218.4837                          
                    
	  Oak Brook, Illinois 60523                        	  	         Fax:   630-574-9677                       
                       
	  Attn: Guadalupe Griffin                           	  	      Email:   griffin@inlandgroup.com                        
     

 DATE SELLER SIGNS THIS AGREEMENT:
                                        
          January 10,
2017                                       

SELLER’S ATTORNEY:   David Neboyskey c/o The Inland Real Estate Group,
Inc.                                         
              
 [Continued below] 

  

			
		  	14

 Exhibit 10.1 
  

					
	  ATTORNEY’S ADDRESS:	  	ATTORNEY’S PHONE:
	  2901 Butterfield Road                  	  	    Phone:	 	   630.218.8000 ext.
4760                                        

	  Oak Brook, Illinois 60523            	  	    Fax:	 	   630.218.4900
                                         
               
	  Attn: David Neboyskey                	  	 Email:	 	   dneboyskey@inlandgroup.com                           

 BROKER: 

Inland Real Estate Advisors, Inc. 

2901 Butterfield Road 
 Oak
Brook, IL 60523 
 (630) 990-8400 Phone (630) 990-5350 Fax 

  

			
		  	15

 Exhibit A 

PROPERTY IDENTIFICATION NUMBERS (PINs) 

03-02-203-002 
 03-02-202-001 

03-02-204-001 
 03-02-100-028 

  

			
		  	16Exhibit

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ARIZONA PUBLIC SERVICE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

ARIZONA PUBLIC SERVICE COMPANY 

4.350% Note due 2045
	
		
	No. 2
	$250,000,000

	 
	CUSIP No. 040555 CT9

    
Arizona Public Service Company, a corporation duly organized and existing under the laws of the State of Arizona (the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Two Hundred Fifty Million Dollars ($250,000,000) on November 15, 2045, and to pay interest thereon and on any overdue interest from November 15, 2016 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on May 15 and November 15 of each year, commencing May 15, 2017, at the rate of 4.350% per annum, until the principal hereof is paid or made available for payment. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months.  

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 1 or November 1, as the case may be, immediately preceding the Interest Payment Date (whether or not a Business Day). Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any 

securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

Payment of the principal of (and premium, if any) and any interest on this Security will be made at the office or agency of the Company maintained for that purpose through the corporate trust office of the Trustee, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by wire transfer to any Holder or by deposit to the account of the Holder of any such Securities if such account is maintained with the Trustee, in each case according to the written instructions given by such Holder on or prior to the applicable record date to the Trustee, which written instructions shall remain in effect until revised by such Holder by an instrument in writing delivered to the Trustee.
Reference is hereby made to the further provisions of this Security set forth following the Company’s signature hereto, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to following the Company’s signature hereto by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
	
	
	ARIZONA PUBLIC SERVICE COMPANY

	 

	By: /s/ Lee R. Nickloy

	Lee R. Nickloy

	Vice President and Treasurer

	
	
	Attest:

	 

	/s/ Shirley A. Baum

	Shirley A. Baum

	Associate Secretary

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of January 15, 1998 (such instrument as originally executed and delivered and as supplemented or amended from time to time, the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., successor to JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank), as Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a description of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the 

Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof. 
The Company may redeem all or any portion of the Securities of this series, at its option, at any time or from time to time, (A) prior to May 15, 2045, at a Redemption Price equal to the greater of (a) 100% of the principal amount of the Securities of this series being redeemed on the Redemption Date or (b) the sum of the present values of the remaining scheduled payments of principal and interest on the Securities of this series being redeemed on that Redemption Date (not including the portion of any payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semiannual basis at the Adjusted Treasury Rate plus 25 basis points, as determined by a Reference Treasury Dealer appointed by the Company for such purpose; and (B) on or after May 15, 2045, at a Redemption Price equal to 100% of the principal amount of the Securities of this series being redeemed on the Redemption Date; plus, in each case, accrued and unpaid interest thereon to the Redemption Date.  Notwithstanding the foregoing, installments of interest on Securities of this series that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the Holders as of the close of business on the relevant record date in accordance with the terms of the Securities of this series and the Indenture.  The Redemption Price will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

If notice has been given as provided in the Indenture and funds for the redemption of any Securities of this series (or any portion thereof) called for redemption shall have been made available on the Redemption Date referred to in such notice, such Securities (or any portion thereof) will cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the Holders of such Securities will be to receive payment of the Redemption Price.
Notice of any optional redemption of Securities of this series (or any portion thereof) will be given to Holders at their addresses, as shown in the Security Register for such Securities, not more than 60 nor less than 30 days prior to the date fixed for redemption. The notice of redemption will specify, among other items, (i) the Redemption Price or the manner of calculation of the Redemption Price and (ii) the principal amount of the Securities of this series held by such Holder to be redeemed if less than all of such Securities.  If less than all of the Securities of this series are to be redeemed at the option of the Company, the Securities to be redeemed will be selected in accordance with the procedures of the Depositary.  
As used herein:
“Adjusted Treasury Rate” means, with respect to any applicable Redemption Date, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.
“Comparable Treasury Issue” means the U.S. Treasury security selected by a Reference Treasury Dealer appointed by the Company for such purpose as having a maturity comparable to the remaining term of this Security to be redeemed that would be utilized, at the time of selection 

and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Security.
“Comparable Treasury Price” means, with respect to any applicable Redemption Date, (A) if the Company obtains three or more Reference Treasury Dealer Quotations, the average of such Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, (B) if the Company obtains two such Reference Treasury Dealer Quotations, the average of such quotations, or (C) if only one Reference Treasury Dealer Quotation is received, such quotation.
“Primary Treasury Dealer” means a primary U.S. government securities dealer in the United States.
“Reference Treasury Dealer” means (A) a Primary Treasury Dealer selected by BNP Paribas Securities Corp., a Primary Treasury Dealer selected by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Primary Treasury Dealer selected by Mizuho Securities USA Inc. and a Primary Treasury Dealer selected by Scotia Capital (USA) Inc.; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the Company.
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any applicable Redemption Date, the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third Business Day preceding such Redemption Date.
The Securities of this series will not be subject to any sinking fund.
In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security and certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.
The Indenture contains provisions limiting the Company’s ability to issue, assume, guarantee or permit to exist any Debt secured by any mortgage, security interest, pledge or lien upon any of its Operating Property, subject to the exceptions and qualifications set forth in the Indenture.
If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee without the consent of such Holders in certain circumstances, or with the consent of the Holders of 66-2/3% in principal amount of the affected Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the affected Securities at the time Outstanding, on behalf of the Holders of all such Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy under the Indenture, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable 

for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes, whether or not this Security be overdue, and none of the Company, the Trustee or any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Form of Trustee’s Certificate of Authentication.

CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
	
					
	Dated:
	March 21, 2017
	 
	THE BANK OF NEW YORK MELLON

	 
	 
	 
	TRUST COMPANY, N.A.,

	 
	 
	 
	 
	 

	 
	 
	 
	 
	As Trustee

	 
	 
	 
	 
	 

	 
	 
	 
	By:  /s/ Valere Boyd

	 
	 
	 
	 
	Authorized Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00268-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00268-of-00352.parquet"}]]