Document:

CINAV 2012 10Q Q3 Exhibit 10.1

Exhibit 10.1

SECOND MODIFICATION AGREEMENT
DATE:                        September 6, 2012
		
	PARTIES:      Borrower:
	COLE REAL ESTATE INCOME STRATEGY (DAILY NAV) OPERATING PARTNERSHIP, LP, a Delaware limited partnership

Administrative Agent        JPMORGAN CHASE BANK, N.A., a national 
for the Lenders:        banking association
Lenders:            JPMORGAN CHASE BANK, N.A., a national 
banking association 

RECITALS
A.The Lenders have extended to Borrower a revolving line of credit ("Loan") in a maximum principal amount not to exceed $50,000,000.00 at any time pursuant to that Borrowing Base Revolving Line of Credit Agreement dated December 8, 2011, among Borrower, Administrative  Agent  and  the  Lenders  defined  therein,  as  modified  by  that  Modification Agreement  (the  "First  Modification")  dated  March  20,  2012  (as  modified,  the  "Loan Agreement"), and evidenced by the Notes.  The unpaid principal of the Loan as of September 6, 2012 was $21,440,300.00.  All undefined capitalized terms used herein shall have the meaning given them in the Loan Agreement.

B.The Loan is secured by the property described in certain of the Loan Documents.

C.The following Repayment Guaranties (severally and collectively, the "Repayment Guaranty") were executed and  delivered  by  the  following Guarantors to Administrative Agent for the benefit of the Lenders: (i) Repayment Guaranties dated as of December 8, 2011, executed by   COLE   REAL   ESTATE   INCOME   STRATEGY   (DAILY   NAV),   INC.,   a   Maryland  corporation,  COLE  WG  ALBUQUERQUE  (3400  COORS)  NM,  LLC,  a  Delaware  limited liability company,  COLE  CV  AUSTIN  TX,  LLC,  a  Delaware limited liability company,  COLE TS LOCKHART TX, LLC, a Delaware limited liability company, and COLE WG REIDSVILLE NC,  LLC,  a  Delaware  limited  liability  company;  (ii)  Repayment  Guaranties  dated  as  of December 9, 2011, executed by COLE TS BRUNSWICK GA, LLC, a Delaware limited liability company, COLE CV ERIE PA, LLC, a Delaware limited liability company, COLE CV MANSFIELD OH, LLC, a Delaware limited liability company, and COLE MT SAN ANTONIO TX,  LLC,  a  Delaware  limited  liability  company;  and  (iii)  Repayment  Guaranty  dated  as  of December  20,  2011,  executed  by  COLE  AA  MACOMB  TOWNSHIP  MI,  LLC,  a  Delaware limited liability company.
D.Borrower  has  requested  that  Administrative  Agent  and  the  Lenders  modify  the Loan and the Loan Documents as provided herein.  Administrative Agent and the Lenders are 

willing  to  so  modify  the  Loan  and  the  Loan  Documents,  subject  to  the  terms  and  conditions herein.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, Administrative Agent and Lenders agree as follows:
		
	SECTION 1. 
	ACCURACY OF RECITALS.

Borrower acknowledges the accuracy of the Recitals.
		
	SECTION 2. 
	MODIFICATION OF LOAN DOCUMENTS.

2.1The  following  definitions  set  forth  in  Section  1.1  of  the  Loan  Agreement  are hereby amended in their entirety to read as follows:
"Applicable Margin"  means,  for  any  day,  (a)  with  respect  to  Eurodollar Borrowings, the rate per annum set forth below under the heading "Eurodollar Margin" opposite the applicable period then in effect, and (b) with respect to Floating Rate Borrowings,  the  rate  per  annum  set  forth  below  under  the  heading  "Floating  Rate Margin"  opposite  the  applicable  period  then  in  effect;  provided,  however,  that  no reduction in the Applicable Margin shall occur after the occurrence and during the continuance of a Default:
	
			
	Period
	Eurodollar Margin
	Floating Rate Margin

	 
	 
	 

	Tier 1 Period
	2.70%
	1.70%

	Tier 2 Period
	2.55%
	1.55%

"Cost Advance" means, for each Qualified Property (i) during the Tier 1 Period, seventy percent (70%) of the Acquisition Costs of such Qualified Property as reasonably determined by Administrative Agent, and (ii) during the Tier 2 Period, sixty-five percent (65%) of the Acquisition Costs of such Qualified Property as reasonably determined by Administrative Agent.
"Debt Coverage Amount" means (i) during the Tier 1 Period, the greater of (a) a 9.50%  Debt  Yield,  and  (b)  a  Debt  Service  Coverage  Ratio of 1.15 to 1.0, and (ii) during the Tier 2 Period, the greater of  (a)  a  10.25%  Debt  Yield,  and  (b)  a  Debt Service Coverage Ratio of 1.25 to 1.0.
"EBITDA" means, with respect to the Consolidated Group for any period, consolidated  net  income of the Consolidated Group as determined in accordance with GAAP, as adjusted by adding or  deducting for,  as  appropriate,  any  adjustment made under  GAAP  during such period for interest, taxes, depreciation, amortization, straight lining of  rents,  gains  or  losses from sales of assets,  extraordinary items, impairment of real estate assets, other non-cash items, fees and expenses associated with the transaction contemplated  by  this  Agreement,  managements  fees and  expenses and real estate acquisition  costs  and  expenses and the Consolidated  Group Pro  Rata  Share  of  interest, 

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taxes,  depreciation,  amortization, straight lining of rents, gains or losses from sales of assets, extraordinary items, impairment of real estate assets, other non-cash items, management fees and expenses and real estate acquisition costs and expenses for the Investment Affiliates.  To  the  extent  previously  adjusted,  all  of  the  above  described modifiers  to  such  consolidated  net  income  are as derived from CREIS's books and records, which books and records are to be maintained in accordance with GAAP.
"First Adjustment Date" means the earlier of (i) January 8, 2013, or (ii) provided that Borrower is in compliance with the terms and provisions of this Agreement  and  no  Event  of  Default  or  Unmatured  Event  of  Default shall exist, the  date  selected  by  Borrower by written notice to Administrative Agent.  Any such election by Borrower shall be irrevocable.
"Value Advance" means, for each Qualified Property (i) during the Tier 1 Period, seventy percent  (70%) of the Appraised  Value of such Qualified Property as determined by Administrative Agent from time to time in accordance with this Agreement, and (ii) during the Tier 2 Period, sixty-five percent (65%) of the Appraised  Value of such  Qualified  Property  as  determined  by Administrative Agent from time to time in accordance with this Agreement.
2.2The following definitions are hereby intentionally deleted from Section 1.1 of the Loan Agreement:
"CMBS Securities"
"Second Adjustment Date"
"Tier 3 Period"
2.3Section 3.2(a)(ii) of the Loan Agreement is hereby amended in its entirety to read as follows:
(ii)    Not less than sixty-five percent (65%) of the aggregate NOI of the Qualified  Properties  comprising  Eligible  Collateral  (as adjusted if necessary to take into account the applicable pro rata share of expenses for Multi-Tenant Properties) shall be attributable to Leases with Credit Tenants;
2.4Section  4.2(c)  of  the  Loan  Agreement  is  hereby  intentionally  deleted  in  its entirety. 
2.5Section  6.16(b)  of  the  Loan  Agreement  is  hereby amended in its entirety to read as follows:
(b)    Leverage Requirement.  As  of  the  end  of  each  fiscal  quarter  of CREIS' commencing with the fiscal quarter ending September 30, 2011, Total Liabilities shall not exceed (i) 75% of CREIS' Total Asset Value during the Tier 1 Period, and (ii) 70% of CREIS' Total Asset Value during the Tier 2 Period.

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2.6The  last  provision  of  Section  7.8(i)  of  the  Loan Agreement, immediately following clause (iv), is hereby amended in its entirety to read as follows:
provided, that, notwithstanding anything to the contrary contained herein, the  value of the Investments permitted pursuant to clauses (i)-(iv) above shall not,  in any case, exceed an amount equal  to  30% of CREIS' Total Asset  Value  provided,  that  no  Blackrock Investments shall be applied to such limitation or any other limitation under this Subsection (i); and
2.7Section 2.3 of the First Modification is hereby intentionally deleted in its entirety.
2.8This  Agreement  shall  constitute  one  of  the  Loan  Documents  as  that  term  is defined in the Loan Agreement.
2.9Each reference in the Loan Documents to any of the Loan Documents is hereby amended to be a reference to such document as modified herein.
		
	SECTION 3. 
	RATIFICATION OF LOAN DOCUMENTS AND COLLATERAL.

The Loan Documents are ratified and affirmed by Borrower and shall remain in full force and  effect  as  modified  herein.   Any  property or rights to or interests in property granted as security  in  the  Loan Documents shall remain as  security for the Loan and the obligations of Borrower in the Loan Documents.
		
	SECTION 4. 
	BORROWER REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants to Administrative Agent and the Lenders:
4.1No  Event  of  Default  or  Unmatured  Event  of  Default  has  occurred  and  is continuing.
4.2There has been no material adverse change in the financial condition of Borrower or any other person whose financial statement has been delivered to Administrative Agent in connection with the Loan from the most recent financial statement received by Administrative Agent.
4.3All representations and warranties made by Borrower and set forth in the Loan Documents  are true and  correct  in all material respects  on the date hereof, except to the extent such representations and warranties refer to an earlier date, in which case they shall be true and correct, in all material respects, as of such earlier date.
4.4As  of  the date hereof, Borrower  knows  of no  claims, counterclaims, defenses, or set-offs with respect to the Loan or the Loan Documents as modified herein.
4.5The Loan Documents as modified  herein  are  the  legal,  valid,  and  binding  obligation  of Borrower,  enforceable  against Borrower in accordance with their terms, subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to  or  affecting  the rights  of  creditors  generally and by equitable principles of general application.

-4-

4.6Borrower is validly existing under the laws of the State of its formation or organization and has the requisite power and authority to execute and deliver this Agreement and to perform  the Loan Documents as modified herein.   The  execution  and  delivery  of  this  Agreement and the performance of the Loan Documents as modified herein have been duly authorized by all requisite action by or on behalf of Borrower.  This Agreement has been duly executed and delivered on behalf of Borrower.
		
	SECTION 5. 
	CONDITIONS PRECEDENT.

The  agreements  of  Administrative  Agent and  the  Lenders  and  the  modifications  contained  herein  shall  not be binding upon Administrative Agent or the Lenders until Administrative Agent and Lenders have executed and delivered this Agreement, and the Administrative Agent has received, at Borrower's expense, all of the following, all of which shall be in form and content satisfactory  to the  Administrative Agent and shall be subject to approval by the Administrative Agent:
5.1An original of this Agreement fully executed by Borrower;
5.2An  original  of the attached Consent and Agreement of Guarantor fully executed by Guarantors;
5.3Such other documents as Administrative Agent or the Lenders may reasonably request;
5.4Such  resolutions  or  authorizations  and  such  other  documents   as  the Administrative Agent may require relating to the existence and good standing of Borrower,  and  the authority of any person executing this Agreement or other documents on behalf of Borrower; and
5.5Payment of all reasonable out-of-pocket external  costs and expenses incurred by the Administrative Agent in  connection  with  this  Agreement (including,  without limitation,  outside attorneys costs, expenses, and fees).
		
	SECTION 6. 
	INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.

The  Loan  Documents  as modified  herein contain the complete understanding and agreement of Borrower, Administrative  Agent  and  the Lenders in  respect of  the  Loan and supersede all prior representations, warranties, agreements, arrangements, understandings, and negotiations.   No provision  of the Loan  Documents  as  modified  herein may be changed, discharged, supplemented,  terminated,  or  waived  except as provided in the Loan Agreement.   The terms of this Agreement shall control with respect to any inconsistencies, conflicts or ambiguities between or among the Agreement and the other Loan Documents.
		
	SECTION 7. 
	BINDING EFFECT.

The Loan  Documents  as  modified herein shall be binding upon and shall inure to the benefit of Borrower, Administrative Agent and the Lenders and their permitted successors and assigns.

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	SECTION 8. 
	CHOICE OF LAW.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF ARIZONA, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES OF THE STATE OF ARIZONA.
		
	SECTION 9. 
	COUNTERPART EXECUTION.

This Agreement may be executed in one or more counterparts, each of which shall  be deemed  an  original and all of which together  shall constitute one and the  same  document.  Signature pages may be detached from the counterparts and attached to a single copy of this Agreement to physically form one document.
DATED as of the date first above stated.
BORROWER:

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV) OPERATING PARTNERSHIP, LP, a Delaware limited partnership

		
	BY:
	COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC., a Maryland corporation, General Partner

By: /s/ D. KirkMcAllaster, Jr.                        
Name:    D. Kirk McAllaster, Jr.
Title:    Chief Financial Officer

ADMINISTRATIVE AGENT AND LENDER:

JPMORGAN CHASE BANK, N.A., a national banking association

By: /s/ Ryan M. Dempsey                             
Name:    Ryan M. Dempsey
Title:    Authorized Officer

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CONSENT AND AGREEMENT OF GUARANTOR
With respect to the Second Modification Agreement, dated September 6, 2012 (the "Agreement"), among COLE REAL ESTATE INCOME STRATEGY  (DAILY  NAV)  OPERATING PARTNERSHIP, LP, a Delaware limited partnership ("Borrower"), the Lenders a party thereto and JPMORGAN CHASE BANK, N.A., a national banking association ("Administrative Agent") (as Administrative Agent for the Lenders (the "Lenders")), the undersigned  (severally  and  collectively  "Guarantor")  agrees  for  the  benefit of Lenders as follows:
1.Guarantor acknowledges  (i)  receiving a copy of and reading the Agreement, (ii) the accuracy of the Recitals in the Agreement, and (iii) the effectiveness of (A) its Repayment Guaranty as modified herein, and (B) any other agreements, documents, or instruments securing  or  otherwise relating to such Repayment Guaranty, (including, without limitation, any environmental indemnity agreement previously executed and delivered by the undersigned), as modified herein.  Each Repayment Guaranty and such other agreements, documents, and instruments, as modified herein, are referred to individually and collectively as the "Guarantor Documents."
2.Guarantor consents to the modification of the Loan Documents as provided in the Agreement and all other matters in the Agreement.
3.Guarantor agrees that all references, if any, to the Notes, the Loan Agreement and the Loan Documents in the Guarantor Documents shall be deemed to refer to such agreements, documents, and instruments as modified and/or replaced by or pursuant to the Agreement.
4.Guarantor reaffirms the Guarantor Documents and agrees that the Guarantor Documents continue in  full  force  and effect  and remain unchanged,  except  as specifically  modified by this Consent and Agreement of Guarantor.  
5.Guarantor agrees that the Guarantor Documents, as modified by this Consent and Agreement of Guarantor, are the legal, valid, and binding  obligations of the undersigned,  enforceable in accordance with their terms against the undersigned, subject to or limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors generally and by equitable principles of general application.
6.Guarantor agrees that, as of the date hereof, Guarantor knows of no claims, counterclaims, defenses, or offsets with respect to the enforcement against Guarantor of the Guarantor Documents.
7.Guarantor represents and warrants that there has been no material adverse change in the financial condition of any Guarantor from the most recent financial statement received by Administrative Agent.
8.Guarantor agrees that this Consent and Agreement of Guarantor may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same document.   Signature and  acknowledgment  pages may be   

detached from the counterparts and attached to a single copy of this Consent and Agreement of Guarantor(s) to physically form one document.
DATED as of the date of the Agreement.
GUARANTOR:

COLE REAL ESTATE INCOME STRATEGY (DAILY NAV), INC., a Maryland corporation

By: /s/ D. KirkMcAllaster, Jr.                        
Name:    D. Kirk McAllaster, Jr.
Title:    Chief Financial Officer

COLE WG ALBUQUERQUE (3400 COORS) NM, LLC, a Delaware limited liability company

		
	By:  
	Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

COLE CV AUSTIN TX, LLC, a Delaware limited liability company

		
	By:  
	Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

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COLE TS LOCKHART TX, LLC, a Delaware limited liability company

		
	By:  
	Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

COLE WG REIDSVILLE NC, LLC, a Delaware limited liability company

By:  Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

COLE TS BRUNSWICK GA, LLC, a Delaware limited liability company

		
	By:  
	Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

-3-

COLE CV ERIE PA, LLC, a Delaware limited liability company

By:  Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

COLE CV MANSFIELD OH, LLC, a Delaware limited liability company

By:  Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

COLE MT SAN ANTONIO TX, LLC, a Delaware limited liability company

By:  Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

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COLE AA MACOMB TOWNSHIP MI, LLC, a Delaware limited liability company

		
	By:  
	Cole Real Estate Income Strategy (Daily NAV) Advisors, LLC, a Delaware limited liability company, its Manager

By: /s/ John M. Pons                                  
Name:    John M. Pons
Title:    Executive Vice President

-5-DATED October 5, 2012

 

 

 

 

 

 

 

		(1)	liverpool victoria friendly society limited

 

		(2)	arc mccaruk001 llc

 

 

 

 

 

 

 

 

 

 

 

 

 

AGREEMENT

for the sale of

Unit 1 58/62 Scotch Street

Carlisle

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 	

    
  

 

 

CONTENTS

 

 

	Clause	Page
	 	 
	1.	DEFINITIONS AND INTERPRETATION	1
	 	 	 
	2.	SALE AND PURCHASE OF THE PROPERTY	2
	 	 	 
	3.	COMPLETION	2
	 	 	 
	4.	STANDARD CONDITIONS	3
	 	 	 
	5.	COVENANTS FOR TITLE	4
	 	 	 
	6.	TITLE	4
	 	 	 
	7.	MATTERS AFFECTING THE PROPERTY	4
	 	 	 
	8.	COVENANTS TO BE INCLUDED IN THE TRANSFER	4
	 	 	 
	9.	INSURANCE	4
	 	 	 
	10.	APPORTIONMENT OF RENT	5
	 	 	 
	11.	ARREARS	6
	 	 	 
	12.	LOCAL LAND CHARGES  NOTICES  ORDERS AND OTHER MATTERS	6
	 	 	 
	13.	REPRESENTATIONS	6
	 	 	 
	14.	NON-ASSIGNMENT AND NON-MERGER	7
	 	 	 
	15.	NOTICES	7
	 	 	 
	16.	VARIATIONS TO THIS AGREEMENT	7
	 	 	 
	17.	LAW AND JURISDICTION	8
	 	 	 
	18.	INCORPORATION OF SCHEDULES	8
	 	 	 
	19.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999	8
	 	 	 
	20.	CONFIDENTIALITY	8
	 	 	 
	SCHEDULE 1 - The Property	11
	 	 
	SCHEDULE 2 - Documents to which the Property is sold subject	12
	 	 
	SCHEDULE 3 - Letting Documents	13
	 	 
	SCHEDULE 4 - VAT	15
	 	 
	SCHEDULE 5 - Special Conditions	17

 

    	 

    	 	

    
 

PARTICULARS

 

	DATE	:	2012
	SELLER	:	LIVERPOOL VICTORIA FRIENDLY SOCIETY LIMITED an incorporated friendly society with reference 61 COL whose principal office is at County Gates Bournemouth BH1 2NF
	BUYER	:	ARC MCCARUK001 LLC a limited liability company registered in the State of Delaware whose registered office is at 2711 Centerville Road Suite 400 Wilmington Delaware 19808 USA 
	PROPERTY	:	Unit 1 58/62 Scotch Street Carlisle described in more detail in Schedule 1
	PRICE	:	ONE MILLION SIX HUNDRED THOUSAND POUNDS (£1,600,000)
	COMPLETION DATE	:	30 October 2012 subject to clause 3.5 of this agreement
	SELLER'S SOLICITORS	:	Lawrence Graham LLP whose registered office is at 4 More London Riverside London SE1 2AU (Ref: ELM/L563/290)
	BUYER'S SOLICITORS	:	Trowers & Hamlins LLP of 3 Bunhill Row London EC1Y 8YZ (Ref: JCA/ARC/01)

 

    	 

    	 	

    
 

THIS AGREEMENT is made on the date
and between the parties specified in the Particulars

 

IT IS AGREED as follows:

 

		1.	DEFINITIONS AND INTERPRETATION

 

		1.1	In this agreement unless the context otherwise requires the following terms shall have the following
meanings:

 

	 	"Actual Completion"	the date on which completion of the sale and purchase of the Property pursuant to this agreement actually takes place
	 	 	 
	 	"Completion"	the later of the Completion Date and Actual Completion
	 	 	 
	 	"Land Registry"	Her Majesty's Land Registry as referred to in section 99 of LRA 2002
	 	 	 
	 	"Letting Documents"	the deeds and documents referred to in Schedule 3
	 	 	 
	 	"LRA 2002"	the Land Registration Act 2002
	 	 	 
	 	"Particulars"	the section at the beginning of this agreement headed "Particulars" which forms part of this agreement (and the definitions set out in the Particulars shall have the meanings specified therein)
	 	 	 
	 	"Planning Acts"	the "Consolidating Acts" as defined in the Planning (Consequential Provisions) Act 1990 and any other legislation relating to town and country planning in force from time to time
	 	 	 
	 	"Schedule"	a schedule to this agreement
	 	 	 
	 	"Standard Conditions"	the Standard Commercial Property Conditions (Second Edition)
	 	 	 
	 	"Tenancies"	the tenancies and other rights of occupation arising under or by virtue of the Letting Documents
	 	 	 
	 	"Tenants"	the tenants or other occupiers of the Property in whom the Tenancies are vested and references to "Tenant" "relevant Tenant" and "relevant Tenants" shall be construed accordingly
	 	 	 
	 	"VAT"	value added tax as referred to in the VAT Act or any tax of a similar nature which may be substituted for or levied in addition to it
	 	 	 
	 	"VAT Act"	the Value Added Tax Act 1994
	 	 	 
	 	"Working Day"	any day (other than a Saturday or a Sunday) on which clearing banks in the City of London are actually open for banking business during banking hours and references to "Working Days" shall be construed accordingly

 

    	 

    	 	

    

 

page 2

 

 

		1.2	In this agreement unless the context otherwise requires:

 

		1.2.1	words importing one gender include any other gender and words importing the singular number include
the plural number and vice versa and any reference to a person includes a reference to a company authority board department or
other body

 

		1.2.2	unless otherwise expressly stated all references to a clause or schedule mean a clause of or schedule
to this agreement

 

		1.2.3	any reference to a statute (whether specifically named or not) or a section of a statute shall
include any amendment or modification or re-enactment of such statute for the time being in force and all instruments orders notices
regulations directions guidance codes of practice bye-laws permissions and plans for the time being made issued or given under
or deriving validity from the same

 

		1.2.4	the table of contents and headings and titles to clauses are for convenience only and shall not
affect the construction or interpretation of this agreement

 

		1.2.5	unless otherwise expressly stated all references to an Annex mean the Annex (if any) so marked
and forming part of this agreement and signed by or on behalf of each of the parties hereto by way of identification

 

		1.2.6	at any time when any party to this agreement comprises two or more persons all references to such
party shall include all or any number of such persons and obligations expressed or implied to be made by or with any of them shall
be deemed to be made by or with all or any two or more of such persons jointly and each of them severally

 

		1.2.7	any obligation on a party to do any act matter or thing includes an obligation to procure that
it be done and any obligation on a party not to do or omit to do any act matter or thing includes an obligation not to permit or
suffer such act matter or thing to be done or omitted to be done by any person under its control

 

		2.	SALE AND PURCHASE OF THE PROPERTY

 

		2.1	The Seller agrees to sell and the Buyer agrees to buy the Property for the Price

 

		2.2	The consideration for any supply made by the Seller under this agreement is exclusive of any VAT
which is or becomes chargeable thereon and if any such sum is or becomes so payable the Buyer shall upon demand pay the same to
the Seller

 

		3.	COMPLETION

 

		3.1	The purchase of the Property shall be completed on the Completion Date at the offices of the Seller's
Solicitors or where they may reasonably direct when the Buyer shall pay the Price (less the Deposit) and any other monies (including
any VAT) then payable under the terms of this agreement upon being provided a valid VAT invoice by the Seller

 

		3.2	If:

 

		3.2.1	the money due on completion is received by the Seller's Solicitors' bankers after 3pm or

 

    	 

    	 	

    
 

page 3

 

 

		3.2.2	completion takes place after 3pm on a Working Day or

 

		3.2.3	takes place on any day other than a Working Day

 

then for the purpose of Standard
Conditions 8.3 and 9.3 the date of Actual Completion shall be deemed to be the next Working Day

 

		3.3	The Buyer shall not be entitled to delay completion solely on the ground that the Seller is unable
to provide the appropriate form of discharge or release in relation to any financial charges to which the sale is not subject but
will accept an undertaking from the Seller's Solicitors on Completion to remit the completion monies towards the discharge of financial
charges (if any) and to send the Buyer the appropriate form of discharge and release immediately upon receipt from the appropriate
chargee or chargees

 

		3.4	Unless any monies due to the Seller on exchange or Completion are remitted to the Seller or the
Seller's Solicitors from a client account in the name of the Buyer's Solicitors the Seller shall not be obliged to accept such
monies (and any such payment shall not be treated as a payment made in accordance with the terms of this agreement) unless the
Buyer shall previously have supplied such evidence as shall be required by the Seller or the Seller's Solicitors regarding the
identity of the Buyer and the source of its funds for entering into this agreement or completing its purchase of the Property with
a view to avoiding any breach of the Money Laundering Regulations 2007 the Terrorism Act 2000 the Financial Services and Markets
Act 2000 or the Proceeds of Crime Act 2002 or any subordinate legislation

 

		3.5	In the event that the Buyer wishes to effect the purchase of the Property prior to the 30 October
2012 the Buyer may serve written notice on the Seller and the Seller's Solicitors specifying the date for completion of the purchase
of the Property (being not less than three Working Days from the date of service of the notice) ("the Amended Completion
Date") in which case for the purposes of this agreement the Completion Date shall be deemed to be the Amended Completion
Date

 

		4.	STANDARD CONDITIONS

 

		4.1	The Standard Conditions apply to this agreement with the variations set out in this clause but
in the event of any conflict between the express terms of this agreement and the Standard Conditions the former shall prevail

 

		4.2	Standard Condition 1.1.1(e) shall be deleted and replaced by the following:

 

"contract rate" means
3% per annum above the base lending rate for the time being of Barclays Bank plc calculated on a day to day basis"

 

		4.3	In Standard Condition 4.1.4 the words "otherwise than by effluxion of time" shall be
added after the words "if the lease ends"

 

		4.4	In Standard Conditions 4.2.4 and 4.2.7(b)(ii) the number "10" shall be replaced by the
number "5"

 

		4.5	Standard Conditions 6.1 6.2 6.3.1 6.3.3 and 6.6 shall be deleted

 

		4.6	In Standard Condition 9.3.4 the words "may give notice to the buyer before the date of actual
completion that it will" shall be deleted and replaced by the words "shall be entitled to" and the words "if
applicable" shall be added to the end of Standard Condition 9.3.4

 

		4.7	Standard Condition 1.4 shall be deleted

 

    	 

    	 	

    
 

page 4

 

 

		5.	COVENANTS FOR TITLE

 

For the purposes of the Law
of Property (Miscellaneous Provisions) Act 1994 the Seller sells with full title guarantee and the transfer of the Property shall
be in the form annexed hereto and shall have effect as if it is expressly made subject to all matters covered by clause 11

 

		6.	TITLE

 

		6.1	Title to the Property has been deduced to the Buyer's Solicitors before the date of this agreement
and the Buyer shall be deemed to have accepted such title and shall not be entitled to raise any objection or requisition concerning
such title

 

		6.2	In the event that the Transfer of the Property is one to which the requirement for registration
applies pursuant to sections 4 or 5 of LRA 2002 or is a disposition which is required to be completed by registration pursuant
to section 27 of LRA 2002 the Buyer shall procure that the Transfer of the Property shall be so registered in accordance with LRA
2002 and shall indemnify and keep indemnified the Seller from and against all actions proceedings costs claims losses and liability
arising as a result of any failure to do so

 

		7.	MATTERS AFFECTING THE PROPERTY

 

The Property is sold subject
to and (as the case may be) with the benefit of:

 

		7.1	the entries on the Property and Charges Registers of the Title Number(s) referred to in Schedule
1 (except mortgages (if any))

 

		7.2	the documents (if any) specified in Schedule 2

 

		7.3	the Letting Documents

 

Full details of the above matters
have been supplied to the Buyer's Solicitors before the date of this agreement and the Buyer shall be deemed to purchase with full
knowledge and notice of them and shall not raise any objection or requisition concerning such matters save in respect of any such
matters arising out of the Buyer's pre-completion searches at the Land Registry such searches being those as a prudent buyer would
undertake prior to Completion.

 

		8.	COVENANTS TO BE INCLUDED IN THE TRANSFER

 

		8.1	The transfer of the Property shall be in the form of the transfer annexed hereto

 

		8.2	The Transfer shall be engrossed by the Seller's Solicitors and executed in original and counterpart

 

		9.	INSURANCE

 

		9.1	The Seller shall maintain its existing insurance in force until Completion and cancel the insurance
of the Property as soon as practicable after Completion

 

		9.2	In so far as the Seller has been reimbursed by any Tenant with the premium for the insurance of
the Property for a period after Completion the Seller shall repay or allow to the relevant Tenant any refund of premium it obtains
following the cancellation of such insurance

 

		9.3.1	If on or before Completion the Property is damaged or destroyed by any of the risks insured against
by the Seller the following provisions of this clause 9.3 shall apply

 

    	 

    	 	

    
 

page 5

 

 

		9.3.2	The Seller shall use its reasonable endeavours to procure payment of the insurance monies by the
insurers in relation to any such damage or destruction

 

		9.3.3	Subject to clause 9.3.4 all insurance monies actually paid by the insurers to the Seller
                                                              (excluding payments for loss of rent for any period prior to Completion) shall be held upon trust for the Buyer and paid to
                                                              the Buyer on Completion

 

		9.3.4	The Seller shall apply any insurance monies received by it prior to Completion (excluding payment
for loss of rent for any period prior to Completion) towards the reinstatement or rebuilding of any such damage or destruction
only if:

 

		9.3.4.1	and to the extent that there is a contractual obligation on the Seller to do so in any of the Letting
Documents or a statutory obligation to do so and then only in liaison with and with the agreement of the Buyer (such agreement
not to be unreasonably withheld or delayed) or

 

		9.3.4.2	the Buyer directs the Seller to do so

 

		9.3.5	The Seller shall upon Completion assign all its rights to the proceeds of such claims (except any
claims for payments for loss of rent for any period prior to Completion) to the Buyer insofar as the same are assignable and shall
notify the insurers upon Completion that all insurance monies are (except as aforesaid) payable to the Buyer and in the meantime
the Seller shall not without the prior written consent of the Buyer (such consent not to be unreasonably withheld or delayed) settle
or compromise any claim with the insurers

 

		9.4	The Buyer shall not be entitled to refuse to complete the purchase of the Property by reason of
damage to or destruction of the Property

 

		10.	APPORTIONMENT OF RENT

 

		10.1	In this clause:

 

		10.1.1	"Rent" shall mean all sums reserved as rents (except service charges VAT and insurance
premiums) under the Tenancies

 

		10.1.2	"Date of Actual Payment" shall mean the date ten Working Days after the Rent for the
relevant Tenancy has been received by the Seller (if such Rent has not been received by the Seller in cleared funds at least two
Working Days prior to Actual Completion)

 

		10.2	Rent paid in advance shall be apportioned with effect from Actual Completion so that the Seller
shall pay or allow to the Buyer on Completion or (if later) the Date of Actual Payment the total of:

 

	 	A	  x (B + 0.5)
	 	365

 

for each such Tenancy where:

 

		A	(subject to any outstanding rent review) is the annual Rent reserved by that Tenancy at Completion
and

 

		B	is the number of days from but excluding Actual Completion to but excluding the date when the next
instalment of the Rent under that Tenancy is due

 

    	 

    	 	

    
 

page 6

 

 

		11.	ARREARS

 

		11.1	For a period of 6 months following Actual Completion the Buyer shall use all reasonable endeavours
to recover from the Tenants any arrears of rent, insurance premiums and any other sums of any description payable by the Tenants
at the Property for the period up to and including Actual Completion and within 10 Working Days of receipt of the same shall account
to the Seller for the said arrears.

 

		11.2	During the period of 6 months following Actual Completion the Buyer shall give to the Seller monthly
updates in writing in respect of the Buyer's progress in collecting the arrears.

 

		11.3	The Seller shall have no right to pursue any arrears nor take any action claim or proceedings against
any Tenant if after a period of 6 months from and including Actual Completion the Buyer has not accounted to the Seller for arrears
under clause 11.1 and furthermore the Seller shall not be entitled to require that the right to pursue any arrears in respect of
the period prior to Actual Completion be assigned by the Buyer to the Seller.

 

		12.	LOCAL LAND CHARGES NOTICES ORDERS AND OTHER MATTERS

 

The Property is sold subject
to the following:

 

		12.1	all Local Land Charges whether registered before or after the date of this agreement and all matters
capable of registration as Local Land Charges whether coming into existence before or after the date of this agreement

 

		12.2	all notices orders demands proposals or requirements served or made by any local or other public
or competent authority or government department whether before or after the date of this agreement

 

		12.3	all actual or proposed orders directions notices charges restrictions conditions agreements or
other matters arising under the Planning Acts whether before or after the date of this agreement

 

		12.4	where the whole or part of the Property is registered all matters which are unregistered interests
which override registered dispositions under schedule 3 (as amended by schedule 12) of LRA 2002

 

		12.5	all existing wayleave consents rights privileges easements liabilities (including drainage and
other service rights or easements) and quasi or reputed easements affecting the Property

 

		12.6	all other matters whatsoever affecting the Property which are capable of discovery by searches
or enquiries or by inspection or survey and whether or not such searches or enquiries inspection or survey have in fact been made
by or on behalf of the Buyer.

 

		13.	REPRESENTATIONS

 

The Seller and the Buyer
acknowledge that this agreement constitutes the entire contract between them to the exclusion of any preceding statement or
representation whether oral written or implied or whether contained in any advertisement particulars or other matters issued
or in any correspondence entered into by the Seller or its employees or agents with the Buyer or its employees or agents and
the Buyer acknowledges that it has not entered into this agreement in reliance upon any such statement or representation
other than those (if any) given in

 

    	 

    	 	

    
 

page 7

 

 

writing by the Seller's Solicitors in response to written enquiries submitted by the Buyer's Solicitors prior to the date of this
agreement

 

		14.	NON-ASSIGNMENT AND NON-MERGER

 

		14.1	The Buyer shall not be entitled to transfer the benefit of this agreement

 

		14.2	The Seller shall not be required to transfer the Property in parts or to any person other than
the Buyer at the Price

 

		14.3	Despite Completion the provisions of this agreement shall remain in full force and effect in so
far as they remain to be observed and performed

 

		14.4	The Buyer shall not sell or otherwise dispose of nor enter into any agreement for sale or other
disposition of any interest in the whole or any part or parts of the Property before the expiry of three Working Days after Completion

 

		15.	NOTICES

 

		15.1	Any notice to be served on or communication to be sent to any party to this agreement shall be
in writing and shall only be regarded as properly served or sent if served or sent to the persons and the addresses specified in
clause 15.3 by:

 

		15.1.1	personal delivery on a Working Day or

 

		15.1.2	pre-paid special or recorded delivery mail

 

		15.2	Notices and communications shall be deemed to have been served or received as follows:

 

		15.2.1	in the case of personal delivery on the date of delivery unless delivered after 4 pm (in which
case delivery shall be treated as having been made on the next Working Day)

 

		15.2.2	in the case of pre-paid special or recorded delivery mail on the second Working Day after the notice
or communication is posted

 

		15.3.1	Notices and communications to the Seller shall be addressed to the Seller's Solicitors at their
address and quoting the reference specified in the Particulars

 

		15.3.2	Notices and communications to the Buyer shall be addressed to the Buyer's Solicitors at their address
and quoting the reference specified in the Particulars

 

		16.	VARIATIONS TO THIS AGREEMENT

 

		16.1	This agreement constitutes the entire contract between the parties and there are no other arrangements
between the parties relating to the subject matter of this agreement

 

		16.2	Save as provided in clause 16.3 any variations to this agreement shall be set out in a formal written
agreement and signed by the parties agreeing such variations

 

		16.3	Any additional conditions or variations to this agreement which are agreed in correspondence between
the parties to this agreement (or their respective solicitors with their authority) must make express reference to this clause
(unless a provision in this agreement allows for such additional conditions or variations to be agreed between the parties in which
case reference need only be made to the appropriate provision in this agreement) in order to be valid and binding on the parties

 

    	 

    	 	

    
 

page 8

 

 

		17.	LAW AND JURISDICTION

 

		17.1	This agreement is governed by English law and the parties to this agreement submit to the non-exclusive
jurisdiction of the English courts

 

		17.2	In this clause 17.2 "Opinion Letter" means a letter from a suitably qualified
                                                             attorney who is qualified and practices in the country of domicile of the Buyer (or of any one or more party constituting the
                                                             Buyer) and is not an employee of the Buyer (or of any such party) and which shall be:

  

		17.2.1	in a form prepared at the request and expense of the Buyer but which shall have first been approved
by the Seller (such approval not to be unreasonably withheld or delayed) and

 

		17.2.2	addressed to the Seller and (if the Seller so requires) its mortgagee

 

		17.3	If:

 

		17.3.1	the Buyer (or any one or more party constituting the Buyer) is a person who is ordinarily resident
outside the United Kingdom or is a company incorporated outside the United Kingdom and

 

		17.3.2	this agreement provides for the Buyer to give covenants in the transfer of the Property

 

the Buyer shall procure that
an Opinion Letter as to the valid execution and enforceability of the transfer shall be given to the Seller by the date two Working
Days before the Completion Date and (if the Buyer fails to do so) the Seller shall not be obliged to complete until the second
Working Day after the Opinion Letter has been given to the Seller and the Buyer shall be deemed to be in default in performing
its obligations under this agreement

 

		18.	INCORPORATION OF SCHEDULES

 

The provisions of the Schedules
apply to this agreement

 

		19.	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

 

		19.1	Unless the right of enforcement is expressly provided for in this agreement a person who is not
a party to this agreement may not by virtue of the Contracts (Rights of Third Parties) Act 1999 enforce any of its terms

 

		19.2	Except to the extent that there is express provision in this agreement to the contrary the parties
may by agreement rescind or vary this agreement without the consent of any such person

 

		20.	CONFIDENTIALITY

 

		20.1	Subject to clause 20.2 no party to this agreement shall without the prior written consent of
                                                             each of the others disclose or publish or cause disclosure or publication of the existence and/or financial terms of this
                                                             agreement and each party shall keep all such information confidential

 

		20.2	The parties to this agreement shall not be prevented from disclosing the existence or financial
terms of this agreement:

 

		20.2.1	where disclosure is required in order to comply with a statutory requirement or the requirements
of any lawful authority or the rules of the Securities and Exchange 

 

 

    	 

    	 	

    
 

page 9

 

 

			Commission, the London Stock Exchange or an order of the English
court or court of Jersey

 

		20.2.2	to any professional adviser who shall agree to keep such information confidential

 

		20.2.3	in order to notify the Tenants of the completion of the sale and purchase and

 

		20.2.4	by way of a press release including the purchase price and address of the Property but not including:

 

		20.2.4.1	the Seller's identity;

 

		20.2.4.2	any reference to Threadneedle Property Investments Limited or any of its associated companies or
any company containing the word "Threadneedle" in its company name; or

 

		20.2.4.3	any reference to Zurich Assurance Limited or any of its associated companies or any company containing
the word "Zurich" in its company name.

 

		20.3	The Buyer shall not make an application to Land Registry to enter an agreed notice (as defined
in LRA 2002) in respect of this agreement and for the avoidance of doubt the Seller shall not be required to make or consent to
the making of an application to Land Registry to enter such an agreed notice and the Buyer acknowledges that the entering into
of this agreement by the Seller does not constitute such a consent

 

		20.4	If the Buyer shall make an application to enter a caution against first registration or a unilateral
notice (as defined in LRA 2002) in respect of this agreement the Buyer shall not submit to Land Registry either the original or
a copy of this agreement

 

		21.	CAPITAL ALLOWANCES

 

		21.1	Defined terms

 

For the purposes of this clause:

 

		21.1.1	CAA 2001 means the Capital Allowances Act 2001

 

		21.1.2	Fixtures means all plant and machinery installed or otherwise fixed in or to the Property
and treated in law as part of the same

 

		21.2	No prior claim

 

The Seller:

 

		21.2.1	warrants that it has not previously made a claim and undertakes that it shall not make a claim
for capital allowances under Part 2 of CAA 2001 and

 

		21.2.2	warrants that it is not required to bring a disposal value into account for capital allowances
purposes

 

in respect of any of the Fixtures

 

		22.	NOTICES

 

Any notices to be served on
the Buyer under this agreement should be sent to ARC Global Trust Inc.at 405 Park Avenue, 15th Floor, New York, NY 10022
(for the 

 

    	 

    	 	

    
 

page 10

 

 

attention of Brian
Block) and with a copy to Moor Park Capital Partners LLP at York House 45 Seymour Street  London W1H 7JT (for the attention
of Graydon Butler)

 

 

SIGNED BY the parties to this agreement
or their duly authorised representatives on the Date specified in the Particulars

 

    	 

    	 	

    
 

page 11

 

SCHEDULE 1

The Property

 

ALL THAT freehold land and property known
as Unit 1 58/62 Scotch Street Carlisle and which is registered at Land Registry with absolute title under Title Number CU46679

 

    	 

    	 	

    
 

page 12

 

SCHEDULE 2

Documents to which the Property is
sold subject

 

	No.	Date	Document	Parties
	1.	01.06.1990	Party Wall Agreement	
        (1) 
        Dunedin Property Development Company (Retail) Limited

        (2) 
        Liverpool Victoria Trustees Limited

          

 

    	 

    	 	

    
 

page 13

 

SCHEDULE 3

Letting Documents

 

Lease of Unit 1

 

	No.	Date	Document	Parties
	1.     	21.03.1989	Agreement for lease	
        (1) 
        Dunedin Property Development Company Limited

        (2) 
        McDonald's Property Company Limited

         

	2.     	29.09.1989	Lease	
        (1) 
        Liverpool Victoria Trustees Limited

        (2) 
        McDonald's Property Company Limited

         

	3.     	16.01.1990	Licence to alter	
        (1) 
        Liverpool Victoria Trustees Limited

        (2) 
        McDonald's Property Company Limited

         

	4.     	26.04.1994	Rent review memorandum	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Property Company Limited

         

	5.     	17.11.1999	Rent review memorandum	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Property Company Limited

         

	6.     	15.01.2003	Licence to sub-underlet	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Property Company Limited

        (3) 
        McDonald's Restaurants Limited

        (4) 
        HBN Restaurants Limited

         

	7.     	17.01.2003	Deed of variation	
        (1) 
        McDonald's Restaurants Limited

        (2) 
        HBN Restaurants Limited

        (3) 
        Christopher John Nicholls

         

	8.     	22.01.2003	Notice of deed of variation	 
	9.     	10.12.2003	Licence to assign	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Property Company Limited

        (3) 
        McDonald's Real Estate Company No. 1 Limited

        (4) 
        McDonald's Real Estate LLP

        (5) 
        McDonald's Restaurants Limited

         

	10.   	06.02.2004	TP3	
        (1) 
McDonald's Property Company Limited 

 

    	 

    	 	

    
 

page 14

 

 

				
        (2) 
McDonald's Real Estate Company No. 1 Limited

         

	11.   	06.02.2004	TP3	
        (1) 
        McDonald's Real Estate Company No. 1 Limited

        (2) 
        McDonald's Real Estate Limited Liability Partnership

         

	12.   	25.03.2004	Notice of assignment	 
	13.   	25.11.2004	Rent review memorandum	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Property Company Limited

         

	14.   	15.06.2007	Licence to carry out works	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Real Estate LLP

        (3) 
        McDonald's Restaurants Limited

         

	15.   	22.10.2009	Rent review memorandum	
        (1) 
        Liverpool Victoria Friendly Society Limited

        (2) 
        McDonald's Property Company Limited

         

 

 

Substation lease

 

	No.	Date	Document	Parties
	1.     	03.07.1989	Lease	
        (1) 
        Liverpool Victoria Trustees Limited

        (2) 
        North Western Electricity Board

         

 

    	 

    	 	

    

 

page 15

 

 

SCHEDULE 4

VAT

  

		1.1	The parties to this agreement intend that Article 5 of the Value Added Tax (Special Provisions)
Order 1995 ("the Order") shall apply to the supply of the Property and shall use all reasonable endeavours to secure
that under Article 5 of the Order the sale of the Property is treated as neither a supply of goods nor a supply of services for
the purposes of VAT

 

		1.2	The Seller warrants and undertakes that:

 

		1.2.1	it (or the representative member of the VAT Group to which the Seller belongs) is registered for
VAT purposes and

 

		1.2.2	it has used and will until Actual Completion use the Property for carrying on the business of letting
in return for rental income and none of the Tenants are members of the VAT group to which the Seller belongs and

 

		1.2.3	it (or a relevant associate for the purposes of paragraph 3 of Schedule 10 to the VAT Act or a
relevant group member for the purposes of paragraph 21 of Schedule 10 to the VAT Act) has exercised the option to tax the Property
and notified the option within the allowed time pursuant to Part 1 Schedule 10 to the VAT Act and

 

		1.2.4	the Property is not a capital item to which Part XV of the VAT Regulations 1995 applies, or being
such an item, the period of adjustment ascertained in accordance with regulation 114 of the VAT Regulations 1995 has expired

 

		1.3	The Buyer represents warrants and undertakes:

 

		1.3.1	that following Actual Completion the Buyer will use the Property for carrying on the business of
letting in return for rental income

 

		1.3.2	that the Buyer is already or as a result of the transfer of the Property will immediately become
a taxable person for the purposes of VAT (and if not already registered for VAT purposes will immediately apply to be so registered
and will provide the Seller with a copy of the Buyer's application to so register)

 

		1.3.3	to comply in all respects with the provisions of Articles 5(2) and 5(2A) of the Order by submitting
by the relevant date (as defined in Article 5(3) of the Order) an option to tax which has effect on or before the relevant date
and prior to Completion to provide to the Seller:

 

		1.3.3.1	a copy of the notification of the option to tax;

 

		1.3.3.2	the acknowledgement of receipt of the option to tax by the Commissioners if received by the Buyer
prior to Completion

 

		1.3.4	not to revoke the option to tax referred to above or otherwise render it ineffective for the purposes
of the transfer of the Property within the terms of Article 5 of the Order

 

		1.3.5	that Article 5(2B) of the Order does not apply to the Buyer

 

		1.3.6	that the Buyer is not purchasing the Property as nominee or otherwise with the intention of holding
it for the benefit of another person

 

    	 

    	 	

    
 

page 16

 

 

		1.4	The Seller and the Buyer shall comply with the provisions of section 49 of the VAT Act and regulations
made thereunder in respect of VAT records relating to the business and assets required to be preserved under paragraph 6 of schedule
11 of the VAT Act and whichever party retains the records shall preserve the said records in safe custody for such period as may
be required by law

 

		1.5	If on Actual Completion the Buyer has breached any representation or warranty or failed to comply
with any undertaking given in paragraph 1.3 of this Schedule, resulting in the supply of the Property being subject to VAT, or
the Commissioners have otherwise determined in writing that VAT is payable in respect of the supply of the Property, the Buyer
shall on Actual Completion pay to the Seller's Solicitors an amount equal to the VAT on the Price and the Seller shall issue to
the Buyer a valid VAT invoice in respect of the taxable supply of the Property (or any part thereof) pursuant to this agreement

 

		1.6	If after Actual Completion the Commissioners determine in writing that VAT is payable in respect
of the supply of the Property the Buyer shall pay such VAT in addition to the balance of the Price within seven days of delivery
of the Seller's tax invoice in respect thereof together with (and in addition thereto) any amount due to the Commissioners by way
of penalty or interest payable by the Seller if the same arise by reason of a breach by the Buyer of a warranty or undertaking
in paragraph 1.3 of this Schedule 4

 

    	 

    	 	

    
 

page 17

 

 

SCHEDULE 5

Special Conditions

 

 None

 

    	 

    	 	

    
 

page 18

 

 

Signed by                                                        /s/
Neil Bisset

duly authorised for and on behalf of           /s/
Joseph Vullo

THE SELLER                                                    

 

 

 

 

Signed by                                                        /s/ Jesse C. Galloway

duly authorised for and on behalf of

THE BUYER

 

    	 

    	 	

    
 

 

APPENDIX 1

 

FORM OF TRANSFER

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