Document:

EXHIBIT 10.16

 

CONTRIBUTION AGREEMENT

 

BY AND AMONG

 

STAG GI INVESTMENTS, LLC

 

STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.

 

AND

 

STAG INDUSTRIAL, INC.

 

DATED AS OF APRIL 4, 2011

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1
    	
CONTRIBUTION   OF HOLDINGS INTERESTS IN EXCHANGE FOR UNITS
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.1
    	
Contribution   Transactions
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.2
    	
Consideration   for Holdings Interests
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.3
    	
Adjusted   Consideration; Risk of Loss
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.4
    	
Allocation   of Consideration
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.5
    	
Tax   Treatment of Contribution
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 1.6
    	
Section 704(c) Method
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
CLOSING
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 2.1
    	
Conditions   Precedent
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 2.2
    	
Date,   Time and Place of Closing
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 2.3
    	
Closing   Deliveries
    	
7
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 2.4
    	
Closing   Costs
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
REPRESENTATIONS   AND WARRANTIES AND INDEMNITIES
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 3.1
    	
Representations   and Warranties of the Company and the Operating Partnership
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 3.2
    	
Representations   and Warranties of the Contributor
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 3.3
    	
Indemnification
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 3.4
    	
No   Reliance, Properties As Is
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
COVENANTS   OF CONTRIBUTOR
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 4.1
    	
Negative   Covenants
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 4.2
    	
Affirmative   Covenants
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
RELEASES   AND WAIVERS
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 5.1
    	
General   Release of Company
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 5.2
    	
General   Release of Contributor
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 5.3
    	
Attorney-in-Fact
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 5.4
    	
Limitation   on Liability
    	
28
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
MISCELLANEOUS
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.1
    	
Further   Assurances
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.2
    	
Counterparts
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.3
    	
Governing   Law, Venue
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.4
    	
Amendment;   Waiver
    	
29
    
					

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.5
    	
Entire   Agreement
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.6
    	
Assignability
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.7
    	
Titles
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.8
    	
Third   Party Beneficiary
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.9
    	
Severability
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.10
    	
Equitable   Remedies
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.11
    	
Time   of the Essence
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.12
    	
Reliance
    	
30
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.13
    	
Survival
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.14
    	
Notice
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.15
    	
Termination
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.16
    	
Confidentiality
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Section 6.17
    	
Joint   Preparation
    	
32
    

 

ii

 

	
Exhibits
    	
 
    
	
 
    	
 
    
	
Exhibit A
    	
Participating   Entities
    
	
Exhibit B
    	
List   of Properties
    
	
Exhibit C
    	
Contribution   and Assumption Agreement
    
	
Exhibit D
    	
Certification   of Non-Foreign Status
    
	
Exhibit E
    	
Ownership   Limit Waiver
    
	
Exhibit F
    	
Registration   Rights Agreement
    
	
Exhibit G
    	
Definitions
    
	
Exhibit H
    	
Voting   Agreement
    
	
Exhibit I
    	
Intentionally   Omitted
    
	
Exhibit J
    	
Letter   Agreement
    
	
Exhibit K
    	
Consideration   Spreadsheet 
    
	
Exhibit L
    	
Lock-Up   Agreement
    
	
 
    	
 
    
	
Disclosure   Schedules
    	
 
    
	
 
    	
 
    
	
Schedule   3.2(a)
    	
Title   Reports
    
	
Schedule   3.2(k)
    	
Brokers
    
	
Schedule   3.2(m)
    	
Litigation
    
	
Schedule   3.2(s)
    	
Agreements   to Sell
    
	
Schedule   3.2(u)
    	
Compliance   with Law
    
	
Schedule   3.2(v)
    	
Condemnation
    

 

iii

 

CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT (including all exhibits and schedules, this “Agreement”) is made and entered into as of April 4, 2011, by and among STAG INDUSTRIAL, INC., a Maryland corporation (the “Company”), STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership and a subsidiary of the Company (the “Operating Partnership”), and STAG GI INVESTMENTS, LLC, a Delaware limited liability company (the “Contributor”).

 

RECITALS

 

A.            The Company, which is the sole member of STAG Industrial GP, LLC, a Delaware limited liability company (the “General Partner”), which in turn is the sole general partner of the Operating Partnership, desires to consolidate the ownership of a portfolio of primarily single tenant real estate assets, all of which assets are either owned or ground leased by those certain limited liability companies and limited partnerships set forth on Exhibit A attached hereto and incorporated herein (each, a “Participating Entity” and, collectively, the “Participating Entities”) or expected to be acquired or ground leased by the Participating Entities after the date hereof, through the transaction contemplated by this Agreement (the “Formation Transaction”).

 

B.            The Formation Transaction relates to the proposed initial public offering (the “Public Offering”) of the common stock, par value $0.01, of the Company (the “Common Stock”).

 

C.            The Contributor owns 100% of the membership interests in STAG GI Investments Holdings, LLC, a Delaware limited liability company (“Holdings”), Holdings owns 100% of the membership interests or limited partnership interests, as applicable, in each of the Participating Entities, and Holdings or the Participating Entities own or ground lease or have rights to acquire the properties set forth on Exhibit B attached hereto and incorporated herein (each, a “Property” and together, the “Properties”).  As used herein, “Participating Entity Agreements” means the articles of organization, certificates of formation, limited liability company agreements, limited partnership agreements, charters and bylaws and other similar organizational documents under which Holdings and each Participating Entity was formed or incorporated (including all amendments and restatements thereto).

 

D.            The Contributor desires to, and the Operating Partnership desires that the Contributor, contribute to the Operating Partnership all of the Contributor’s right, title and interest, free and clear of all Encumbrances, as a member of Holdings, including, without limitation, all of its voting rights and interests in the capital, profits and losses of Holdings or any property distributable therefrom, constituting all of its rights and interests in Holdings (such right, title and interest, the “Holdings Interests”), in exchange for common units of limited partnership interests in the Operating Partnership (the “Units”) in a transaction intended by the parties to qualify as a tax-free contribution to the Operating Partnership pursuant to Section 721(a) of the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “Code”).  As used herein, “Participating Equity Interests” means all of Holdings’ right, title and interest, free and clear of all Encumbrances, as a member of each Participating Entity, including, without limitation, all of its voting rights and interests in the

 

 

capital, profits and losses of each such Participating Entity or any property distributable therefrom, constituting all of its rights and interests in each such Participating Entity.

 

E.             The parties acknowledge that the acquisition of the Holdings Interests by the Operating Partnership is in connection with the consummation of the Public Offering and the satisfaction of the conditions set forth herein.

 

F.             Simultaneously herewith, STAG Investments III, LLC, STAG Investments IV, LLC, Net Lease Aggregation Fund, LLC, BSB STAG III, LLC, STAG III Employees, LLC, Innovative Promotions, LLC, NED STAG III Residual LLC, Roseview Capital Partners, LLC, Gregory W. Sullivan and Benjamin S. Butcher (collectively, together with any additional contributor approved by the foregoing, the “Other Contributors” and each, an “Other Contributor”) have entered into Contribution Agreements (collectively, the “Other Agreements” and each, an “Other Agreement”) pursuant to which such Other Contributors have agreed to contribute their respective assets to the Operating Partnership simultaneously with the Contributor’s contribution hereunder (the “Roll-Up”) in exchange for an aggregate number of Units as set forth in the Other Agreements, which aggregate number of Units shall be determined based on the initial offering price of the Common Stock and which, together with the number of Units received by the Contributor hereunder, shall total 7,590,000 Units (and which number of Units received by each Contributor is subject to adjustment as expressly provided herein and in the Other Agreements).

 

G.            The parties intend this Agreement to be a “Contribution Agreement” pursuant to the terms of the Operating Partnership’s Agreement of Limited Partnership (the “Operating Partnership Agreement”).

 

H.            All references in this Agreement to sections, articles, exhibits, schedules, attachments and recitals shall refer to the corresponding sections, articles, exhibits, schedules, attachments and recitals of or to this Agreement.  Capitalized terms used and not defined in the body of this Agreement shall have the meanings set forth in Exhibit G attached hereto and incorporated herein.

 

NOW, THEREFORE, for and in consideration of the foregoing premises, and the mutual undertakings set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the foregoing recitals are incorporated into, and made a part of this Agreement, and the parties hereto further agree as follows:

 

TERMS OF AGREEMENT

 

ARTICLE 1

 

CONTRIBUTION OF HOLDINGS INTERESTS IN EXCHANGE FOR UNITS

 

Section 1.1            Contribution Transactions.

 

(a)           At the Closing and subject to and on the terms and conditions contained in this Agreement, the Contributor shall contribute, transfer, assign, convey and deliver to the Company, all of the Holdings Interests (also sometimes referred to as the “Contributed Assets”).

 

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The contribution of the Holdings Interests to the Operating Partnership shall be evidenced by the execution and delivery of a Contribution and Assumption Agreement in substantially the form of Exhibit C attached hereto and incorporated herein.

 

(b)           The parties shall take such additional actions and execute such additional documentation as may be required by the Participating Entity Agreements or as requested in the reasonable judgment of counsel to the Company or the Operating Partnership in order to effect the transactions contemplated hereby.

 

Section 1.2            Consideration for Holdings Interests.  In exchange for the Holdings Interests contributed to the Operating Partnership by the Contributor, the Operating Partnership shall issue a certain number of Units to the Contributor based on the initial public offering price of the Common Stock as set forth below, such number of Units being referred to herein as the Contributor’s “Consideration” relating to the Holdings Interests contributed hereunder.  If the initial public offering price for the Common Stock is between $15.00 per share and $17.00 per share, then the Contributor’s Consideration shall be the number of Units set forth in the spreadsheet attached hereto and incorporated herein as Exhibit K in the row corresponding with the initial public offering price of the Common Stock and the column entitled “Venture Units”.  For example, if the initial pubic offering price for the Common Stock were $16.50 per share, the Consideration would be 4,689,995 Units.  If the initial public offering price is less than $15.00 per share or more than $17.00 per share, then the Contributor’s Consideration shall be the number of Units determined by dividing the Contributor’s Value by the initial public offering price for the Common Stock.  “Contributors Value” means, if the initial public offering price for the Common Stock is less than $15.00 per share, $74,854,304, and if the initial public offering price for the Common Stock is greater than $17.00 per share, the sum of (A) $74,854,304 plus (B) 64.3% of the excess of (i) the product of the total number of Units issued to the Contributor and all Other Contributors in the Roll-Up (i.e., 7,590,000 Units) multiplied by the initial public offering price per share of the Common Stock in the Public Offering over (ii) $121,440,000, consistent with the allocation of Units when the initial public offering price for the Common Stock is between $16.01 per share and $17.00 per share as set forth on Exhibit K attached hereto.  In the event that, subsequent to the date of this Agreement but before the closing of the Formation Transaction, the Common Stock or the units of limited partnership interest of the Operating Partnership issued and outstanding shall, through a reorganization, recapitalization, stock or unit dividend, stock or unit split or similar change in the capitalization of the Company or the Operating Partnership increase or decrease in number, then an appropriate and proportionate adjustment shall be made to the Consideration.

 

Section 1.3            Adjusted Consideration; Risk of Loss.

 

(a)           At the Closing, (i) real estate taxes and assessments (including special assessments and, personal property taxes, if any), (ii) rental income (including base rents, additional rents, escalation charges, common area maintenance charges, imposition charges, heating and cooling charges, insurance charges, charges for utilities, percentage rent, and all other rents, charges and commissions paid by tenants to the Participating Entities), (iii) interest payable under loans secured by Permitted Liens, (iv) insurance premiums, (v) utilities serving the Properties, (vi) property management fees, (vii) prepaid charges, payment and accrued charges under any contracts entered into by Holdings or any Participating Entity with respect to

 

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the Properties, and (viii) all other items of income and expense with respect to the Properties shall be prorated between the Contributor, on the one hand, and the Operating Partnership, on the other hand, with all such items attributable to the period prior to the Closing Date (as defined in Section 2.2) to be credited or charged to Contributor, and all such items attributable to the period commencing on the Closing Date to be credited or charged to the Operating Partnership.  Except as otherwise provided in this Section 1.3, income and expenses shall be prorated on the basis of a 30-day month and on the basis of the accrual method of accounting.  In addition, at Closing, the Contributor shall receive a credit equal to the amount of any reserves (other than any cash reserves established with the lender with respect to the Allocated Debt (the “Lender Reserves”)) established by Holdings or any Participating Entity with respect to the Properties (the “Reserves”).  Notwithstanding the generality of the foregoing, to the extent that any tenant of a Property pays any of the expenses described in clauses (i), (iv), (v), (vi), (vii) or (viii) above directly to an applicable third party (and not as a reimbursement to a Participating Entity), such amounts shall not be prorated at Closing.  The prorations to be performed hereunder shall be completed by the Company based on the parties’ estimates as of the Closing, shall be evidenced by a closing statement prepared by the Company, shall be reconciled based on actual amounts when available, but in all events within ninety (90) days of Closing (the “Reconciliation Period”) and shall be implemented through a cash payment from the Operating Partnership to the Contributor to the extent the prorations result in a net credit to the Contributor and a cash payment from the Contributor to the Operating Partnership to the extent the prorations result in a net charge to the Contributor.  In addition, immediately prior to Closing, Holdings shall distribute to the Contributor any cash (other than Reserves, any security deposits then held by the Participating Entities under Leases for the Properties and any Acquisition Cash) then held by Holdings or any Participating Entity (to the extent not being transferred with the Contributed Assets as a proration in accordance with this Section 1.3(a)) and such cash shall not be contributed to the Operating Partnership with the Contributed Assets.  On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the Lender Reserves (but only to the extent the Lender Reserves and the obligation to maintain such Lender Reserves are not being released by the lender to the Contributor in connection with the Closing).  The parties acknowledge that preparation of the closing statement will involve substantial time and effort because of the number of Properties and hereby agree that the closing statement shall be prepared by the Company based on assumptions that the Closing takes place on the Estimated Closing Date and that all of the Committed Properties that are, under the terms of the applicable Purchase Contracts, scheduled to close by the Estimated Closing Date are in fact owned or ground leased by Holdings or the Participating Entities on said date.  If the Closing actually takes place on a day other than the Estimated Closing Date and/or not all of such Committed Properties are owned or ground leased by Holdings or the Participating Entities on the Closing Date, then, during the Reconciliation Period, the prorations shall be recalculated as of the actual Closing Date, with respect to the Properties owned or ground leased by Holdings or the Participating Entities as of the actual Closing Date based on actual amounts and the Company shall prepare a revised closing statement, and to the extent such revised closing statement reveals that the Contributor received more or less cash than it should have received had the prorations included in the original closing statement not been based on estimated amounts and the Closing occurring on the Estimated Closing Date, then the Operating Partnership (if the Contributor received less cash than it should have received) or the Contributor (if the Contributor received

 

4

 

more cash than it should have received), as applicable, shall make a cash payment to the other as necessary to make the cash received by the Contributor correct based on the revised closing statement.  If the Allocated Debt is greater than or less than the Estimated Allocated Debt Amount, the difference (as well as any interest accruals or other charges or payments of the Allocated Debt for the period after the Allocated Debt Determination Date and until the Closing Date) will be prorated and credited (to the extent the Allocated Debt is less than the Estimated Allocated Debt Amount) or charged (to the extent the Allocated Debt is greater than the Estimated Allocated Debt Amount) to the Contributor and adjusted in cash during the proration reconciliation process.  Finally, the Contributor shall receive a credit in the amount of any refundable deposits made by Holdings or a Participating Entity under any non-binding purchase agreement as well as a credit for any third party costs paid by Holdings or a Participating Entity in connection with due-diligence on any property subject to any such non-binding purchase agreement.  For the avoidance of doubt, any such non-binding purchase agreement shall not be deemed a “Purchase Contract” for purposes of this Agreement.  As used herein, “Acquisition Cash” means an amount equal to the gross purchase price for each Committed Property, plus the estimated transaction costs and closing costs payable by Holdings or its subsidiary, as purchaser, for such Committed Property to the extent incurred and not paid as of Closing and/or expected to be incurred from and after the Closing, less the amount of the purchase price to be financed.  On the Closing Date, in addition to the Consideration, the Operating Partnership shall pay to the Contributor by wire transfer of immediately available federal funds an amount equal to the refundable deposit paid under any purchase contracts with respect to real properties that are not Committed Properties, together with all due diligence and transaction costs with respect to such purchase contracts and real properties.

 

(b)           The risk of loss relating to the Holdings Interests and the underlying Properties contributed hereunder prior to Closing shall be borne by the Contributor to the extent set forth in this Section 1.3(b).  If, prior to the Closing, any Property is destroyed or materially damaged by fire or other casualty or taken by condemnation or similar proceeding, then the Company shall (a) cause the Operating Partnership to acquire the Holdings Interests (including, the Contributor’s indirect interests in any such Participating Entity that directly or indirectly owns the affected Property), (b) direct the Contributor to cause the Participating Entity or Participating Entities, as applicable, to pay or cause to be paid to the Operating Partnership any sums collected under any policies of insurance relating to such casualty or condemnation proceeds, as applicable, and otherwise assign to the Operating Partnership all rights to collect such sums as may then be uncollected, and (c) adjust or settle any insurance claim or condemnation proceeding.  Under such circumstances, the pro rata share of the amount of any deductibles under the applicable insurance policies or award (except to the extent such deductibles are the responsibility of tenants under leases), plus all reasonable costs of collection shall be a proration item charged to the Contributor and adjusted in cash after the Closing during the proration reconciliation process in accordance with Section 1.3(a).

 

Section 1.4            Allocation of Consideration.  In connection with the Closing, the Consideration shall be allocated for tax and accounting purposes among the Participating Entities (and to the extent necessary, among the Properties owned by a Participating Entity) as reasonably determined by the Company (in consultation with its independent public accountants).  Each of the Contributor, the Company and the Operating Partnership agree to (a) be bound by such allocations, (b) act in accordance with the allocation in the preparation of

 

5

 

financial statements and filing of all tax returns and in the course of any tax audit, tax review or tax litigation relating thereto, and (c) take no position, and cause their Affiliates to take no position, inconsistent with such allocations for income tax purposes.

 

Section 1.5            Tax Treatment of Contribution.  The contribution, transfer, conveyance and assignment of the Holdings Interests, Participating Equity Interests and/or Properties to the Operating Partnership from the Contributor is intended to be treated as a transaction qualifying under Section 721(a) of the Code.

 

Section 1.6            Section 704(c) Method.  The Operating Partnership shall use the “traditional method” described in Treas. Reg. § 1.704-3(b) with respect to the contributed Holdings Interests and the related Participating Entity Interests and underlying Properties, with no “curative allocation” of income or gain to offset any “shortfall” in depreciation that results by reason of the use of the “traditional method,” following any “Book-Up Event” (i.e., a subsequent issuance of OP Units (as defined in the Operating Partnership Agreement), an in-kind contribution of property to the Operating Partnership in exchange for OP Units, or a redemption of OP Units).

 

ARTICLE 2

 

CLOSING

 

Section 2.1            Conditions Precedent.  The effectiveness of the Company’s Registration Statement on Form S-11 relating to the Public Offering (as amended from time to time, the “Registration Statement”) and the consummation of the Public Offering are conditions precedent to the obligations of all parties to this Agreement to effect the transactions contemplated by this Agreement on the Closing Date.  These conditions may not be waived by any party to this Agreement.

 

(a)           The obligations of the Company and the Operating Partnership to effect the Formation Transaction shall be subject to the following additional conditions precedent:

 

(i)            the representations and warranties of the Contributor contained in this Agreement shall have been true and correct in all material respects on the date such representations and warranties were made and shall be true and correct on the Closing Date as if made at and as of the Closing Date, subject to changes that would not reasonably be expected to have a Material Adverse Effect;

 

(ii)           each obligation to be performed by the Contributor shall have been duly performed by the Contributor on or before the Closing Date, and the Contributor shall not have materially breached any of its covenants contained herein;

 

(iii)          concurrently with the Closing, the Contributor shall have executed and delivered to the Company or the Operating Partnership, as applicable, the documents required to be delivered pursuant to Section 2.3;

 

(iv)          all necessary consents or approvals of governmental authorities or third parties (including, without limitation, lenders to the Contributor, Holdings or any

 

6

 

Participating Entity) to the consummation of the transactions contemplated herein shall have been obtained, other than the consents or approvals of lenders whose loans are to be repaid before or immediately after the Closing;

 

(v)           there shall not have occurred between the date hereof and the Closing Date any material adverse change in any of the assets, business, financial condition, results or prospects of operation of the Properties that has, or could reasonably be expected to have, a Material Adverse Effect;

 

(vi)          no order, statute, rule, regulation, executive order, injunction, stay, decree or restraining order shall have been enacted, entered, promulgated or enforced by any court of competent jurisdiction or governmental or regulatory authority or instrumentality that prohibits the consummation of the transactions contemplated herein, and no litigation or governmental proceeding seeking such an order shall be pending or threatened in writing;

 

(vii)         subject to Section 4.2(c), no new matters with respect to any Property which the Company would be required to disclose in the Registration Statement shall have arisen or occurred; and

 

(viii)        all of the Other Contributors (other than the Company and the Operating Partnership) shall have made the contributions under their respective Other Agreements.

 

Any of the foregoing conditions in this Section 2.1(a) may be waived by the Company in its sole and absolute discretion.

 

(b)           The obligations of the Contributor to effect the Formation Transaction shall be subject to the following conditions precedent, either of which may be waived by Contributor in its sole discretion:

 

(i)            All Other Contributors shall have made the contributions described in their respective Other Agreements; and

 

(ii)           Each of Benjamin Butcher, Gregory Sullivan, Stephen C. Mecke, Kathryn Arnone and David King shall have entered into employment agreements with the Company or its subsidiary with respect to post-Closing employment on terms and conditions consistent with the descriptions contained in the Registration Statement.

 

Section 2.2            Date, Time and Place of Closing.  The time, place and date of the Formation Transaction shall be at 10:00 a.m. in the office of DLA Piper LLP (US), 33 Arch Street, 26th Floor, Boston, Massachusetts on the day on which the Company receives the proceeds from the Public Offering from the underwriters thereof (the “Closing” or “Closing Date”); provided, however, that the Contributor shall deliver the Closing Documents into a closing escrow established by the Company and the Operating Partnership one (1) business day prior to the expected Closing Date.

 

Section 2.3            Closing Deliveries.  At the Closing, each party shall make, execute, acknowledge and deliver the legal documents and other items (collectively, the “Closing

 

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Documents”) necessary to carry out the intention of this Agreement, which Closing Documents and other items shall include, without limitation, the following:

 

(a)           a Contribution and Assumption Agreement substantially in the form attached hereto as Exhibit C;

 

(b)           for the Contributor, a certificate from the Operating Partnership that effective at the Closing the books and records of the Operating Partnership will indicate that the Contributor is the holder of a number of Units equal to the Consideration;

 

(c)           an affidavit from the Contributor in the form of Exhibit D, stating, under penalty of perjury, the Contributor’s United States Taxpayer Identification Number and that the Contributor is not a foreign person pursuant to section 1445(b)(2) of the Code and a comparable affidavit satisfying Massachusetts’ and any other state’s withholding requirements, if any;

 

(d)           all title insurance policies, leases, lease files, letters of credit, contracts, stock certificates, original promissory notes held by Holdings or a Participating Entity and other indicia of ownership with respect to Holdings and each Participating Entity that are in the Contributor’s possession or that can be obtained through reasonable efforts in the Contributor’s capacity as indirect owner of any Participating Entity shall be delivered or made available to the Company;

 

(e)           a certificate from the Contributor affirming that the representations and warranties made by the Contributor pursuant to this Agreement remain true and correct in all material respects as of the Closing Date;

 

(f)            the Operating Partnership Agreement;

 

(g)           an Ownership Limit Waiver substantially in the form attached hereto as Exhibit E;

 

(h)           a lockup agreement in the form attached hereto as Exhibit L;

 

(i)            a Registration Rights Agreement substantially in the form attached hereto as Exhibit F;

 

(j)            a Voting Agreement substantially in the form attached hereto as Exhibit H;

 

(k)           a letter agreement in the form attached hereto as Exhibit J, with respect to permitted transfers of Units by the Contributor;

 

(l)            if requested by the Company, certified copies of all organizational documents for the Contributor, together with certified copies of all appropriate limited liability company actions authorizing the execution, delivery and performance by the Contributor of this Agreement, any related documents and the Closing Documents;

 

8

 

(m)          evidence reasonably satisfactory to the Company that the lender of any borrowed money secured by a mortgage or deed of trust disclosed in the Title Reports, other than those lenders whose loans are being repaid before or immediately after the Closing, has consented to the transaction as required by any loan document, deed of trust, mortgage or other evidence of indebtedness related to any Property;

 

(n)           any other documents reasonably requested by the Company or the Operating Partnership to assign, transfer, convey, contribute and deliver the Holdings Interests, free and clear of all Encumbrances, and effectuate the transactions contemplated hereby; and

 

(o)           all state and local transfer tax returns and any filings to be made in any applicable governmental jurisdiction in which the Company or the Operating Partnership reasonably believes that it is required to file its organizational documentation or in which the recording of the Contribution and Assumption Agreement is required.

 

Section 2.4            Closing Costs.  At Closing, the Company shall pay all costs associated with the Public Offering and the Roll-Up and the transactions in connection therewith (collectively, the “Transaction”), including, without limitation, the fees of the Company’s legal counsel in preparing documents related to the Transaction (including the legal fees of DLA Piper LLP (US) with respect to only the Transaction (i.e., not the formation of the Contributor, Holdings or any Participating Entity, the acquisition of Properties by the Contributor, Holdings or any Participating Entity or any Allocated Debt (the “Excluded Work”)), the fees of the Company’s accountants, filing fees, underwriting fees, and transfer or documentary stamp taxes triggered by the Transaction, other than Allocated Debt Transfer Costs and costs associated with the Excluded Work, all of which costs are collectively referred to herein as the “Transaction Costs” and the Company shall reimburse the Contributor for all Transaction Costs previously paid by the Contributor.  For the avoidance of doubt, the Contributor hereby agrees to be solely responsible for all assumption costs, debt transfer costs, consent fees, prepayment fees or other charges payable with respect to the transfer of its Contributed Assets subject to the Allocated Debt (the “Allocated Debt Transfer Costs”).

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES AND INDEMNITIES

 

Section 3.1            Representations and Warranties of the Company and the Operating Partnership.  The Operating Partnership and the Company, jointly and severally, hereby represent and warrant to, and covenant with, the Contributor that:

 

(a)           Organization; Authority.  Each of the Company and the Operating Partnership has been duly formed and is validly existing under the laws of the jurisdiction of its incorporation or formation with requisite corporate or limited partnership power and authority, as applicable, to enter this Agreement and all agreements contemplated hereby.  The persons and entities executing this Agreement and all agreements contemplated hereby on behalf of the Company and the Operating Partnership have the power and authority to enter into this Agreement and such other contemplated agreements.

 

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(b)           No Violation.  Assuming the truth and accuracy of the representations and warranties of the Contributor in Section 3.2, (i) the execution, delivery and performance by the Company and the Operating Partnership of its obligations under this Agreement and all other agreements contemplated hereby will not contravene any provision of applicable law, the certificate of incorporation and bylaws of the Company or the certificate of limited partnership or Operating Partnership Agreement, or any material agreement or other material instrument binding upon the Company or the Operating Partnership, or any applicable law, judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or the Operating Partnership, and (ii) no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Company or the Operating Partnership of its obligations under this Agreement and all other agreements contemplated hereby, which, if not obtained, would cause a Material Adverse Effect.

 

(c)           No Brokers.  Except as set forth on Schedule 3.2(k), neither the Company nor the Operating Partnership has entered into, nor will either of them enter into, any agreement, arrangement or understanding with any person or firm that will result in the obligation of the Contributor or any of the Contributor’s equity holders or beneficiaries (as such) to pay any finder’s fee, brokerage commission or similar payment in connection with the transactions contemplated hereby.

 

(d)           Valid Issuance of Units.  The Units, when issued and delivered in compliance with the provisions of the Agreement will be duly authorized, validly issued, fully paid and, except as provided in the Operating Partnership Agreement and except as affected by Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, non-assessable.  The Units will be free of any Encumbrances created by the Company or the Operating Partnership; provided, however, that the Units are subject to restrictions on transfer under U.S. state and/or federal securities laws and as set forth in the Operating Partnership Agreement.  The Units will  not be issued in violation of any preemptive rights or rights of first refusal granted by the Company or the Operating Partnership.

 

(e)           Tax Status of the Operating Partnership.  The Operating Partnership has at all times during its existence been properly treated as either a “disregarded entity” or a partnership and not as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, and each subsidiary of the Operating Partnership has at all times during its existence been properly treated as either a “disregarded entity” or a partnership and not as an association or publicly traded partnership taxable as a corporation for federal income tax purposes, other than STAG Industrial TRS, Inc., a wholly-owned subsidiary of the Operating Partnership that is taxable as a corporation for federal tax purposes as a taxable REIT subsidiary.

 

(f)            REIT Status.

 

(i)            The Company intends to qualify as a real estate investment trust (“REIT”) under the Code, and the Company will be organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and its proposed ownership and method of operation will enable it to continue to qualify as a REIT under the Code for the Company’s taxable years ending December 31, 2011 and thereafter.

 

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(ii)           The Common Stock will be registered pursuant to Section 12(b) of the Securities Act of 1934, as amended, and will be listed on the New York Stock Exchange.

 

(g)           Litigation.  Except as set forth in the Registration Statement, there is no Action pending against the Company or the Operating Partnership and for which service has occurred or, to the Knowledge of the Company, threatened in writing that would, in the reasonable judgment of the Company, if determined adversely to the Company or the Operating Partnership, as applicable, have a Material Adverse Effect.  Except as set forth in the Registration Statement, no outstanding order, writ, injunction or decree of any court, government, governmental entity or authority or arbitration naming or specifically identifying the Company or the Operating Partnership that in any such case would impair the Company’s or the Operating Partnership’s ability to enter into and perform all of its obligations under this Agreement or would reasonably be expected to have a Material Adverse Effect.

 

(h)           Investment Company Act of 1940.  Neither the Company nor the Operating Partnership is and, after giving effect to the Public Offering, neither the Company nor the Operating Partnership will be, an “investment company,” as defined in the Investment Company Act of 1940, as amended.

 

(i)            Valid Issuance of Common Stock.  The outstanding shares of Common Stock are, and when issued and duly delivered against payment therefor as contemplated in the applicable underwriting agreement, the shares of Common Stock issued in the Public Offering will be, duly authorized, validly issued, fully paid and non-assessable.

 

Section 3.2            Representations and Warranties of the Contributor.  The Contributor represents and warrants to the Company and the Operating Partnership as set forth below in this Section 3.2 with respect to Holdings, each Participating Entity and the Properties.  Unless otherwise expressly provided in this Agreement, the Contributor makes no representation, warranty, covenant or agreement to indemnify any Indemnified Company Party (as defined in Section 3.3(b)).

 

(a)           Title.  (i) Each Participating Entity or Holdings owns (A) fee title to the Property or Properties identified as owned on Exhibit B, and (B) the leasehold estate in any Property or Properties identified as ground leased on Exhibit B and (C) the purchaser’s interest under a purchase contract to purchase each Property identified on Exhibit B as a Property to be acquired (collectively, the “Committed Properties”), provided that each such contract (a “Purchase Contract”) is binding on the purchaser and the seller thereunder and pursuant to which (1) the Contributor (or its subsidiary) has made an earnest money deposit that is subject to loss if the purchaser fails to close, (2) there are no conditions to closing in favor of the parties other than the truth and accuracy of the parties’ representations and warranties, compliance with the parties’ covenants and other closing conditions customary for a binding purchase and sale agreement for real estate after completion of the purchaser’s due diligence and (3) not later than the commencement of the road show relating to the Public Offering, Contributor shall have funded to Holdings the Acquisition Cash; and (ii) the fee ownership of, or ground leasehold interest in, such Properties, as applicable, are not subject to any liens other than (x) as specifically set forth in the title reports listed on Schedule 3.2(a), (y) as disclosed in the

 

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Registration Statement or (z)  liens created after the date of the title reports listed on Schedule 3.2(a), which liens are specifically identified on Exhibit B and are Permitted Liens.

 

(b)           Organization; Authority.  The Contributor has the full right, authority, power and legal capacity to enter into this Agreement and any other agreement, document or instrument to be executed and delivered by the Contributor pursuant to this Agreement and to carry out the transactions contemplated hereby and thereby, including, without limitation, the conveyance of the Holdings Interests free and clear of all Encumbrances.  The Contributor, Holdings and each Participating Entity is duly formed, validly existing and in good standing (to the extent applicable) under the laws of the jurisdiction of its formation, and has all requisite power and authority to own, lease or operate its property and to carry on its business as presently conducted and, to the extent required under applicable law, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary.

 

(c)           Due Authorization.  The execution, delivery and performance of this Agreement and any other agreement, document or instrument to be executed and delivered by the Contributor pursuant to this Agreement has been duly and validly authorized by all necessary action of the Contributor.  Each of this Agreement and the agreements, documents and instruments executed and delivered by or on behalf of the Contributor pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of the Contributor, each enforceable against the Contributor in accordance with its terms, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting creditors’ rights generally, as from time to time in effect, or the application of equitable principles.

 

(d)           Consents and Approvals.  No consent, waiver, approval or authorization of any third party, including, without limitation, any governmental authority or agency, is required to be obtained by the Contributor, Holdings or the Participating Entities in connection with the execution, delivery and performance of this Agreement and the transactions contemplated hereby, except any of the foregoing that shall have been satisfied or obtained at or prior to the Closing Date and except for such consents, waivers, approvals and authorizations the failure of which to obtain would not have a Material Adverse Effect or materially and adversely effect the ability of the Contributor to execute and deliver this Agreement and perform its obligations thereunder.

 

(e)           Ownership of the Interests.  The Contributor is the sole record owner of the Holdings Interests to be transferred by the Contributor, free and clear of any Encumbrances and has good and valid title to such Holdings Interests.  Holdings is the sole record owner of the Participating Entity Interests, which are held free and clear of any Encumbrances and for which Holdings has good and valid title.  Holdings has not assigned its interest under any Purchase Contract to any Person (other than a Participating Entity).

 

(f)            Interests.

 

(i)            The Holdings Interests to be contributed by the Contributor and the Participating Entity Interests constitute all of the issued and outstanding interests owned (directly

 

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or indirectly) by the Contributor in Holdings and the Participating Entities.  The Contributor has no equity interest, either direct or indirect, in the Properties, except for the Holdings Interests and the Participating Entity Interests, which are the subject of this Agreement.

 

(ii)           The Holdings Interests owned by the Contributor and the Participating Entity Interests owned by Holdings were validly issued and are duly authorized and fully paid and were not issued in violation of any preemptive rights.  The Holdings Interests and the Participating Entity Interests have been issued in compliance with applicable law and the Participating Entity Agreements.  There are no rights, subscriptions, warrants, options, conversion rights, preemptive rights or agreements of any kind outstanding to purchase or to otherwise acquire any of the interests that comprise the Holdings Interests, the Participating Entity Interests or any securities or obligations of any kind convertible into any of the interests that comprise the Holdings Interests, the Participating Entity Interests or other equity interests or profit participation of any kind in Holdings or any Participating Entity.  At the Closing, upon receipt of the consideration contemplated by this Agreement, the Contributor will have transferred the Holdings Interests to the Operating Partnership free and clear of all Encumbrances.

 

(g)           No Violation.  Subject to the consent requirements contained in the loan documents for each Property, copies of which have been previously made available to the Company, its agents and underwriters, none of the execution, delivery or performance of this Agreement, the documents required pursuant thereto and the transactions contemplated hereby and thereby does or will, with or without the giving of notice, lapse of time, or both, (a) violate, conflict with, result in a breach of, or constitute a default under or give to others any right of termination or cancellation of (i) the organizational documents of the Contributor, (ii) any material agreement, document or instrument to which the Contributor, Holdings or any Participating Entity is a party or by which the Contributor, the Holdings Interests, the Participating Entity Interests or any of its direct or indirect assets or properties are bound or (iii) any applicable law, or term or provision of any judgment, order, writ, injunction, or decree of any governmental or regulatory authority, which is binding on the Contributor, Holdings or any Participating Entity or by which the Contributor or any of its direct or indirect assets or properties are bound or subject or (b) result in the creation of any Encumbrance upon the Holdings Interests, the Participating Entity Interests or any Lien on the Properties.  Except as shall have been cured, consented to or waived prior to the Closing, none of the Contributor, Holdings or any Participating Entity is in violation of its organizational documents.

 

(h)           Non-Foreign Status.  The Contributor is not a “disregarded entity” within the meaning of  Treas. Reg. Section 1.1445-2(b)(2)(iii) and is not a foreign person, foreign corporation, foreign partnership, foreign trust or foreign estate (as defined in the Code), and is, therefore, not subject to the provisions of the Code relating to the withholding of sales proceeds to foreign persons.

 

(i)            Withholding.  The Contributor shall execute at Closing such certificates or affidavits reasonably necessary to document the inapplicability of any federal or state withholding provisions, including, without limitation, those referred to in Section 3.2(h) above and any similar provisions under Massachusetts law.  Notwithstanding anything herein to the contrary, the Company or the Operating Partnership shall be entitled to withhold a portion of any

 

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payments otherwise to be made to the Contributor as required by the Code or any applicable state law, including (without limitation) Massachusetts law.

 

(j)            Investment Purposes.  The Contributor acknowledges its understanding that the Units to be acquired pursuant to this Agreement and any shares of Common Stock for which the Units may be redeemed are not being registered under the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder (the “Act”) and may not be transferred except as provided for in the Registration Rights Agreement executed and delivered by the Operating Partnership or pursuant to the Act or any applicable state blue sky laws pursuant to a specific exemption or exemptions therefrom, and the Operating Partnership’s reliance on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Contributor, including the following:

 

(i)            Investment.  The Contributor is acquiring the Units solely for its own account for the purpose of investment and not as a nominee or agent for any other Person and not with a view to, or for offer or sale in connection with, any distribution of any thereof.  The Contributor agrees and acknowledges that it will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of (hereinafter, “Transfer”) any of the Units (or shares of Common Stock for which the Units may be redeemed) unless (i) the Transfer is pursuant to an effective registration statement under the Act and qualification or other compliance under applicable blue sky or state securities laws, (ii) if required by the Company, counsel for the Contributor (which counsel shall be reasonably acceptable to the Company and may be DLA Piper LLP (US)) shall have furnished the Company with an opinion, reasonably satisfactory in form and substance to the Company, to the effect that no such registration is required because of the availability of an exemption from registration under the Act and qualification or other compliance under applicable blue sky or state securities laws, or (iii) the Transfer is a redemption of the Units in accordance with the Operating Partnership Agreement.

 

(ii)           Knowledge.  The Contributor is knowledgeable, sophisticated and experienced in business and financial matters and fully understands the limitations on transfer imposed by the federal securities laws and as described in this Agreement.  The Contributor is able to bear the economic risk of holding the Units for an indefinite period and is able to afford the complete loss of the Contributor’s investment in the Units.  The Contributor has received and reviewed all information and documents about or pertaining to the Company, the Operating Partnership, the business and prospects of the Company and the Operating Partnership, and the issuance of the Units and the Common Stock as the Contributor deems necessary or desirable, and has been given the opportunity to obtain any additional information or documents and to ask questions of the proposed management of the Company and the Operating Partnership and receive answers about such information and documents, the Company, the Operating Partnership, the business and prospects of the Company and the Operating Partnership and the Common Stock that the Contributor deems necessary or desirable to evaluate the merits and risks related to the Contributor’s investment in the Units and to conduct its own independent valuation of the purchase of the Units.  The Contributor acknowledges that any such questions posed were answered to the Contributor’s satisfaction.  The Contributor understands and has taken cognizance of all risk factors related to the purchase of the Units, including, without limitation, the risk factors set forth in the Registration Statement.  The Contributor is a sophisticated real estate investor.  The Contributor is relying upon its own independent analysis and assessment

 

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(including with respect to taxes), and the advice of the Contributor’s advisors (including tax advisors), and not upon that of the Company and Operating Partnership, for purposes of evaluating, entering into, and consummating the transactions contemplated by this Agreement.

 

(iii)          Holding Period.  The Contributor acknowledges that it has been advised that (i) unless the Units and shares of Common Stock that may be issued upon redemption of the Units are subsequently registered under the Act or an exemption from such registration is available, the Units and the shares, as applicable, must be held (and the Contributor must continue to bear the economic risk of the investment in the Units and the shares of Common Stock) indefinitely, (ii) a restrictive legend in the form hereafter set forth shall be placed on any certificates representing the Units or, if applicable, shares of Common Stock and (iii) stop transfer and other notations shall be made in the appropriate records of the Operating Partnership and the Company and the Company’s transfer agent indicating that the Units and the shares of Common Stock are subject to restrictions on transfer.

 

(iv)          Accredited Investor.  The Contributor is an “accredited investor” (as such term is defined in Rule 501 (a) of Regulation D under the Act).

 

(v)           Legend.  Each certificate representing the Units or shares of Common Stock for which the Units may be redeemed, may, to the extent applicable, bear the following legend:

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS, IF REQUIRED BY THE COMPANY, THE TRANSFEROR DELIVERS TO THE COMPANY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

 

In addition, each certificate representing shares of Common Stock will bear a legend regarding restriction on ownership and transfer related to the Company’s status as a real estate investment trust.

 

(k)           No Brokers.  Except as set forth on Schedule 3.2(k), neither the Contributor nor any of the Contributor’s respective managers, trustees, members or beneficiaries, as applicable, has employed or made any agreement with any broker, finder or similar agent or any Person that will result in the obligation of the Company or any of its Affiliates to pay any finder’s fee, brokerage fees or commissions or similar payment in connection with the transactions contemplated by this Agreement.

 

(l)            Taxes.  The Contributor makes the following representations with respect to Holdings and each Participating Entity (the “Contributed Entities”), and with respect to itself as to Section 3.2(l)(viii) below:

 

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(i)            (A) All Tax Returns required to be filed by, on behalf of, or with respect to, the Contributed Entities have been duly and timely filed with the appropriate taxing authorities in all jurisdictions in which such Tax Returns are required to be filed (after giving effect to any valid extensions of time in which to make such filings), and all such Tax Returns were true, complete and correct in all material respects; (B) all Taxes due and payable by, on behalf of, or with respect to the Contributed Entities, either directly or otherwise, have been fully and timely paid, except (1) to the extent adequately reserved for in accordance with generally accepted accounting principles consistently applied on the balance sheet of such Contributed Entity (or other applicable entity), and adequate reserves or accruals for Taxes have been provided in the balance sheet of such Contributed Entity (or other applicable entity) with respect to any period through the date hereof for which Tax Returns have not yet been filed or for which Taxes are not yet due and owing and (2) with respect to real estate taxes and assessments for the Properties that are paid directly by the tenants under the Leases and pursuant to such Leases, as to which the Contributor has no knowledge of any tenant’s material failure to pay such Taxes and Contributor covenants to use commercially reasonable efforts to enforce the provisions of such Leases with respect to the payment of such Taxes; (C) no agreement, waiver or other document or arrangement extending or having the effect of extending the period for assessment or collection of Taxes (including, but not limited to, any applicable statute of limitations) has been executed or filed with any taxing authority by or on behalf of the Contributed Entities, and (D) each Contributed Entity is, and at all times during its existence has been, a limited liability company that is taxable as a partnership or “disregarded entity” (rather than being taxable as an association or a publicly-traded partnership taxable as a corporation).

 

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

 

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

 

(iv)          No claim has been made by a taxing authority in a jurisdiction where a Contributed Entity does not file an income or franchise Tax Return that such Contributed Entity is or may be subject to taxation by, or required to file an income or franchise Tax Return in, that jurisdiction.

 

(v)           (A) There are no deficiencies asserted or assessments made as a result of any examinations by any taxing authority of the Tax Returns of or covering or including any Contributed Entity, or such deficiencies or assessments have been fully paid, and there are no other audits or investigations by any taxing authority in progress, nor has such Contributed Entity received any notice from any taxing authority that it intends to conduct such an audit or

 

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investigation; (B) no requests for a ruling or a determination letter are pending with any taxing authority by, or with respect to, such Contributed Entity; and (C) no issue has been raised in writing by any taxing authority in any current or prior examination which, by application of the same or similar principles, could reasonably be expected to result in a proposed deficiency against or with respect to such Contributed Entity for any subsequent taxable period that could be material.

 

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

 

(vii)         There are no Liens as a result of any unpaid taxes (other than statutory liens for taxes not yet delinquent) upon any of the assets of any Contributed Entity, other than Permitted Liens.

 

(viii)        The Contributor is a United States person within the meaning of Section 7701(a)(30) of the Code.

 

(ix)           No Contributed Entity (or portion thereof) has ever constituted or been taxable as a “corporation” or an “association” (within the meaning of the Code).

 

(x)            No Contributed Entity has engaged in a “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4.

 

(xi)           The transactions contemplated hereby will not result in any income Tax liability to the Company, the Operating Partnership or any Contributed Entity.

 

(xii)          For purposes of this Agreement,

 

(A)          “Taxes” shall mean any (i) federal, state or local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, escheat, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax, assessment or governmental charge of

 

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any kind whatever imposed by any taxing authority, including any interest, penalty or addition thereto, whether disputed or not, and (ii) liability for the payment of any amount of the type described in clause (i) above as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person.

 

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

 

(m)          Litigation.  Except as set forth on Schedule 3.2(m) or in the Registration Statement, there is no Action pending against the Contributor, Holdings, any Participating Entity or any of their Properties or their other assets, and for which service has occurred or, to the Knowledge of the Contributor, threatened in writing that would, in the reasonable judgment of the Contributor, if determined adversely to the Contributor, Holdings or any Participating Entity, as applicable, have a Material Adverse Effect.  Except as set forth on Schedule 3.2(m), no outstanding order, writ, injunction or decree of any court, government, governmental entity or authority or arbitration naming or specifically identifying the Contributor, Holdings or any Participating Entity, all or any portion of the Holdings Interests, the Participating Entity Interest, any Purchase Agreement or any Property that in any such case would impair the Contributor’s ability to enter into and perform all of its obligations under this Agreement or would reasonably be expected to have a Material Adverse Effect.

 

(n)           Leases.  True, correct and complete copies of all leases, subleases and rights of occupancy which are (i) in effect with respect to the Properties as of the date of this Agreement or (ii) fully executed as of the date hereof (the “Leases”), together with all amendments and supplements thereto, and a true, complete and correct rent roll for the Properties have been delivered or made available to the Company, its agents and underwriters.

 

(o)           Other Contracts.  The Contributor has delivered or made available to the Company, its agents and underwriters true, correct and complete in all material respects, copies of each agreement, undertaking or contract (other than the Leases) that materially affects the ownership, use and operation of any Property, including, without limitation, each Purchase Contract.  The purchaser and, to the Knowledge of the Contributor, the seller under each Purchase Contract are in compliance with their respective obligations under said Purchase Contract.

 

(p)           Liabilities; Indebtedness.  Except as disclosed in the Registration Statement, no Participating Entity has incurred any indebtedness related to any of the Properties owned by such Participating Entity except in each instance for the Allocated Debt, debt secured by Permitted Liens, trade payables which are no more than sixty (60) days past due and other customary and ordinary expenses in the ordinary course of business.

 

(q)           Insurance.  Each Participating Entity, directly or through its tenants, currently maintains or causes to be maintained customary public liability, casualty and other insurance coverage in commercially reasonable amounts with reputable insurance companies (excluding in all cases, earthquake, flood and terrorism insurance coverage) with respect to the

 

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Property or Properties owned by such Participating Entity.  Participating Entities shall use diligent efforts to require that the tenants maintain all such insurance coverage in full force and effect through the Closing Date and pay all premiums when due.

 

(r)            Personal Property.  All equipment, fixtures and personal property that is owned by any Participating Entity and that is located at or on any Property shall remain and not be removed by the Contributor or any Participating Entity prior to the Closing Date, except for such equipment, fixtures and personal property that becomes obsolete or unusable, which may be disposed of or replaced in the ordinary course of business.

 

(s)           No Other Agreements to Sell.  Except as set forth in the Registration Statement or on Schedule 3.2(s), the Contributor has not entered into any agreement with, and has no obligation (absolute or contingent) to, any other Person (other than the Operating Partnership) to sell, transfer or in any way encumber any of the Holdings Interests or to not sell the Holdings Interests, or to enter into any agreement with respect to a sale, transfer or encumbrance of or put or call right with respect to the Holdings Interests that has not been waived or terminated.  Except as otherwise set forth in the Registration Statement or on Schedule 3.2(s), none of the Contributor, Holdings or any Participating Entity has made any outstanding agreement with, and has any outstanding obligation (absolute or contingent) to, any other Person (other than the Operating Partnership) to sell, transfer or in any way encumber any Property owned by such Participating Entity or to not sell any Property, or to enter into any agreement with respect to a sale, transfer or encumbrance of or put or call right with respect to any Property owned by such Participating Entity.

 

(t)            Environmental Reports.  The Contributor has delivered or made available to the Company, its agents and underwriters copies that are true, correct and complete in all material respects of any third-party environmental reports prepared for the Contributor, Holdings, or any Participating Entity during the Participating Entities’ period of ownership of their respective properties or in the Contributor’s possession or control relating to the Properties, including, without limitation, the Committed Properties.

 

(u)           Compliance With Laws.  As of the date of this Agreement, except as set forth in Schedule 3.2(u) or in the Registration Statement, neither the Contributor nor Holdings nor any Participating Entity has received any written notice from any governmental agency requiring the correction of any condition with respect to the Property, or any part thereof, by reason of a violation of any applicable federal, state, county or municipal laws, ordinances, rules, regulations, codes, orders and statutes (including, without limitation, those currently relating to fire and safety, conservation, parking, Americans with Disabilities Act, zoning and building laws) except where the failure to be in compliance with such laws would not reasonably be expected to have a Material Adverse Effect.

 

(v)           Condemnation.  Except as disclosed on Schedule 3.2(m) or Schedule 3.2(v) or in the Registration Statement, there are no pending or threatened in writing or to the Knowledge of the Contributor, proposed, condemnation, eminent domain or similar proceedings, or negotiations for purchase in lieu of condemnation with respect to any Properties that would reasonably be expected to have a Material Adverse Effect.

 

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(w)          ERISA.  No Participating Entity has any employees.

 

(x)            Bankruptcy.  (i) There has not been filed any petition or application with respect to, or any proceeding commenced by or against, any of the assets of Holdings or any Participating Entity under any bankruptcy law, and neither Holdings nor any Participating Entity has made any assignment for the benefit of creditors, (ii) none of the Contributor, Holdings or any Participating Entity is “insolvent” within the meaning of any bankruptcy law and (iii) neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby shall render the Contributor insolvent.

 

(y)           FINRA Disclosures.  No relationship, direct or indirect, exists between or among the Contributor, Holdings or any Participating Entity, on the one hand, and the directors, managers, officers, or to the Contributor’s Knowledge, equity interest holders of the Contributor, Holding or any Participating Entity, on the other hand, which is required by the rules of the Financial Industry Regulatory Authority, Inc. (the “FINRA”) to be described in the Registration Statement, which is not so described.

 

(z)            Disclosure Schedules.  The Disclosure Schedules are, and except as disclosed to the Company in writing, shall remain as of the Closing Date, true, correct and complete in all material respects.

 

Section 3.3            Indemnification.

 

(a)           Survival of Representations and Warranties; Remedy for Breach.

 

(i)            All representations and warranties contained in this Agreement or in any Schedule or certificate delivered pursuant hereto shall survive the Closing for the period specified in Section 3.3(e).

 

(ii)           Notwithstanding anything to the contrary in this Agreement, none of the Contributor, the Company or the Operating Partnership shall be liable under this Agreement for monetary damages (or otherwise) for breach of any of their respective representations, warranties and covenants contained in Section 3.1 or Section 3.2, as applicable, or this Agreement, or in any Schedule, certificate or affidavit delivered by it pursuant thereto, other than pursuant to the succeeding provisions of this Section 3.3.

 

(iii)          Notwithstanding anything to the contrary in this Agreement, any party may bring suit or pursue any other legal right available to such party as a result of willful misconduct or fraud by any other party to this Agreement.

 

(b)           General Indemnification.

 

(i)            The Company and the Operating Partnership shall indemnify and hold harmless the Contributor and its directors, managers, officers, employees, agents, representatives, beneficiaries, equity interest holders and Affiliates (each of which is an “Indemnified Contributor Party”) from and against any and all claims, losses, damages, liabilities and expenses, including, without limitation, amounts paid in settlement, reasonable attorneys’ fees, costs of investigation and remediation, costs of investigative, judicial or administrative

 

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proceedings or appeals therefrom, and costs of attachment or similar bonds (collectively, “Losses”) arising out of or relating to, asserted against, imposed upon or incurred by the Indemnified Contributor Party in connection with (A) any breach of a representation, warranty or covenant of the Company or the Operating Partnership contained in this Agreement, or (B) any Action brought by a third party in the Public Offering against the Contributor relating to any alleged federal or state securities laws violations in connection with the Public Offering, including, without limitation, untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or any untrue statement or alleged untrue statement of a material fact contained in the prospectus portion of the Registration Statement or related “issuer free writing prospectus” (as defined in Rule 433 of the Act) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, except in each case in this clause (B) insofar as such Losses arise out of, or are based upon, (1) any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to the Contributor or any of its controlling Affiliates furnished to the Company in writing by such Contributor or a controlling Affiliate expressly for use therein, (2) the Contributor’s breach of a representation, warranty or covenant of this Agreement, or (3) the Contributor’s fraud, willful misconduct or gross negligence.

 

(ii)           The Contributor shall indemnify and hold harmless the Company, the Operating Partnership and their Affiliates and each of their respective directors, managers, officers, employees, agents, representatives, beneficiaries, equity interest holders and Affiliates (each of which is an “Indemnified Company Party”) from and against any and all Losses arising out of or relating to, asserted against, imposed upon or incurred by such Indemnified Company Party in connection with or as a result of (A) any breach of a representation, warranty or covenant of the Contributor contained in this Agreement or in any schedule of certificate delivered pursuant thereto, or (B) any Action brought by a third party in the Public Offering against the Company or the Operating Partnership relating to any alleged federal or state securities laws violations in connection with the Public Offering, including, without limitation, untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or any untrue statement or alleged untrue statement of a material fact contained in the prospectus portion of the Registration Statement or related “issuer free writing prospectus” (as defined in Rule 433 of the Act) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case in this clause (B) only with respect to Losses that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to the Contributor or any of its controlling Affiliates furnished to the Company in writing by such Contributor or a controlling Affiliate expressly for use therein.

 

(c)           Notice and Defense of Claims.  As soon as reasonably practicable after receipt by the Indemnified Company Party or the Indemnified Contributor Party, as applicable (as applicable, an “Indemnified Party”) of notice of any liability or claim incurred by or asserted

 

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against the Indemnified Party that is subject to indemnification by the Contributor or the Company or the Operating Partnership, as applicable, under this Section 3.3 (as applicable, the “Indemnifying Party”), the Indemnified Party shall give notice thereof to the Indemnifying Party, including, without limitation, liabilities or claims to be applied against the indemnification basket established pursuant to Section 3.3(d)(i).  The Indemnified Party may at its option demand indemnity under this Section 3.3 from the Indemnifying Party as soon as a claim has been threatened in writing by a third party, regardless of whether an actual Loss has been suffered, so long as the Indemnified Party shall in good faith determine that such claim is not frivolous and that the Indemnified Party may be liable for, or otherwise incur, a Loss as a result thereof and shall give notice of such determination to the Indemnifying Party.  The Indemnified Party shall permit the Indemnifying Party, at its option and expense, to assume the defense of any such claim by counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party, and to settle or otherwise dispose of the same; provided, that the Indemnified Party may at all times participate (but not control) in such defense at its expense; provided  further, that the Indemnifying Party shall not, in defense of any such claim, except with the prior written consent of the Indemnified Party, in its sole and absolute discretion, consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff in question to the Indemnified Party and its Affiliates of a release of all liabilities in respect of such claims, or that does not result only in the payment of money damages; and provided  further that in the event of a conflict, the Indemnified Party may choose separate counsel at the Indemnifying Party’s reasonable cost and expense.  Notwithstanding the foregoing, if the Company or the Operating Partnership is required to retain counsel, any such counsel shall be selected by the Company (and may include DLA Piper LLP (US)).  If the Indemnifying Party shall fail to undertake such defense within 30 days after such notice, or within such shorter time as may be reasonable under the circumstances, then the Indemnified Party shall have the right to undertake the defense, compromise or settlement of such liability or claim on behalf of and for the account of the Indemnifying Party.

 

(d)           Limitations on and Threshold for Indemnification.

 

(i)            Threshold for Contributor.  Notwithstanding anything contained herein to the contrary, the Contributor shall not be liable under Section 3.3(b) or this Agreement unless and until the aggregate amount of all Losses recoverable by the Indemnified Company Parties under Section 3.3(b) and this Agreement for which the Contributor would, but for this provision, be liable exceeds on an aggregate basis one percent (1%) of the Consideration (valuing each Unit at the per-share initial public offering price of the Common Stock in the Public Offering) and then only to the extent of such excess.

 

(ii)           Indemnification Limitation.  Notwithstanding anything contained herein to the contrary, the Indemnified Company Parties shall look exclusively to the Contributor’s Units for indemnification under this Section 3.3 (valuing each Unit at the initial public offering price of the Common Stock in the Public Offering) and, with respect to any indemnification (other than those claims made with respect to a breach of Sections 3.2(a)(ii)(z), 3.2(b), (c), (e), (f) and (j) (the “Full Value Representations”)), the aggregate recovery that may be sought or obtained under this Agreement or under applicable law for all breaches or claims for indemnification hereunder shall not exceed twenty-five percent (25%) of the Consideration (valuing each Unit at the initial public offering price of the Common Stock in the Public

 

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Offering) (the “Maximum Liability”).  Without limiting the generality of the foregoing, the Contributor acknowledges that its indemnification liability for any breach of the Full Value Representations shall be up to the value of its Units (valuing each Unit at the per-share initial public offering price of the Common Stock in the Public Offering).  Notwithstanding anything contained herein to the contrary, no Indemnified Party shall have the right to receive or recover incidental, special, consequential or punitive damages against the Indemnifying Party by reason of any breach under or in connection with this Agreement or any schedule, exhibit, certificate or affidavit or any other document delivered by the Contributor or the Company or the Operating Partnership, as applicable, pursuant to this Agreement (unless such incidental, special or consequential (but not punitive) damages are incurred by an Indemnified Party as a result of a third party claim for Losses), and each Indemnified Party hereby waives any and all rights to receive such damages.

 

(e)           Limitation Period.

 

(i)            Notwithstanding the foregoing, any claim for indemnification under Section 3.3(b) must be asserted in writing by the Indemnified Company Party, stating the nature of the Losses and the basis for indemnification therefor.  Any claim for indemnification against the Company or the Operating Partnership and any claim against the Contributor with respect to any representations or warranties contained in this Agreement or in any schedule or certificate delivered pursuant hereto must be brought within one (1) year after the Closing.  Any such claim for indemnification not so asserted in writing within one year after the Closing shall not thereafter be asserted and shall forever be waived.

 

(ii)           If so asserted in writing within one year after the Closing (or the expiration of such later applicable period described in Section 3.3(e)(i)), such claims for indemnification shall survive until resolved by mutual agreement between the Contributor and the Indemnified Company Party or by judicial determination.

 

(f)            Reservation of Contributor Rights.  Notwithstanding anything else in this Section 3.3 or this Agreement to the contrary, the Contributor reserves unto itself all rights and remedies (including, without limitation, rights to seek contribution) against any third party indemnitors and prior property owners or occupants for liabilities with respect to which the Company or the Operating Partnership has been indemnified by the Contributor hereunder.

 

(g)           No Effect on Insurance.  Nothing contained in this Section 3.3 or this Agreement shall be construed to release or otherwise relieve any insurer of the Contributor, Indemnified Company Party or any Affiliate thereof from paying any of its claims or otherwise performing any of its duties and obligations pursuant to the terms and provisions of any policy of insurance which insures the Contributor, Indemnified Company Party or the Property.  If any claims as to which an Indemnified Company Party would be entitled to indemnification under Section 3.3(b) are covered by the insurance, the indemnification obligations shall be reduced by, but only by, the amount paid by the insurance company and not by any deductible or other amount reimbursed to the insurance company by an Indemnified Company Party.

 

Section 3.4            No Reliance, Properties As Is.  Each of the Company and the Operating Partnership acknowledge that, except for the Contributor’s representations set forth in

 

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Section 3.2, it has not relied upon any statements, representations or warranties by the Contributor or any agent of the Contributor.  Without limiting the generality of the foregoing, each of the Company and the Operating Partnership acknowledge and agree that any environmental, physical condition or other reports provided or made available to it by the Contributor or the Contributor’s agents are provided or made available without any representation or warranty of any kind, express or implied, as to the completeness or accuracy of the facts, presumptions, conclusions or other matters contained therein.  Except for the Contributor’s representations set forth in Section 3.2, each of the Company and the Operating Partnership agree that (i) the Properties shall be contributed to the Operating Partnership (through the contribution of the Holdings Interests) and that the Company and the Operating Partnership shall accept possession of the Properties on the Closing Date strictly on an “AS IS, WHERE IS” and “WITH ALL FAULTS, LIABILITIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN” basis, with no right of set-off or reduction in the Consideration, and (ii) such contribution shall be without representation or warranty of any kind, express or implied, including any warranty of income potential, operating expenses, conformance of financial information to generally accepted accounting principles, uses, merchantability or fitness for a particular purpose and that the Contributor has, by executing this Agreement, disclaimed and renounced any such representation or warranty.

 

ARTICLE 4

 

COVENANTS OF CONTRIBUTOR

 

Section 4.1            Negative Covenants.

 

(a)           Interests.  From the date hereof through the Closing, except as described in the Registration Statement, the Contributor shall not, without the prior written consent of the Company:

 

(i)            sell, transfer or otherwise dispose (or agree to sell, transfer or otherwise dispose) of, or cause or allow the sale, transfer or disposition of (or agree to do any of the foregoing) all or any portion of the Holdings Interests, or

 

(ii)           encumber or pledge (or permit to become encumbered or pledged) all or any portion of its Holdings Interests.

 

(b)           Participating Entity Operations.  From the date hereof through the Closing, the Contributor agrees that it shall cause Holdings and each Participating Entity to conduct its business in the ordinary course, consistent with past practices.  It is specifically agreed by the parties that Holdings and the Participating Entities may exercise options to purchase, rights under pending purchase and sale agreements and rights of first refusal with respect to properties described in the Registration Statement prior to Closing without the consent of the Company or the Operating Partnership.  Except as described or as will be described in the Registration Statement or the Disclosure Schedules, the Contributor shall not permit Holdings or any Participating Entity without the prior written consent of the Company to:

 

(i)            enter into a transaction not in the ordinary course of business;

 

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(ii)           sell, transfer or dispose of, or cause the sale, transfer or disposition of (or agree to do any of the foregoing) any assets of Holdings or such Participating Entity, except for distributions that are not prohibited by clause (viii) below;

 

(iii)          mortgage, pledge or encumber (or permit to become encumbered) any assets of Holdings or such Participating Entity, except for Permitted Liens;

 

(iv)          amend, modify or terminate any Lease with annual rental payments in excess of $500,000, except for such amendments or modifications which do not decrease the aggregate rent paid thereunder or reduce the current term thereof;

 

(v)           amend or modify in any material respect or terminate any Purchase Contract;

 

(vi)          terminate or amend any existing property insurance policies affecting the Properties carried by Holdings or such Participating Entity that results in a material reduction in insurance coverage for one or more Properties;

 

(vii)         knowingly cause or permit Holdings or such Participating Entity to violate any applicable laws;

 

(viii)        materially alter the manner of keeping Holdings’ or such Participating Entity’s books, accounts or records or the accounting practices therein reflected; or

 

(ix)           make any distribution to its beneficiaries or equity interest holders, except as contemplated in Section 1.3;

 

(x)            make or change any tax election, settle or compromise any Tax liability or claim any refund for Taxes, file any amended Tax Return or any other similar action relating to the filing of any Tax Return or the payment or refund of any Tax, in each case, with respect to Holdings or any Participating Entity;

 

(xi)           incur any new indebtedness (other than trade payables in the ordinary course of business or indebtedness that will be repaid in full at or prior to Closing) or guaranty the indebtedness of any other entity, except for amounts payable with respect to Permitted Liens that are not delinquent or that are being contested in good faith by appropriate proceedings diligently pursued, and provided further that the principal amounts of the Allocated Debt shall not increase above the Estimated Allocated Debt Amount (other than new Allocated Debt associated with the acquisition of Committed Properties); or

 

(xii)          make any payments which reduce the outstanding principal balance of the Allocated Debt other than regular amortization payments or payments upon maturity, in each case, in accordance with the documents governing the Allocated Debt as of the date hereof.

 

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Section 4.2            Affirmative Covenants.

 

(a)           From the date hereof through the Closing, the Contributor, Company and Operating Partnership shall each use its diligent efforts to obtain any approvals, waivers or other consents of third parties, governmental authorities and agencies required to effect the Formation Transaction.  Nothing herein shall obligate the Company or the Operating Partnership to pursue or complete the Public Offering, which decision shall be made by the Company in its sole discretion.

 

(b)           Without limiting the obligations of the Contributor set forth in this Agreement, from the date hereof through the Closing, the Contributor shall use its diligent efforts (i) to prevent the breach of any representation or warranty of the Contributor hereunder, (ii) to satisfy all covenants of the Contributor hereunder, provided, however, that subsequent to the Closing the Contributor shall use its diligent efforts to satisfy all covenants of the Contributor hereunder that survive the Closing and (iii) to promptly cure any breach of a representation, warranty or covenant of the Contributor hereunder upon its learning of same.  Compliance with this covenant shall not limit the Contributor’s liability for a breach of, or failure to perform, any other representation, warranty or covenant herein unless the Company knows of such breach of representation prior to Closing and completes the Closing.

 

(c)           Each party hereto will give written notice to the other parties of any material development affecting the ability of such party to consummate the transactions contemplated by this Agreement.  In addition, five business days before each amendment to the Registration Statement filed with the Securities and Exchange Commission (other than any amendment filed solely for the purpose of filing exhibits) (each such date, a “Permitted Supplement Date”), the Contributor may supplement in writing any existing Disclosure Schedule or create a new Disclosure Schedule, to any representation or warranty in Section 3.2 and further agrees, on each Permitted Supplement Date, to give the Company written notice if it has any Knowledge that any representation or warranty made by the Contributor in this Agreement was untrue in any material respect when made or that would be untrue in any material respect if made as of such date (other than representations and warranties relating to a specified date).  Any such disclosure by the Contributor pursuant to this Section 4.2(c) made before the filing with the Securities and Exchange Commission of the last amendment to the Registration Statement before the commencement of the road show relating to the Public Offering, shall be deemed to amend and supplement each applicable Schedule or shall be deemed to constitute a new Schedule, and cure any misrepresentation or breach of warranty or covenant to the extent such information would cure the misrepresentation or breach of warranty or covenant.

 

(d)           From the date hereof and subsequent to the Closing, the Contributor agrees to provide the Company with such tax information relating to the Holdings Interests, the Participating Entity Interests and the Properties that is in the Contributor’s possession or control and that is reasonably requested by the Company and not otherwise in the Company’s or the Operating Partnership’s possession or control and to cooperate with the Company and the Operating Partnership with respect to the filing of their respective tax returns, including, without limitation, the depreciation and amortization schedules for Properties, as kept for both book and tax purposes, showing original basis and accumulated depreciation or amortization as of the Closing Date and basis information as of the Closing Date (computed for both book and tax

 

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purposes, if different) for all non-depreciable, non-amortizable assets held by any of the Contributed Entities.  The Contributor further agrees to notify the Company and the Operating Partnership, in writing, of any audits that could affect the amounts shown on the returns of the Company or the Operating Partnership for any taxable period.  The provisions of this Section 4.2(d) shall survive the Closing.

 

(e)           Contributor shall, or shall cause Holdings or its subsidiaries to, timely perform such party’s obligations under each Purchase Contract required to be performed prior to Closing, and to enforce all obligations of the seller under each Purchase Contract required to be performed at or before Closing.

 

(f)            Not later than the commencement of the road show relating to the Public Offering, Contributor shall fund the Acquisition Cash to Holdings or its subsidiaries.

 

ARTICLE 5

 

RELEASES AND WAIVERS

 

Each of the releases and waivers enumerated in this Article 5 shall become effective only upon the Closing.

 

Section 5.1            General Release of Company.  As of the Closing, the Contributor irrevocably waives, releases and forever discharges the Company, the Operating Partnership, Holdings, the Participating Entities and each of their respective directors, managers, officers, employees, agents, equity interest holders, attorneys, affiliates, successors and assigns of and from, any and all losses of any nature whatsoever existing as of the closing (collectively, “Contributor Claims”), known or unknown, suspected or unsuspected, arising out of or relating to the Participating Entity Agreements, Holdings, the Participating Entities or the Properties, except for Contributor Claims arising from the breach of any express representation, warranty, covenant or obligation of the Company or the Operating Partnership under this Agreement, any agreement contemplated hereby or entered into in connection herewith, or the governing documents of the Company or the Operating Partnership, subject to the obligations of the Company and the Operating Partnership under this Agreement.

 

Section 5.2            General Release of Contributor.  As of the Closing, the Company and the Operating Partnership irrevocably waives, releases and forever discharges the Contributor and each of the Contributor’s directors, managers, officers, employees, agents, equity interest holders, attorneys, Affiliates, successors and assigns of and from, any and all Losses of any nature whatsoever existing as of the Closing (collectively, “Company Claims”), known or unknown, suspected or unsuspected, arising out of or relating to the Participating Entity Agreements, Holdings, the Participating Entities, the Properties or any other matter which exists at the Closing, except for Company Claims arising from the breach of any express representation, warranty, covenant or obligation of the Contributor under this Agreement, any agreement contemplated hereby or entered into in connection herewith, or the governing documents of the Company or the Operating Partnership for which the Contributor has an indemnification obligation under this Agreement.

 

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Section 5.3            Attorney-in-Fact.  Contributor hereby irrevocably appoints the Company (or its designee) and any successor thereof from time to time (the Company or such designee or any such successor of any of them acting in the Contributor’s capacity as attorney-in-fact pursuant hereto, the “Attorney-in-Fact”) as the true and lawful attorney-in-fact and agent of Contributor, to act in the name, place and stead of Contributor to make, execute, acknowledge and deliver all such other contracts, orders, receipts, notices, requests, instructions, certificates, consents, letters and other writings relating to the transactions contemplated by this Agreement (including, without limitation, the execution of any Closing Documents or other documents) relating to the acquisition by the Company of the Contributor’s Holdings Interests, all in accordance with the terms and conditions of this Agreement, as well as the organizational documents of the Company and the Operating Partnership, as they may be amended or revised, any registration rights agreements and any lock-up agreements, and to provide information to the Securities and Exchange Commission and others about the transactions contemplated hereby, as fully as could the Contributor if personally present and acting (the “Power of Attorney”).  The Contributor agrees, at the request of the Company, to execute a separate power of attorney and proxy on the same terms as set forth in this Section 5.3, with such execution to be witnessed and notarized.

 

The Power of Attorney entered into by the Contributor and all authority granted hereby shall be coupled with an interest and therefore shall be irrevocable and shall not be terminated by any act of Contributor, by operation of law or by the occurrence of any other event or events, and if any other such act or event shall occur before the completion of the transactions contemplated by this Agreement, the Attorney-in-Fact shall nevertheless be authorized and directed to complete all such transactions as if such other act or event had not occurred and regardless of notice thereof.  Contributor hereby authorizes the reliance of third parties on each of the Power of Attorney.  Contributor hereby ratifies and confirms all that the Attorney-in-Fact shall lawfully do or cause to be done by virtue of the exercise of the powers granted to it by Contributor hereunder.

 

Contributor acknowledges that the Company has, and any designee or successor thereof acting as Attorney-in-Fact may have, an economic interest in the transactions contemplated by this Agreement.

 

The Power of Attorney contained in this Section 5.3 shall expire on the earlier of the first anniversary of the Closing or the termination of this Agreement.  Notwithstanding anything to the contrary, the Attorney-in-Fact may not expand the Contributor’s covenants, representations or covenants beyond those contemplated by this Agreement and the other documents and agreements contemplated hereby or modify the provisions of this Agreement pursuant to such Power of Attorney.

 

Section 5.4            Limitation on Liability.  It is understood that the Attorney-in-Fact (but solely in its role as Attorney-in-Fact) assumes no responsibility or liability to any person or entity by virtue of the Power of Attorney granted by Contributor hereby.  Other than as specifically set forth in this Agreement, the Attorney-in-Fact makes no representations with respect to and shall have no responsibility for the Formation Transactions or the Public Offering or the acquisition of the Holdings Interests by the Company or the Operating Partnership and shall not be liable for any error or judgment or for any act done or omitted or for any mistake of

 

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fact or law except for actions by the Attorney-in-Fact that constitute gross negligence or bad faith.  Contributor agrees that the Attorney-in-Fact may consult with counsel of its own choice (who may be counsel for the Company, the Operating Partnership, the Contributors or any of their successors or Affiliates), and it shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.  It is understood that the Attorney-in-Fact may, without breaching any express or implied obligation to the Contributor hereunder, release, amend or modify any other power of attorney or proxy granted by any other person or entity under any related agreement.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1            Further Assurances.  Each of the Contributor, Company and Operating Partnership agrees to take such other actions and execute and deliver such additional documents following the Closing as the Contributor, Company or the Operating Partnership may reasonably request in order to effect the transactions contemplated hereby.

 

Section 6.2            Counterparts.  This Agreement may be executed in one or more counterparts and by facsimile, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

Section 6.3            Governing Law, Venue.  This Agreement shall be governed by the internal laws of the State of New York, without regard to the choice of laws provisions thereof.  Any action to enforce, which arises out of or in any way relates to, any of the provisions of this Agreement or the instruments, agreements and other documents contemplated hereby shall be brought and prosecuted in the state or federal courts located in the State of New York, New York County.  Each party irrevocably:  (a) submits to the exclusive jurisdiction of the aforesaid courts, and (b) waives any objection which it may have at any time to the laying of venue of any suit, action or proceeding (“Proceedings”) brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have jurisdiction over such party.  The parties irrevocably consent to service of process given in the manner provided for notices in Section 6.14.  Nothing in this Agreement will affect the right of any party to serve process in any other manner permitted by law.

 

Section 6.4            Amendment; Waiver.  Any amendment hereto shall be in writing and signed by all parties hereto.  No waiver of any provisions of this Agreement shall be valid unless in writing and signed by the party against whom enforcement is sought.

 

Section 6.5            Entire Agreement.  This Agreement, all related agreements referred to herein and that certain Master Roll-Up Agreement among Contributor, the Other Contributors, the Company and the Operating Partnership dated as of July 21, 2010 (as the same was amended as of December 21, 2010 and as of the date hereof and as the same may be further modified or amended from time to time) constitute the entire agreement and supersede conflicting provisions set forth in all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.  In the event of a conflict between the provisions

 

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of this Agreement and any other agreement referred to herein, the provisions of this Agreement shall control.

 

Section 6.6            Assignability.  This Agreement shall be binding upon, and shall be enforceable by and inure to the benefit of, the parties hereto and their respective heirs, legal representatives, successors and assigns; provided, that this Agreement may not be assigned (except by operation of law) by any party without the prior written consent of the other parties and any attempted assignment without such consent shall be void and of no effect, except that  the Company may assign this Agreement, the Closing Documents, and its rights and obligations hereunder and thereunder to a direct or indirect subsidiary of the Company without the consent of the Contributor.

 

Section 6.7            Titles.  The titles and captions of the Articles, Sections and paragraphs of this Agreement are included for convenience of reference only and shall have no effect on the construction or meaning of this Agreement.

 

Section 6.8            Third Party Beneficiary.  Other than the indemnification provisions in favor of the parties’ owners, directors, officers, employees, agents, attorneys and Affiliates, no provision of this Agreement is intended, nor shall it be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any customer, Affiliate, stockholder, partner, member, director, officer or employee of any party hereto or any other person or entity.

 

Section 6.9            Severability.  If any provision of this Agreement, or the application thereof, is for any reason held to any extent to be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons, entities or circumstances will be interpreted so as reasonably to affect the intent of the parties hereto.  The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision and to execute any amendment, consent or agreement deemed necessary or desirable by the parties to effect such replacement.

 

Section 6.10         Equitable Remedies.  Each party hereby agrees that irreparable damage would occur to the other parties in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that any of them shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by any others of them and to enforce specifically the terms and provisions hereof in any federal or state court located in Massachusetts (as to which the parties agree to submit to jurisdiction for the purposes of such action), this being in addition to any other remedy to which the non-breaching party is entitled under this Agreement or otherwise at law or in equity.

 

Section 6.11         Time of the Essence.  Time is of the essence with respect to all obligations under this Agreement.

 

Section 6.12         Reliance.  Each party to this Agreement acknowledges and agrees that it is not relying on tax advice or other advice from the other party to this Agreement and that it has or will consult with its own tax advisors for purposes of determining the tax implications of

 

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entering into this Agreement and the transactions contemplated herein, and understands the consequences thereof.  Notwithstanding anything to the contrary herein, each party agrees that it shall bear any tax liability associated with or attributable to the terms of this Agreement, and nothing in this Agreement shall be construed as a guarantee by the Company or any party of the tax consequences to any other party of entering into this Agreement.

 

Section 6.13         Survival.  It is the express intention and agreement of the parties hereto that certain of the representations, warranties and covenants of the Contributor and of the Company and the Operating Partnership set forth in this Agreement shall survive the consummation of the transactions contemplated hereby; provided, that the representations and warranties of the Contributor shall survive only for the period specified in  Section 3.3.  The provisions of this Agreement that contemplate performance after the Closing shall survive the Closing and shall not be deemed to be merged into or waived by the instruments of Closing.

 

Section 6.14         Notice.  Any notice to be given hereunder by any party to the other parties shall be given in writing by personal delivery, by registered or certified mail, postage prepaid, return receipt requested or by any nationally-recognized overnight carrier, and shall be deemed communicated as of the date of personal delivery (including delivery by overnight courier).  Mailed notices shall be addressed as set forth below, but any party may change the address set forth below by written notice to other parties in accordance with this paragraph.

 

	
To   Contributor:
    	
 
    	
STAG   GI Investments LLC

c/o   STAG Capital Partners, LLC

99   High Street, 28th Floor

Boston,   MA 02110

Attn:   Benjamin S. Butcher
    
	
 
    	
 
    	
 
    
	
With   a copy to:
    	
 
    	
GI   Partners

2180   Sand Hill Road, Suite 210

Menlo   Park, CA  94025

Attn:  Alexander Fraser
    
	
 
    	
 
    	
 
    
	
To   the Company or the Operating Partnership:
    	
 
    	
STAG   Industrial, Inc.

99   High Street, 28th Floor

Boston,   MA 02110

Attn:  Benjamin S. Butcher
    

 

Section 6.15         Termination.  This Agreement shall terminate if the Closing shall not have occurred on or prior to May 3, 2011.  In addition, this Agreement may be terminated before Closing by a document signed by the Company, Operating Partnership and the Contributor.  Upon such termination, this Agreement shall become void and have no effect, and no party hereto shall have any liability to the other parties hereto.

 

Section 6.16         Confidentiality.  All press releases or other public communications of any kind relating to the Public Offering or the transactions contemplated herein, and the method and timing of release for publication there, will be subject to the prior approval of the Company.

 

31

 

Section 6.17         Joint Preparation.  The parties acknowledge that this Agreement was jointly prepared by them, by and through their legal counsel, and any uncertainty or ambiguity existing herein shall not be interpreted against any of the parties, but otherwise according to the application of the rules on interpretation of contracts.

 

[Signature Page Follows]

 

32

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
COMPANY:  
    
	
 
    	
 
    
	
 
    	
STAG   Industrial, Inc., a Maryland corporation 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Benjamin S. Butcher
    
	
 
    	
 
    	
Benjamin   S. Butcher 
    
	
 
    	
 
    	
President
    
	
 
    	
 
    
	
 
    	
OPERATING   PARTNERSHIP: 
    
	
 
    	
 
    
	
 
    	
STAG   Industrial Operating Partnership, L.P., a
   Delaware limited partnership 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
STAG   Industrial GP, LLC, a Delaware limited liability company, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   Benjamin S. Butcher
    
	
 
    	
 
    	
 
    	
Benjamin   S. Butcher 
    
	
 
    	
 
    	
 
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
CONTRIBUTOR:  
    
	
 
    	
 
    
	
 
    	
STAG   GI Investments, LLC, a Delaware limited liability company 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
STAG   Manager, LLC, its manager 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Benjamin S. Butcher
    
	
 
    	
 
    	
Benjamin   S. Butcher 
    
	
 
    	
 
    	
President
    

 

(Signature Page to STAG GI Investments Contribution Agreement)

 

 

EXHIBIT A
 TO
 CONTRIBUTION AGREEMENT

 

PARTICIPATING ENTITIES

 

	
Entity Name
    	
 
    	
State of Formation
    
	
STAG   GI O’Fallon, LLC
    	
 
    	
Delaware
    
	
STAG   GI New Jersey, LLC
    	
 
    	
Delaware
    
	
STAG   GI Goshen, LLC
    	
 
    	
Delaware
    
	
STAG   GI Charlotte, LLC
    	
 
    	
Delaware
    
	
STAG   GI Charlotte 2, LLC
    	
 
    	
Delaware
    
	
STAG   GI Madison, LLC
    	
 
    	
Delaware
    
	
STAG   GI Walker, LLC
    	
 
    	
Delaware
    
	
STAG   GI Streetsboro, LLC
    	
 
    	
Delaware
    
	
STAG   GI Vonore, LLC
    	
 
    	
Delaware
    
	
STAG   GI Rogers, LLC
    	
 
    	
Delaware
    
	
STAG   GI Salem, LLC
    	
 
    	
Delaware
    
	
STAG   GI Mooresville, LLC
    	
 
    	
Delaware
    
	
STAG   GI Cleveland, LLC
    	
 
    	
Delaware
    

 

A-1

 

EXHIBIT B
 TO
 CONTRIBUTION AGREEMENT

 

LIST OF PROPERTIES

 

OWNED PROPERTIES

 

	
Entity Name
    	
 
    	
Property Address
    
	
STAG   GI O’Fallon, LLC
    	
 
    	
3801   Lloyd King Drive, O’Fallon Missouri
    
	
STAG   GI New Jersey, LLC
    	
 
    	
190   Strykers Road, Lopatcong, New Jersey
   251 Circle Drive North, Piscataway, New Jersey
    
	
STAG   GI Goshen, LLC
    	
 
    	
2600   College Avenue, Goshen, Indiana
    
	
STAG   GI Charlotte, LLC
    	
 
    	
10701   Nations Ford Road, Charlotte, North Carolina
    
	
STAG   GI Charlotte 2, LLC
    	
 
    	
3700   Display Drive, Charlotte, North Carolina
    
	
STAG   GI Madison, LLC
    	
 
    	
538   Myatt Drive, Madison, Tennessee
    
	
STAG   GI Walker, LLC
    	
 
    	
2640   Northridge Drive NW, Walker, Michigan
    
	
STAG   GI Streetsboro, LLC
    	
 
    	
9777   Mopar Drive, Streetsboro, Ohio
    
	
STAG   GI Vonore, LLC
    	
 
    	
90   Deer Crossing, Vonore, Tennessee
    
	
STAG   GI Rogers, LLC
    	
 
    	
19850   Diamond Lake Road, Rogers, Minnesota
    
	
STAG   GI Salem, LLC
    	
 
    	
4050/4060   Fairview Industrial Drive, Salem, Oregon
    
	
STAG   GI Mooresville, LLC
    	
 
    	
1313   Mooresville Blvd., Mooresville, North Carolina
    

 

GROUND LEASED PROPERTIES

 

	
Entity Name
    	
 
    	
Property Address
    
	
N/A
    	
 
    	
N/A
    

 

COMMITTED PROPERTIES

 

	
Entity Name
    	
 
    	
Property Address
    
	
STAG   GI Cleveland, LLC
    	
 
    	
4405   Michigan Avenue Road, Cleveland, Tennessee
    

 

B-1

 

EXHIBIT C
 TO
 CONTRIBUTION AGREEMENT

 

CONTRIBUTION AND ASSUMPTION AGREEMENT

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby assigns, transfers, contributes and conveys to STAG Industrial Operating Partnership, LP, a Delaware limited partnership (the “Company”), its entire legal and beneficial right, title and interest in and to STAG GI Investments Holdings, LLC, a Delaware limited liability company (“Holdings”), which owns 100% of the ownership interests in the entities listed on Attachment 1 hereto (each, a “Participating Entity” and collectively, the “Participating Entities”), including, without limitation, (a) all right, title and interest, if any, of the undersigned in and to the assets and liabilities of Holdings and the Participating Entities (b) the right to receive distributions of money, profits and other assets from Holdings and the Participating Entities from and after Closing, and (c) the obligations of Holdings and the Participating Entities, in each case whether arising before or after the Closing, presently existing or hereafter at any time arising or accruing (such right, title and interest are hereinafter collectively referred to as the “Participating Entity Interests”), TO HAVE AND TO HOLD the same unto the Company, its successors and assigns, forever.

 

Upon the execution and delivery hereof, the Company assumes all obligations in respect of the Participating Entity Interests.

 

This Contribution and Assumption Agreement is in respect of the real property described in Attachment 1 attached hereto.

 

	
Executed:                                    , 2011
    	
STAG   GI Investments, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
STAG   Manager, LLC, its manager  
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
STAG   Industrial Operating Partnership, L.P., a 

Delaware   limited partnership 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STAG   Industrial GP, LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

C-1

 

Attachment 1
 To
 Contribution and Assumption Agreement

 

OWNED PROPERTIES

 

	
Entity Name
    	
 
    	
Property Address
    
	
STAG   GI O’Fallon, LLC
    	
 
    	
3801   Lloyd King Drive, O’Fallon Missouri
    
	
STAG   GI New Jersey, LLC
    	
 
    	
190   Strykers Road, Lopatcong, New Jersey
   251 Circle Drive North, Piscataway, New Jersey
    
	
STAG   GI Goshen, LLC
    	
 
    	
2600   College Avenue, Goshen, Indiana
    
	
STAG   GI Charlotte, LLC
    	
 
    	
10701   Nations Ford Road, Charlotte, North Carolina
    
	
STAG   GI Charlotte 2, LLC
    	
 
    	
3700   Display Drive, Charlotte, North Carolina
    
	
STAG   GI Madison, LLC
    	
 
    	
538   Myatt Drive, Madison, Tennessee
    
	
STAG   GI Walker, LLC
    	
 
    	
2640   Northridge Drive NW, Walker, Michigan
    
	
STAG   GI Streetsboro, LLC
    	
 
    	
9777   Mopar Drive, Streetsboro, Ohio
    
	
STAG   GI Vonore, LLC
    	
 
    	
90   Deer Crossing, Vonore, Tennessee
    
	
STAG   GI Rogers, LLC
    	
 
    	
19850   Diamond Lake Road, Rogers, Minnesota
    
	
STAG   GI Salem, LLC
    	
 
    	
4050/4060   Fairview Industrial Drive, Salem, Oregon
    
	
STAG   GI Mooresville, LLC
    	
 
    	
1313   Mooresville Blvd., Mooresville, North Carolina
    
	
STAG   GI Cleveland, LLC(1)
    	
 
    	
4405   Michigan Avenue Road, Cleveland, Tennessee
    

 

GROUND LEASED PROPERTIES

 

	
Entity Name
    	
 
    	
Property Address
    
	
N/A
    	
 
    	
N/A
    

 

COMMITTED PROPERTIES

 

	
Entity Name
    	
 
    	
Property Address
    
	
N/A
    	
 
    	
N/A
    

 

(1)  This property is identified as an owned property on this Attachment because on the date this document is signed and delivered (i.e., the Closing Date), the property will be owned by STAG GI Cleveland, LLC.

 

B-1

 

EXHIBIT D
 TO
 CONTRIBUTION AGREEMENT

 

CERTIFICATION OF NON-FOREIGN STATUS

 

Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”, provides that a transferee of a United States real property interest must withhold tax if the transferor is a foreign person.  To inform STAG Industrial Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”), that the withholding of tax is not required upon the contribution of Interests by  STAG GI Investments, LLC, a Delaware limited liability company  (the “Contributor”) to the Operating Partnership in exchange for common units of limited partnership in the Operating Partnership, which transfer occurred on                     , 2011, the undersigned hereby certifies the following on behalf of Contributor:

 

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

 

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

 

3.             Contributor’s employer identification number (or Contributor’s social security number, if Contributor is an individual) is                                      ; and

 

4.             Contributor’s address is:

	
 
    	
c/o   STAG Capital Partners, LLC
    
	
 
    	
99   High Street, 28th Floor
    
	
 
    	
Boston,   MA 02110
    

 

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

 

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

 

	
 
    	
By:
    	
STAG   GI Investments, LLC 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
STAG   Manager, LLC, its manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
Date:             , 2011
    

 

D-1

 

EXHIBIT E
 TO
 CONTRIBUTION AGREEMENT

 

OWNERSHIP LIMIT WAIVER

 

See Attached

 

E-1

 

Ownership Limit Waiver

 

1.               The Board of Directors (the “Board”) of STAG Industrial, Inc., a real estate investment trust for United States federal income tax purposes (the “Company”), has the authority to grant an exemption from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit (each as defined in Section 6.1 of the amended and restated charter of the Company (the “Charter”)) applicable to holders of shares of common stock of the Company, $0.01 par value per share (the “Common Shares”), and/or shares of preferred stock of the Company, $0.01 par value per share (the “Preferred Shares” and together with the Common Shares, the “Shares”), provided that certain conditions are met.  Capitalized terms used but not otherwise defined in this Ownership Limit Waiver have the meanings ascribed to such terms in the Charter.

 

2.               In connection with the Company’s initial public offering and related formation transactions, STAG GI Investments, LLC (the “Investor”) holds common units of limited partnership interest in STAG Industrial Operating Partnership, L.P., for which, upon a permitted redemption, the Investor may receive Common Shares with respect to which the Investor will be treated as a Beneficial Owner or Constructive Owner under the Charter and with respect to which GI Partners Fund III, L.P. or GI STAG Investco LLC (together, the “Investor Owners”) may be treated as a Beneficial Owner or Constructive Owner under the Charter by virtue of their ownership interests in the Investor.

 

3.               The Investor has requested that the Board grant the Investor and the Investor Owners an exemption from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit in connection with the Investor’s potential receipt of Common Shares upon redemption of the common units of limited partnership interest referenced above.

 

4.               Based on the terms and conditions set forth herein, the Board has approved and granted an exemption from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit for the Investor and the Investor Owners in an aggregate amount of up to [INSERT NUMBER OF UNITS RECEIVED IN THE FORMATION TRANSACTIONS/TOTAL NUMBER UNITS AND SHARES OUTSTANDING IMMEDIATELY POST IPO]% of the outstanding Common Shares.

 

5.               Each of the Investor and the Investor Owners represents and warrants to the Company:

 

a.               None of the Investor and the Investor Owners is an “individual” within the meaning of Section 542(a)(2) of the Internal Revenue Code of 1986, as amended (the “Code”).

 

b.              No “individual” within the meaning of Section 542(a)(2) of the Code holding an ownership interest in any of the Investor and the Investor Owners, directly or indirectly, Beneficially Owns or Constructively Owns more than 9.8% (in number or value, whichever is more restrictive) of the outstanding Common Shares or of the outstanding shares of any class or series of Preferred Shares by reason of the Beneficial Ownership or Constructive Ownership of Shares by any of the Investor and the Investor Owners.

 

c.               None of the Investor and the Investor Owners, nor any Person owning a direct or indirect interest in any of the Investor and the Investor Owners, owns, actually or

 

E-2

 

constructively, an interest in any tenant of the Company (or a tenant of an entity owned or controlled by the Company) that would cause the Company to own, actually or constructively, more than a 9.8% ownership interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant unless such tenant is a taxable REIT subsidiary (as defined in Section 856(l) of the Code) of the Company.

 

6.               Each of the Investor and the Investor Owners agrees with the Company that none of the Investor and the Investor Owners (or any Person owning a direct or indirect interest in any of the Investor and the Investor Owners) will take or allow any action (within its control) after the date of this Ownership Limit Waiver that will cause the foregoing representations or warranties to fail to be true and accurate.

 

7.               Each of the Investor and the Investor Owners acknowledges and agrees that (i) the Board is relying on the continuing truth and accuracy of, and compliance with, the representations, warranties and agreements of the Investor and the Investor Owners in this Ownership Limit Waiver in granting the exemption from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit to the Investor and the Investor Owners and that such exemption will be void and ineffective if any of the representations and warranties is not true and accurate at any time or any of the agreements is violated, and (ii) such exemption is solely for the Investor and the Investor Owners and only with respect to Common Shares received and held by the Investor upon redemption of the common units of limited partnership interest referenced above, and not for any other Person or for any “individual” within the meaning of Section 542(a)(2) of the Code.

 

8.               Each of the Investor and the Investor Owners further acknowledges and agrees that if such exemption is void or ineffective, Shares deemed to be Beneficially Owned or Constructively Owned by any of the Investor and the Investor Owners in excess of the Aggregate Stock Ownership Limit or the Common Stock Ownership Limit will be subject to the provisions of Section 6.2 of the Charter, which provide that Shares held in excess of the Aggregate Stock Ownership Limit or the Common Stock Ownership Limit shall be deemed transferred to a Charitable Trust as of the close of business on the business day prior to the date of the purported transfer or other event resulting in a stockholder’s ownership of Shares exceeding the Aggregate Stock Ownership Limit or the Common Stock Ownership Limit.

 

9.               The Company will reasonably consider a request to grant a similar exemption from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit to a Person acquiring the common units of limited partnership interest referenced above or the Common Shares issued upon redemption of such units, provided such Person is acquiring, and will hold, such units and Common Shares in the ordinary course of its business and not with the purpose nor with the effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b) under the Securities Exchange Act of 1934.

 

10.         Notwithstanding anything herein to the contrary, the Company reserves its right to increase the exemption granted herein in the sole and absolute discretion of the Board, and the Investor and the Investor Owners shall be deemed to have made a request for any such increase, all subject to the provisions of Section 6.2.7 of the Charter.

 

E-3

 

11.         This Ownership Limit Waiver shall become effective upon the acceptance of the terms and conditions hereof by the Investor.

 

(signature page follows)

 

E-4

 

IN WITNESS WHEREOF, the undersigned have executed this Ownership Limit Waiver as of [INSERT DATE].

 

 

	
STAG INDUSTRIAL, INC.
    	
STAG   GI INVESTMENTS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:   
    	
STAG   Manager, LLC,
    
	
 
    	
Benjamin S. Butcher,
    	
 
    	
 
    	
its manager
    
	
 
    	
President and Chief Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Benjamin   S. Butcher,
    
	
 
    	
 
    	
President
    
	
99   High Street, 28th Floor
    	
 
    	
 
    
	
Boston,   MA 02110
    	
99   High Street, 28th Floor
    
	
 
    	
Boston,   MA 02110
    
	
 
    	
 
    	
 
    
	
 
    	
cc:   GI Partners
    
	
 
    	
2180   Sand Hill Road, Suite 210
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
Attention:   Rick Magnuson
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GI   PARTNERS FUND III, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
2180   Sand Hill Road, Suite 210
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
Attention:   Rick Magnuson
    
	
 
    	
 
    	
 
    
	
 
    	
GI   STAG INVESTCO LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
2180   Sand Hill Road, Suite 210
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
Attention:   Rick Magnuson
    

 

E-5

 

EXHIBIT F
 TO
 CONTRIBUTION AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT

 

See Attached

 

F-1

 

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

STAG INDUSTRIAL, INC.,

STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P.

AND THE CONTRIBUTORS

 

 

DATED AS OF              , 2011

 

F-2

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (including all exhibits and schedules, this “Agreement”) is made and entered into as of                    , 2011, by and among STAG INDUSTRIAL, INC., a Maryland corporation (the “Company”), STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the “Operating Partnership”), and the contributors whose names are set forth on the signature pages hereto (each a “Contributor” and collectively, the “Contributors”).

 

RECITALS

 

A.                                   In connection with the initial public offering of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), the Company, the Operating Partnership and the Contributors will engage in certain formation transactions (the “Formation Transactions”) whereby:

 

(i)                                     the Contributors will contribute to the Operating Partnership their interests in entities owning certain real estate properties and other assets (the “Properties”); and

 

(ii)                                  the Contributors will receive common units of limited partnership in the Operating Partnership (“OP Units”) in exchange for their respective indirect interests in the Properties, and a subsidiary of the Company will be the general partner of the Operating Partnership.

 

B.                                     Pursuant to the Partnership Agreement (as defined below), the OP Units will be redeemable for cash or, at the sole and absolute discretion of the Company, exchangeable for shares of Common Stock upon the terms and subject to the conditions contained in the Partnership Agreement.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1
  DEFINITIONS

 

Section 1.1                                   Definitions.  In addition to the definitions set forth above, the following terms, as used herein, have the following meanings:

 

“Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person.  For the purposes of this definition, “control” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York, New York or Boston, Massachusetts are authorized or required by law, regulation or executive order to close.

 

F-3

 

“Charter” means the amended and restated charter of the Company as filed with the State Department of Assessments and Taxation of Maryland on          , 2011, as the same may be amended, modified or restated from time to time.

 

“Commission” means the Securities and Exchange Commission.

 

“Confidential Information” means Confidential Information as defined in Section 2.13(a).

 

“Demand Registration” means a Demand Registration as defined in Section 2.2.

 

“Demand Registration Statement” means a Demand Registration Statement as defined in Section 2.2.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.

 

“Family Member” of any individual means such individual’s spouse, ex-spouse, ancestors, descendants (whether by blood or by adoption), brothers and sisters and intervivos or testamentary trusts of which only such Person and his spouse, ancestors, descendants (whether by blood or by adoption), brothers and sisters are beneficiaries.

 

“GI Entities” means GI STAG Investco, LLC, STAG GI Investments, LLC, GI Partners Fund III-A L.P., GI Partners Fund III-B L.P., GI Partners Fund III L.P., GI STAG UBTI Blocker, Inc. and GI STAG ECI Blocker, Inc.

 

“Holder” means any Initial Holder who is the record or beneficial owner of any Registrable Security or any assignee or transferee of such Registrable Security (including assignments or transfers of Registrable Securities to such assignees or transferees as a result of the foreclosure on any loans secured by such Registrable Securities) to the extent (x) permitted under the Partnership Agreement, the Charter or a separate written agreement between the Holder and the Company, as applicable, and (y) (1) the Company is furnished with written notice of the name and address of such assignee or transferee and the securities with respect to which such registration rights are being assigned and (2) such assignee or transferee agrees in writing to be bound by all the provisions hereof, unless such Registrable Security is acquired in a public distribution pursuant to a registration statement under the Securities Act or pursuant to transactions exempt from registration under the Securities Act where securities sold in such transaction may be resold without subsequent registration under the Securities Act.

 

“Indemnified Party” means an Indemnified Party as defined in Section 2.9.

 

“Indemnifying Party” means an Indemnifying Party as defined in Section 2.9.

 

“Indemnitee” means Indemnitee as defined in Section 2.7.

 

“Initial Holder” means (i) any Contributor, (ii) any partner, member or stockholder of any Contributor and any of their respective partners, members or stockholders (and continuing to any and all other partners, members or stockholders that receive a permitted distribution of OP

 

F-4

 

Units or Registrable Securities), (iii) any Affiliate of any such partner, member or stockholder, and (iv) any Family Member of any of the foregoing.

 

“Initial Public Offering” means the offering of Common Stock pursuant to the Form S-11 Registration Statement (No. 333-              ) filed by the Company with the Commission under the Securities Act.

 

“Inspectors” means Inspectors as defined in Section 2.5(g).

 

“Losses” means Losses as defined in Section 2.7.

 

“Market Value” means, with respect to the Common Stock, the average of the daily market price for the ten (10) consecutive trading days immediately preceding the date of a written request for registration pursuant to Section 2.2.  The market price for each such trading day shall be:

 

(i) if the Common Stock is listed or admitted to trading on any securities exchange, the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day, in either case as reported in the principal consolidated transaction reporting system,

 

(ii) if the Common Stock is not listed or admitted to trading on any securities exchange, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the Company, or

 

(iii) if the Common Stock is not listed or admitted to trading on any securities exchange and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the Company, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than (10) days prior to the date in question) for which prices have been so reported;

 

provided that if there are no bid and asked prices reported during the ten (10) days prior to the date in question, the Market Value of the Common Stock shall be determined by the Board of Directors of the Company acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate.

 

“Notice Period” means the Notice Period as defined in Section 2.2(a).

 

“Partnership Agreement” means the Amended and Restated Agreement of Limited Partnership of the Operating Partnership dated as of               , 2011, as the same may be amended, modified or restated from time to time.

 

“Person” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

 

F-5

 

“Piggy-Back Registration” means a Piggy-Back Registration as defined in Section 2.3.

 

“Records” means Records as defined in Section 2.5(g).

 

“Registrable Securities” means shares of Common Stock at any time owned, either of record or beneficially, by any Holder and issued in the Formation Transactions or upon exchange of OP Units received in the Formation Transactions and any additional Common Stock issued as a dividend, distribution or exchange for, or in respect of such shares until

 

(i)                                     a registration statement covering such shares has been declared effective by the Commission and such shares have been disposed of pursuant to such effective registration statement;

 

(ii)                                  such shares shall have ceased to be outstanding;

 

(iii)                               such shares are sold under circumstances in which all of the applicable conditions of Rule 144 (or any similar provisions then in force) under the Securities Act are met;

 

(iv)                              such shares held may be sold pursuant to Rule 144 under the Securities Act (or any similar rule or regulation then in effect) without limitation as to volume or manner of sale; or

 

(v)                                 such shares have been sold or otherwise transferred in a transaction that would constitute a sale thereof under the Securities Act, the Company has delivered a new certificate or other evidence of ownership for such shares not bearing the Securities Act restricted stock legend and such shares may be resold without subsequent registration under the Securities Act;

 

provided, however, that “Registrable Securities” for purposes of the indemnification obligations contained in Section 2.7 and Section 2.8 shall mean all shares that are registered on the applicable Shelf Registration, Demand Registration or Piggy-Back Registration, notwithstanding that such shares may not otherwise be “Registrable Securities” by operation of clause (iv) above.

 

“Registration Expenses” means Registration Expenses as defined in Section 2.6.

 

“Securities Act” means the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder.

 

“Selling Holder” means a Holder who is selling Registrable Securities pursuant to a registration statement under the Securities Act.

 

“Shelf Registration Statement” means a Shelf Registration statement as defined in Section 2.1.

 

“STAG Parties” means STAG Investments III, LLC and STAG Investments IV, LLC.

 

“Suspension” means a Suspension as defined in Section 2.14.

 

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“Suspension Notice” means a Suspension Notice as defined in Section 2.14.

 

“Underwriter” means a securities dealer who purchases any Registrable Securities as principal and not as part of such dealer’s market-making activities.

 

ARTICLE 2
  REGISTRATION RIGHTS

 

Section 2.1                                   Shelf Registration.  Within two weeks after the anniversary of the consummation date of the Initial Public Offering, subject to Section 2.13 and Section 2.14,  the Company shall prepare and file a “shelf” registration statement with respect to the resale (except as provided in the next sentence) of the Registrable Securities on an appropriate form for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (together with any amendments or supplements thereto, the “Shelf Registration Statement”) and shall use its commercially reasonable efforts to cause the Shelf Registration Statement to be declared effective on or as soon as practicable thereafter, and to keep such Shelf Registration Statement continuously effective for a period ending when all shares of Common Stock covered by the Shelf Registration Statement are no longer Registrable Securities.  With respect to Holders other than Affiliates of the Company (including as an Affiliate of the Company, for purposes of this Section 2.1, the GI Entities), the Company may, at its option, satisfy its obligation in this Section 2.1 to register on a Shelf Registration Statement the resale of the Registrable Securities by instead registering on a Shelf Registration Statement the issuance of the Registrable Securities by the Company to such Holders, provided such issuance Shelf Registration Statement is initially filed within the time period required by the staff of the Commission.  In the event that the Company fails to file, or if filed fails to maintain the effectiveness of, a Shelf Registration Statement, the Holders may participate in a Piggy-Back Registration (as defined below) pursuant to Section 2.3 herein; provided, further, that if and so long as a Shelf Registration Statement is on file and effective, then the Company shall have no obligation to allow participation in a Piggy-Back Registration. Notwithstanding anything to the contrary contained herein, the Company shall not be obligated to file a Shelf Registration Statement unless the Company is eligible to file a registration Statement on Form S-3 or any successor form.

 

Section 2.2                                   Demand Registration

 

(a)                                  Request for Registration.  Commencing on or after the date which is one year after the consummation date of the Initial Public Offering, Holders (which may include the GI Entities and the STAG Entities), the GI Entities (so long as they are Holders) or the STAG Entities (so long as they are Holders) may, subject to Section 2.13 and Section 2.14, deliver to the Company a written request that the Company prepare and file with the Commission a registration statement on an appropriate form under the Securities Act (together with any amendments or supplements thereto, a “Demand Registration Statement”), registering under the Securities Act all or part of its or their Registrable Securities (a “Demand Registration”).  For purposes of this Agreement, a Demand Registration requested by the Holders is referred to as a “Holder Demand Registration,” a Demand Registration requested by the GI Entities is referred to a “GI Demand Registration,” and a Demand Registration requested by the STAG Entities is referred to as a “STAG Demand Registration.”  Notwithstanding the foregoing, (i)

 

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the Company shall not be obligated to effect more than six Demand Registrations in total, one GI Demand Registration in total or one STAG Demand Registration in total or more than one Demand Registration in any twelve month period, except that a GI Demand Registration may occur six months before or after a Holder Demand Registration or a STAG Demand Registration, and (ii) in the case of a Holder Demand Registration, the number of shares of Registrable Securities proposed to be sold by the Holders making such written request shall have a Market Value of at least $20,000,000.  Any request for a Demand Registration will specify the number of Registrable Securities proposed to be sold and will also specify the intended method of disposition thereof.  Within five (5) Business Days after receipt of such request, the Company will give written notice of such registration request to all other Holders and include in such registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) Business Days after the mailing of the Company’s notice to the applicable Holder (the “Notice Period”).  Each such request will also specify the number of shares of Registrable Securities to be registered and the intended method of disposition thereof (which may include an underwritten offering).

 

(b)                                 Effective Registration.  A registration will not count as a Demand Registration until it has become effective.  For purposes of this Agreement, an offering on a Demand Registration Statement is deemed to be effected on the effective date thereof and has remained effective and available for at least 180 days.

 

(c)                                  Selling Holders Become Party to Agreement.  Each Holder acknowledges that by asserting or participating in its registration rights pursuant to this Article II, he or she may become a Selling Holder and thereby will be deemed a party to this Agreement and will be bound by each of its terms.

 

(d)                                 Underwritten Demand Registrations.  If the Holders of a majority of shares of the Registrable Securities to be registered in a Demand Registration so elect by written notice to the Company, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering.  The Company shall select the book-running managing Underwriter in connection with any such Demand Registration; provided that such managing Underwriter must be reasonably satisfactory to (i) in the case of a Holder Demand Registration, the Holders of a majority of the shares of the Registrable Securities to be registered on such Demand Registration and, as long as the GI Entities register on such Demand Registration Registrable Securities with a Market Value of at least $5,000,000, the GI Entities, (ii) in the case of a GI Demand Registration, the GI Entities and (iii) in the case of a STAG Demand Registration, the STAG Entities.  The Company may select any additional investment banks and managers to be used in connection with the offering; provided that such additional investment bankers and managers must be reasonably satisfactory to a majority of the Holders of the Registrable Securities initiating such Demand Registration.

 

Section 2.3                                   Piggy-Back Registration.

 

(a)                                  Subject to Section 2.1 hereof, if the Company proposes to file a registration statement under the Securities Act (or a prospectus supplement to effect a takedown from an effective shelf registration statement) with respect to an underwritten equity offering by the Company for its own account or for the account of any of its respective security holders of

 

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any class of security (other than (i) any registration statement filed by the Company under the Securities Act relating to an offering of Common Stock for its own account as a result of the exercise of the exchange rights set forth in the Partnership Agreement, (ii) any registration statement filed in connection with a demand registration other than a Demand Registration under this Agreement or (iii) a registration statement on Form S-4 or S-8 (or any substitute form that may be adopted by the Commission) or filed in connection with an exchange offer or offering of securities solely to the Company’s existing security holders), then the Company shall give written notice of such proposed filing to the Holders as soon as practicable (but in no event less than ten (10) Business Days before the anticipated filing date), and such notice shall offer such Holders the opportunity to register such number of shares of Registrable Securities as each such Holder may request (a “Piggy-Back Registration”).  The Company shall use commercially reasonable efforts to cause the managing Underwriter or Underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of the Company included therein.

 

(b)                                 The Company shall select the lead underwriter or underwriters and any co-manager or co-managers to administer any offering of Registrable Securities pursuant to a Piggy-Back Registration.  In the event the Company gives the Holders notice of its intention to effect an offering pursuant to a Piggy-Back Registration and subsequently declines to proceed with such offering, the Holders shall have no rights in connection with such offering; provided, however, that, subject to Section 2.13 and Section 2.14, at the request of the Holders, the Company shall proceed with such offering with respect to the Registrable Securities included therein, which offering shall be deemed a Demand Registration for all purposes hereunder. The Holders shall participate in any offering of Registrable Securities pursuant to a Piggy-Back Registration (or deemed Demand Registration, if applicable) in accordance with the same plan of distribution for such Piggy-Back Registration as the Company or the holder or holders of Common Stock that proposed such Piggy-Back Registration, as the case may be.

 

Section 2.4                                   Reduction of Offering.  Notwithstanding anything contained herein, if the managing Underwriter or Underwriters of an offering described in Section 2.2 or Section 2.3 hereof advise the Company and the Holders of the Registrable Securities included in such offering that, in their judgment, (i) the size of the offering that the Holders, the Company and such other Persons intend to make or (ii) in the case of a Piggy-Back Registration only, the kind of securities that the Holders, the Company and/or any other Persons intend to include in such offering are such that the marketability of the offering would be adversely affected by inclusion of the Registrable Securities requested to be included, then

 

(A)                              if the size of the offering is the basis of such Underwriter’s advice, the amount of securities to be offered for the accounts of Holders shall be reduced pro rata (according to the number of Registrable Securities proposed for registration) to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing Underwriter or Underwriters; provided, that, in the case of a Demand Registration, the number of Registrable Securities to be included in such Demand Registration shall not be reduced unless all other securities are first entirely excluded from such underwriting; provided further, that, in the case of a GI Demand Registration, the number of Registrable Securities of the GI Entities to be included in such Demand Registration shall not be reduced unless all other

 

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securities are first entirely excluded from such underwriting; provided further, that, in the case of a STAG Demand Registration, the number of Registrable Securities of the STAG Entities to be included in such Demand Registration shall not be reduced unless all other securities are first entirely excluded from such underwriting; provided further, that, in the case of a Piggy-Back Registration, if securities are being offered for the account of other Persons as well as the Company, then the Company shall include in such offering:

 

(1)                                  first, securities that the Company proposes to offer;

 

(2)                                  second, securities requested to be included therein by the Holders, pro rata;

 

(3)                                  third, securities that any other Person proposes to offer pursuant to contractual rights of such holder or holders, pro rata; and

 

(4)                                  fourth, any other securities; and

 

(B)                                if the combination of securities to be offered is the basis of such Underwriter’s advice, (x) the Registrable Securities to be included in such offering shall be reduced as described in clause (A) above (subject to the provisos in clause (A)) or (y) if the actions described in clause (x) would, in the judgment of the managing Underwriter or Underwriters, be insufficient to substantially eliminate the adverse effect that inclusion of the Registrable Securities requested to be included would have on such offering, such Registrable Securities will be excluded from such offering; provided that no Registrable Securities will be excluded from an offering pursuant to this clause (B) in the case of a Demand Registration.

 

Section 2.5                                   Registration Procedures; Filings; Information.  In connection with any Shelf Registration Statement under Section 2.1 or whenever Holders request that any Registrable Securities be registered pursuant to Section 2.2 hereof, the Company will use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof (which in the case of a Demand Registration but not in the case of a Shelf Registration Statement may include an underwritten offering) as quickly as practicable, and in connection with any such request:

 

(a)                                  Subject to Section 2.13, the Company will as expeditiously as possible within the time periods set forth in Sections 2.1 and 2.2 but in any event no later than 30 days after the Notice Period for a Demand Registration, prepare and file with the Commission a registration statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities to be registered thereunder in accordance with the intended method of distribution thereof, and use its commercially reasonable efforts to cause such filed registration statement to become and remain effective: (i) in the case of a Shelf Registration Statement filed pursuant to Section 2.1 hereof, for a period ending when all shares of Common Stock covered by the Shelf Registration Statement are no longer Registrable Securities; and (ii) in the case of a Demand Registration Statement filed pursuant to Section 2.2 hereof, for at least 180 days.

 

(b)                                 The Company will, if requested, prior to filing a registration statement or prospectus or any amendment or supplement thereto, furnish to each Selling Holder and each

 

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Underwriter, if any, of the Registrable Securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter furnish to such Selling Holder and Underwriter, if any, such number of conformed copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder or Underwriter may reasonably request to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

 

(c)           After the filing of the registration statement, the Company will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.

 

(d)           The Company will use its commercially reasonable efforts to (i) register or qualify the Registrable Securities under such other securities or blue sky laws of such jurisdictions in the United States (where an exemption does not apply) as any Selling Holder or managing Underwriter or Underwriters, if any, reasonably (in light of such Selling Holder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities in such jurisdictions; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (d), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction.

 

(e)           The Company will immediately notify each Selling Holder, at any time when a preliminary prospectus, prospectus or prospectus supplement relating thereto is required to be delivered under the Securities Act, of the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and promptly make available to each Selling Holder any such supplement or amendment.

 

(f)            The Company will enter into customary agreements (including an underwriting agreement, if any, in customary form) and take such other actions as the Selling Holders reasonably request in order to expedite or facilitate the disposition of such Registrable Securities, including, in the case of a GI Demand Registration or a STAG Demand Registration and to the extent reasonably requested by the lead or managing Underwriters, sending appropriate officers of the Company to attend “roadshows” scheduled in reasonable number and at reasonable times.

 

(g)           The Company will make available for inspection by any Selling Holder, any Underwriter participating in any disposition pursuant to such registration statement and any

 

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attorney, accountant or other professional retained by any such Selling Holder or Underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any Inspectors in connection with such registration statement.  Records which the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in such registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction.  Each Selling Holder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally available to the public.  Each Selling Holder further agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

 

(h)           The Company will furnish to each Selling Holder and to each Underwriter, if any, a signed counterpart, addressed to such Selling Holder or Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) if eligible under applicable accounting standards, a comfort letter or comfort letters from the Company’s independent public accountants, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the Holders of a majority of the Registrable Securities included in such offering or the managing Underwriter or Underwriters therefore reasonably requests.

 

(i)            The Company will otherwise comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of 12 months, beginning within three months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder (or any successor rule or regulation hereafter adopted by the Commission).

 

(j)            So long as Common Stock is listed or quoted on any United States securities exchange or quotation system, the Company will use its commercially reasonable efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed.

 

The Company may require each Selling Holder of Registrable Securities to promptly furnish in writing to the Company such information regarding such Selling Holder, the Registrable Securities held by it and the intended method of distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration.

 

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Section 2.6            Registration Expenses.  In connection with any registration statement required to be filed hereunder, the Company shall pay the following registration expenses incurred in connection with the registration hereunder (the “Registration Expenses”): (i) all registration and filing fees, (ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities, (vi) reasonable fees and disbursements of counsel for the Company and customary fees and expenses for independent certified public accountants retained by the Company (including the expenses of any legal opinions or comfort letters or costs associated with the delivery by counsel or independent certified public accountants, as applicable, of an opinion or opinions or comfort letter or comfort letters requested pursuant to Section 2.5(h) hereof), and (vii) the reasonable fees and expenses of any special experts retained by the Company in connection with such registration; provided, that the Company shall not be required to pay any expenses of any registration proceeding begun pursuant to Section 2.2 if the registration request is subsequently withdrawn (other than if such withdrawal (i) is the result of any change, or development that would reasonably be expected to have a change, in the financial markets in the United States or in national financial or economic conditions that would adversely affect the marketability of the offering or (ii) is the result of any change, or development that would reasonably be expected to have a change, in the financial condition or results of operations of the Company that would adversely affect the marketability of the offering, and, in either case, such withdrawal is made with reasonable promptness following such change or development) at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration).  If such Holders shall fail to reimburse the Company for such expenses, the Company shall not be obligated to file another Demand Registration Statement for a period of 12 months from the date such registration statement was withdrawn.  The Company shall have no obligation to pay any underwriting fees, discounts or commissions attributable to the sale of Registrable Securities, any fees and expenses of counsel to the Underwriters attributable to the sale of Registrable Securities, or any out-of-pocket expenses of the Holders (or the agents who manage their accounts) or any transfer taxes relating to the registration or sale of the Registrable Securities.

 

Section 2.7            Indemnification by the Company.  The Company agrees to indemnify and hold harmless each Selling Holder, its officers, directors and agents, and each Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each an “Indemnitee”) from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) (collectively, “Losses”) caused by any untrue statement or alleged untrue statement of a material fact contained in any registration statement contemplated by this Agreement or any related preliminary prospectus, prospectus or prospectus supplement relating to the Registrable Securities (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such Losses are caused by any such untrue statement or omission or alleged untrue statement or omission

 

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included or omitted in conformity with information furnished in writing to the Company by such Indemnitee or on such Indemnitee’s behalf expressly for inclusion therein.  The Company also agrees to indemnify any Underwriters of the Registrable Securities, their officers and directors and each Person who controls such underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Selling Holders provided in this Section 2.7.   The indemnity provided for in this Section 2.7 shall remain in full force and effect regardless of any investigation made by or on behalf of any Selling Holder.

 

Section 2.8            Indemnification by Selling Holders.  Each Selling Holder agrees, severally but not jointly, to indemnify and hold harmless the Company, its officers, directors and agents and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Selling Holder, but only with respect to Losses caused by any untrue statement or omission included or omitted in conformity with information relating to such Selling Holder furnished in writing by such Selling Holder or on such Selling Holder’s behalf expressly for use in any registration statement contemplated by this Agreement or any related preliminary prospectus, prospectus or prospectus supplement relating to the Registrable Securities (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto).  In case any action or proceeding shall be brought against the Company or its officers, directors or agents or any such controlling person, in respect of which indemnity may be sought against such Selling Holder, such Selling Holder shall have the rights and duties given to the Company, and the Company or its officers, directors or agents or such controlling person shall have the rights and duties given to such Selling Holder, by Section 2.7.  Each Selling Holder also agrees to indemnify and hold harmless Underwriters of the Registrable Securities, their officers and directors and each Person who controls such Underwriters within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act on substantially the same basis as that of the indemnification of the Company provided in this Section 2.8.  The liability of any Selling Holder pursuant to this Section 2.8 may not, in any event, exceed the net proceeds received by such Selling Holder from sales of Registrable Securities giving rise to the indemnification obligations of such Selling Holder.

 

Section 2.9            Conduct of Indemnification Proceedings.  In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to Section 2.7 or Section 2.8, such person (an “Indemnified Party”) shall promptly notify the person against whom such indemnity may be sought (an “Indemnifying Party”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses.  In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them and, in all such cases, the Indemnifying Party shall only be responsible for the reasonable fees and expenses of such counsel.  It is understood that the Indemnifying Party shall not, in

 

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connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties not having actual or potential differing interests among them, and that all such fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the case of Persons indemnified pursuant to Section 2.7 hereof, the Selling Holders which owned a majority of the Registrable Securities sold under the applicable registration statement and (ii) in the case of Persons indemnified pursuant to Section 2.8, the Company.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any Loss (to the extent stated above) resulting from such settlement or judgment.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding and does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of the Indemnified Party.

 

Section 2.10         Contribution.  If the indemnification provided for in Section 2.7 or Section 2.8 hereof is unavailable to an Indemnified Party or insufficient in respect of any Losses referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses , claims, damages or liabilities (i) as between the Company and the Selling Holders on the one hand and the Underwriters on the other, in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Holders on the one hand and the Underwriters on the other from the offering of the securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company and the Selling Holders on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations and (ii) between the Company on the one hand and each Selling Holder on the other, in such proportion as is appropriate to reflect the relative fault of the Company and of each Selling Holder in connection with such statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations.  The relative benefits received by the Company and the Selling Holders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and the Selling Holders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the prospectus.  The relative fault of the Company and the Selling Holders on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Selling Holders or by the Underwriters.  The relative fault of the Company on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement

 

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of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Indemnifying Party shall not be required to contribute pursuant to this Section 2.10 if there has been a settlement of any proceeding effected without its written consent.

 

The Company and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.10 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Party as a result of the Losses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 2.10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total commissions and discounts received by such Underwriter in connection with the sale of the securities underwritten by it and distributed to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no Selling Holder shall be required to contribute any amount in excess of the amount by which the net proceeds from the sale of the securities of such Selling Holder to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Selling Holder’s obligations to contribute pursuant to this Section 2.10 are several in proportion to the proceeds of the offering received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint.

 

Section 2.11         Participation in Underwritten Registrations.  No Person may participate in any underwritten registration hereunder unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, custodian agreements  and other documents reasonably required under the terms of such underwriting arrangements and these registration rights provided for in this Article II.

 

Section 2.12         Rule 144.  Until such date as no Holder owns any Registrable Securities, the Company covenants that it will file any reports required to be filed by it under the Securities Act and the Exchange Act and that it will take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission.  Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

 

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Section 2.13         Holdback Agreements.

 

(a)           Temporary Suspension of Rights to Sell Based on Confidential Information or Material Transaction.  If the Company determines in its good faith judgment that the filing of the Shelf Registration Statement under Section 2.1 or a Demand Registration under Section 2.2 hereof or the use of any related preliminary prospectus, prospectus or prospectus supplement (i) would require the public disclosure of previously non-public material information that the Company has a bona fide business purpose for preserving as confidential that the Company is not otherwise required by applicable securities laws or regulations to disclose (the “Confidential Information”) or (ii) would materially interfere with any good faith proposal or plan by the Company or any of its Affiliates to engage in any material acquisition, merger, consolidation, tender offer, securities offering or other material transaction, and upon written notice of such determination by the Company, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to the Shelf Registration Statement or a Demand Registration or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to the Shelf Registration Statement or a Demand Registration shall be suspended until the date upon which the Company notifies the Holders in writing that suspension of such rights for the grounds set forth in this Section 2.13(a) is no longer necessary; provided, however, in no event shall any such suspension be for more than an aggregate of 120 days in any rolling twelve month period or for more than 90 consecutive days.  The Company agrees to give such notice as promptly as practicable following the date that such suspension of rights is no longer necessary.  Nothing in this Section 2.13(a) shall prevent a Holder from offering, selling or distributing pursuant to Rule 144 at any time.

 

(b)           Temporary Suspension of Rights to Sell Based on Exchange Act Reports Not Yet Filed or Regulation S-X.  (i) If all reports required to be filed by the Company pursuant to the Exchange Act have not been filed by the required date without regard to any extension, (ii) if the consummation of any business combination by the Company has occurred or is probable for purposes of Rule 3-05 or Article 11 of Regulation S-X under the Act, or (iii) if the Company has acquired or proposes to acquire one or more properties which in the aggregate are significant for purposes of Rule 3-14 of Regulation S-X, upon written notice thereof by the Company to the Holders, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to the Shelf Registration Statement or a Demand Registration or to require the Company to take action with respect to the registration or sale of any Registrable Securities pursuant to the Shelf Registration Statement or a Demand Registration shall be suspended (to the extent required under the Securities Act or the Exchange Act) until the date on which the Company has filed such reports or obtained and filed the financial information required by Rule 3-05, Rule 3-14 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in the Shelf Registration Statement or Demand Registration Statement, and the Company shall notify the Holders as promptly as practicable when such suspension is no longer required.  The Company agrees to use its commercially reasonable efforts to file such reports or obtain and file the financial information required by Rule 3-05, Rule 3-14 or Article 11 of Regulation S-X to be included or incorporated by reference, as applicable, in the Shelf Registration Statement or Demand Registration Statement as promptly as practicable. Nothing in this Section 2.13(b) shall prevent a Holder from offering, selling or distributing pursuant to Rule 144 at any time.

 

F-17

 

(c)                                  Restrictions on Public Sale by Holder of Registrable Securities. With respect to underwritten offerings prior to the second anniversary of the date of this Agreement, for so long as the Holder beneficially owns one percent or more of the outstanding Common Stock (assuming conversion of such Holder’s OP Units or other convertible securities but not any other OP Units or convertible securities), each Holder agrees not to sell, offer for sale or otherwise transfer any Registrable Securities during any of the following periods:

 

(i)            unless the lead Underwriter administering the offering otherwise agrees, the period commencing five days prior to the anticipated effective date of a registration statement for any underwritten public offering of Common Stock (or any securities convertible into or exchangeable or exercisable for the Common Stock) and ending 90 days after such effectiveness; and

 

(ii)           in the case of a Rule 415 registration statement, unless the lead Underwriter administering the offering otherwise agrees, the period commencing five days prior to the anticipated date of the Company’s notice of commencement of distribution in connection with such offering and ending 90 days after the commencement of such distribution.

 

(d)                                 Notwithstanding the provisions of Section 2.13(c):

 

(i)            any applicable period shall terminate on such earlier date as the Company gives notice to the Holders that the Company declines to proceed with any such offering set forth in Section 2.13(c);

 

(ii)           all executive officers and directors of the Company then holding shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common Stock of the Company shall enter into similar agreements for not less than the entire time period required of the Holders hereunder; and

 

(iii)          the Holders shall be allowed any concession or proportionate release allowed to any executive officer or director that entered into similar agreements.

 

Section 2.14                            Suspension Rights.  In the event of:

 

(a)                                  any request by the Commission or any other federal or state governmental authority during the period of effectiveness of a registration statement contemplated by this Agreement for amendments or supplements to such registration statement or related preliminary prospectus, prospectus or prospectus supplement or for additional information;

 

(b)                                 the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of any registration statement contemplated by this Agreement or the initiation of any proceedings for that purpose;

 

(c)                                  the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; or

 

F-18

 

(d)           any event or circumstance that necessitate the making of any changes in a registration statement contemplated by this Agreement or related preliminary prospectus, prospectus or prospectus supplement, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of a registration statement, it will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that, in the case of a preliminary prospectus, prospectus or prospectus supplement, it will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

then the Company shall deliver a written notice to the Holders with Registrable Securities covered by such registration statement or related preliminary prospectus, prospectus or prospects supplement (the “Suspension Notice”) to the effect of the foregoing (which do not disclose the content of any material non-public information and will indicate the date of the beginning and end of the intended suspension, if known), and, upon receipt of such Suspension Notice, such Holders will refrain from selling any Registrable securities pursuant to such registration statement (a “Suspension”) until such Holder’s receipt of copies of a supplemented or amended preliminary prospectus, prospectus or prospectus supplement prepared an filed by the Company, or until it is advised in writing by the Company that the current preliminary prospectus, prospectus or prospectus supplement may be used, and has received copies of any additional or supplement filings that are incorporated or deemed incorporated by reference in any such preliminary prospectus, prospectus or prospectus supplement.  In the event of any Suspension, the Company will use commercially reasonable efforts to cause the use of the preliminary prospectus, the prospectus or the prospectus supplement so suspended to be resumed as soon as reasonably practicable after delivery of a Suspension Notice to such Holders, subject to Section 2.13.  The Suspension and Suspension Notice shall be held in confidence and not disclosed by such Holders, except as required by law.

 

Section 2.15         Other Registration Rights.  Nothing herein shall prohibit the Company from granting to any Person the right to cause the Company to register any securities of the Company under the Securities Act; provided, that the Company shall not enter into any agreement (or amendment or waiver of the provisions of any agreement) with any holder or prospective holder of any securities of the Company that would grant such holder registration rights that are pari passu or senior to the registration rights provided in this Agreement to the Holders or any other rights that conflict with the rights of the Holders under this Agreement or otherwise limits or reduces such rights.  The Company shall cause each other holder of Common Stock (or any security convertible or exchangeable into Common Stock) who obtains the right, after the date of this Agreement, to propose a registration giving rise to a Piggy-Back Registration, if any, to agree not to transfer any shares of Common Stock or securities convertible into or exchangeable for Common Stock, for the applicable periods set forth in Section 2.13(c).

 

Section 2.16         Survival.  The obligations of the Company and the Holders under Section 2.7, Section 2.8, Section 2.9 and Section 2.10 hereof shall survive the completion of any offering of Registrable Securities and the termination or expiration of this Agreement.

 

F-19

 

ARTICLE 3
 MISCELLANEOUS

 

Section 3.1            Remedies.  In addition to being entitled to exercise all rights provided herein and granted by law, including recovery of damages, the Holders shall be entitled to specific performance of the rights under this Agreement.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

Section 3.2            Amendments and Waivers.  Except as otherwise provided herein, the provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, in each case without the written consent of the Company and the Holders of a majority of the Registrable Securities then outstanding.  No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

 

Section 3.3            Notices.  All notices and other communications in connection with this Agreement shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery to the address set forth on the signature page hereto, or to such other address and to such other Persons as any party hereto may hereafter specify in writing.

 

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when received if deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery.

 

Section 3.4            Successors and Assigns.  Except as expressly provided in this Agreement, the rights and obligations of the Initial Holders under this Agreement shall not be assignable by any Initial Holder to any Person that is not an Initial Holder.  This Agreement shall be binding upon the parties hereto and their respective successors and assigns.

 

Section 3.5            Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

 

Section 3.6            Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York  without regard to the choice of law provisions thereof.

 

Section 3.7            Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or

 

F-20

 

unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 3.8                                   Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Registrable Securities.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

Section 3.9                                   Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 3.10                            No Third Party Beneficiaries.  Nothing express or implied herein is intended or shall be construed to confer upon any person or entity, other than the parties hereto and their respective successors and assigns, any rights, remedies or other benefits under or by reason of this Agreement.

 

F-21

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
 
    	
COMPANY
    
	
 
    	
 
    	
STAG   Industrial, Inc., a Maryland corporation
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
99 High Street, 28th Floor
    
	
 
    	
 
    	
 
    	
Boston, MA 02110
    
	
 
    	
 
    	
 
    	
Attention: General Counsel
    
	
 
    	
 
    	
 
    	
Fax: 617-514-0052
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
OPERATING   PARTNERSHIP
    
	
 
    	
 
    	
STAG   Industrial Operating Partnership, L.P., a Delaware limited partnership
    
	
 
    	
 
    	
By:   
    	
STAG   Industrial GP, LLC, a Delaware limited liability company, its general partner
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
99 High Street, 28th Floor
    
	
 
    	
 
    	
 
    	
Boston, MA 02110
    
	
 
    	
 
    	
 
    	
Attention: General Counsel
    
	
 
    	
 
    	
 
    	
Fax: 617-514-0052
    

 

F-22

 

	
 
    	
 
    	
CONTRIBUTORS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
STAG   GI INVESTMENTS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
STAG   MANAGER, LLC, its manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
STAG   INVESTMENTS III, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
STAG   MANAGER III, LLC, a Delaware limited liability company, its manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

F-23

 

	
 
    	
 
    	
STAG   INVESTMENTS IV, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
STAG   MANAGER, LLC, a Delaware limited liability company, its manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
NET   LEASE AGGREGATION FUNDS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

F-24

 

	
 
    	
 
    	
INNOVATIVE   PROMOTIONS LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
GREGORY   W. SULLIVAN
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

F-25

 

	
 
    	
 
    	
ROSEVIEW   CAPITAL PARTNERS LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
BSB   STAG III, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

F-26

 

	
 
    	
 
    	
STAG   III EMPLOYEES, LLC
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
NED   STAG III RESIDUAL LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
BENJAMIN   S. BUTCHER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

F-27

 

EXHIBIT G
 TO
 CONTRIBUTION AGREEMENT

 

DEFINITIONS

 

The following capitalized terms used in this Agreement shall have the meanings set forth below.

 

Actions:  Means all actions, litigation, written claims, complaints, charges, written accusations, investigations, petitions, suits, arbitrations, mediations or other proceedings, whether civil or criminal, at law or in equity, judicial or administrative or before any arbitrator or governmental body or agency.

 

Affiliate:  Means a Person who as to another Person controls, is controlled by, or is under common control with, such other Person.

 

Allocated Debt:  Means the debt allocated or related to the Properties that is assumed by the Operating Partnership as of the Closing Date by virtue of its ownership of Holdings and the Participating Entities.  The aggregate outstanding principal amount of the Allocated Debt as of Allocated Debt Determination Date is $104,131,235.00 (the “Estimated Allocated Debt Amount”), which includes $7,350,000 with respect to the Property located at 1313 Mooresville Blvd., Mooresville, North Carolina (“Carolina Beer & Beverage”) and $3,075,000 with respect to the Committed Property located at 4405 Michigan Avenue Road, Cleveland, Tennessee (“Renfro”)

 

Allocated Debt Determination Date:  means (a) with respect to any Property that was owned by Holdings or a Participating Entity on December 31, 2010, December 31, 2010, (b) with respect Carolina Beer & Beverage, February 28, 2011, and (c) with respect to Renfro, the closing date of the acquisition of such Committed Property, currently scheduled for April 6, 2011.

 

Claims:  Means claims, disputes or Actions pending, threatened in writing or, to the Contributor’s Knowledge, otherwise threatened that directly or indirectly affect any of the Contributor, Holdings, one or more Participating Entities, the Holdings Interests, the Participating Entity Interests or the Properties.

 

Disclosure Schedules:  Means the Disclosure Schedule dated of even date herewith and delivered by the Contributor to the Company and the Operating Partnership, which Disclosure Schedule is attached hereto and incorporated herein and contains Schedule 3.2(a) through Schedule 3.2(v).

 

Encumbrances:  Means, with respect to the subject personal property, each of the following:  all pledges, liens, options, charges, security interests, restrictions, prior assignments, encumbrances, rights of others, licenses, or other similar arrangement or interest in personal property of any kind or nature whatsoever, direct or indirect, including, without limitation, interests in or claims to revenues generated by the personal property in question.

 

Estimated Closing Date:  Means April 13, 2011.

 

G-1

 

Knowledge:  Means, with respect to any representation or warranty so indicated, the actual knowledge of Benjamin S. Butcher, without any duty of inquiry or investigation.

 

Liens:  Means, with respect to the subject real property, each of the following, other than any of the following that would constitute Permitted Liens:  all mortgages, deeds of trust, pledges, liens, options, charges, security interests, restrictions, prior assignments, encumbrances, covenants, encroachments, assessments, rights of others, licenses, easements, or other similar arrangement or interest in real property of any kind or nature whatsoever, direct or indirect, including, without limitation, interests in or claims to revenues generated by the real property in question and mortgages, deeds of trust and other instruments securing the Allocated Debt.

 

Material Adverse Effect:  Means any material adverse effect on the assets, business, financial condition, prospects or results of operations of the Company, the Operating Partnership and the Participating Entities (including the Properties) taken as a whole.

 

Permitted Liens:  Means

 

(i)                                     Liens, or deposits made to secure the release of such Liens, securing taxes, the payment of which is not delinquent or the payment of which is actively being contested in good faith by appropriate proceedings diligently pursued, but only to the extent such Liens have been disclosed in the Title Reports, Disclosure Schedules or the Registration Statement;

 

(ii)                                  zoning laws and ordinances generally applicable to the districts in which the Properties are located;

 

(iii)                               Liens imposed by laws, such as carriers’, warehousemen’s, carriers’ and mechanics’ liens, and other similar liens arising in the ordinary course of business that are being contested in good faith by appropriate proceedings diligently pursued (provided that adequate reserves or accruals for payments of such contested liens have been provided in the balance sheet of the Participating Entity) or as disclosed in the Title Reports, Disclosure Schedules or the Registration Statement;

 

(iv)                              easements for public utilities and other access and use easements that do not have a Material Adverse Effect upon the Properties;

 

(v)                                 leases and licenses (and purchase rights contained therein) that are identified in the Disclosure Schedules or the Registration Statement or that have otherwise been delivered or made available to Company, its agents and underwriters; and

 

(vi)                              any exceptions contained in the Title Reports or otherwise set forth in Schedule 3.2(a).

 

Person:  Means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or governmental entity.

 

G-2

 

Road Show Prospectus Filing Date:  Means the date of filing with the Securities Exchange Commission of an amendment to the Company’s S-11 that contains the definitive form of preliminary prospectus anticipated to be used for the “road show” of the Public Offering, which preliminary prospectus includes the offering price range, the number of shares to be offered to the public and the value, based on the mid-point of the offering range, of the Units to be delivered to the Contributor and Other Contributors hereunder and under the Other Agreements.

 

Title Reports.  Means those title insurance policies issued in the name of the Participating Entities with respect to the Properties, as described on Schedule 3.2(a).

 

Valuation Date:  Means as of the date of this Agreement.

 

G-3

 

EXHIBIT H
 TO
 CONTRIBUTION AGREEMENT

 

VOTING AGREEMENT

 

See Attached

 

H-1

 

VOTING AGREEMENT

 

THIS VOTING AGREEMENT (this “Agreement”) is made and entered into as of                   , 2011, by and among STAG INDUSTRIAL, INC., a Maryland corporation (the “Company”), STAG INDUSTRIAL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the “Operating Partnership”), GI STAG INVESTCO, LLC, a Delaware limited liability company (“GISI”) and the undersigned contributors (each a “Contributor” and collectively, the “Contributors”).

 

RECITALS

 

A.                                   WHEREAS, on                 , 2011, the Company and the Operating Partnership entered into several contribution agreements (the “Contribution Agreements”) with the Contributors, which provide for the contribution of various portfolios of primarily single-tenant real estate assets (the “Contributions”) in connection with a proposed initial public offering (the “Public Offering” and together with the Contributions, the “Formation Transactions”) of shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”);

 

B.                                       WHEREAS, each Contributor is the record owner or beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of, and has the right to direct the voting or disposition of, the number of shares of Common Stock, or common units of limited partnership in the Operating Partnership (“OP Units”), indicated on the signature page of this Agreement (such shares of common stock and shares of Common Stock issuable upon redemption of the OP Units, the “Shares”); and

 

C.                                     WHEREAS, as an inducement for (i) GISI to enter into the limited liability company agreement (the “JV Agreement”) of STAG GI INVESTMENTS, LLC, a Delaware limited liability company (“STAG GI”), and (ii) each of the Contributors to enter into such Contributor’s Contribution Agreement with the Company and the Operating Partnership, and as part of the conditions to the consummation of the Formation Transactions, the Company desires to agree to provide GISI the right to select up to two individuals to be nominated to serve on the Board of Directors of the Company (the “Board”), and each Contributor desires to agree to vote the Shares over which the Contributor has voting power as described below;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                       Initial Board of Directors.

 

(a)                                  If GISI, through its interest in STAG GI, receives beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 10% or more of the total OP Units issued by the Operating Partnership in the Contributions, then immediately following the Public Offering, the Board shall consist of seven directors, at least five of whom will be Independent Directors (as defined below), each of whom will serve a one-year term and two of whom shall have been selected by GISI.  Of the two directors to be selected by GISI, both must be Qualified Nominees (as defined below) and at least one must qualify as an Independent Director and qualify to serve as chairperson of at least one of the compensation, audit, nominating and investment committees of the Board and will be required to serve as chairperson 

 

H-2

 

of one of the aforesaid committees; provided, however, the composition of the Board and each committee thereof shall satisfy all listing requirements of the New York Stock Exchange.  GISI agrees to notify the Company of its proposed appointments for the initial Board at least one week in advance of the expected filing of the first amendment to the registration statement for the Public Offering, together with any information regarding such appointees as the Company reasonably requests.

 

(b)                                 “Independent Director” means an individual who qualifies as an “independent director” under the requirements of the New York Stock Exchange.

 

(c)                                  “Qualified Nominee” means an individual (i) who is not a competitor of the Company or any of its subsidiaries or an affiliate of a competitor of the Company or any of its subsidiaries, as reasonably determined by the Board, (ii) who does not have a material conflict of interest in serving as a member of the Board or would be unable to comply with the Company’s code of business conduct and ethics and corporate governance guidelines, as reasonably determined by the Board, (iii) with respect to whom none of the events described in Item 401(f) of Regulation S-K under the Securities Act of 1933, as amended (or any successor regulation), has occurred in the prior 10 years and (iv) whose nomination and recommendation by the Board, in the good faith determination of the Board, would not be inconsistent with the Board’s duties to the Company and its stockholders.  For purposes of this definition, a managing director or director of GI Partners shall not be deemed to be a competitor or an affiliate of a competitor of the Company or any of its subsidiaries or to have a material conflict of interest in serving as a member of the Board by reason of such position or any ownership interest in GI Partners or its subsidiaries.

 

2.                                       Agreement to Nominate Directors.

 

(a)                                  If GISI, through its interest in STAG GI, receives beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 10% or more of the total OP Units issued by the Operating Partnership in the Contributions, then from the date hereof until the Expiration Date (defined below) and subject to the terms and conditions in this Agreement, at every annual meeting of the stockholders of the Company relating to the election of members of the Board, the Company shall cause two individuals selected by GISI (both of whom must be Qualified Nominees and at least one of whom must be an Independent Director and qualify to serve as chairperson of at least one of the compensation, audit, nominating and investment committees of the Board and will be required to serve as chairperson of one of the aforesaid committees) to be nominated for election to the Board; provided, however, the composition of the Board and each committee thereof shall satisfy all listing requirements of the New York Stock Exchange.

 

(b)                                 If at any time while the Company’s obligations under this Section 2 are in effect, the Board shall be classified with the result that directors serve for terms of greater than one year, the Company shall not be required to make any nominations otherwise required under this Section 2, except at an annual meeting at which the term of an individual nominated pursuant to this Section 2 and elected to the Board in connection with such nomination (a “GI Director”), is scheduled to expire; provided that if the Board shall be classified, the GI Directors shall be placed in different classes.

 

H-3

 

(c)                                  This Agreement shall not, and shall not be construed to, grant any other rights with regard to the nomination of directors other than the limited rights set forth in this Section 2.

 

3.                                       Agreement to Vote Shares.

 

(a)                                  From the date hereof until the Expiration Date, at every annual meeting of the stockholders of the Company relating to the election of members of the Board, each of GISI and the Contributors (in the capacity as a stockholder) shall appear at the meeting or otherwise cause the Shares, if any, to be present for purposes of establishing a quorum and shall vote the Shares, if any,  in favor of the election of the nominee or nominees, as applicable, for the Board selected by GISI pursuant to, and in accordance with, this Agreement.

 

(b)                                 If GISI or a Contributor is the beneficial owner, but not the record holder, of the Shares, GISI or such Contributor, as applicable, agrees to take all reasonable actions necessary to cause the record holder and any nominees to vote all of the Shares, if any, in the manner provided in Section 3(a).

 

(c)                                  This Agreement shall not, and shall not be construed to, grant any other rights with regard to the voting of the Shares, if any, other than the limited rights set forth in this Section 3. None of GISI and the Contributors shall have any right to influence in any manner the voting of the Shares, if any, on any other matters that may come before the stockholders of the Company.

 

(d)                                 This Agreement shall not, and shall not be construed to, restrict the ability of GISI or any Contributor to sell or dispose of any Shares or other securities of the Company or the Operating Partnership, in the open market or otherwise.

 

4.                                       Action in Stockholder Capacity Only. None of GISI and the Contributors makes any agreement or understanding herein as director or officer of the Company or as a fiduciary of, or participant in, any compensation plan of the Company. Each of GISI and the Contributors has entered into this Agreement solely in an individual capacity as a record holder and/or beneficial owner of Shares and OP Units, and nothing herein shall limit or affect any actions taken in a capacity as an officer or director of the Company or as a fiduciary of, or participant in, any compensation plan of the Company.

 

5.                                       Representations and Warranties of the Company and the Operating Partnership.  The Company and the Operating Partnership represent and warrant as follows:

 

(a)                                  The Company and the Operating Partnership have full power and authority to make, enter into and carry out the terms of this Agreement.  This Agreement has been duly and validly executed and delivered by the Company and the Operating Partnership and constitutes a valid and binding agreement of the Company and the Operating Partnership enforceable against them in accordance with its terms.

 

(b)                                 The execution and delivery of this Agreement and the performance by the Company and the Operating Partnership of their agreements and obligations hereunder will not result in any breach or violation of or be in conflict with or constitute a default under any term of 

 

H-4

 

any agreement, judgment, injunction, order, decree, law, regulation or arrangement to which the Company or the Operating Partnership is a party or by which they (or any of their assets) is bound.

 

6.                                       Representations and Warranties of Contributor.  Each Contributor severally and not jointly represents as follows:

 

(a)                                  As of the date of this Agreement, Contributor is the beneficial or record owner of the Shares and OP Units indicated on the signature page of this Agreement, and Contributor does not beneficially own any securities of the Company other than (i) the Shares and OP Units set forth on the signature page of this Agreement and (ii) any Common Stock beneficially owned under any compensation plan of the Company.  Contributor has full power and authority to make, enter into and carry out the terms of this Agreement.  This Agreement has been duly and validly executed and delivered by Contributor and constitutes a valid and binding agreement of Contributor enforceable against such Contributor in accordance with its terms.

 

(b)                                 Except for this Agreement or as otherwise permitted by this Agreement, Contributor has full legal power, authority and right to vote or to direct the voting of all of the Shares then owned of record or beneficially as described in this Agreement, without the consent or approval of, or any other action on the part of, any other person or entity. Without limiting the generality of the foregoing, Contributor has not entered into any voting agreement (other than this Agreement) with any person or entity with respect to any of the Shares, granted any person or entity any proxy (revocable or irrevocable) or power of attorney with respect to any of the Shares, deposited any of the Shares in a voting trust, or entered into any arrangement or agreement with any person or entity limiting or affecting such Contributor’s legal power, authority or right to vote the Shares on any matter.

 

(c)                                  The execution and delivery of this Agreement and the performance by Contributor of such Contributor’s agreements and obligations hereunder will not result in any breach or violation of or be in conflict with or constitute a default under any term of any agreement, judgment, injunction, order, decree, law, regulation or arrangement to which Contributor is a party or by which Contributor (or any of such Contributor’s assets) is bound.

 

7.                                       Representations and Warranties of GISI.  GISI represents and warrants as follows:

 

(a)                                  As of the date of this Agreement, GISI is the beneficial or record owner of the Shares and OP Units indicated on the signature page of this Agreement, and GISI does not beneficially own any securities of the Company other than (i) the Shares and OP Units set forth on the signature page of this Agreement and (ii) any Common Stock beneficially owned under any compensation plan of the Company. GISI has full power and authority to make, enter into and carry out the terms of this Agreement.  This Agreement has been duly and validly executed and delivered by GISI and constitutes a valid and binding agreement of GISI enforceable against GISI in accordance with its terms.

 

(b)                                 Except for this Agreement or as otherwise permitted by this Agreement, GISI has full legal power, authority and right to vote or to direct the voting of all of the Shares 

 

H-5

 

then owned of record or beneficially as described in this Agreement, without the consent or approval of, or any other action on the part of, any other person or entity (subject to the terms of the JV Agreement with respect to Shares owned through STAG GI). Without limiting the generality of the foregoing, GISI has not entered into any voting agreement (other than this Agreement and the JV Agreement) with any person or entity with respect to any of the Shares, granted any person or entity any proxy (revocable or irrevocable) or power of attorney with respect to any of the Shares, deposited any of the Shares in a voting trust, or entered into any arrangement or agreement with any person or entity limiting or affecting GISI’s legal power, authority or right to vote the Shares on any matter.

 

(c)                                  The execution and delivery of this Agreement and the performance by GISI of its agreements and obligations hereunder will not result in any breach or violation of or be in conflict with or constitute a default under any term of any agreement, judgment, injunction, order, decree, law, regulation or arrangement to which GISI is a party or by which GISI (or any of its assets) is bound.

 

(d) GISI is controlled by GI Partners.

 

8.                                       Termination.

 

(a)                                  This Agreement shall terminate if:

 

(i) at any time immediately following a transfer by GISI or any of the GI Controlled Affiliates of any interest in the Formation Securities, GISI and the GI Controlled Affiliates no longer beneficially own (within the meaning of Rule 13d-3 under the Exchange Act), 10% or more of the total shares of Common Stock of the Company outstanding on a fully diluted basis immediately following such transfer (assuming all securities convertible or exchangeable into shares of Common Stock, including all OP Units not held directly or indirectly by the Company, are converted or exchanged into or redeemed for shares of Common Stock), or

 

(ii) at any time on or after the third anniversary of the Public Offering, GISI and the GI Controlled Affiliates no longer beneficially own (within the meaning of Rule 13d-3 under the Exchange Act), 10% or more of the total shares of Common Stock of the Company outstanding on a fully diluted basis (assuming all securities convertible or exchangeable into shares of Common Stock, including all OP Units not held directly or indirectly by the Company, are converted or exchanged into or redeemed for shares of Common Stock)  (the earlier to occur of the events in clause (i) and (ii), the “Expiration Date”).

 

(b)                                 Upon such termination, no party shall have any further obligations or liabilities hereunder; provided that such termination shall not relieve any party from liability for any breach of this Agreement prior to such termination.

 

(c)                                  For purposes of this Agreement, (i) “transfer” means any transfer, sale, assignment, gift, exchange or redemption (other than an exchange or redemption of OP Units for shares of Common Stock), distribution or any other disposition by law or otherwise; (ii) 

 

H-6

 

“Formation Securities” means the OP Units issued to GISI (through STAG GI) in the Formation Transactions and shares of Common Stock issued upon redemption of any such OP Units (or any securities issued as a dividend or distribution on, or in exchange for such OP Units or shares of Common Stock); and (iii) “GI Controlled Affiliates” means, so long as they are controlled by GI Partners, GI Partners Fund III-A L.P., GI Partners Fund III-B L.P., GI Partners Fund III L.P., GI STAG UBTI Blocker, Inc. and GI STAG ECI Blocker, Inc.

 

9.                                       Miscellaneous Provisions.

 

(a)                                  Amendments, Modifications and Waivers. No amendment, modification or waiver in respect of this Agreement shall be effective against any party unless it shall be in writing and signed by the Company, the Operating Partnership, GISI and the Contributors.

 

(b)                                 Entire Agreement. This Agreement constitutes the entire agreement among the parties to this Agreement and supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

 

(c)                                  Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.

 

(d)                                 Assignment and Successors. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto. This Agreement and all the provisions hereof are personal to each of the parties hereto, shall not inure to a party’s respective successors and may not be assigned, other than to one of the GI Controlled Affiliates, by a party without the prior written consent of the other parties. Any assignment in violation of the foregoing shall be void and of no effect.

 

(e)                                  No Third Party Rights. Nothing in this Agreement, express or implied, is intended to or shall confer upon any person (other than the parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

(f)                                    Cooperation. Each of the parties hereto agrees to cooperate fully with the other parties and to execute and deliver such further documents, certificates, agreements and instruments and to take such other actions as may be reasonably requested by another party to evidence or reflect the transactions contemplated by this Agreement and to carry out the intent and purpose of this Agreement. Each of the parties hereto agrees that the other parties may publish and disclose each party’s identity and ownership of Shares, OP Units and other securities of the Company or the Operating Partnership and the nature of each party’s commitments, arrangements and understandings under this Agreement as may be required by applicable law in any filing made by a party with the Securities and Exchange Commission.

 

(g)                                 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

H-7

 

(h)                                 Specific Performance; Injunctive Relief. Each party hereto acknowledges that the other parties may be irreparably harmed and that there may be no adequate remedy at law for a breach of any of the covenants or agreements of a party’s set forth in this Agreement. Therefore, each party hereto hereby agree that, in addition to any other remedies that may be available upon any such breach, each party shall have the right to seek specific performance, injunctive relief or any other remedies available to such party at law or in equity without posting any bond or other undertaking in order to enforce such covenants and agreements.

 

(i)                                     Notices. All notices, consents, requests, claims, demands and other communications under this Agreement shall be in writing (which shall include communications by e-mail) and shall be delivered (a) in person or by courier or overnight service, or (b) by e-mail with a copy delivered as provided in clause (a). If to a Contributor, to Contributor’s address or e-mail address shown below Contributor’s signature on the signature pages hereof, and

 

with a copy (which shall not constitute notice) to:

 

STAG Capital Partners, LLC

99 High Street, 28th Floor

Boston, MA 02110

Attention: General Counsel

Fax: 617-514-0052

E-mail: karnone@stagcapital.com

 

with a further copy (which shall not constitute notice) to:

 

DLA Piper LLP (US)
 33 Arch Street, 26th Floor
 Boston, MA 02110
 Attn: John L. Sullivan, Esq.
 Fax:  617-406-6100

E-mail: john.sullivan@dlapiper.com

 

If to the Company and the Operating Partnership:

 

STAG Industrial, Inc.

99 High Street, 28th Floor

Boston, MA 02110

Attention: General Counsel

Fax: 617-514-0052

E-mail: karnone@stagcapital.com

 

If to GISI:

 

GI Partners

2180 Sand Hill Road, Suite 210

Menlo Park, CA 94025

 

H-8

 

Attention: Alexander Fraser

Fax: 650-233-3601

E-mail: alexander@gipartners.com

 

with a copy (which shall not constitute notice) to:

 

STAG Capital Partners, LLC

99 High Street, 28th Floor

Boston, MA 02110

Attention: General Counsel

Fax: 617-514-0052

E-mail: karnone@stagcapital.com

 

with a further copy (which shall not constitute notice) to:

 

Paul, Hastings, Janofsky & Walker LLP

695 Town Center Drive, Seventeenth Floor Costa Mesa, CA 92626
 Attn:  John Simonis, Esq.
 Fax:  714-668-6336

E-mail: johnsimonis@paulhastings.com

 

or to such other address or facsimile number as the parties hereto may designate in writing to the other in accordance with this Section 9(i). Any party may change the address or facsimile number to which notices are to be sent by giving written notice of such change of address or number to the other parties in the manner above provided for giving notice. If delivered personally or by courier, the date on which the notice, request, instruction or document is delivered shall be the date on which such delivery is made and if delivered by facsimile or e-mail transmission or mail as aforesaid, the date on which such notice, request, instruction or document is received shall be the date of delivery.

 

(j)                                   Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument, and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties; it being understood that all parties need not sign the same counterpart.

 

H-9

 

(k)                                Headings. The headings contained in this Agreement are for the convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

 

[Signatures on the Following Pages]

 

H-10

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
STAG   INDUSTRIAL, INC., a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
OPERATING   PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
STAG   INDUSTRIAL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
STAG   INDUSTRIAL GP, LLC, a Delaware limited liability company, its general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
GISI
    
	
 
    	
 
    
	
 
    	
GI   STAG INVESTCO, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    	
Shares Beneficially Owned (ownership is through   STAG GI Investments, LLC and duplicative of the “Shares Beneficially Owned”   indicated for STAG GI Investment, LLC below):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    

 

H-11

 

	
 
    	
CONTRIBUTORS
    
	
 
    	
 
    
	
 
    	
STAG   GI INVESTMENTS, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
STAG   MANAGER, LLC, its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Shares   Beneficially Owned:
    
	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    
	
 
    	
 
    	
 
    
	
 
    	
STAG   INVESTMENTS III, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STAG   MANAGER III, LLC, a Delaware limited liability company, its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares   Beneficially Owned:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    
					

 

H-12

 

	
 
    	
STAG   INVESTMENTS IV, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
STAG   MANAGER, LLC, a Delaware limited liability company, its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Shares   Beneficially Owned:
    
	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    
	
 
    	
 
    	
 
    
	
 
    	
NET   LEASE AGGREGATION FUNDS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    

 

H-13

 

	
 
    	
INNOVATIVE   PROMOTIONS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GREGORY   W. SULLIVAN
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    

 

H-14

 

	
 
    	
ROSEVIEW   CAPITAL PARTNERS LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    
	
 
    	
 
    	
 
    
	
 
    	
BSB   STAG III, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    

 

H-15

 

	
 
    	
STAG   III EMPLOYEES, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    
	
 
    	
 
    	
 
    
	
 
    	
NED   STAG III RESIDUAL LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    

 

H-16

 

	
 
    	
 
    
	
 
    	
BENJAMIN   S. BUTCHER
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Shares Beneficially Owned (excludes any shares of   Common Stock or OP Units owned through STAG GI Investments, LLC, STAG   Investments III, LLC or STAG Investment IV, LLC):
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
                        shares of Common Stock
    
	
 
    	
 
    	
                        OP Units
    

 

H-17

 

EXHIBIT I
 TO
 CONTRIBUTION AGREEMENT

 

INTENTIONALLY OMITTED

 

I-1

 

EXHIBIT J
 TO
 CONTRIBUTION AGREEMENT

 

LETTER AGREEMENT

 

See Attached

 

J-1

 

STAG Industrial GP, LLC
 c/o STAG Industrial, Inc.
 99 High Street, 28th Floor

Boston, MA 02110

 

                            , 2011

 

STAG GI Investments, LLC
 c/o STAG Capital Partners, LLC
 99 High Street
 Boston, MA 02110
 Attention:  Benjamin S. Butcher

 

	
Re:
    	
Transfer   of Common Units of Limited Partnership Interests in STAG Industrial Operating   Partnership, L.P., a Delaware limited partnership (the “Operating   Partnership”)
    

 

Dear Mr. Butcher:

 

Reference is hereby made to (i) that certain Contribution Agreement dated on or about the date hereof (the “Contribution Agreement”) by and among STAG GI Investments, LLC, a Delaware limited liability company (the “Company”), the Operating Partnership and STAG Industrial, Inc., a Maryland corporation (the “REIT”), (ii) that certain Amended and Restated Limited Partnership Agreement of the Operating Partnership (the “Partnership Agreement”) by and among the undersigned, as general partner (the “General Partner”), the REIT, STAG Investments III, LLC, a Delaware limited liability company, the Company, and the other persons whose names appear on Exhibit A of the Partnership Agreement, as limited partners, (iii) that certain Voting Agreement referred to in the Contribution Agreement and by and among the Company, the REIT and other parties and (iv) that certain Registration Rights Agreement referred to in the Contribution Agreement and by and among the Company, the REIT and other parties.  Capitalized terms used in this letter and not otherwise defined herein shall have the meanings given to them in the Partnership Agreement or the Contribution Agreement, as applicable.

 

In connection with the Company’s contribution of its entire legal and beneficial right, title and interest in and to Holdings to the Operating Partnership in exchange for Units pursuant to the Contribution Agreement, the General Partner hereby consents, in its capacity as general partner of the Operating Partnership, pursuant to Section 3.3(c)(iii), Section 11.3, Section 11.4 and Section 12.4 of the Partnership Agreement, to the following:

 

1.               After the expiration of the lockup agreement made by the Company to the REIT at the request of the underwriters of the REIT’s initial public offering but subject in all cases to Sections 11.3(d), (e) and (f) of the Partnership Agreement (which Sections shall apply notwithstanding this consent) (a) the Company may distribute the Units to its direct or

 

J-2

 

indirect members as of the date hereof (and such member may in turn distribute the Units to its direct or indirect members as of the date hereof) so long as each such distributee first (i) makes in writing substantially the same representations and warranties to the REIT as are contained in Section 3.2(j) of the Contribution Agreement, mutatis mutandis, and (ii) executes and delivers to the Partnership a counterpart to the Partnership Agreement and to the REIT a counterpart to the Registration Rights Agreement and, unless waived by the REIT, the Voting Agreement, and (b) upon their receipt of the Units, the Company’s members (or its direct or indirect members’ members, as the case may be) shall be admitted into the Operating Partnership as Substituted Limited Partners in accordance with Section 11.4 of the Partnership Agreement; provided that the total number of direct and indirect distributees of the Company (through GI STAG Investco, LLC) may not exceed 30 (including for purposes of this proviso those Persons indirectly owning an interest in the Operating Partnership through the Company or a distributee that is a partnership, limited liability company, S corporation or grantor trust (such entity, a “flow through entity”), but only if more than 50% of the value of such Person’s interest in the Company or flow through entity is attributable to the Company’s or flow through entity’s interest (direct or indirect) in the Operating Partnership).

 

2.               After the expiration of the lockup agreement made by the Company to the REIT at the request of the underwriters of the REIT’s initial public offering and, if later, the one year anniversary of the issuance of the Units but subject in all cases to Sections 11.3(d) and (e) of the Partnership Agreement (which Sections shall apply notwithstanding this consent), the Company or any permitted distributee under paragraph 1. above may make a bona fide pledge of the Units to a bona fide third-party financial institution to secure borrowings by the Company (or such permitted distributee, as the case may be) from such institution, so long as such institution first (i) agrees in writing to offer to redeem (and, without further action, shall be deemed to have irrevocably been redeemed) for the Cash Amount or, in the sole and absolute discretion of the REIT, the REIT Shares Amount any Unit in which such institution holds a security interest simultaneously with the time at which such institution would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such institution under Section 752 of the Internal Revenue Code of 1986, as amended, and (ii) provides in writing such representations, covenants and undertakings as the Board of Directors deems appropriate to conclude that the REIT may deliver such institution the REIT Shares Amount upon a redemption of the pledged Units without jeopardizing the REIT’s status as a real estate investment trust under the Code.

 

J-3

 

If the foregoing fairly represents our understanding, please so acknowledge by placing your authorized signature and the date below, and return the original to my attention, retaining the enclosed copy for your records.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
STAG   Industrial GP, LLC
    
	
 
    	
 
    
	
 
    	
           By:  STAG Industrial, Inc., its sole member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    

 

 

Agreed:

 

STAG GI Investments, LLC

 

STAG Manager, LLC, its manager

 

 

	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    	
 
    

 

 

	
cc:
    	
GI   Partners
    
	
 
    	
2180   Sand Hill Road, Suite 210
    
	
 
    	
Menlo   Park, CA 94025
    
	
 
    	
Attention:   Rick Magnuson
    

 

J-4

 

EXHIBIT K
 TO
 CONTRIBUTION AGREEMENT

 

CONSIDERATION SPREADSHEET

 

See Attached

 

 

Appendix A-1

Determination of Number of Units

 

OP Units to Contributing Entities

Differing Initial Share Price

 

	
Share Price
    	
 
    	
$15
    	
 
    	
$16
    	
 
    	
$17
    	
 
    
	
STAG III
    	
 
    	
689,793
    	
 
    	
772,549
    	
 
    	
766,574
    	
 
    
	
STAG IV
    	
 
    	
1,860,311
    	
 
    	
2,083,497
    	
 
    	
2,067,383
    	
 
    
	
Venture
    	
 
    	
4,990,287
    	
 
    	
4,678,394
    	
 
    	
4,700,913
    	
 
    
	
SCP
    	
 
    	
15,875
    	
 
    	
17,779
    	
 
    	
17,642
    	
 
    
	
SCP III
    	
 
    	
33,734
    	
 
    	
37,781
    	
 
    	
20,288
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
7,871,250
    	
 
    	
7,871,250
    	
 
    	
7,854,049
    	
 
    

 

Estimated Allocated Debt

 

	
STAG III
    	
 
    	
208,338,671
    	
 
    
	
STAG IV
    	
 
    	
86,587,368
    	
 
    
	
Venture
    	
 
    	
104,131,235
    	
 
    
	
SCP
    	
 
    	
1,435,000
    	
 
    
	
SCP III
    	
 
    	
2,983,000
    	
 
    

 

Note:  Contributors receive the number of Units set forth below based on the final IPO share price.  As price increases above $17.00/share, Venture receives 64.3% of the increased value over the value at $16.00/share and STAG III, STAG IV, SCP and SCP III share the remainder pro rata.  If the price decreases below $15.00/share, Venture will receive the necessary number of OP Units to maintain a value of $74,854,304 and STAG III, STAG IV, SCP and SCP III share the remainder pro rata.

 

	
 
    	
 
    	
3
    	
 
    	
5
    	
 
    	
6
    	
 
    	
7A
    	
 
    	
7B
    	
 
    	
 
    	
 
    	
 

	
 
    	
 
    	
Units
    	
 
    	
 

	
Share Price
    	
 
    	
Venture Units
    	
 
    	
STAG III Units
    	
 
    	
STAG IV Units
    	
 
    	
SCP Units
    	
 
    	
SCP III Units
    	
 
    	
Total Units
    	
 
    	
 

	
$
    	
15.00
    	
 
    	
4,990,287
    	
 
    	
689,793
    	
 
    	
1,860,311
    	
 
    	
15,875
    	
 
    	
33,734
    	
 
    	
7,871,250
    	
 
    	
 

	
15.01 
    	
 
    	
4,986,962
    	
 
    	
690,675
    	
 
    	
1,862,690
    	
 
    	
15,895
    	
 
    	
33,777
    	
 
    	
7,871,250
    	
 
    	
 

	
15.02 
    	
 
    	
4,983,642 
    	
 
    	
691,556 
    	
 
    	
1,865,066 
    	
 
    	
15,915 
    	
 
    	
33,820 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.03 
    	
 
    	
4,980,326 
    	
 
    	
692,436 
    	
 
    	
1,867,439 
    	
 
    	
15,935 
    	
 
    	
33,863 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.04 
    	
 
    	
4,977,015 
    	
 
    	
693,315 
    	
 
    	
1,869,809 
    	
 
    	
15,956 
    	
 
    	
33,906 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.05 
    	
 
    	
4,973,708 
    	
 
    	
694,192 
    	
 
    	
1,872,175 
    	
 
    	
15,976 
    	
 
    	
33,949 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.06 
    	
 
    	
4,970,405 
    	
 
    	
695,069 
    	
 
    	
1,874,538 
    	
 
    	
15,996 
    	
 
    	
33,992 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.07 
    	
 
    	
4,967,107 
    	
 
    	
695,944 
    	
 
    	
1,876,899 
    	
 
    	
16,016 
    	
 
    	
34,034 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.08 
    	
 
    	
4,963,813 
    	
 
    	
696,818 
    	
 
    	
1,879,256 
    	
 
    	
16,036 
    	
 
    	
34,077 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.09 
    	
 
    	
4,960,524 
    	
 
    	
697,691 
    	
 
    	
1,881,609 
    	
 
    	
16,056 
    	
 
    	
34,120 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.10 
    	
 
    	
4,957,239 
    	
 
    	
698,562 
    	
 
    	
1,883,960 
    	
 
    	
16,076 
    	
 
    	
34,162 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.11 
    	
 
    	
4,953,958 
    	
 
    	
699,433 
    	
 
    	
1,886,308 
    	
 
    	
16,096 
    	
 
    	
34,205 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.12 
    	
 
    	
4,950,681 
    	
 
    	
700,302 
    	
 
    	
1,888,652 
    	
 
    	
16,117 
    	
 
    	
34,248 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.13 
    	
 
    	
4,947,409 
    	
 
    	
701,170 
    	
 
    	
1,890,994 
    	
 
    	
16,136 
    	
 
    	
34,290 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.14 
    	
 
    	
4,944,142 
    	
 
    	
702,037 
    	
 
    	
1,893,332 
    	
 
    	
16,156 
    	
 
    	
34,332 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.15 
    	
 
    	
4,940,878 
    	
 
    	
702,903 
    	
 
    	
1,895,668 
    	
 
    	
16,176 
    	
 
    	
34,375 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.16 
    	
 
    	
4,937,619 
    	
 
    	
703,768 
    	
 
    	
1,898,000 
    	
 
    	
16,196 
    	
 
    	
34,417 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.17 
    	
 
    	
4,934,364 
    	
 
    	
704,632 
    	
 
    	
1,900,329 
    	
 
    	
16,216 
    	
 
    	
34,459 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.18 
    	
 
    	
4,931,114 
    	
 
    	
705,494 
    	
 
    	
1,902,655 
    	
 
    	
16,236 
    	
 
    	
34,501 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.19 
    	
 
    	
4,927,867 
    	
 
    	
706,355 
    	
 
    	
1,904,978 
    	
 
    	
16,256 
    	
 
    	
34,544 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.20 
    	
 
    	
4,924,625 
    	
 
    	
707,216 
    	
 
    	
1,907,298 
    	
 
    	
16,276 
    	
 
    	
34,586 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.21 
    	
 
    	
4,921,388 
    	
 
    	
708,075 
    	
 
    	
1,909,615 
    	
 
    	
16,295 
    	
 
    	
34,628 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.22 
    	
 
    	
4,918,154 
    	
 
    	
708,933 
    	
 
    	
1,911,929 
    	
 
    	
16,315 
    	
 
    	
34,670 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.23 
    	
 
    	
4,914,925 
    	
 
    	
709,789 
    	
 
    	
1,914,239 
    	
 
    	
16,335 
    	
 
    	
34,712 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.24 
    	
 
    	
4,911,700 
    	
 
    	
710,645 
    	
 
    	
1,916,547 
    	
 
    	
16,355 
    	
 
    	
34,753 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.25 
    	
 
    	
4,908,479 
    	
 
    	
711,500 
    	
 
    	
1,918,852 
    	
 
    	
16,374 
    	
 
    	
34,795 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.26 
    	
 
    	
4,905,262 
    	
 
    	
712,353 
    	
 
    	
1,921,154 
    	
 
    	
16,394 
    	
 
    	
34,837 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.27 
    	
 
    	
4,902,050 
    	
 
    	
713,206 
    	
 
    	
1,923,452 
    	
 
    	
16,413 
    	
 
    	
34,879 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.28 
    	
 
    	
4,898,842 
    	
 
    	
714,057 
    	
 
    	
1,925,748 
    	
 
    	
16,433 
    	
 
    	
34,920 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.29 
    	
 
    	
4,895,638 
    	
 
    	
714,907 
    	
 
    	
1,928,041 
    	
 
    	
16,453 
    	
 
    	
34,962 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.30 
    	
 
    	
4,892,438 
    	
 
    	
715,756 
    	
 
    	
1,930,330 
    	
 
    	
16,472 
    	
 
    	
35,003 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.31 
    	
 
    	
4,889,243 
    	
 
    	
716,604 
    	
 
    	
1,932,617 
    	
 
    	
16,492 
    	
 
    	
35,045 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.32 
    	
 
    	
4,886,051 
    	
 
    	
717,451 
    	
 
    	
1,934,901 
    	
 
    	
16,511 
    	
 
    	
35,086 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.33 
    	
 
    	
4,882,864 
    	
 
    	
718,296 
    	
 
    	
1,937,182 
    	
 
    	
16,531 
    	
 
    	
35,128 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.34 
    	
 
    	
4,879,681 
    	
 
    	
719,141 
    	
 
    	
1,939,459 
    	
 
    	
16,550 
    	
 
    	
35,169 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.35 
    	
 
    	
4,876,502 
    	
 
    	
719,984 
    	
 
    	
1,941,734 
    	
 
    	
16,569 
    	
 
    	
35,210 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.36 
    	
 
    	
4,873,327 
    	
 
    	
720,827 
    	
 
    	
1,944,006 
    	
 
    	
16,589 
    	
 
    	
35,251 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.37 
    	
 
    	
4,870,156 
    	
 
    	
721,668 
    	
 
    	
1,946,275 
    	
 
    	
16,608 
    	
 
    	
35,292 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.38 
    	
 
    	
4,866,990 
    	
 
    	
722,508 
    	
 
    	
1,948,541 
    	
 
    	
16,628 
    	
 
    	
35,334 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.39 
    	
 
    	
4,863,827 
    	
 
    	
723,347 
    	
 
    	
1,950,804 
    	
 
    	
16,647 
    	
 
    	
35,375 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.40 
    	
 
    	
4,860,669 
    	
 
    	
724,185 
    	
 
    	
1,953,064 
    	
 
    	
16,666 
    	
 
    	
35,416 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.41 
    	
 
    	
4,857,515 
    	
 
    	
725,022 
    	
 
    	
1,955,321 
    	
 
    	
16,685 
    	
 
    	
35,456 
    	
 
    	
7,871,250 
    	
 
    	
 
    
																

 

 

	
 
    	
 
    	
Units
    	
 
    	
 
    
	
Share Price
    	
 
    	
Venture Units
    	
 
    	
STAG III Units
    	
 
    	
STAG IV Units
    	
 
    	
SCP Units
    	
 
    	
SCP III Units
    	
 
    	
Total Units
    	
 
    	
 
    
	
15.42 
    	
 
    	
4,854,365 
    	
 
    	
725,858 
    	
 
    	
1,957,575 
    	
 
    	
16,705 
    	
 
    	
35,497 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.43 
    	
 
    	
4,851,219 
    	
 
    	
726,693 
    	
 
    	
1,959,826 
    	
 
    	
16,724 
    	
 
    	
35,538 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.44 
    	
 
    	
4,848,077 
    	
 
    	
727,527 
    	
 
    	
1,962,075 
    	
 
    	
16,743 
    	
 
    	
35,579 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.45 
    	
 
    	
4,844,939 
    	
 
    	
728,359 
    	
 
    	
1,964,320 
    	
 
    	
16,762 
    	
 
    	
35,620 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.46 
    	
 
    	
4,841,805 
    	
 
    	
729,191 
    	
 
    	
1,966,563 
    	
 
    	
16,781 
    	
 
    	
35,660 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.47 
    	
 
    	
4,838,675 
    	
 
    	
730,021 
    	
 
    	
1,968,802 
    	
 
    	
16,800 
    	
 
    	
35,701 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.48 
    	
 
    	
4,835,549 
    	
 
    	
730,851 
    	
 
    	
1,971,039 
    	
 
    	
16,820 
    	
 
    	
35,742 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.49 
    	
 
    	
4,832,428 
    	
 
    	
731,679 
    	
 
    	
1,973,273 
    	
 
    	
16,839 
    	
 
    	
35,782 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.50 
    	
 
    	
4,829,310 
    	
 
    	
732,506 
    	
 
    	
1,975,504 
    	
 
    	
16,858 
    	
 
    	
35,822 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.51 
    	
 
    	
4,826,196 
    	
 
    	
733,332 
    	
 
    	
1,977,732 
    	
 
    	
16,877 
    	
 
    	
35,863 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.52 
    	
 
    	
4,823,087 
    	
 
    	
734,157 
    	
 
    	
1,979,957 
    	
 
    	
16,896 
    	
 
    	
35,903 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.53 
    	
 
    	
4,819,981 
    	
 
    	
734,981 
    	
 
    	
1,982,180 
    	
 
    	
16,915 
    	
 
    	
35,944 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.54 
    	
 
    	
4,816,879 
    	
 
    	
735,804 
    	
 
    	
1,984,399 
    	
 
    	
16,934 
    	
 
    	
35,984 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.55 
    	
 
    	
4,813,782 
    	
 
    	
736,626 
    	
 
    	
1,986,616 
    	
 
    	
16,952 
    	
 
    	
36,024 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.56 
    	
 
    	
4,810,688 
    	
 
    	
737,447 
    	
 
    	
1,988,830 
    	
 
    	
16,971 
    	
 
    	
36,064 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.57 
    	
 
    	
4,807,598 
    	
 
    	
738,267 
    	
 
    	
1,991,040 
    	
 
    	
16,990 
    	
 
    	
36,104 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.58 
    	
 
    	
4,804,512 
    	
 
    	
739,086 
    	
 
    	
1,993,249 
    	
 
    	
17,009 
    	
 
    	
36,144 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.59 
    	
 
    	
4,801,431 
    	
 
    	
739,903 
    	
 
    	
1,995,454 
    	
 
    	
17,028 
    	
 
    	
36,184 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.60 
    	
 
    	
4,798,353 
    	
 
    	
740,720 
    	
 
    	
1,997,656 
    	
 
    	
17,047 
    	
 
    	
36,224 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.61 
    	
 
    	
4,795,279 
    	
 
    	
741,536 
    	
 
    	
1,999,856 
    	
 
    	
17,065 
    	
 
    	
36,264 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.62 
    	
 
    	
4,792,209 
    	
 
    	
742,350 
    	
 
    	
2,002,053 
    	
 
    	
17,084 
    	
 
    	
36,304 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.63 
    	
 
    	
4,789,143 
    	
 
    	
743,164 
    	
 
    	
2,004,247 
    	
 
    	
17,103 
    	
 
    	
36,344 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.64 
    	
 
    	
4,786,081 
    	
 
    	
743,976 
    	
 
    	
2,006,438 
    	
 
    	
17,122 
    	
 
    	
36,383 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.65 
    	
 
    	
4,783,023 
    	
 
    	
744,788 
    	
 
    	
2,008,626 
    	
 
    	
17,140 
    	
 
    	
36,423 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.66 
    	
 
    	
4,779,968 
    	
 
    	
745,598 
    	
 
    	
2,010,812 
    	
 
    	
17,159 
    	
 
    	
36,463 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.67 
    	
 
    	
4,776,918 
    	
 
    	
746,407 
    	
 
    	
2,012,995 
    	
 
    	
17,178 
    	
 
    	
36,502 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.68 
    	
 
    	
4,773,871 
    	
 
    	
747,216 
    	
 
    	
2,015,175 
    	
 
    	
17,196 
    	
 
    	
36,542 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.69 
    	
 
    	
4,770,829 
    	
 
    	
748,023 
    	
 
    	
2,017,352 
    	
 
    	
17,215 
    	
 
    	
36,581 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.70 
    	
 
    	
4,767,790 
    	
 
    	
748,829 
    	
 
    	
2,019,527 
    	
 
    	
17,233 
    	
 
    	
36,621 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.71 
    	
 
    	
4,764,755 
    	
 
    	
749,635 
    	
 
    	
2,021,698 
    	
 
    	
17,252 
    	
 
    	
36,660 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.72 
    	
 
    	
4,761,724 
    	
 
    	
750,439 
    	
 
    	
2,023,867 
    	
 
    	
17,270 
    	
 
    	
36,699 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.73 
    	
 
    	
4,758,697 
    	
 
    	
751,242 
    	
 
    	
2,026,033 
    	
 
    	
17,289 
    	
 
    	
36,739 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.74 
    	
 
    	
4,755,674 
    	
 
    	
752,044 
    	
 
    	
2,028,197 
    	
 
    	
17,307 
    	
 
    	
36,778 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.75 
    	
 
    	
4,752,654 
    	
 
    	
752,845 
    	
 
    	
2,030,357 
    	
 
    	
17,326 
    	
 
    	
36,817 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.76 
    	
 
    	
4,749,639 
    	
 
    	
753,646 
    	
 
    	
2,032,515 
    	
 
    	
17,344 
    	
 
    	
36,856 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.77 
    	
 
    	
4,746,627 
    	
 
    	
754,445 
    	
 
    	
2,034,671 
    	
 
    	
17,363 
    	
 
    	
36,895 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.78 
    	
 
    	
4,743,619 
    	
 
    	
755,243 
    	
 
    	
2,036,823 
    	
 
    	
17,381 
    	
 
    	
36,934 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.79 
    	
 
    	
4,740,615 
    	
 
    	
756,040 
    	
 
    	
2,038,973 
    	
 
    	
17,399 
    	
 
    	
36,973 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.80 
    	
 
    	
4,737,614 
    	
 
    	
756,836 
    	
 
    	
2,041,120 
    	
 
    	
17,418 
    	
 
    	
37,012 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.81 
    	
 
    	
4,734,618 
    	
 
    	
757,631 
    	
 
    	
2,043,264 
    	
 
    	
17,436 
    	
 
    	
37,051 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.82 
    	
 
    	
4,731,625 
    	
 
    	
758,425 
    	
 
    	
2,045,406 
    	
 
    	
17,454 
    	
 
    	
37,090 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.83 
    	
 
    	
4,728,636 
    	
 
    	
759,218 
    	
 
    	
2,047,545 
    	
 
    	
17,472 
    	
 
    	
37,129 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.84 
    	
 
    	
4,725,651 
    	
 
    	
760,010 
    	
 
    	
2,049,681 
    	
 
    	
17,491 
    	
 
    	
37,168 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.85 
    	
 
    	
4,722,669 
    	
 
    	
760,802 
    	
 
    	
2,051,814 
    	
 
    	
17,509 
    	
 
    	
37,206 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.86 
    	
 
    	
4,719,691 
    	
 
    	
761,592 
    	
 
    	
2,053,945 
    	
 
    	
17,527 
    	
 
    	
37,245 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.87 
    	
 
    	
4,716,717 
    	
 
    	
762,381 
    	
 
    	
2,056,073 
    	
 
    	
17,545 
    	
 
    	
37,283 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.88 
    	
 
    	
4,713,747 
    	
 
    	
763,169 
    	
 
    	
2,058,199 
    	
 
    	
17,563 
    	
 
    	
37,322 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.89 
    	
 
    	
4,710,781 
    	
 
    	
763,956 
    	
 
    	
2,060,322 
    	
 
    	
17,581 
    	
 
    	
37,360 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.90 
    	
 
    	
4,707,818 
    	
 
    	
764,742 
    	
 
    	
2,062,442 
    	
 
    	
17,600 
    	
 
    	
37,399 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.91 
    	
 
    	
4,704,859 
    	
 
    	
765,527 
    	
 
    	
2,064,559 
    	
 
    	
17,618 
    	
 
    	
37,437 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.92 
    	
 
    	
4,701,904 
    	
 
    	
766,311 
    	
 
    	
2,066,674 
    	
 
    	
17,636 
    	
 
    	
37,476 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.93 
    	
 
    	
4,698,952 
    	
 
    	
767,095 
    	
 
    	
2,068,786 
    	
 
    	
17,654 
    	
 
    	
37,514 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.94 
    	
 
    	
4,696,004 
    	
 
    	
767,877 
    	
 
    	
2,070,895 
    	
 
    	
17,672 
    	
 
    	
37,552 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.95 
    	
 
    	
4,693,060 
    	
 
    	
768,658 
    	
 
    	
2,073,002 
    	
 
    	
17,690 
    	
 
    	
37,590 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.96 
    	
 
    	
4,690,119 
    	
 
    	
769,438 
    	
 
    	
2,075,106 
    	
 
    	
17,708 
    	
 
    	
37,629 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.97 
    	
 
    	
4,687,182 
    	
 
    	
770,217 
    	
 
    	
2,077,208 
    	
 
    	
17,726 
    	
 
    	
37,667 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.98 
    	
 
    	
4,684,249 
    	
 
    	
770,996 
    	
 
    	
2,079,307 
    	
 
    	
17,743 
    	
 
    	
37,705 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
15.99 
    	
 
    	
4,681,320 
    	
 
    	
771,773 
    	
 
    	
2,081,403 
    	
 
    	
17,761 
    	
 
    	
37,743 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.00 
    	
 
    	
4,678,394 
    	
 
    	
772,549 
    	
 
    	
2,083,497 
    	
 
    	
17,779 
    	
 
    	
37,781 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.01 
    	
 
    	
4,678,633 
    	
 
    	
772,486 
    	
 
    	
2,083,326 
    	
 
    	
17,778 
    	
 
    	
37,778 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.02 
    	
 
    	
4,678,872 
    	
 
    	
772,422 
    	
 
    	
2,083,155 
    	
 
    	
17,776 
    	
 
    	
37,775 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.03 
    	
 
    	
4,679,110 
    	
 
    	
772,359 
    	
 
    	
2,082,984 
    	
 
    	
17,775 
    	
 
    	
37,771 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.04 
    	
 
    	
4,679,349 
    	
 
    	
772,296 
    	
 
    	
2,082,814 
    	
 
    	
17,773 
    	
 
    	
37,768 
    	
 
    	
7,871,250 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Units
    	
 
    	
 
    
	
Share Price
    	
 
    	
Venture Units
    	
 
    	
STAG III Units
    	
 
    	
STAG IV Units
    	
 
    	
SCP Units
    	
 
    	
SCP III Units
    	
 
    	
Total Units
    	
 
    	
 
    
	
16.05 
    	
 
    	
4,679,587 
    	
 
    	
772,233 
    	
 
    	
2,082,643 
    	
 
    	
17,772 
    	
 
    	
37,765 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.06 
    	
 
    	
4,679,824 
    	
 
    	
772,170 
    	
 
    	
2,082,473 
    	
 
    	
17,770 
    	
 
    	
37,762 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.07 
    	
 
    	
4,680,062 
    	
 
    	
772,107 
    	
 
    	
2,082,304 
    	
 
    	
17,769 
    	
 
    	
37,759 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.08 
    	
 
    	
4,680,299 
    	
 
    	
772,044 
    	
 
    	
2,082,134 
    	
 
    	
17,768 
    	
 
    	
37,756 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.09 
    	
 
    	
4,680,535 
    	
 
    	
771,981 
    	
 
    	
2,081,965 
    	
 
    	
17,766 
    	
 
    	
37,753 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.10 
    	
 
    	
4,680,772 
    	
 
    	
771,918 
    	
 
    	
2,081,795 
    	
 
    	
17,765 
    	
 
    	
37,750 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.11 
    	
 
    	
4,681,008 
    	
 
    	
771,856 
    	
 
    	
2,081,626 
    	
 
    	
17,763 
    	
 
    	
37,747 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.12 
    	
 
    	
4,681,244 
    	
 
    	
771,793 
    	
 
    	
2,081,458 
    	
 
    	
17,762 
    	
 
    	
37,744 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.13 
    	
 
    	
4,681,479 
    	
 
    	
771,731 
    	
 
    	
2,081,289 
    	
 
    	
17,760 
    	
 
    	
37,741 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.14 
    	
 
    	
4,681,715 
    	
 
    	
771,668 
    	
 
    	
2,081,121 
    	
 
    	
17,759 
    	
 
    	
37,738 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.15 
    	
 
    	
4,681,950 
    	
 
    	
771,606 
    	
 
    	
2,080,953 
    	
 
    	
17,757 
    	
 
    	
37,735 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.16 
    	
 
    	
4,682,184 
    	
 
    	
771,544 
    	
 
    	
2,080,785 
    	
 
    	
17,756 
    	
 
    	
37,732 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.17 
    	
 
    	
4,682,419 
    	
 
    	
771,481 
    	
 
    	
2,080,617 
    	
 
    	
17,755 
    	
 
    	
37,729 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.18 
    	
 
    	
4,682,653 
    	
 
    	
771,419 
    	
 
    	
2,080,449 
    	
 
    	
17,753 
    	
 
    	
37,725 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.19 
    	
 
    	
4,682,887 
    	
 
    	
771,357 
    	
 
    	
2,080,282 
    	
 
    	
17,752 
    	
 
    	
37,722 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.20 
    	
 
    	
4,683,120 
    	
 
    	
771,295 
    	
 
    	
2,080,115 
    	
 
    	
17,750 
    	
 
    	
37,719 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.21 
    	
 
    	
4,683,353 
    	
 
    	
771,233 
    	
 
    	
2,079,948 
    	
 
    	
17,749 
    	
 
    	
37,716 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.22 
    	
 
    	
4,683,586 
    	
 
    	
771,172 
    	
 
    	
2,079,781 
    	
 
    	
17,747 
    	
 
    	
37,713 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.23 
    	
 
    	
4,683,819 
    	
 
    	
771,110 
    	
 
    	
2,079,615 
    	
 
    	
17,746 
    	
 
    	
37,710 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.24 
    	
 
    	
4,684,051 
    	
 
    	
771,048 
    	
 
    	
2,079,448 
    	
 
    	
17,745 
    	
 
    	
37,707 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.25 
    	
 
    	
4,684,284 
    	
 
    	
770,987 
    	
 
    	
2,079,282 
    	
 
    	
17,743 
    	
 
    	
37,704 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.26 
    	
 
    	
4,684,515 
    	
 
    	
770,925 
    	
 
    	
2,079,117 
    	
 
    	
17,742 
    	
 
    	
37,701 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.27 
    	
 
    	
4,684,747 
    	
 
    	
770,864 
    	
 
    	
2,078,951 
    	
 
    	
17,740 
    	
 
    	
37,698 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.28 
    	
 
    	
4,684,978 
    	
 
    	
770,802 
    	
 
    	
2,078,785 
    	
 
    	
17,739 
    	
 
    	
37,695 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.29 
    	
 
    	
4,685,209 
    	
 
    	
770,741 
    	
 
    	
2,078,620 
    	
 
    	
17,738 
    	
 
    	
37,692 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.30 
    	
 
    	
4,685,440 
    	
 
    	
770,680 
    	
 
    	
2,078,455 
    	
 
    	
17,736 
    	
 
    	
37,689 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.31 
    	
 
    	
4,685,670 
    	
 
    	
770,619 
    	
 
    	
2,078,290 
    	
 
    	
17,735 
    	
 
    	
37,686 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.32 
    	
 
    	
4,685,900 
    	
 
    	
770,558 
    	
 
    	
2,078,125 
    	
 
    	
17,733 
    	
 
    	
37,683 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.33 
    	
 
    	
4,686,130 
    	
 
    	
770,497 
    	
 
    	
2,077,961 
    	
 
    	
17,732 
    	
 
    	
37,680 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.34 
    	
 
    	
4,686,360 
    	
 
    	
770,436 
    	
 
    	
2,077,797 
    	
 
    	
17,731 
    	
 
    	
37,677 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.35 
    	
 
    	
4,686,589 
    	
 
    	
770,375 
    	
 
    	
2,077,633 
    	
 
    	
17,729 
    	
 
    	
37,674 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.36 
    	
 
    	
4,686,818 
    	
 
    	
770,314 
    	
 
    	
2,077,469 
    	
 
    	
17,728 
    	
 
    	
37,671 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.37 
    	
 
    	
4,687,047 
    	
 
    	
770,253 
    	
 
    	
2,077,305 
    	
 
    	
17,726 
    	
 
    	
37,668 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.38 
    	
 
    	
4,687,275 
    	
 
    	
770,193 
    	
 
    	
2,077,142 
    	
 
    	
17,725 
    	
 
    	
37,666 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.39 
    	
 
    	
4,687,503 
    	
 
    	
770,132 
    	
 
    	
2,076,978 
    	
 
    	
17,724 
    	
 
    	
37,663 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.40 
    	
 
    	
4,687,731 
    	
 
    	
770,072 
    	
 
    	
2,076,815 
    	
 
    	
17,722 
    	
 
    	
37,660 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.41 
    	
 
    	
4,687,959 
    	
 
    	
770,011 
    	
 
    	
2,076,653 
    	
 
    	
17,721 
    	
 
    	
37,657 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.42 
    	
 
    	
4,688,186 
    	
 
    	
769,951 
    	
 
    	
2,076,490 
    	
 
    	
17,719 
    	
 
    	
37,654 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.43 
    	
 
    	
4,688,413 
    	
 
    	
769,891 
    	
 
    	
2,076,327 
    	
 
    	
17,718 
    	
 
    	
37,651 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.44 
    	
 
    	
4,688,640 
    	
 
    	
769,831 
    	
 
    	
2,076,165 
    	
 
    	
17,717 
    	
 
    	
37,648 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.45 
    	
 
    	
4,688,866 
    	
 
    	
769,771 
    	
 
    	
2,076,003 
    	
 
    	
17,715 
    	
 
    	
37,645 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.46 
    	
 
    	
4,689,092 
    	
 
    	
769,711 
    	
 
    	
2,075,841 
    	
 
    	
17,714 
    	
 
    	
37,642 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.47 
    	
 
    	
4,689,318 
    	
 
    	
769,651 
    	
 
    	
2,075,680 
    	
 
    	
17,712 
    	
 
    	
37,639 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.48 
    	
 
    	
4,689,544 
    	
 
    	
769,591 
    	
 
    	
2,075,518 
    	
 
    	
17,711 
    	
 
    	
37,636 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.49 
    	
 
    	
4,689,769 
    	
 
    	
769,531 
    	
 
    	
2,075,357 
    	
 
    	
17,710 
    	
 
    	
37,633 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.50 
    	
 
    	
4,689,995 
    	
 
    	
769,471 
    	
 
    	
2,075,196 
    	
 
    	
17,708 
    	
 
    	
37,630 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.51 
    	
 
    	
4,690,219 
    	
 
    	
769,412 
    	
 
    	
2,075,035 
    	
 
    	
17,707 
    	
 
    	
37,627 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.52 
    	
 
    	
4,690,444 
    	
 
    	
769,352 
    	
 
    	
2,074,874 
    	
 
    	
17,706 
    	
 
    	
37,624 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.53 
    	
 
    	
4,690,668 
    	
 
    	
769,292 
    	
 
    	
2,074,714 
    	
 
    	
17,704 
    	
 
    	
37,621 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.54 
    	
 
    	
4,690,892 
    	
 
    	
769,233 
    	
 
    	
2,074,553 
    	
 
    	
17,703 
    	
 
    	
37,619 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.55 
    	
 
    	
4,691,116 
    	
 
    	
769,174 
    	
 
    	
2,074,393 
    	
 
    	
17,701 
    	
 
    	
37,616 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.56 
    	
 
    	
4,691,340 
    	
 
    	
769,114 
    	
 
    	
2,074,233 
    	
 
    	
17,700 
    	
 
    	
37,613 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.57 
    	
 
    	
4,691,563 
    	
 
    	
769,055 
    	
 
    	
2,074,073 
    	
 
    	
17,699 
    	
 
    	
37,610 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.58 
    	
 
    	
4,691,786 
    	
 
    	
768,996 
    	
 
    	
2,073,914 
    	
 
    	
17,697 
    	
 
    	
37,607 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.59 
    	
 
    	
4,692,008 
    	
 
    	
768,937 
    	
 
    	
2,073,755 
    	
 
    	
17,696 
    	
 
    	
37,604 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.60 
    	
 
    	
4,692,231 
    	
 
    	
768,878 
    	
 
    	
2,073,595 
    	
 
    	
17,695 
    	
 
    	
37,601 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.61 
    	
 
    	
4,692,453 
    	
 
    	
768,819 
    	
 
    	
2,073,436 
    	
 
    	
17,693 
    	
 
    	
37,598 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.62 
    	
 
    	
4,692,675 
    	
 
    	
768,760 
    	
 
    	
2,073,278 
    	
 
    	
17,692 
    	
 
    	
37,595 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.63 
    	
 
    	
4,692,896 
    	
 
    	
768,701 
    	
 
    	
2,073,119 
    	
 
    	
17,691 
    	
 
    	
37,593 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.64 
    	
 
    	
4,693,118 
    	
 
    	
768,643 
    	
 
    	
2,072,961 
    	
 
    	
17,689 
    	
 
    	
37,590 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.65 
    	
 
    	
4,693,339 
    	
 
    	
768,584 
    	
 
    	
2,072,803 
    	
 
    	
17,688 
    	
 
    	
37,587 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.66 
    	
 
    	
4,693,560 
    	
 
    	
768,525 
    	
 
    	
2,072,644 
    	
 
    	
17,687 
    	
 
    	
37,584 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.67 
    	
 
    	
4,693,780 
    	
 
    	
768,467 
    	
 
    	
2,072,487 
    	
 
    	
17,685 
    	
 
    	
37,581 
    	
 
    	
7,871,250 
    	
 
    	
 
    

 

 

	
 
    	
 
    	
Units
    	
 
    	
 
    
	
Share Price
    	
 
    	
Venture Units
    	
 
    	
STAG III Units
    	
 
    	
STAG IV Units
    	
 
    	
SCP Units
    	
 
    	
SCP III Units
    	
 
    	
Total Units
    	
 
    	
 
    
	
16.68 
    	
 
    	
4,694,001 
    	
 
    	
768,408 
    	
 
    	
2,072,329 
    	
 
    	
17,684 
    	
 
    	
37,578 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.69 
    	
 
    	
4,694,221 
    	
 
    	
768,350 
    	
 
    	
2,072,172 
    	
 
    	
17,683 
    	
 
    	
37,575 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.70 
    	
 
    	
4,694,440 
    	
 
    	
768,292 
    	
 
    	
2,072,014 
    	
 
    	
17,681 
    	
 
    	
37,573 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.71 
    	
 
    	
4,694,660 
    	
 
    	
768,233 
    	
 
    	
2,071,857 
    	
 
    	
17,680 
    	
 
    	
37,570 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.72 
    	
 
    	
4,694,879 
    	
 
    	
768,175 
    	
 
    	
2,071,700 
    	
 
    	
17,679 
    	
 
    	
37,567 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.73 
    	
 
    	
4,695,098 
    	
 
    	
768,117 
    	
 
    	
2,071,544 
    	
 
    	
17,677 
    	
 
    	
37,564 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.74 
    	
 
    	
4,695,317 
    	
 
    	
768,059 
    	
 
    	
2,071,387 
    	
 
    	
17,676 
    	
 
    	
37,561 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.75 
    	
 
    	
4,695,535 
    	
 
    	
768,001 
    	
 
    	
2,071,231 
    	
 
    	
17,675 
    	
 
    	
37,558 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.76 
    	
 
    	
4,695,753 
    	
 
    	
767,943 
    	
 
    	
2,071,075 
    	
 
    	
17,673 
    	
 
    	
37,555 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.77 
    	
 
    	
4,695,971 
    	
 
    	
767,885 
    	
 
    	
2,070,919 
    	
 
    	
17,672 
    	
 
    	
37,553 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.78 
    	
 
    	
4,696,189 
    	
 
    	
767,828 
    	
 
    	
2,070,763 
    	
 
    	
17,671 
    	
 
    	
37,550 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.79 
    	
 
    	
4,696,406 
    	
 
    	
767,770 
    	
 
    	
2,070,607 
    	
 
    	
17,669 
    	
 
    	
37,547 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.80 
    	
 
    	
4,696,624 
    	
 
    	
767,712 
    	
 
    	
2,070,452 
    	
 
    	
17,668 
    	
 
    	
37,544 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.81 
    	
 
    	
4,696,840 
    	
 
    	
767,655 
    	
 
    	
2,070,297 
    	
 
    	
17,667 
    	
 
    	
37,541 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.82 
    	
 
    	
4,697,057 
    	
 
    	
767,597 
    	
 
    	
2,070,142 
    	
 
    	
17,665 
    	
 
    	
37,539 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.83 
    	
 
    	
4,697,273 
    	
 
    	
767,540 
    	
 
    	
2,069,987 
    	
 
    	
17,664 
    	
 
    	
37,536 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.84 
    	
 
    	
4,697,490 
    	
 
    	
767,483 
    	
 
    	
2,069,832 
    	
 
    	
17,663 
    	
 
    	
37,533 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.85 
    	
 
    	
4,697,705 
    	
 
    	
767,425 
    	
 
    	
2,069,678 
    	
 
    	
17,661 
    	
 
    	
37,530 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.86 
    	
 
    	
4,697,921 
    	
 
    	
767,368 
    	
 
    	
2,069,524 
    	
 
    	
17,660 
    	
 
    	
37,527 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.87 
    	
 
    	
4,698,136 
    	
 
    	
767,311 
    	
 
    	
2,069,370 
    	
 
    	
17,659 
    	
 
    	
37,525 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.88 
    	
 
    	
4,698,351 
    	
 
    	
767,254 
    	
 
    	
2,069,216 
    	
 
    	
17,657 
    	
 
    	
37,522 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.89 
    	
 
    	
4,698,566 
    	
 
    	
767,197 
    	
 
    	
2,069,062 
    	
 
    	
17,656 
    	
 
    	
37,519 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.90 
    	
 
    	
4,698,781 
    	
 
    	
767,140 
    	
 
    	
2,068,908 
    	
 
    	
17,655 
    	
 
    	
37,516 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.91 
    	
 
    	
4,698,995 
    	
 
    	
767,083 
    	
 
    	
2,068,755 
    	
 
    	
17,653 
    	
 
    	
37,513 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.92 
    	
 
    	
4,699,209 
    	
 
    	
767,026 
    	
 
    	
2,068,602 
    	
 
    	
17,652 
    	
 
    	
37,511 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.93 
    	
 
    	
4,699,423 
    	
 
    	
766,970 
    	
 
    	
2,068,449 
    	
 
    	
17,651 
    	
 
    	
37,508 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.94 
    	
 
    	
4,699,637 
    	
 
    	
766,913 
    	
 
    	
2,068,296 
    	
 
    	
17,649 
    	
 
    	
37,505 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.95 
    	
 
    	
4,699,850 
    	
 
    	
766,856 
    	
 
    	
2,068,143 
    	
 
    	
17,648 
    	
 
    	
37,502 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.96 
    	
 
    	
4,700,063 
    	
 
    	
766,800 
    	
 
    	
2,067,991 
    	
 
    	
17,647 
    	
 
    	
37,500 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.97 
    	
 
    	
4,700,276 
    	
 
    	
766,743 
    	
 
    	
2,067,839 
    	
 
    	
17,646 
    	
 
    	
37,497 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.98 
    	
 
    	
4,700,488 
    	
 
    	
766,687 
    	
 
    	
2,067,686 
    	
 
    	
17,644 
    	
 
    	
37,494 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
16.99 
    	
 
    	
4,700,701 
    	
 
    	
766,630 
    	
 
    	
2,067,535 
    	
 
    	
17,643 
    	
 
    	
37,491 
    	
 
    	
7,871,250 
    	
 
    	
 
    
	
17.00 
    	
 
    	
4,700,913 
    	
 
    	
766,574 
    	
 
    	
2,067,383 
    	
 
    	
17,642 
    	
 
    	
37,489 
    	
 
    	
7,871,250 
    	
 
    	
 
    

 

 

EXHIBIT L
 TO
 CONTRIBUTION AGREEMENT

 

FORM OF LOCK-UP AGREEMENT

 

·, 2011

 

MERRILL LYNCH & CO.
 Merrill Lynch, Pierce, Fenner & Smith 
                     Incorporated,

 

J.P. Morgan Securities LLC

UBS Securities LLC 
   as Representatives of the several
   Underwriters to be named in the
   within-mentioned Underwriting Agreement
 c/o Merrill Lynch & Co.
              Merrill Lynch, Pierce, Fenner & Smith
                                    Incorporated

 

One Bryant Park
 New York, New York 10036

 

c/o J.P. Morgan Securities LLC
 383 Madison Avenue
 New York, New York 10179

 

c/o UBS Securities LLC
 299 Park Avenue
 New York, New York 10171

 

Re:       Proposed Public Offering by STAG Industrial, Inc.

 

Dear Sirs:

 

The undersigned, a stockholder, officer and/or director of STAG Industrial, Inc., a Maryland corporation (the “Company”), and/or holder of units (“OP Units”) in STAG Industrial Operating Partnership, L.P., a Delaware limited partnership and the Company’s operating partnership (the “Operating Partnership”), understands that Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), J.P. Morgan Securities LLC (“J.P. Morgan”)  and UBS Securities LLC (“UBS” and together with Merrill Lynch and J.P. Morgan, the “Representatives”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company and the Operating Partnership providing for the initial public offering (the “Offering”) of shares (the “Securities”) of the Company’s common stock, par value $.01 per share (the “Common Stock”).  In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder, officer and/or director of the Company and/or holder of OP Units, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Underwriting Agreement that, during the period beginning on the date hereof and ending on the

 

6

 

date that is 12 months from the date of the Underwriting Agreement (subject to extensions as discussed below), the undersigned will not, without the prior written consent of the Representatives, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, lend or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock (including, without limitation, OP Units), whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”), or exercise any right with respect to the registration of any of the Lock-Up Securities, or file or cause to be filed any registration statement in connection therewith, under the Securities Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise.

 

Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities as follows without the prior written consent of the Representatives, provided that (1) the Representatives receive a signed lock-up agreement for the balance of the lockup period from each donee, trustee, distributee, or transferee, as the case may be, (2) any such transfer shall not involve a disposition for value, (3) such transfers are not required to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16 of the Securities Exchange Act of 1934, as amended, and (4) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers:

 

as a bona fide gift or gifts; or

 

to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this lock-up agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); or

 

as a distribution to limited partners, members or stockholders of the undersigned; or

 

to the undersigned’s affiliates or to any investment fund or other entity controlled or managed by the undersigned.

 

[FOR LOCK-UP TO BE EXECUTED BY STAG INVESTMENTS III, LLC ONLY: Notwithstanding the foregoing, the undersigned STAG Investments III, LLC may pledge any OP Units that it holds that are Lock-Up Securities without the prior written consent of the Representatives pursuant to that certain Pledge Agreement entered into by STAG Investments III, LLC in favor of Bank of America, N.A., as Administrative Agent for the benefit of the Secured Parties thereunder, under that certain Credit Agreement among STAG III Streamwood, LLC, STAG III Mason 2, LLC, STAG III Pomfret, LLC, STAG Investments III, LLC, each lender from time to time party thereto and Bank of America, N.A., as Administrative Agent.]

 

Furthermore, the undersigned may sell shares of Common Stock of the Company purchased by the undersigned on the open market following the Offering if and only if (i) such sales are not required to be reported in any public report or filing with the Securities and Exchange Commission, or otherwise and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales.

 

Notwithstanding the foregoing, if:

 

7

 

(1)                                  during the last 17 days of the 12-month lock-up period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or

 

(2)                                  prior to the expiration of the 12-month lock-up period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the 12-month lock-up period,

 

1)                                      the restrictions imposed by this lock-up agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event, as applicable, unless the Representatives waive, in writing, such extension.

2)

 

The undersigned agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date of this lock-up agreement to and including the 34th day following the expiration of the initial 12-month lock-up period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the 12-month lock-up period (as may have been extended pursuant to the previous paragraph) has expired.

 

The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s (or any other applicable) transfer agent and registrar against the transfer of the Lock-Up Securities except in compliance with the foregoing restrictions.

[SIGNATURE PAGE FOLLOWS]

 

8

 

	
Very   truly yours,
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Article I.
    
	
For Natural   Persons:
    	
 
    	
 
    	
For Entities:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Name)
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
 
    
	
(Signature)
    	
 
    	
 
    	
Name:   
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
						

 

K-1Exhibit 10.17

 

PURCHASE OPTION AGREEMENT

 

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

 

BACKGROUND:

 

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

 

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

 

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

 

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

 

 

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

 

E.                                      In connection with the transfer of the ownership interests in the Property Entities to Retained Holdings and the Contribution Transaction, Bank of America, N.A., for itself and certain other lenders (collectively, the “Lender”) has made a loan to Retained Holdings and the Property Entities in the principal amount of approximately $22,755,511 (the “Loan”), which is secured by first mortgages on the Properties.  The proceeds of the Loan were used to repay a portion of a loan made by Lender to Holdings, the Property Entities and others that was secured in part by the Properties and to obtain the release of the Properties from mortgages securing said loan.

 

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

 

A G R E E M E N T:

 

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

 

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

 

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

 

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

 

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

 

2

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

3.                                       Method and Terms of Exercise.

 

(a)                                  Notice.

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

	
To the Fund:
    	
 
    	
STAG Investments III, LLC
    
	
 
    	
 
    	
c/o STAG Industrial, Inc.
    
	
 
    	
 
    	
99 Chauncy Street
    
	
 
    	
 
    	
Boston, Massachusetts 02111
    
	
 
    	
 
    	
Attn: Benjamin S. Butcher
    
	
 
    	
 
    	
 
    
	
with a copy to
    	
 
    	
DLA Piper LLP (US)
    
	
 
    	
 
    	
33 Arch Street, 26th Floor
    
	
 
    	
 
    	
Boston, Massachusetts 02110
    
	
 
    	
 
    	
Attn: John L. Sullivan, Esq.
    
	
 
    	
 
    	
Fax No. 617-406-6100
    
	
 
    	
 
    	
 
    
	
To the Operating Partnership
    	
 
    	
STAG Industrial Operating Partnership, L.P.
    
	
 
    	
 
    	
c/o STAG Industrial, Inc.
    
	
 
    	
 
    	
99 Chauncy Street
    
	
 
    	
 
    	
Boston, Massachusetts 02111
    
	
 
    	
 
    	
Attn: Benjamin S. Butcher
    
	
 
    	
 
    	
 
    
	
and with a copy to:
    	
 
    	
DLA Piper LLP (US)
    
	
 
    	
 
    	
33 Arch Street, 26th Floor
    
	
 
    	
 
    	
Boston, Massachusetts 02110
    
	
 
    	
 
    	
Attn: John L. Sullivan, Esq.
    
	
 
    	
 
    	
Fax   No. 617-406-6100
    

 

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

 

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

 

11

 

11.                                 Governing Law.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

13

 

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

 

 

	
 
    	
STAG INVESTMENTS III LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STAG Manager III LLC, a Delaware limited
    
	
 
    	
 
    	
liability company, its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Benjamin S. Butcher
    
	
 
    	
 
    	
Executive Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
STAG INDUSTRIAL LIMITED PARTNERSHIP, L.P.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
STAG Industrial GP, LLC, a Delaware limited
    
	
 
    	
 
    	
liability company, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    

 

Signature Page to Purchase Option

 

 

Exhibit A

 

Property Entities and Properties

 

	
Property Entities
    	
 
    	
Properties
    
	
STAG III Mason 2, LLC
    	
 
    	
(“Mason”)
    
	
STAG III Pomfret, LLC
    	
 
    	
(“Pomfret”)
    
	
STAG III Streamwood, LLC
    	
 
    	
(“Streamwood”)
    

 

 

Exhibit B

 

Omitted

 

 

Exhibit C-1

 

Mason Land Description

 

PARCEL ONE

 

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

 

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

 

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

 

SAVE AND
EXCEPT THE FOLLOWING-DESCRIBED REAL ESTATE:

 

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

 

 

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

 

PARCEL TWO

 

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

 

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

 

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

 

 

Exhibit C-2

 

Pomfret Land Description

 

	
  FEE PARCEL

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  

 

 

	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  EASEMENT PARCELS

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  

 

 

Exhibit C-3

 

Streamwood Land Description

 

Parcel 1:

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

 

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

 

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

 

 

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

 

Parcel 2:

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

 

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

 

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

 

Shown for
Informational purposes only:

 

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

 

	
  Tax Parcel ID:

  	
  a) 06-35-400-012-0000

  
	
   

  	
  b) 06-36-310-039-0000

  
	
   

  	
  c)
  06-36-310-045-0000

  

 

 

Exhibit D

 

Title Exceptions

 

Mason

 

	
  1.

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

  
	
   

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

  
	
   

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

  
	
   

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

  
	
   

  	
   

  
	
  2.

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

  
	
   

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

  
	
   

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

  
	
   

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

  
	
   

  	
   

  
	
  3.

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

  
	
   

  	
  a)

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

  
	
   

  	
   

  
	
  4.

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

  
	
   

  	
   

  
	
  5.

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

  
	
   

  	
   

  
	
  6.

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

  
	
   

  	
   

  
	
  7.

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

  
	
   

  	
   

  
	
  8.

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

  

 

 

Pomfret

 

Special
Exceptions:

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

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

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

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

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

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

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

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

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

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

 

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

 

Comprehensive
Endorsement;

Access Endorsement;

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

Same as Survey
Endorsement;

Tax Parcel
Endorsement;

Subdivision
Endorsement;

Creditors’
Rights Endorsement;

 

 

Streamwood

 

STANDARD
EXCEPTIONS:

 

	
  1.

  	
  (a)

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

  
	
   

  	
  (b)

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

  
	
   

  	
  (c)

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

  
	
   

  	
  (d)

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

  
	
   

  	
  (e)

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  

 

ADDITIONAL
EXCEPTIONS:

 

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

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

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

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

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

 

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

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

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

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

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

 

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

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

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

 

 

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Exhibit E

 

Form of Purchase and Sale Agreement

 

See attached

 

E-1

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

STAG III PROPERTIES, LLC

 

(as Seller)

 

AND

 

[                                                 ]
 (as Purchaser)

 

CONCERNING CERTAIN PROPERTY KNOWN AS

 

[                                                 ]

 

AND LOCATED AT

 

[                                                                                  ]

 

 

Schedules and Exhibits

 

	
Schedule 1.1
    	
-
    	
Defined Terms
    
	
Schedule 3.1
    	
-
    	
Deposit Escrow Provisions
    
	
Schedule 5.1
    	
-
    	
Seller Deliveries
    
	
Exhibit A
    	
-
    	
Land
    
	
Exhibit B
    	
-
    	
Form of Lease Estoppel Certificate
    
	
Exhibit C
    	
-
    	
Lease Related Disclosures
    
	
Exhibit D
    	
-
    	
Exceptions to Seller Representations
    
	
Exhibit E
    	
-
    	
Form of Assignment and Assumption of   Membership Interests
    
	
Exhibit F
    	
-
    	
Form of Updated Representation Certificate
    
	
Exhibit G
    	
-
    	
List of Contracts
    
	
Exhibit H
    	
-
    	
List of Personal Property
    
	
Exhibit I
    	
-
    	
List of Warranties
    
	
Exhibit J
    	
-
    	
Additional Representations and Warranties
    
	
[Exhibit H
    	
-
    	
Omitted
    
	
Exhibit I
    	
-
    	
Form of FIRPTA Certificate
    

 

E-1

 

PURCHASE AND SALE AGREEMENT

 

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

 

Background

 

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

 

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

 

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

 

Agreement

 

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

 

ARTICLE 1

 

Definitions

 

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

 

ARTICLE 2

 

Agreement; Purchase Price; Closing Date

 

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

 

Section 2.2.  Purchase Price.  The Purchase Price for the Membership Interests shall be [                                                   ] ($                                     ).  Subject to the adjustments and apportionments as hereinafter set forth, the Purchase Price shall be paid on the Closing Date by: (i)

 

1

 

so long as any portion of the Loan remains inpaid, by wire transfer of immediately available federal funds or (ii) if the Loan has been repaid in full, by a combination of OP Units and cash, in the sole and absolute discretion of Purchase.  The value of the OP Units shall be their Market Value as of the day immediately preceding the Closing Date and the number of OP Units shall be rounded to the nearest whole number of OP Units to avoid the issuance of fractional OP Units.

 

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

 

ARTICLE 3

 

Deposit

 

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

 

ARTICLE 4

 

Title and Survey

 

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

 

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

 

ARTICLE 5

 

Inspection and Audit

 

Section 5.1.  Due Diligence Materials; Access.

 

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

 

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

 

Section 5.2.  Intentionally Omitted.

 

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

 

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

 

Section 5.4.  Intentionally Omitted.

 

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

 

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

 

ARTICLE 6

 

Conditions Precedent, Casualty Damage or Condemnation

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.5.  Leasing and Other Activities Prior to Closing.

 

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

 

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

 

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

 

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

 

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

 

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ARTICLE 7

 

As-Is Sale; Limited Representations and Warranties

 

Section 7.1.  As-Is Sale.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)           Representations Concerning Seller.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Representations Concerning the Property.

 

(i)                                     The Lease:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)          Warranties, Permits and Related Matters.

 

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

 

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

 

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

 

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

 

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

 

(v)           Litigation and Other Proceedings.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(x)                                   Reports and Other Information.

 

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

 

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

 

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

 

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

 

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

 

(c)                                  Representations Concerning the Membership Interests.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 8

 

Closing

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)           At least two original Tenant estoppel certificates;

 

(d)           At least two original SNDAs;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 8.4.  Costs and Prorations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 9

 

Real Estate Commission

 

Section 9.1.  Commissions.

 

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

 

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

 

The provisions of this Section 9.1 shall survive the Closing.

 

ARTICLE 10

 

Termination and Default

 

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

 

24

 

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

 

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

 

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

 

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

 

25

 

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

 

Section 10.5.  Mutual Indemnifications.

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 11

 

Miscellaneous

 

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

 

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

 

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

 

	
To Seller:
    	
STAG III Properties, LLC
    c/o STAG Industrial, Inc.
    99 Chauncy Street
    Boston, Massachusetts 02111
    Attn:    Benjamin S. Butcher
    
	
 
    	
 
    
	
With a copy to:
    	
DLA Piper LLP (US)
    33 Arch Street, 26th Floor
    Boston, Massachusetts 02110
    Attn:    John L. Sullivan, Esq.
    Fax No. 617-406-6100
    
	
 
    	
 
    
	
To Purchaser:
    	
[                                             ]
    c/o STAG Industrial, Inc.
    99 Chauncy Street
    Boston, Massachusetts 02111
    Attn:    Benjamin S. Butcher
    
	
 
    	
 
    
	
With a copy to:
    	
DLA Piper LLP (US)
    33 Arch Street, 26th Floor
    Boston, Massachusetts 02110
    Attn:    John L. Sullivan, Esq.
    Fax No. 617-406-6100
    

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

	
 
    	
SELLER:
    
	
 
    	
 
    
	
 
    	
STAG III PROPERTIES, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Benjamin S. Butcher
    
	
 
    	
 
    	
President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PURCHASER:
    
	
 
    	
 
    
	
 
    	
[                                                                ]
    
	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

Schedule 1.1

 

Defined Terms

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

“Loan shall mean the loan in the original principal amount of $22,755,511 made by Lender to the Company and certain other affiliates which encumbers the Property and certain other Property.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Tenant” shall mean                                                               .

 

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

 

“Title Company” shall mean [                                               ].

 

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

 

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

 

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

 

 

Schedule 3.1

 

Deposit Escrow Provisions

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

a court of competent jurisdiction.

 

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

 

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

 

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

 

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

 

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

 

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

 

JOINDER BY THE TITLE COMPANY

 

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

 

 

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

 

 

	
 
    	
[                                                 ]
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    

 

 

Schedule 5.1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(11)                            all Contracts;

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

EXHIBIT A

 

DESCRIPTION OF LAND

 

 

EXHIBIT B

 

FORM OF
 LEASE ESTOPPEL CERTIFICATE

 

Landlord:

 

Tenant:

 

Tenant Trade Name:

 

Lender: Connecticut General Life Insurance Company

 

New Landlord:

 

Premises:

 

	
Area:                                             Sq.Ft.
    	
 
    	
Lease Date:
    	
 
    	
 
    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

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

 

(initial all applicable subparagraphs)

 

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

 

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

 

 

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

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

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

 

 

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

 

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

 

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

 

 

Tenant:

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

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

 

 

New Landlord:

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

EXHIBIT C

 

LEASE RELATED DISCLOSURES

 

 

EXHIBIT D

 

EXCEPTIONS TO SELLER REPRESENTATIONS

 

 

EXHIBIT E

 

ASSIGNMENT AND ASSUMPTION OF
MEMBERSHIP INTERESTS

 

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

 

Background

 

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

 

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

 

Agreement

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

[Signature Page Follows]

 

 

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

 

	
   

  	
  Assignor:

  
	
   

  	
   

  
	
   

  	
  STAG III Properties, LLC, a Delaware limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Assignee:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT F

 

UPDATED REPRESENTATION
CERTIFICATE

 

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

 

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

 

Dated as of this       day
of           , 20  .

 

 

	
   

  	
  SELLER

  
	
   

  	
   

  
	
   

  	
  [                                            ]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT G

 

LIST OF CONTRACTS

 

	
   

  	
   

  	
  DATE OF CONTRACT

  	
   

  	
   

  	
   

  	
   

  
	
  VENDOR

  	
   

  	
  AND ALL AMENDMENTS

  	
   

  	
  SERVICE

  	
   

  	
  ADDRESS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT H

 

LIST OF PERSONAL PROPERTY

 

 

EXHIBIT I

 

LIST OF WARRANTIES

 

 

EXHIBIT J

 

ADDITIONAL REPRESENTATIONS AND
WARRANTIES

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

 

EXHIBIT H

 

LIST OF LOAN DOCUMENTS, ESCROW
BALANCES AND RESERVE BALANCES

 

 

EXHIBIT I

 

FORM OF FIRPTA CERTIFICATE

 

FIRPTA Certificate

 

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

 

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

 

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

 

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

 

iv)           The Transferor’s address is:

 

c/o STAG Capital Partners, LLC

99 Chauncy Street, 10th Floor

Boston, MA  02111

 

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

 

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

 

	
  Dated:

  	
  By:

  	
  STAG Manager III, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
  Date:               ,
  20

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