MEMBERSHIP INTEREST PURCHASE AGREEMENT

between

MACKENZIE REALTY CAPITAL, INC.,

as Buyer,

and

THE WISEMAN COMPANY LLC

as the Seller

Dated as of

April 12, 2022

MEMBERSHIP INTEREST PURCHASE AGREEMENT

This Membership Interest Purchase Agreement (this “Agreement”), dated as of April 12, 2022, is entered into between MacKenzie Realty Capital, Inc., a Maryland corporation (“Buyer”) and The Wiseman Company LLC, a California limited liability company (“Seller”).

RECITALS

WHEREAS, Seller owns all of the limited liability company membership interests (the “Membership Interests”) in each of the California limited liability companies identified on Exhibit A attached hereto (each a “Management Company” and, collectively, the “Management Companies”), and is the sole managing member of each of the Management Companies;

WHEREAS, each of the Management Companies is the sole general partner of each of the limited partnerships set forth on Exhibit A (each a “Property Company” and, collectively, the “Property Companies”); and

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, all of the Membership Interests, subject to the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements 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:

Section 1.01 

(a)

Purchase and Sale of Membership Interests. Subject to the terms and conditions set forth herein, at the Closing (as defined herein), Seller shall sell to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title, and interest in and to the Membership Interests, free and clear of any mortgage, pledge, lien, charge, security interest, claim, or other encumbrance (“Encumbrance”), for the consideration specified in Section 1.02. For purposes hereof, all of Seller’s right, title, and interest in and to the Membership Interests shall include, but is not limited to: (a) Seller’s capital account in the particular Management Company, (b) Seller’s right to share in the distributions and allocations of profits and losses of the particular Management Company, (c) Seller’s right to a distributive share of the assets of the particular Management Company, (d) Seller’s right to receive distributions from the particular Management Company, and (e) the exercise of all manager, member, or managing member rights, including the voting rights, attributable to the Membership Interests and any other interest in the Management Companies.

(b)

Purchase and Sale of Realty.  Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller that certain parcel of real property consisting of approximately 3 acres of land located at the corner of Business Center Drive and Healthcare Drive in Fairfield, California, which is legally described at the end of Exhibit “F” attached to this Agreement (the “Realty”), together with the following property and rights owned by Seller, with respect to the Realty:

(i)

All rights, easements and appurtenances pertaining to or accruing to the benefit of the Realty, including without limitation (i) all right, title and interest of Seller (if any) in and to adjacent streets, alleys or rights-of-way, (ii) strips, gaps and gores, if any, in connection with the Realty, and (iii) all right, title and interest of Seller with respect to any easements or covenants that benefit or burden the Realty;

(ii)	The structures and other improvements (if any) on the Realty;

(iii)

Seller’s interest in all licenses, permits, consents, deposits, authorizations, approvals, site plans, variances, waivers, licenses, applications, development agreements, development rights, civil plans, design plans, building plans, rights, benefits and privileges held by Seller and pertaining to the Realty and all other tangible and intangible rights of Seller pertaining to the ownership and/or operation of the Realty (“Intangible Rights”);

(iv)	All fixtures, equipment, furnishings, machinery and other items of personal property owned by Seller and presently affixed, attached to, placed or situated upon the Realty and used in connection with the ownership, operation and occupancy of the Realty (“Personalty”); and

(v)	To the extent assignable, all surveys and all percolation, soil, topographical, traffic, engineering, inspection and environmental reports or studies and other similar written reports pertaining to the Realty held by Seller and in the possession of Seller.

(vi)	The Realty and all of the other property and rights described in this Paragraph (b) are hereinafter collectively called the “Real Property”.  The Purchase of the Real Property will be further subject to the terms and conditions set forth in Exhibit F.

(a)	At the Closing, Buyer shall deliver the Seller:

(i)	the Closing Date Payment (as hereinafter defined), by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer no later than two (2) business days prior to the Closing Date;

(ii)	the Realty and Intangibles Purchase Prices, by wire transfer of $2,300,000 in immediately available funds to the account designated above and by issuance of $750,000 in OP Units;

(iii)

a certificate of the secretary or assistant secretary of Buyer certifying as to (i) the resolutions of the board of directors of Buyer, duly adopted and in full force and effect, which authorize the execution, delivery, and performance of this Agreement and the transactions contemplated hereby, and (ii) the names and signatures of the officers of Buyer authorized to sign this Agreement and the documents to be delivered hereunder;

(iv)	all other agreements, documents, instruments or certificates as the Seller may collectively reasonably request in connection with the consummation of the transactions contemplated hereby; and

(v)	an agreement indemnifying Doyle Wiseman and his affiliates against any liability under any personal guaranty granted by him in favor of any Property Company mortgage loan or solar equipment lease.

(b)	At the Closing, the Seller shall deliver to Buyer:

(i)	an assignment, substantially in the form attached hereto as Exhibit B, evidencing the transfer from Seller to Buyer of the Membership Interests, free and clear of all Encumbrances, duly endorsed in blank;

(ii)

original forms of the consents, resolutions, or other minutes of the partners of each of the Property Companies pursuant to which each of the Amended Partnership Agreements (as hereinafter defined) was adopted and approved and the waivers and irrevocable consents required by Section 6.10 were provided;

(iii)

each Management Company’s joinder or other counterpart signature pages to the Amended Partnership Agreements;

(iv)	copies of all consents, approvals, waivers, and authorizations referred to in Sections 2.02, 3.02, and 4.02 of the Disclosure Schedules;

(v)

a certificate of the manager of Seller certifying as to (i) the resolutions of the managing member and members of Seller, duly adopted and in full force and effect, which authorize the execution, delivery, and performance of this Agreement and the transactions contemplated hereby, and (ii) the names and signatures of the authorized representatives of Seller authorized to sign this Agreement and the documents to be delivered hereunder;

(vi)

a certificate meeting the requirements of IRS Notice 2018-29 and Treasury Regulations Section 1.1446(f)-2(b)(2) and Treasury Regulations Section 1.1445-2(b) to the effect that Seller is not a foreign person within the meaning of Section 1446(f) or Section 1445 of the Internal Revenue Code of 1986, as amended (“Code”), duly executed by Seller and in form and substance reasonably satisfactory to the Buyer;

(vii)

a completed investor questionnaire and counterpart signature page to the Limited Partnership Agreement of MacKenzie Realty Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), pursuant to which the Seller represents and warrants that it is qualified to own the OP Units and agrees to be bound by such Limited Partnership Agreement;  and

(viii)

all other agreements, documents, instruments or certificates as Buyer may reasonably request in connection with the consummation of the transactions contemplated hereby, including FIRPTA certificates and similar documents relating to the transfer of real property.

(a)

Closing Adjustment. At the Closing, the Purchase Price for the Membership Interests in any Management Company (as set forth on Exhibit A attached hereto) shall be reduced by twenty percent (20%) if, as of the Closing Date, the Property Company of which such Management Company is the general partner has not received fully executed and in force leases, the annualized scheduled rents of which are equal to or greater than the Target Scheduled Rent established for it on Exhibit C attached hereto (such target, the “Target Scheduled Rent,” and the achievement of such annual target, “Stabilization”).

(i)	The net Purchase Price of all Membership Interests after giving effect to such adjustment shall be the amount of the “Closing Date Payment.”

(ii)	The amount of the adjustment applicable to any Management Company shall be such Management Company’s “Holdback Amount.”

(iii)

When used herein, “Scheduled Rent” means the annual gross rent from tenants of a particular property paid to the Property Company, net of any amounts paid to the Property Company by such tenants in respect of insurance, taxes, common area maintenance charges, tenant improvements, and other expenses.

(b)

Stabilization Adjustments. For twenty-four (24) consecutive months beginning in the calendar month following the month in which the Closing Date occurs (the “Stabilization Period”), no later than the fifteenth (15th) day of each month Buyer shall review the operating results of each Property Company and its associated Management Company with respect to which a Holdback Amount exists (each a “Deficient Company”) to determine whether such Deficient Company’s underlying Property Company has reached Stabilization. If any Deficient Company’s Property Company achieves Stabilization during the Stabilization Period, then Buyer shall, no later than ten (10) Business Days after the date of its determination thereof, pay to Seller the Holdback Amount applicable to such Management Company, adjusted in accordance with Section 1.04(c) hereof, by wire transfer of immediately available funds. If a Deficient Company’s Property Company does not achieve Stabilization during the Stabilization Period, then the Holdback Amount with respect to such Deficient Company shall be forfeited by Seller.

(c)

Holdback Amount Offset. Any Holdback Amount payable upon Stabilization of any Deficient Company’s Property Company pursuant to the preceding Section 1.04(b) shall be reduced dollar-for-dollar by (i) the Management Company’s pro-rata portion, if any, of any tenant improvement allowances, build outs, or leasing commissions incurred by such Property Company during the Stabilization Period (“Stabilization Costs”) and (ii) any Indemnification Offset Amount (as hereinafter defined) applicable in accordance with Section 7.05 hereof. If at any time the Management Company’s pro-rata portion of the Stabilization Costs for any Deficient Company exceed the Holdback Amount applicable thereto (as reduced by any Indemnification Offset Amount), then Seller (and its successors and beneficial owners) hereby agrees to pay to Buyer an amount equal to the difference between such Stabilization Costs and the Holdback Amount (as reduced by any Indemnification Offset Amount) with respect to such Deficient Company. Further, if the Stabilization Costs are less than the cash left in the Property Company’s accounts at Closing, then the Holdback Amount shall be increased by the Management Company’s pro-rata share of the difference between such cash and the Stabilization Costs.

(d)

Adjustments to Purchase Price.  The Purchase Price for the Membership Interests in any Management Company shall be (1) increased by the Management Company’s pro-rata share of any cash balances in any operating or restricted accounts held by the Property Company at Closing; (2) adjusted for any other net current assets or liabilities, security deposits, property taxes, and insurance as is customary in a closing, and (3) increased (or decreased) by the Management Company’s pro rata share of any reduction (or increase) in the outstanding principal balance of the Property Companies loans between the date used to derive the Purchase Price on Exhibit A and the Closing Date.

ARTICLE II
REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER

The Seller represents and warrants to Buyer that the statements contained in this Article II are true and correct as of the date hereof. For purposes of this Article II, “Seller’s knowledge,” “knowledge of Seller,” and any similar phrases shall mean the actual or constructive knowledge of Doyle Wiseman, John Barkey, Brian Wills, and Zen Hunter-Ishikawa.

(a)

Seller is the sole legal, beneficial, record, and equitable owner of the Membership Interests it is selling, free and clear of all Encumbrances whatsoever other than any restrictions imposed by the Existing Operating Agreements and is the sole member and sole managing member of each Management Company.

(b)

The Membership Interests that Seller is selling were issued in compliance with applicable laws. The Membership Interests that Seller is selling were not issued in violation of the organizational documents of the Management Company or any other agreement, arrangement, or commitment to which Seller or the Management Company is a party and are not subject to or in violation of any preemptive or similar rights of any Person.

(c)	Other than the organizational documents of the Management Company, there are no voting trusts, proxies, or other agreements or understandings in effect with respect to the voting or transfer of any of the Membership Interests that Seller is selling.

The Seller represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof. For purposes of this Article III, “Seller’s knowledge,” “knowledge of Seller,” and any similar phrases shall mean the actual or constructive knowledge of Doyle Wiseman, John Barkey, Brian Wills, and Zen Hunter-Ishikawa, after due inquiry.

(a)

Each of the Management Companies is the sole legal, beneficial, record, and equitable owner of the general partner partnership interests set forth on Exhibit A attached hereto (the “Partnership Interests”), free and clear of all Encumbrances whatsoever other than any restrictions imposed by the Existing Partnership Agreements (as hereinafter defined).

(b)

The Partnership Interests were issued in compliance with applicable laws. The Partnership Interests were not issued in violation of the organizational documents of any Property Company or any other agreement, arrangement, or commitment to which any Management Company or Property Company are a party and are not subject to or in violation of any preemptive or similar rights of any Person (other than Management Companies as the general partners of each Property Company).

(c)	Other than the organizational documents of each Property Company, there are no voting trusts, proxies, or other agreements or understandings in effect with respect to the voting or transfer of any of the Partnership Interests.

(a)	event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)	material change in any method of accounting or accounting practice of any Management Company, except as required by GAAP or as disclosed in the notes to the Financial Statements;

(c)	entry into any contract that would constitute a Material Contract (as hereinafter defined);

(d)	incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(e)	transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Financial Statements dated as of the Balance Sheet Date or cancellation of any debts or entitlements;

(f)	material damage, destruction or loss (whether or not covered by insurance) to its property;

(g)	any capital investment in, or any loan to, any other Person;

(h)	any material capital expenditures;

(i)	imposition of any Encumbrance upon any Management Company’s properties or assets, tangible or intangible;

(j)	any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its members or current or former members, managing members, officers, or employees;

(k)

adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy law or consent to the filing of any bankruptcy petition against it under any similar law, or acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

(l)

action by any Management Company to make, change or rescind any tax election, amend any tax returns or take any position on any tax returns, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the tax liability or reducing any tax asset of the members of the Management Company in respect of any post-closing tax period; or

(m)	any agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing.

As used in this Agreement, “Material Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise) or assets of a Management Company or Property Company, or (b) the ability of Seller to consummate the transactions contemplated hereby on a timely basis; provided, however, that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions; (ii) any changes in financial or securities markets in general; (iii) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof; (iv) any changes in applicable laws or accounting rules; or (v) the public announcement, pendency or completion of the transactions contemplated by this Agreement; provided further, however, that any event, occurrence, fact, condition or change referred to in clauses (i) through (iii) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on a Management Company or Property Company compared to other participants in the industries in which such Management Company or Property Company conducts its business.

(a)	Section 3.11(a) of the Disclosure Schedules lists each of the following contracts of the Management Companies (such contracts, together with all contracts concerning the occupancy, management or operation of any real property, being “Material Management Contracts”):

(i)	except for contracts relating to trade payables, all contracts relating to indebtedness (including, without limitation, guarantees) of any Management Company;

(ii)	all contracts with any governmental entity to which any Management Company is a party;

(iii)

any contracts to which any Management Company is a party that provide for any joint venture, partnership or similar arrangement by a Management Company;

(iv)	all contracts between or among a Management Company on the one hand and the Seller or any Affiliates of the Seller on the other hand; and

(v)	any other contract that is material to any Management Company and not previously disclosed pursuant to this Section 3.11.

(b)

Each Material Management Contract is valid and binding on each Management Company party thereto in accordance with its terms and is in full force and effect. No Management Company or any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Material Management Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Management Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Management Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES RELATING TO EACH PROPERTY COMPANY

The Seller represents and warrants to Buyer that the statements contained in this Article IV are true and correct as of the date hereof. For purposes of this Article IV, “Seller’s knowledge,” “knowledge of the Seller,” and any similar phrases shall mean the actual or constructive knowledge of Doyle Wiseman, John Barkey, Brian Wills, and Zen Hunter-Ishikawa.

(a)	event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)	material change in any method of accounting or accounting practice of any Property Company, except as required by GAAP or as disclosed in the notes to the Partnership Financial Statements;

(c)	entry into any contract that would constitute a Material Contract (as hereinafter defined);

(d)	incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(e)	transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Partnership Financial Statements dated as of the Balance Sheet Date or cancellation of any debts or entitlements;

(f)	material damage, destruction or loss (whether or not covered by insurance) to its property;

(g)	any capital investment in, or any loan to, any other Person;

(h)	any material capital expenditures;

(i)	imposition of any Encumbrance upon any Property Company’s properties or assets, tangible or intangible;

(j)	any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its partners or current or former partners, officers, or employees;

(k)

adoption of any plan of merger, consolidation, reorganization, liquidation or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy law or consent to the filing of any bankruptcy petition against it under any similar law, or acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

(l)

action by any Property Company to make, change or rescind any tax election, amend any tax returns or take any position on any tax returns, take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the tax liability or reducing any tax asset of the partners of any Property Company in respect of any post-closing tax period; or

(m)	any agreement to do any of the foregoing, or any action or omission that would result in any of the foregoing.

(a)

Section 4.08(a) of the Disclosure Schedules lists each of the following contracts of any Property Company (such contracts, together with all contracts concerning the occupancy, management or operation of any real property, being “Material Property Contracts,” and, together with the Material Management Contracts, the “Material Contracts”):

(i)	except for contracts relating to trade payables, all contracts relating to indebtedness (including, without limitation, guarantees) of any Property Company;

(ii)	all contracts with any governmental entity to which any Property Company is a party;

(iii)

all other contracts, agreements, orders, resolutions, understandings, or other relationships pursuant to which any governmental entity or jurisdictional body has agreed to provide any Property Company or its underlying assets with entitlements, approvals, authorizations, or services which may be material to such Property Company;

(iv)	any contracts to which any Property Company is a party that provide for any joint venture, partnership or similar arrangement by such Property Company;

(v)	all contracts between or among any Property Company on the one hand and the Seller, and Management Company, or any Affiliates of the foregoing on the other hand; and

(vi)	any other contract that is material to any Property Company and not previously disclosed pursuant to this Section 4.08.

(b)

Each Material Property Contract is valid and binding on each Property Company party thereto in accordance with its terms and is in full force and effect. No Property Company or any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Material Property Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Property Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder. Complete and correct copies of each Material Property Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer.

(a)	Herein, the following terms have the definitions assigned to them in this Section 4.11:

(i)

“Environmental Claim” means any Action, governmental order, lien, fine, penalty, or, as to each, any settlement or judgment arising therefrom, by or from any Person alleging liability of whatever kind or nature (including liability or responsibility for the costs of enforcement proceedings, investigations, cleanup, governmental response, removal or remediation, natural resources damages, property damages, personal injuries, medical monitoring, penalties, contribution, indemnification and injunctive relief) arising out of, based on or resulting from: (a) the presence, release of, or exposure to, any hazardous materials; or (b) any actual or alleged non-compliance with any Environmental Law or term or condition of any Environmental Permit.

(ii)

“Environmental Law” means any applicable law, and any governmental order or binding agreement with any governmental entity: (a) relating to pollution (or the cleanup thereof) or the protection of natural resources, endangered or threatened species, human health or safety, or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata); (b) concerning the presence of, exposure to, or the management, manufacture, use, containment, storage, recycling, reclamation, reuse, treatment, generation, discharge, transportation, processing, production, disposal or remediation of any hazardous materials; or (c) relates to the use of septic, public water, sewage, storm drainage, or other public utility systems. The term “Environmental Law” includes, without limitation, the following (including their implementing regulations and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§ 7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. §§ 651 et seq.

(iii)

“Environmental Notice” means any written directive, notice of violation or infraction, or notice respecting any Environmental Claim relating to actual or alleged non-compliance with any Environmental Law or any term or condition of any Environmental Permit.

(iv)	“Environmental Permit” means any Permit, letter, clearance, consent, waiver, closure, exemption, decision or other action required under or issued, granted, given, authorized by or made pursuant to Environmental Law.

(b)

Each Property Company is currently and has been in compliance with all Environmental Laws and has not received from any Person any: (i) Environmental Notice or Environmental Claim; or (ii) written request for information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing obligations or requirements as of the Closing Date.

(c)

Each Property Company has obtained and is in material compliance with all Environmental Permits (each of which is disclosed in Section 4.11(b) of the Disclosure Schedules) necessary for the ownership, lease, operation or use of the business or assets of the Property Company and all such Environmental Permits are in full force and effect and shall be maintained in full force and effect by each Property Company through the Closing Date in accordance with Environmental Law, and no Property Company is aware of any condition, event or circumstance that might prevent or impede, after the Closing Date, the ownership, lease, operation or use of the business or assets of any Property Company as currently carried out. With respect to any such Environmental Permits, each Property Company has undertaken, or will undertake prior to the Closing Date, all measures necessary to facilitate transferability of the same, and no Property Company is aware of any condition, event or circumstance that might prevent or impede the transferability of the same, nor has it received any Environmental Notice or written communication regarding any material adverse change in the status or terms and conditions of the same.

(d)	No real property currently or formerly owned, operated or leased by any Property Company is listed on, or has been proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA, or any similar state list.

(e)

Seller has provided or otherwise made available to Buyer and listed in Section 4.11(e) of the Disclosure Schedules: (i) any and all environmental reports, studies, audits, records, sampling data, site assessments, risk assessments, economic models and other similar documents with respect to the business or assets of any Property Company or any currently or formerly owned, operated or leased real property which are in the possession or control of any Property Company related to compliance with Environmental Laws, Environmental Claims or an Environmental Notice or the Release of Hazardous Materials; and (ii) any and all material documents concerning planned or anticipated capital expenditures required to reduce, offset, limit or otherwise control pollution and/or emissions, manage waste or otherwise ensure compliance with current or future Environmental Laws (including, without limitation, costs of remediation, pollution control equipment and operational changes).

(a)

Each Property Company has good and valid and, in the case of owned real property, good and marketable fee simple, title to, all real property and personal property and other assets reflected in the Partnership Financial Statements or acquired after the Balance Sheet Date, other than properties and assets sold or otherwise disposed of in the ordinary course of business consistent with past practice since the Balance Sheet Date. All such properties and assets are free and clear of Encumbrances except for the following (collectively referred to as “Permitted Encumbrances”):

(i)	liens for taxes not yet due and payable;

(ii)	mechanics, carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the ordinary course of business consistent with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the business of the respective Property Company;

(iii)

easements, rights of way, zoning ordinances and other similar encumbrances affecting real property which are not, individually or in the aggregate, material to the business of the respective Property Company;

(iv)

other than with respect to owned real property, liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business consistent with past practice which are not, individually or in the aggregate, material to the business of the respective Property Company; or

(v)	Mortgage loans, secured by Deeds of Trust, in the amounts listed on Schedule 4.12(a).

(b)

Schedule 4.12(b) lists the street address of each parcel of real property. With respect to real property, each Property Company has delivered or made available to Buyer true, complete and correct copies of the deeds and other instruments (as recorded) by which such Property Company acquired such real property, and copies of all title insurance policies, opinions, abstracts and surveys in the possession of such Property Company and relating to the real property, together with any and all as-built surveys of the real property and its improvements and any architectural designs or renderings related thereto. The use and operation of the real property in the conduct of each Property Company’s business does not violate in any material respect any law, covenant, condition, restriction, easement, license, permit or agreement. No material improvements constituting a part of the real property encroach on real property owned or leased by a Person other than the respective Property Company. There are no Actions pending nor, to the Seller’s Knowledge, threatened against or affecting the real property or any portion thereof or interest therein in the nature or in lieu of condemnation or eminent domain proceedings.

Buyer represents and warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof. For purposes of this Article V, “Buyer’s knowledge,” “knowledge of Buyer” and any similar phrases shall mean the actual or constructive knowledge of any Robert Dixon, Glen Fuller, Chip Patterson, and Chris Simpson.

ARTICLE VI
COVENANTS AND CONDITIONS TO CLOSING

(a)

No governmental entity shall have enacted, issued, promulgated, enforced or entered any order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

(b)	The Seller shall have received all consents, authorizations, orders and approvals referred to in Sections 2.02, 3.02, and 4.02, in each case, in form and substance reasonably satisfactory to Buyer, and no such consent, authorization, order and approval shall have been revoked.

(a)

The representations and warranties of the Seller contained in this Agreement and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(b)	The Seller shall have terminated any and all agreements between Seller or its Affiliates, on the one hand, and any Management Company or Property Company, on the other hand.

(c)	The Seller shall have resigned as the managing member of each of the Management Companies and removed itself and any of its Affiliates from any offices of any Management Company.

(d)	The Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and to be performed or complied with by it prior to or on the Closing Date.

(e)	From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

(f)	At least five (5) Business Days before Closing, the Seller shall have delivered to Buyer a certificate indicating whether all of the Property Companies have achieved Stabilization and identifying any Property Companies that have not.

(g)

The Seller shall have delivered to Buyer a good standing certificate (or its equivalent) for each Management Company and Property Company from the secretary of state or similar governmental entity of the jurisdiction under the laws in which each such Management Company or Property Company is organized.

(h)	Buyer shall have completed, to its satisfaction, due diligence of the Subsidiaries, their assets, and Liabilities.

(i)	The Seller shall have delivered to Buyer all of the items required to be delivered pursuant to Section 1.03 hereof.

(a)

The representations and warranties of Buyer contained in this Agreement and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(b)	Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and to be performed or complied with by it prior to or on the Closing Date.

(c)	Buyer shall have delivered to the Seller cash in an amount equal to the Closing Date Payment by wire transfer of immediately available funds and evidence of the issuance of the OP Units.

(d)	Buyer shall have delivered to the Seller all of the items required to be delivered pursuant to Section 1.03 hereof.

(a)	cause its Subsidiaries to preserve and maintain all of their permits;

(b)	cause its Subsidiaries to pay their debts, taxes and other obligations when due;

(c)	cause its Subsidiaries to maintain the properties and assets owned, operated or used by such Subsidiaries in the same condition as they were on the date of this Agreement;

(d)	cause the Subsidiaries to continue in full force and effect without modification all insurance policies, except as required by applicable law;

(e)	cause its Subsidiaries to defend and protect their properties and assets from infringement or usurpation;

(f)	cause its Subsidiaries to perform all of their obligations under all contracts relating to or affecting their properties, assets or business;

(g)	cause its Subsidiaries to maintain their books and records in accordance with past practice; and

(h)	cause its Subsidiaries to comply in all material respects with all applicable laws.

(a)	From the date hereof until the Closing, the Seller shall promptly notify Buyer in writing of:

(i)

any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by the Seller not being true and correct, or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 6.02 to be satisfied;

(ii)	any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(iii)

any notice or other communication from any governmental entity in connection with the transactions contemplated by this Agreement; and

(iv)

any Actions commenced or, to the Seller’s Knowledge, threatened against, relating to or involving or otherwise affecting any Seller or any of its Subsidiaries that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Articles II, III, or IV or that relates to the consummation of the transactions contemplated by this Agreement.

(b)	Buyer’s receipt of information pursuant to this Section 6.08 shall not operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement and shall not be deemed to amend or supplement the Disclosure Schedules.

(a)	Prior to the Closing Date, the Seller, by and through the Management Companies, shall cause the Existing Partnership Agreements of each of the Property Companies to be amended (such amended partnership agreements, the “Amended Partnership Agreements”) to:

(i)

Cause each Property Company to amend Section 5.6(f) of each of the Existing Partnership Agreements to the following: “The Wiseman Company, as withdrawing general partner, upon the sale of the Property, will be paid real estate commissions as the real estate broker of the customary real estate commission, but paid by the limited partners out of the limited partners’ proportionate share of such sales proceeds based on their remaining equity in the Partnership, such that the share of sales proceeds payable to the Management Companies as general partners shall not be reduced by any sales commissions.  Thus, based upon the limited partners’ agreement to sell the Property for $[the price listed on Schedule 6.10], The Wiseman Company would be entitled to a sales commission of $[5% of the price listed on Schedule 6.10].  Because the limited partners are entitled to [LP ownership percentage]% of all net sales proceeds, any distribution of sales proceeds to limited partners shall be reduced by [LP ownership percentage]% of such sales commission, which amount will be paid to The Wiseman Company (or a pro rata percentage of any consideration being paid other than in cash).”

(ii)

amend Section 4.8 of each of the Existing Partnership Agreements to affix final sharing percentages applicable to all distributions made by each Property Company to its general partner and limited partners going forward equal to the percentage of proceeds Seller calculates as distributable to the general partner and limited partners assuming the Property Company's property was sold as of the date hereof at the price set forth on Schedule 6.10 attached hereto and the proceeds therefrom were distributed in accordance with the Property Company's respective Existing Partnership Agreement (the “Crystallization”).

(b)	Prior to the Closing Date, Seller, by and through the Management Companies, shall cause each Property Company and the majority in interest of its respective limited partners to:

(i)	waive any claims such Property Company or its limited partners may have against the Property Company, Management Company, or Buyer, in any capacity, in connection with the negotiation, approval, or consummation of a transaction of the type contemplated by Section 6.10(b)(ii) hereof; and

(ii)

irrevocably consent, for a period of no less than 2 years from the Closing Date to permit Management Company, as the general partner of such Property Company, to sell the real property and all other assets of such Property Company to Buyer or its Affiliates in one or more transactions, for no less than the price and terms set forth on Schedule 6.10 attached hereto (as adjusted from time to time in the manner provided in the consent), or in another merger, exchange, or similar transaction based upon such value, without need for any further consent, approval, or ratification by the majority in interest of the limited partners of such Property Company.  If within two years from the Closing Date, the Buyer has not purchased the property owned by the Property Company, then the consent shall be null and void and the power to cause the sale of the property shall revert to the majority in interest of the limited partners of the Property Company, and, if applicable, any distribution percentages previously fixed per Limited Partnership Agreement amendments executed pursuant to this Section 6.10, shall be restored as if such amendments had not been executed.

(a)

all claims, judgments, damages, liabilities, settlements, losses, costs, and expenses, including reasonable attorneys’ fees and disbursements (collectively, a “Loss”), arising from or relating to any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document delivered in connection herewith;

(b)	any Loss arising from or relating to any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Seller pursuant to this Agreement or any document delivered in connection herewith; or

(c)

the amount of any imputed underpayment (as described in Section 6225 of the Code) imposed on any of the Subsidiaries and allocable to Seller or attributable to the Membership Interests during taxable years, or portions thereof, when the Seller owned the Membership Interests (the “Seller Ownership Period”), or any other income tax assessment imposed on any Management Company under any similar provision of state or local law and allocable to Seller or attributable to the Membership Interests during the Seller Ownership Period.

For purposes of this Agreement, “Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including 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 a Person, whether through the ownership of voting securities, by contract, or otherwise.

(a)	any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document delivered in connection herewith; or

(b)	any breach or non-fulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement or any document delivered in connection herewith.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective representatives thereunto duly authorized.

Exhibit A

Respective Management Companies, Property Companies, Partnership Interests, and Purchase Prices

Exhibit B

Form of Assignment

[TBD]

Exhibit C

Annualized Target Scheduled Rent

Exhibit D

Financial Statements

Attached.

Exhibit E

Partnership Financial Statements

Attached.

Exhibit F

Realty Purchase Terms and Conditions

Title.  Buyer, at Buyer’s expense, shall obtain a title commitment (the “Title Commitment”) for an owner’s ALTA 2006 Standard Form of Owner’s Policy of Title Insurance from a national title insurance company selected by Buyer (the “Title Company”) in favor of Buyer in the amount of the Realty Purchase Price, which shall cover the legal description of the Realty.  The Title Commitment shall show Seller to be vested with fee simple title to the Realty subject only to Permitted Exceptions (as defined below).

Buyer shall have 30 days (the “Title Review Date”) within which to examine the Title Commitment.  If Buyer finds title or the Survey (as defined below) to be defective, Buyer shall, no later than the Title Review Date to notify Seller in writing specifying the defect(s) (the “Title Objection Letter”).  If Buyer fails to timely deliver the Title Objection Letter to Seller by the Title Review Date, then Buyer shall have waived its right to object to any matters relating to the status of title to the Realty or the Survey other than the Mandatory Cure Items (as defined below).  If Buyer timely delivers the Title Objection Letter to Seller, then Seller shall have the right to deliver to Buyer within five (5) Business Days after receipt of the Title Objection Letter (the “Title Response Period”) written notice as to which objections in the Title Objection Letter Seller will satisfy or cure by Closing (the “Title Cure Letter”).  Seller shall be obligated to satisfy and cure at its cost and expense on or before Closing those matters it agrees to satisfy and cure in the Title Cure Letter.  In the event that Seller fails to timely deliver the Title Cure Letter to Buyer, Seller shall be deemed to have elected to not take any action with respect to the objections set forth in the Title Objection Letter, in which case Buyer shall have the right to terminate this Agreement by delivering a written notice of termination to Seller within five (5) Business Days after the expiration of the Title Response Period, upon which this Agreement shall terminate, the Escrow Agent shall promptly return the Deposit and all interest earned thereon (if any) to Buyer, whereupon both parties shall be released from all further obligations under this Agreement, except from those that expressly survive its termination. If Seller timely delivers the Title Cure Letter to Buyer but refuses to satisfy and cure all objections set forth in the Title Objection Letter, then Buyer shall have the right to terminate this Agreement by delivering a written notice of termination to Seller within five (5) Business Days after receipt of the Title Cure Letter, upon which this Agreement shall terminate, the Escrow Agent shall promptly return the Deposit and all interest earned thereon (if any) to Buyer, whereupon both parties shall be released from all further obligations under this Agreement, except from those that expressly survive its termination.

Prior to Closing, Buyer may cause the Title Commitment and Survey to be updated and if such updates reveals any new matters of record which are material and objectionable to Buyer, and same is not caused by, through or under Buyer (which matters Buyer shall be obligated to accept), Buyer shall immediately notify Seller of same and such defect(s) shall be treated in the same manner as title defects are treated under this paragraph.

Notwithstanding anything to the contrary contained in this Agreement, and in addition to those matters that Seller expressly agrees to satisfy and cure in the Title Cure Letter, Seller shall be obligated to have taken on or before Closing the necessary action to satisfy, delete, release and/or discharge from the Title Commitment and/or public record (as applicable) by payment, bonding, or otherwise, the following matters whether or not objected to in the Title Objection Letter (the “Mandatory Cure Items”): (i)  any liens, judgments, mortgages, tax warrants or other liquidated monetary encumbrances of record which affect the Realty and which can be satisfied and discharged by payment of a liquidated sum; (ii) any open permits and/or existing code violations affecting the Realty; and (iii) those matters that Seller agrees to satisfy and cure in the Title Cure Letter or is deemed to have agreed to satisfy as set forth above.

Seller shall convey the Realty to Buyer at Closing by limited warranty deed free and clear of all liens, claims and encumbrances, other than (i) taxes for the current year not yet due and payable; (ii) zoning ordinances affecting the Realty; (iii) encumbrances arising by, through or under Buyer; and (iv) any title matters to which Buyer does not timely object to or accepts in accordance with the foregoing provisions.

Representations.  Seller shall make any standard representations and/or warranties relating to the purchase of real property, if so request by Buyer.  The Closing of the purchase of the Realty shall be subject to standard conditions precedent and terms and conditions.

Realty Legal Description

Annex I

Existing Operating Agreements

Attached.

Annex II

Existing Partnership Agreements

Attached.

Schedule 6.10

Minimum Purchase Price for Each Property Company’s Underlying Property

* The purchase prices listed in the table above will be subject to adjustment as follows: Once the Property Company owning a property reaches Stabilization, Buyer shall have the right to purchase such property from the Property Company at the price set forth above (or propose a merger, exchange, or similar transaction at the equivalent value, so long as the limited partners have the option to receive cash equal to or greater than what they would have received in an outright sale at the purchase price as adjusted).  If Buyer does not purchase such property within ninety (90) days following the Property Company which owns such property’s Stabilization, then the purchase price for such property from the table above shall increase by 0.33% per full calendar month from such date of Stabilization until the purchase is completed.

^† Further, once a Property Company’s property reaches Stabilization, Buyer will be required to pay to Property Company the option premium shown above which is either 3% or 5% of the limited partners’ proceeds from a sale at the purchase price, depending upon whether Buyer elects an option period of six months (3%) or more than 6 months (5%), in order to secure the right to purchase the property as agreed herein, unless the property is purchased within 90 days of Stabilization (no option payment required).  If the Buyer completes the purchase of the property, the purchase price shall be reduced by the amount of the option payment made. If the Buyer does not complete the purchase of the property, the option premium shall be distributed to the Limited Partners.

 Disclosure Schedules

Attached.

Schedule 3.12

There are two Actions pending by a Management Company, seeking damages from prior tenants, listed below.  Seller will continue those actions after Closing at no cost to Buyer or Property Company and any proceeds from such Actions shall be assigned to Seller.

1.	1300 Main, L.P. v. Zei Wei Liu, Napa County, Case No. 21CV000525, relating to damages caused by tenant’s failing to take occupancy.

2.	Woodland Corporate Center Two, L.P. v. Daniel Taheri, M.D., Inc., Yolo County, Case No. CV2021-1462, relating to damages caused by tenant’s failing to take occupancy.

Schedule 4.12

(a) The Property Companies are encumbered by the following mortgage loans, with remaining principal balances listed below as of the date set forth below:

1300 Main, LP

Citizens Business Bank

Balance as of 3/10/2022: $8,694,486

First and Main, LP

Exchange Bank

Balance as of 3/21/22:  $11,677,152

Green Valley Medical Center, LP

F & M Bank

Balance as of 3/28/22:  $4,581,698

Main Street West, LP

First Northern Bank

Balance as of 3/21/22:  $16,202,745

Martin Plaza Associates, LP

First Northern Bank

Balance as of 3/07/22:  $7,933,937

One Harbor Center, LP

Travis Credit Union

Balance as of 3/17/22:  $8,206,457

Westside Professional Center I, LP

First Bank

Balance as of 3/16/22:  $2,677,634

(b) The following is a list of the street address of each parcel of real property owned by the respective Property Company:

1300 Main, LP

1300 Main Street

Napa, CA  94559

First & Main, LP

1000 Main Street

Napa, CA  94559

Green Valley Medical Center, LP

5140 Business Center Drive

Fairfield, CA  94534

Main Street West, LP

1250 Main Street West

Napa, CA  94559

Martin Plaza Associates, LP

2420 & 2450 Martin Road

Fairfield, CA  94534

One Harbor Center, LP

One Harbor Center

Suisun City, CA  94585

Westside Professional Center I, LP

2480 Hilborn Road

Fairfield, CA  94534

Woodland Corporate Center II, LP

1100 Main Street

Woodland, CA  95695