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STANDARD OFFER, AGREEMENT AND ESCROW

INSTRUCTIONS FOR PURCHASE OF REAL ESTATE

(Non-Residential)

AIR Commercial Real Estate Association

 

November 23, 2004          

(Date for Reference Purposes)

 

1. Buyer.

 

1.1 Rexford Industrial, LLC, ( “Buyer”) hereby offers to purchase the real
property, hereinafter described, from the owner thereof (“Seller”)
(collectively, the “Parties” or individually, a “Party”), through an escrow
(“Escrow”) to close on or before fifteen (15) days following the expiration of
the “Buyer’s Contingencies” referenced in Paragraph 9.1 and Paragraphs 29 and 30
of the Addendum. (“Expected Closing Date”) to be held by Chicago Title Company
(Irene Meltzer, Escrow Officer) (“Escrow Holder”) whose address is 700 S. Flower
Street, Suite 800, Los Angeles, California 90017, Phone No. 213-488-4300,
Facsimile No. 213-488-4388 upon the terms and conditions set forth in this
agreement (“Agreement”). Buyer shall have the right to assign Buyer’s rights
hereunder, but any such assignment shall not relieve Buyer of Buyer’s
obligations herein unless Seller expressly releases Buyer.

 

1.2 The term “Date of Agreement” as used herein shall be the date when by
execution and delivery (as defined in paragraph 20.2) of this document or a
subsequent counteroffer thereto, Buyer and Seller have reached agreement in
writing whereby Seller agrees to sell, and Buyer agrees to purchase, the
Property upon terms accepted by both Parties.

 

2. Property.

 

2.1 The real property (“Property”) that is the subject of this offer consists of
(insert a brief physical description) an approximately 114,424 square foot
building on approximately 249,300 square feet of M2 zoned land (dimensions and
zoning to be verified by Buyer) is located in the City of Los Angeles (Sylmar),
County of Los Angeles, State of California, is commonly known by the street
address of 15148 Bledsoe Street and is legally described as: to be provided by
Chicago Title during Escrow (APN: 2502-002-011).

 

2.2 If the legal description of the Property is not complete or is inaccurate,
this Agreement shall not be invalid and the legal description shall be completed
or corrected to meet the requirements of Chicago Title Company (Michael Slinger)
(“Title Company”), which shall issue the title policy hereinafter described.

 

2.3 The Property includes, at no additional cost to Buyer, the permanent
improvements thereon, including those items which pursuant to applicable law are
a part of the property, as well as the following items, if any, owned by Seller
and at present located on the Property: electrical distribution systems (power
panel, bus ducting, conduits, disconnects, lighting fixtures); security systems;
telephone distribution systems (lines, jacks and connections only); space
heaters; heating, ventilating, air conditioning equipment (“HVAC”); air lines;
fire sprinkler systems; security and fire detection systems; carpets; window
coverings; wall coverings; and N / A (collectively, the “Improvements”).

 

2.4 The fire sprinkler monitor:¨ is owned by Seller and included in the Purchase
Price, or ¨ is leased by Seller, and Buyer will need to negotiate a new lease
with the fire monitoring company.

 

2.5 Except as provided in Paragraph 2.3, the Purchase Price does not include
Seller’s or Tenant’s personal property, furniture and furnishings., and

 

                                                                               
                                        
                                        
                                                    all of which shall be
removed by Seller prior to Closing.

 

3. Purchase Price.

 

3.1 The purchase price (“Purchase Price”) to be paid by Buyer to Seller for the
Property shall be $6,420,000.00, payable as follows:

 

    

(a)    Cash down payment, including the Deposit as defined in paragraph 4.3 (or
if an all cash transaction, the Purchase Price):

   $ 6,420,000.00

(Strike if not applicable)

              

(b)    Amount of “New Loan” as defined in paragraph 5.1, if any:

   $                          

(c)    Buyer shall take title to the Property subject to the following existing
deed(s) of trust (“Existing Deed(s) of Trust”) securing the existing promissory
note(s) (“Existing Note(s)”):

           

(i)     An Existing Note (“First Note”) with an unpaid principal balance as of
the Closing of approximately:

   $                          

Said First Note is payable at $                             per month,

      

(Strike if not applicable)

  

including interest at the rate of        % per annum until paid (and/or the
entire unpaid balance is due on     ) .

           

(ii)    An Existing Note (“Second Note”) with an unpaid principal balance as of
the Closing of approximately:

Said Second Note is payable at $                                      per month,
including interest at the rate of     % per annum until paid (and/or the entire
unpaid balance is due on     ) .

   $                     

(Strike if not applicable)

  

(d)    Buyer shall give Seller a deed of trust (“Purchase Money Deed of Trust”)
on the property, to secure the promissory note of Buyer to Seller described in
paragraph 6

            Total Purchase Price:    $ 6,420,000.00

 

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3.2 If Buyer is taking title to the Property subject to, or assuming, an
Existing Deed of Trust and such deed of trust permits the beneficiary to demand
payment of fees including, but not limited to, points, processing fees, and
appraisal fees as a condition to the transfer of the Property, Buyer agrees to
pay such fees up to a maximum of 1.5% of the unpaid principal balance of the
applicable Existing Note.

 

4. Deposits.

 

4.1 ¨ Buyer has delivered to Broker a check in the sum of $             ,
payable to Escrow Holder, to be held by Broker until both Parties have executed
this Agreement and the executed Agreement has been delivered to Escrow Holder,
or þ Buyer shall deliver to Escrow Holder a check in the sum of $200,000.00 when
both Parties have executed this Agreement and the executed Agreement has been
delivered to Escrow Holder. When cashed, the check shall be deposited into the
Escrow’s trust account to be applied toward the Purchase Price of the Property
at the Closing. Should Buyer and Seller not enter into an agreement for purchase
and sale, Buyer’s check or funds shall, upon request by Buyer, be promptly
returned to Buyer. Escrow holder shall deposit the check(s) into an
interest-bearing account with all interest earned being for the benefit of
Buyer, except in case of a Buyer default.

 

4.2 Additional deposits:

 

(a) Within 5 business days after the Date of Agreement, Buyer shall deposit with
Escrow Holder the additional sum of $             to be applied to the Purchase
Price at the Closing.

 

(b) Within 5 business days after the contingencies discussed in paragraph 9.1
(a) through (k) are approved or waived, Buyer shall deposit with Escrow Holder
the additional sum of $             to be applied to the Purchase Price at the
Closing.

 

4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to
paragraphs 4.1 and 4.2 (collectively the “Deposit”), in a State or Federally
chartered bank in an interest bearing account whose term is appropriate and
consistent with the timing requirements of this transaction. The interest
therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that
there may be penalties or interest forfeitures if the applicable instrument is
redeemed prior to its specified maturity. Buyer’s Federal Tax Identification
Number is              . NOTE: Such interest bearing account cannot be opened
until Buyer’s Federal Tax Identification Number is provided.

 

5. Financing Contingency. (Strike if not applicable)

 

5.1 This offer is contingent upon Buyer obtaining from an insurance company,
financial institution or other lender, a commitment to lend to Buyer a sum equal
to at least        % of the Purchase Price, at terms reasonably acceptable to
Buyer. Such loan (“New Loan”) shall be secured by a first deed of trust or
mortgage on the Property. If this Agreement provides for Seller to carry back
junior financing, then Seller shall have the right to approve the terms of the
New Loan. Seller shall have 7 days from receipt of the commitment setting forth
the proposed terms of the New Loan to approve or disapprove of such proposed
terms. If Seller fails to notify Escrow Holder, in writing, of the disapproval
within said 7 days it shall be conclusively presumed that Seller has approved
the terms of the New Loan.

 

5.2 Buyer hereby agrees to diligently pursue obtaining the New Loan. If Buyer
shall fail to notify its Broker, Escrow Holder and Seller, in writing within
     days following the Date of Agreement, that the New Loan has not been
obtained, it shall be conclusively presumed that Buyer has either obtained said
New Loan or has waived this New Loan contingency.

 

5.3 If, after due diligence, Buyer shall notify its Broker, Escrow Holder and
Seller, in writing, within the time specified in paragraph 5.2 hereof, that
Buyer has not obtained said New Loan, this Agreement shall be terminated, and
Buyer shall be entitled to the prompt return of the Deposit, plus any interest
earned thereon, less only Escrow Holder and Title Company cancellation fees and
costs, which Buyer shall pay.

 

6. Seller Financing (Purchase Money Note). (Strike if not applicable)

 

6.1 The Purchase Money Note shall provide for interest on unpaid principal at
the rate of        % per annum, with principal and interest paid as follows:

 

________________________________________________________________________________________________________________________________________________________________________________________________________

 

________________________________________________________________________________________________________________________________________________________________________________________________________

 

________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

 

The Purchase Money Note and Purchase Money Deed of Trust shall be on the current
forms commonly used by Escrow Holder, and be junior and subordinate only to the
Existing Note(s) and/or the New Loan expressly called for by this Agreement.

 

6.2 The Purchase Money Note and/or the Purchase Money Deed of Trust shall
contain provisions regarding the following (see also paragraph 10.3 (b)):

 

(a) Prepayment. Principal may be prepaid in whole or in part at any time without
penalty, at the option of the Buyer.

 

(b) Late Charge. A late charge of 6% shall be payable with respect to any
payment of principal, interest, or other charges, not made within 10 days after
it is due.

 

(c) Due On Sale. In the event the Buyer sells or transfers title to the Property
or any portion thereof, then the Seller may, at Seller’s option, require the
entire unpaid balance of said Note to be paid in full.

 

6.3 If the Purchase Money Deed of Trust is to be subordinate to other financing,
Escrow Holder shall, at Buyer’s expense prepare and record on Seller’s behalf a
request for notice of default and/or sale with regard to each mortgage or deed
of trust to which it will be subordinate.

 

6.4 WARNING: CALIFORNIA LAW DOES NOT ALLOW DEFICIENCY JUDGEMENTS ON SELLER
FINANCING. IF BUYER ULTIMATELY DEFAULTS ON THE LOAN, SELLER’S SOLE REMEDY IS TO
FORECLOSE ON THE PROPERTY.

 

7. Real Estate Brokers.

 

7.1 The following real estate broker(s) (“Brokers”) and brokerage relationships
exist in this transaction and are consented to by the Parties (check the
applicable boxes):

 

¨                                                           represents Seller
exclusively (“Seller’s Broker”);

 

¨                                                           represents Buyer
exclusively (“Buyer’s Broker”); or

 

þ CB Richard Ellis, Inc. represents both Seller and Buyer (“Dual Agency”).

 

The Parties acknowledge that Brokers are the procuring cause of this Agreement.
See paragraph 24 for disclosures regarding the nature of a real estate agency
relationship. Buyer shall use the services of Buyer’s Broker exclusively in
connection with any and all negotiations and offers with respect to the Property
for a period of 1 year from the Date of Agreement.

 

7.2 Buyer and Seller each represent and warrant to the other that he/she/it has
had no dealings with any person, firm, broker or finder in connection with the
negotiation of this Agreement and/or the consummation of the purchase and sale
contemplated herein, other than the Brokers named in paragraph 7.1, and no
broker or other person, firm or entity, other than said Brokers is/are entitled
to any commission or finder’s fee in connection with this transaction as the
result of any dealings or acts of such Party. Buyer and Seller do each hereby
agree to indemnify, defend, protect and hold the other harmless from and against
any costs, expenses or liability for compensation, commission or charges which
may be claimed by any broker, finder or other similar party, other than said
named Brokers by reason of any dealings or act of the indemnifying Party.

 

8. Escrow and Closing.

 

8.1 Upon acceptance hereof by Seller, this Agreement, including any
counter-offers incorporated herein by the Parties, shall constitute not only the
agreement of purchase and sale between Buyer and Seller, but also instructions
to Escrow Holder for the consummation of the Agreement through the Escrow.
Escrow Holder shall not prepare any further escrow instructions restating or
amending the Agreement unless specifically so instructed by the Parties or a
Broker herein. Subject to the reasonable approval of the Parties, Escrow Holder
may, however, include its standard general escrow provisions.

 

8.2 As soon as practical after the receipt of this Agreement and any relevant
counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in
paragraphs 1.2 and 20.2 and advise the Parties and Brokers, in writing, of the
date ascertained.

 

8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in
accordance with this Agreement, applicable law and custom and

 

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practice of the community in which Escrow Holder is located, including any
reporting requirements of the Internal Revenue Code. In the event of a conflict
between the law of the state where the Property is located and the law of the
state where the Escrow Holder is located, the law of the state where the
Property is located shall prevail.

 

8.4 Subject to satisfaction of the contingencies herein described, Escrow Holder
shall close this escrow (the “Closing”) by recording a general warranty deed (a
grant deed in California) and the other documents required to be recorded, and
by disbursing the funds and documents in accordance with this Agreement.

 

8.5 Buyer and Seller shall each pay one-half of the Escrow Holder’s charges and
Seller shall pay the usual recording fees and any required documentary transfer
taxes. Seller shall pay the premium for a standard coverage owner’s or joint
protection policy of title insurance.

 

8.6 Escrow Holder shall verify that all of Buyer’s contingencies have been
satisfied or waived prior to Closing. The matters contained in paragraphs 9.1
subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 9.5, 12, 13, 14,
16, 18, 20, 21, 22, and 24 are, however, matters of agreement between the
Parties only and are not instructions to Escrow Holder.

 

8.7 If this transaction is terminated for non-satisfaction and non-waiver of a
Buyer’s Contingency, as defined in paragraph 9.2, then neither of the Parties
shall thereafter have any liability to the other under this Agreement, except to
the extent of a breach of any affirmative covenant or warranty in this
Agreement. In the event of such termination, Buyer shall be promptly refunded
all funds deposited by Buyer with Escrow Holder, less only Title Company and
Escrow Holder cancellation fees and costs, all of which shall be Buyer’s
obligation.

 

8.8 The Closing must shall occur on the Expected Closing Date, unless both Buyer
and Seller both agree, in writing, to extend the Expected Closing Date. Neither
party shall have any obligation to agree to extend the Expected Closing Date, or
as soon thereafter as the Escrow is in condition for Closing; provided, however,
that f the Closing does not occur by the Expected Closing Date, and said Date is
not extended by mutual instructions of the Parties, a Party not then in default
under this Agreement may notify the other Party, Escrow Holder, and Brokers, in
writing that, unless the Closing occurs within 5 business days following said
notice, the Escrow shall be deemed terminated without further notice or
instructions.

 

8.9 Except as otherwise provided herein, the termination of Escrow shall not
relieve or release either Party from any obligation to pay Escrow Holder’s fees
and costs or constitute a waiver, release or discharge of any breach or default
that has occurred in the performance of the obligations, agreements, covenants
or warranties contained therein.

 

8.10 If this Escrow is terminated for any reason other than Seller’s breach or
default, then at Seller’s request, and as a condition to the return of Buyer’s
deposit, Buyer shall within 5 days after written request deliver to Seller, at
no charge, copies of all surveys, engineering studies, soil reports, maps,
master plans, feasibility studies and other similar items prepared by or for
Buyer that pertain to the Property (the “Buyer’s Reports”). Buyer’s delivery of
the Buyer’s Reports, if any, shall be without representation or warranty of any
kind, whether express or implied, and Seller shall accept all risk with respect
to its use of the Buyer’s Reports. Including, without limitation, any inaccuracy
or incompleteness in the Buyer’s Reports. Provided, however, that Buyer shall
not be required to deliver any such report if the written contract which Buyer
entered into with the consultant who prepared such report specifically forbids
the dissemination of the report to others.

 

9. Contingencies to Closing.

 

9.1 The Closing of this transaction is contingent upon the satisfaction or
waiver of the following contingencies prior to the Inspection Deadline. IF BUYER
FAILS TO NOTIFY ESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID
CONTINGENCIES PRIOR TO THE INSPECTION DEADLINE (EXCEPT WITH RESPECT TO THE
BUYER’S CONTINGENCIES DESCRIBED IN SECTIONS 9.1(m), (n), (o) or (p), WHICH SHALL
BE GOVERNED BY WITHIN THE TIME SPECIFIED IN THOSE SECTIONS THEREIN), IT SHALL BE
CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT.
Buyer’s conditional approval shall constitute disapproval, unless provision is
made by the Seller within the time specified therefore by the Buyer in such
conditional approval or by this Agreement, whichever is later, for the
satisfaction of the condition imposed by the Buyer. Escrow Holder shall promptly
provide all Parties with copies of any written disapproval or conditional
approval which it receives. With regard to subparagraphs (a) through (i) the
pre-printed time periods shall control unless a different number of days is
inserted in the spaces provided.

 

(a) Disclosure. Seller shall make to Buyer, through escrow, all of the
applicable disclosures required by law (See AIR Commercial Real Estate
Association (“AIR”) standard form entitled “Seller’s Mandatory Disclosure
Statement”) and provide Buyer with a completed Property Information Sheet
(“Property Information Sheet”) concerning the Property, duly executed by or on
behalf of Seller in the current form or equivalent to that published by the AIR
within 10 or      days following the Date of Agreement. Buyer has 10 days from
the receipt of said disclosures to approve or disapprove the matters disclosed.

 

(b) Physical Inspection. Buyer has until the Inspection Deadline (as defined in
Paragraph 31 of the Addendum) 10 or      days from the receipt of the Property
Information Sheet or the Date of Agreement, whichever is later, to satisfy
itself with regard to the physical aspects and size of the Property.

 

(c) Hazardous Substance Conditions Report. Buyer has until the Inspection
Deadline 30 or      days from the receipt of the Property Information Sheet or
the Date of Agreement, whichever is later, to satisfy itself with regard to the
environmental aspects of the Property. Seller recommends that Buyer obtain a
Hazardous Substance Conditions Report concerning the Property and relevant
adjoining properties. Any such report shall be paid for by Buyer. A “Hazardous
Substance” for purposes of this Agreement is defined as any substance whose
nature and/or quantity of existence, use, manufacture, disposal or effect,
render it subject to Federal, state or local regulation, investigation,
remediation or removal as potentially injurious to public health or welfare. A
“Hazardous Substance Condition” for purposes of this Agreement is defined as the
existence on, under or relevantly adjacent to the Property of a Hazardous
Substance that would require remediation and/or removal under applicable
Federal, state or local law.

 

(d) Soil Inspection. Buyer has until the Inspection Deadline 30 or      days
from the receipt of the Property Information Sheet or the Date of Agreement,
whichever is later, to satisfy itself with regard to the condition of the soils
on the Property. Seller recommends that Buyer obtain a soil test report. Any
such report shall be paid for by Buyer. Seller shall provide Buyer copies of any
soils report that Seller may have within 10 days of the Date of Agreement.

 

(e) Governmental Approvals. Buyer has until the Inspection Deadline 30 or     
days from the Date of Agreement to satisfy itself with regard to approvals and
permits from governmental agencies or departments which have or may have
jurisdiction over the Property and which Buyer deems necessary or desirable in
connection with its intended use of the Property, including, but not limited to,
permits and approvals required with respect to zoning, planning, building and
safety, fire, police, handicapped and Americans with Disabilities Act
requirements, transportation and environmental matters.

 

(f) Conditions of Title. Escrow Holder shall cause a current commitment for
title insurance (“Title Commitment”) concerning the Property issued by the Title
Company, as well as legible copies of all documents referred to in the Title
Commitment (“Underlying Documents”) to be delivered to Buyer within 10 or 1 days
following the Date of Agreement. Buyer has until the Inspection Deadline 10 days
from the receipt of the Title Commitment and Underlying Documents to satisfy
itself with regard to the condition of title. The disapproval of Buyer of any
monetary encumbrance, which by the terms of this Agreement is not to remain
against the Property after the Closing, shall not be considered a failure of
this contingency, as Seller shall have the obligation, at Seller’s expense, to
satisfy and remove such disapproved monetary encumbrance at or before the
Closing.

 

(g) Survey. Buyer has until the Inspection Deadline 30 or      days from the
receipt of the Title Commitment and Underlying Documents to satisfy itself with
regard to any ALTA title supplement based upon a survey prepared to American
Land Title Association (“ALTA”) standards for an owner’s policy by a licensed
surveyor, showing the legal description and boundary lines of the Property, any
easements of record, and any improvements, poles, structures and things located
within 10 feet of either side of the Property boundary lines. Any such survey
shall be prepared at Buyer’s direction and expense. If Buyer has obtained a
survey and approved the ALTA title supplement, Buyer may elect within the period
allowed for Buyer’s approval of a survey to have an ALTA extended coverage
owner’s form of title policy, in which event Buyer shall pay any additional
premium attributable thereto.

 

(h) Existing Leases and Tenancy Statements. Seller shall within 10 or 1 days of
the Date of Agreement provide both Buyer and Escrow Holder with legible copies
of all leases, subleases or rental arrangements (collectively, “Existing
Leases”) affecting the Property, and with a copy of the Writ of Possession
(“Writ of Possession”) and Judgment for Possession issued in favour of Seller
against the existing tenant in the case captioned Rows Properties, Inc. vs.
S.T.L. Enterprises, Inc. et. al., Los Angeles Superior Court Case No. BC294182
(the “Action”) tenancy statement (“Estoppel Certificate”) in the latest form or
equivalent to that published by the AIR, executed by Seller and/or each tenant
and subtenant of the Property. Seller shall use its best efforts to have each
tenant complete and execute an Estoppel Certificate. If any tenant fails or
refuses to provide an Estoppel Certificate then Seller shall complete and
execute an Estoppel Certificate for that tenancy. Buyer has until the Inspection
Deadline 10 days from the receipt of said Existing Leases, Writ of Possession
and Judgment for Possession and Estoppel Certificates to satisfy itself with
regard to the Existing Leases and any other tenancy issues. See Paragraph 29 of
the Addendum.

 

(i) Other Agreements. Seller shall within 3 10 or      days of the Date of
Agreement provide Buyer with legible copies of all other agreements (“Other
Agreements”) known to Seller that will affect the Property after Closing,
together with all other documents and instruments required by Paragraph 30 of
the Addendum. Buyer has until the Inspection Deadline 10 days from the receipt
of said Other Agreements to satisfy itself with regard to such Agreements.

 

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(j) Financing. If paragraph 5 hereof dealing with a financing contingency has
not been stricken, the satisfaction or waiver of such New Loan contingency.

 

(k) Existing Notes. If paragraph 3.1(c) has not been stricken, Seller shall
within 10 or      days of the Date of Agreement provide Buyer with legible
copies of the Existing Notes, Existing Deeds of Trust and related agreements
(collectively, “Loan Documents”) to which the Property will remain subject after
the Closing. Escrow Holder shall promptly request from the holders of the
Existing Notes a beneficiary statement (“Beneficiary Statement”) confirming: (1)
the amount of the unpaid principal balance, the current interest rate, and the
date to which interest is paid, and (2) the nature and amount of any impounds
held by the beneficiary in connection with such loan. Buyer has 10 or      days
from the receipt of the Loan Documents and Beneficiary Statements to satisfy
itself with regard to such financing. Buyer’s obligation to close is conditioned
upon Buyer being able to purchase the Property without acceleration or change in
the terms of any Existing Notes or charges to Buyer except as otherwise provided
in this Agreement or approved by Buyer, provided, however, Buyer shall pay the
transfer fee referred to in paragraph 3.2 hereof.

 

(l) Personal Property. In the event that any personal property is included in
the Purchase Price, Buyer has 10 or      days from the Date of Agreement to
satisfy itself with regard to the title condition of such personal property.
Seller recommends that Buyer obtain a UCC-1 report. Any such report shall be
paid for by Buyer. Seller shall provide Buyer copies of any liens or
encumbrances affecting such personal property that it is aware of within 10 or
     days of the Date of Agreement.

 

(m) Destruction, Damage or Loss. There shall not have occurred prior to the
Closing, a destruction of, or damage or loss to, the Property or any portion
thereof, from any cause whatsoever, which would cost more than $10,000.00
$50,000.00 to repair or cure. If the cost of repair or cure is $10,000.00
$50,000.00 or less, Seller shall repair or cure the loss prior to the Closing.
Buyer shall have the option, within 10 days after receipt of written notice of a
loss costing more than $10,000.00 $50,000.00 to repair or cure, to either
terminate this transaction or to purchase the Property notwithstanding such
loss, but without deduction or offset against the Purchase Price as provided in
this clause (m). If the cost to repair or cure is more than $50,000 $10,000.00,
and Buyer does not elect to terminate this transaction, Buyer shall be entitled
to (i) any insurance proceeds applicable to such loss (including, without
limitation, Seller’s rental insurance, if any) and (ii) a deduction against the
Purchase Price in an amount equal to the deductible and any insurance proceeds
paid to Seller’s lenders. Unless otherwise notified in writing, Escrow Holder
shall assume no such destruction, damage or loss has occurred prior to Closing.

 

(n) Material Change. Buyer shall have 10 days following receipt of written
notice of a Material Change within which to satisfy itself with regard to such
change. “Material Change” shall mean a change in the status of the use,
occupancy, tenants, or condition of the Property that occurs after the date of
this offer and prior to the Closing that individually or in the aggregate
(together with all other changes) costs more than $50,000.00 to repair or cure.
Unless otherwise notified in writing, Escrow Holder shall assume that no
Material Change has occurred prior to the Closing.

 

(o) Seller Performance. The delivery of all documents and the due performance by
Seller of each and every undertaking and agreement to be performed by Seller
under this Agreement.

 

(p) Warranties. That each representation and warranty of Seller herein be true
and correct as of the Closing. Escrow Holder shall assume that this condition
has been satisfied unless notified to the contrary in writing by any Party prior
to the Closing.

 

(q) Brokerage Fee. Payment at the Closing of such brokerage fee as is specified
in this Agreement or later written instructions to Escrow Holder executed by
Seller and Brokers (“Brokerage Fee”). It is agreed by the Parties and Escrow
Holder that Brokers are a third party beneficiary of this Agreement insofar as
the Brokerage Fee is concerned, and that no change shall be made with respect to
the payment of the Brokerage Fee specified in this Agreement, without the
written consent of Brokers.

 

9.2 All of the contingencies specified in subparagraphs (a) through (p) of
paragraph 9.1, together with any contingencies contained in the Addendum, are
for the benefit of, and may be waived by, Buyer, and may be elsewhere herein
referred to as “Buyer Contingencies.”

 

9.3 If any Buyer’s Contingency or any other matter subject to Buyer’s approval
is disapproved as provided for herein in a timely manner (“Disapproved Item”),
Seller shall have the right within 10 days following the receipt of notice of
Buyer’s disapproval to elect to cure such Disapproved Item prior to the Expected
Closing Date (“Seller’s Election”). Seller’s failure to give to Buyer within
such period, written notice of Seller’s commitment to cure such Disapproved Item
on or before the Expected Closing Date shall be conclusively presumed to be
Seller’s Election not to cure such Disapproved Item. If Seller elects, either by
written notice or failure to give written notice, not to cure a Disapproved
Item, Buyer shall have the election, within 10 days after Seller’s Election to
either accept title to the Property subject to such Disapproved Item, or to
terminate this transaction. Buyer’s failure to notify Seller in writing of
Buyer’s election to accept title to the Property subject to the Disapproved Item
without deduction or offset shall constitute Buyer’s election to terminate this
transaction. Unless expressly provided otherwise herein, Seller’s right to cure
shall not apply to the remediation of Hazardous Substance Conditions or to the
Financing Contingency. Unless the Parties mutually instruct otherwise, if the
time periods for the satisfaction of contingencies or for Seller’s and Buyer’s
said Elections would expire on a date after the Expected Closing Date, the
Expected Closing Date shall be deemed extended for 3 business days following the
expiration of: (a) the applicable contingency period(s), (b) the period within
which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects
not to cure, the period within which Buyer may elect to proceed with this
transaction, whichever is later.

 

9.4 Buyer understands and agrees that until such time as all Buyer’s
Contingencies have been satisfied or waived, Seller and/or its agents may not
solicit, entertain and/or accept back-up offers to purchase the subject
Property.

 

9.5 The Parties acknowledge that extensive local, state and Federal legislation
establish broad liability upon owners and/or users of real property for the
investigation and remediation of Hazardous Substances. The determination of the
existence of a Hazardous Substance Condition and the evaluation of the impact of
such a condition are highly technical and beyond the expertise of Brokers. The
Parties acknowledge that they have been advised by Brokers to consult their own
technical and legal experts with respect to the possible presence of Hazardous
Substances on this Property or adjoining properties, and Buyer and Seller are
not relying upon any investigation by or statement of Brokers with respect
thereto. The Parties hereby assume all responsibility for the impact of such
Hazardous Substances upon their respective interests herein.

 

10. Documents Required at or before Closing:

 

10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated
Title Commitment concerning the Property from the Title Company and provide
copies thereof to each of the Parties.

 

10.2 Seller shall deliver to Escrow Holder in time for delivery to Buyer at the
Closing:

 

(a) Grant or general warranty deed, duly executed and in recordable form,
conveying fee title to the Property to Buyer.

 

(b) If applicable, the Beneficiary Statements concerning Existing Note(s).

 

(c) If applicable, the Existing Leases, the Writ of Possession and Judgment of
Possession and Other Agreements together with duly executed assignments thereof
by Seller and Buyer. The assignment of Existing Leases shall be on the most
recent Assignment and Assumption of Lessor’s Interest in Lease form published by
the AIR or its equivalent, except such assignment shall be without recourse to
Seller and shall in no event convey any right to rents arising thereunder for
periods prior to the closing (the “Pre-Closing Payments”). Seller retains all
rights to receive such Pre-Closing Payments from the current tenant (S.T.L.
Enterprises, Inc., T.M.W. Corporation dba Castle Precision Industries) (the
“Current Tenant”), its successors and assigns, to levy on any collateral
securing such Pre-Closing Payments and to enforce any judgment, right or remedy
to collect such Pre-Closing Payments; provided, however, that if (i) the Closing
occurs and (ii) Buyer and the Current Tenant enter into a new lease for the
Property, Seller shall be deemed to release the Current Tenant from, and be
precluded from seeking recovering with respect to, claims as provided in
Paragraph 29 of the Addendum.

 

(d) If applicable, Estoppel Certificates executed by Seller and/or the tenant(s)
of the Property.

 

(e) An affidavit executed by Seller to the effect that Seller is not a “foreign
person” within the meaning of Internal Revenue Code Section 1445 or successor
statutes. If Seller does not provide such affidavit in form reasonably
satisfactory to Buyer at least 3 business days prior to the Closing, Escrow
Holder shall at the Closing deduct from Seller’s proceeds and remit to Internal
Revenue Service such sum as is required by applicable Federal law with respect
to purchases from foreign sellers.

 

(f) If the Property is located in California, an affidavit executed by Seller to
the effect that Seller is not a “nonresident” within the meaning of California
Revenue and Tax Code Section 18662 or successor statutes. If Seller does not
provide such affidavit in form reasonably satisfactory to Buyer at least 3
business days prior to the Closing, Escrow Holder shall at the Closing deduct
from Seller’s proceeds and remit to the Franchise Tax Board such sum as is
required by such statute.

 

(g) If applicable, a bill of sale, duly executed, conveying title to any
included personal property to Buyer.

 

(h) If the Seller is a corporation, a duly executed corporate resolution
authorizing the execution of this Agreement and the sale of the Property.

 

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10.3 Buyer shall deliver to Seller through Escrow:

 

(a) The cash portion of the Purchase Price and such additional sums as are
required of Buyer under this Agreement shall be deposited by Buyer with Escrow
Holder, by federal funds wire transfer, or any other method acceptable to Escrow
Holder as immediately collectable funds, no later than 2:00 P.M. on the business
day prior to the Expected Closing Date.

 

(b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by
this Agreement, the duly executed originals of those documents, the Purchase
Money Deed of Trust being in recordable form, together with evidence of fire
insurance on the improvements in the amount of the full replacement cost naming
Seller as a mortgage loss payee, and a real estate tax service contract (at
Buyer’s expense), assuring Seller of notice of the status of payment of real
property taxes during the life of the Purchase Money Note.

 

(c) The Assignment and Assumption of Lessor’s Interest in Lease form specified
in paragraph 10.2(c) above, duly executed by Buyer.

 

(d) Assumptions duly executed by Buyer of the obligations of Seller that accrue
after Closing under any Other Agreements.

 

(e) If applicable, a written assumption duly executed by Buyer of the loan
documents with respect to Existing Notes.

 

(f) If the Buyer is a corporation, a duly executed corporate resolution
authorizing the execution of this Agreement and the purchase of the Property.

 

10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard
coverage (or ALTA extended, if elected pursuant to 9.1(g)) owner’s form policy
of title insurance effective as of the Closing, issued by the Title Company in
the full amount of the Purchase Price, insuring title to the Property vested in
Buyer, subject only to the exceptions approved by Buyer. In the event there is a
Purchase Money Deed of Trust in this transaction, the policy of title insurance
shall be a joint protection policy insuring both Buyer and Seller.

 

IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO
OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE
PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY
BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO
ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING.

 

11. Prorations and Adjustments.

 

11.1 Taxes. Applicable real property taxes and special assessment bonds shall be
prorated through Escrow as of the date of the Closing, based upon the latest tax
bill available. The Parties agree to prorate as of the Closing any taxes
assessed against the Property by supplemental bill levied by reason of events
occurring prior to the Closing. Payment of the prorated amount shall be made
promptly in cash upon receipt of a copy of any supplemental bill.

 

11.2 Insurance. WARNING: Any insurance which Seller maintained will terminate on
the Closing. Buyer is advised to obtain appropriate insurance to cover the
Property.

 

11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing
Notes, utilities, and operating expenses shall be prorated as of the date of
Closing. The Parties agree to promptly adjust between themselves outside of
Escrow any rents received after the Closing.

 

11.4 Security Deposit. Buyer acknowledges the Security Deposit under the
existing lease has been applied against past due rent and that no security
deposit adjustment shall occur at closing. Security Deposits held by Seller
shall be given to Buyer as a credit to the cash required of Buyer at the
Closing.

 

11.5 Post Closing Matters. Any item to be prorated that is not determined or
determinable at the Closing shall be promptly adjusted by the Parties by
appropriate cash payment outside of the Escrow when the amount due is
determined.

 

11.6 Variations in Existing Note Balances. In the event that Buyer is purchasing
the Property subject to an Existing Deed of Trust(s), and in the event that a
Beneficiary Statement as to the applicable Existing Note(s) discloses that the
unpaid principal balance of such Existing Note(s) at the Closing will be more or
less than the amount set forth in paragraph 3.1(c) hereof (“Existing Note
Variation”), then the Purchase Money Note(s) shall be reduced or increased by an
amount equal to such Existing Note Variation. If there is to be no Purchase
Money Note, the cash required at the Closing per paragraph 3.1(a) shall be
reduced or increased by the amount of such Existing Note Variation.

 

11.7 Variations in New Loan Balance. In the event Buyer is obtaining a New Loan
and the amount ultimately obtained exceeds the amount set forth in paragraph
5.1, then the amount of the Purchase Money Note, if any, shall be reduced by the
amount of such excess.

 

12. Representation and Warranties of Seller and Disclaimers.

 

12.1 Seller’s warranties and representations shall survive the Closing and
delivery of the deed for a period of one (1) year 3 years, and, are true,
material and relied upon by Buyer and Brokers in all respects. Seller hereby
makes the following warranties and representations to Buyer and Brokers:

 

(a) Authority of Seller. Seller is the owner of the Property and/or has the full
right, power and authority to sell, convey and transfer the Property to Buyer as
provided herein, and to perform Seller’s obligations hereunder.

 

(b) Maintenance During Escrow and Equipment Condition At Closing. Except as
otherwise provided in paragraph 9.1(m) hereof, Seller shall maintain the
Property until the Closing in its present condition, ordinary wear and tear
excepted. The HVAC, plumbing, elevators, loading doors and electrical systems
shall be in good operating order and condition at the time of Closing.

 

(c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as
otherwise disclosed to Buyer in writing, of the existence or prior existence on
the Property of any Hazardous Substance, nor of the existence or prior existence
of any above or below ground storage tank. Seller’s knowledge shall be deemed
limited to matters disclosed in the Phase I Environmental Site Assessment
prepared by Project Resources, Inc., dated December 13, 2001, the Phase II
Environmental Site Assessment Report dated December 31, 2001, the Phase I
Environmental Site Assessment Report dated July 2004, the Phase II Environmental
Site Assessment Report dated August 2004 (all three provided by Soils
Engineering, Inc.) and the results of the Los Angeles County Fire Department
work plan currently in progress, which reports and matters disclosed therein
have been provided to and deemed disclosed to Buyer in writing.

 

(d) Compliance. Seller has notified Buyer that Tenant has made certain
renovations and improvements without permits and without the consent of Seller
and Buyer shall have the opportunity to review such improvements and ascertain
any risk associated with the same during the physical inspection under Section
9.1B. Seller has provided Buyer with a copy of an Order to Comply dated April
29, 2004 (“Order”). Seller shall provide Buyer with copies of all documents and
other information in Seller’s possession or control which relate to the
non-permitted and/or non-approved renovations and improvements. Buyer shall have
until the Inspection Deadline to satisfy itself with regard to all issues
related to said renovations and improvements. Seller has no knowledge of any
aspect or condition of the Property which violates applicable laws, rules,
regulations, codes or covenants, conditions or restrictions, or of improvements
or alterations made to the Property without a permit where one was required, or
of any unfulfilled order or directive of any applicable governmental agency or
casualty insurance company requiring any investigation, remediation, repair,
maintenance or improvement be performed on the Property.

 

(e) Changes in Agreements. Prior to the Closing, Seller will not violate or
modify any Existing Lease or Other Agreement, or create any new leases or other
agreements affecting the Property, without Buyer’s written approval, which
approval will not be unreasonably withheld.

 

(f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing,
have any right to possession of the Property, except as disclosed by this
Agreement or otherwise in writing to Buyer.

 

(g) Mechanics’ Liens. There are no unsatisfied mechanics’ or materialmens’ lien
rights concerning the Property.

 

(h) Actions, Suits or Proceedings. Seller has no knowledge of any actions, suits
or proceedings pending or threatened before any commission, board, bureau,
agency, arbitrator, court or tribunal that would affect the Property or the
right to occupy or utilize same, except for the order and except for judgment
entered against Tenant and in favor of Seller in the Action and Writ of
Possession issued pursuant to said Judgment for Possession.

 

(i) Notice of Changes. Seller will promptly notify Buyer and Brokers in writing
of any Material Change (see paragraph 9.1(n)) affecting the Property that
becomes known to Seller prior to the Closing.

 

(j) No Tenant Bankruptcy Proceedings. As of the date of this contract, Seller
has no notice or knowledge that any tenant of the Property is the subject of a
bankruptcy or insolvency proceeding.

 

(k) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy,
insolvency or probate proceeding nor is Seller insolvent as of the execution of
the Agreement.

 

(l) Personal Property. Seller has no knowledge that anyone will, at the Closing,
have any right to possession of any personal property included in the Purchase
Price nor knowledge of any liens or encumbrances affecting such personal
property, except as disclosed by this Agreement or otherwise in writing to
Buyer.

 

12.2 Buyer hereby acknowledges that, except as otherwise stated in this
Agreement, Buyer is purchasing the Property in its existing condition and will,
by the time called for herein, make or have waived all inspections of the
Property Buyer believes are necessary to protect its own interest in, and its
contemplated use of, the Property. The Parties acknowledge that, except as
otherwise stated in this Agreement, no representations, inducements, promises,
agreements, assurances, oral or written, concerning the Property, or any aspect
of the occupational safety and health laws, Hazardous Substance laws, or any
other act, ordinance or law, have been made by either Party or Brokers, or
relied upon by either Party hereto.

 

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12.3 In the event that Buyer learns that a Seller representation or warranty
might be untrue prior to the Closing, and Buyer elects to purchase the Property
anyway then, and in that event, Buyer waives any right that it may have to bring
an action or proceeding against Seller or Brokers regarding said representation
or warranty.

 

12.4 Any environmental reports, soils reports, surveys, and other similar
documents which were prepared by third party consultants and provided to Buyer
by Seller or Seller’s representatives, have been delivered as an accommodation
to Buyer and without any representation or warranty as to the sufficiency,
accuracy, completeness, and/or validity of said documents, all of which Buyer
relies on at its own risk. Seller believes said documents to be accurate, but
Buyer is advised to retain appropriate consultants to review said documents and
investigate the Property.

 

13. Possession.

 

Possession of the Property shall be given to Buyer at the Closing subject to the
rights of tenants under Existing Leases.

 

14. Buyer’s Entry.

 

At any time during the Escrow period, Buyer, and its agents and representatives,
shall have the right at reasonable times and subject to rights of tenants, to
enter upon the Property for the purpose of making inspections and tests
specified in this Agreement. No destructive testing shall be conducted, however,
without Seller’s prior approval which shall not be unreasonably withheld.
Following any such entry or work, unless otherwise directed in writing by
Seller, Buyer shall return the Property to the condition it was in prior to such
entry or work, including the recompaction or removal of any disrupted soil or
material as Seller may reasonably direct. All such inspections and tests and any
other work conducted or materials furnished with respect to the Property by or
for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify,
defend, protect and hold harmless Seller and the Property of and from any and
all claims, liabilities, losses, expenses (including reasonable attorneys’
fees), damages, including those for injury to person or property, arising out of
or relating to any such work or materials or the acts or omissions of Buyer, its
agents or employees in connection therewith: provided, however, that Buyer shall
have no obligation to indemnify, defend, protect or hold Seller of the Property
harmless from any conditions which already exist on, under or about the Property
which are discovered as a result of such acts or omissions of Buyer, its agents
or employees in connection therewith.

 

15. Further Documents and Assurances.

 

The Parties shall each, diligently and in good faith, undertake all actions and
procedures reasonably required to place the Escrow in condition for Closing as
and when required by this Agreement. The Parties agree to provide all further
information, and to execute and deliver all further documents, reasonably
required by Escrow Holder or the Title Company.

 

16. Attorneys’ Fees.

 

If any Party or Broker brings an action or proceeding (including arbitration)
involving the Property whether founded in tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys’ fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of its claim or defense. The attorneys’ fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys’ fees reasonably incurred.

 

17. Prior Agreements/Amendments.

 

17.1 This Agreement supersedes any and all prior agreements between Seller and
Buyer regarding the Property.

 

17.2 Amendments to this Agreement are effective only if made in writing and
executed by Buyer and Seller.

 

18. Broker’s Rights.

 

18.1 If this sale is not consummated due to the default of either the Buyer or
Seller, the defaulting Party shall be liable to and shall pay to Brokers the
Brokerage Fee that Brokers would have received had the sale been consummated. If
Buyer is the defaulting party, payment of said Brokerage Fee is in addition to
any obligation with respect to liquidated or other damages.

 

18.2 Upon the Closing, Brokers are authorized to publicize the facts of this
transaction.

 

19. Notices.

 

19.1 Whenever any Party, or Escrow Holder or Brokers herein shall desire to give
or serve any notice, demand, request, approval, disapproval or other
communication, each such communication shall be in writing and shall be
delivered personally, by messenger or by mail, postage prepaid, to the address
set forth in this Agreement or by facsimile transmission.

 

19.2 Service of any such communication shall be deemed made on the date of
actual receipt if personally delivered. Any such communication sent by regular
mail shall be deemed given 48 hours after the same is mailed. Communications
sent by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed delivered 24 hours after delivery of the same to the
Postal Service or courier. Communications transmitted by facsimile transmission
shall be deemed delivered upon telephonic confirmation of receipt (confirmation
report from fax machine is sufficient), provided a copy is also delivered via
delivery or mail. If such communication is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.

 

19.3 Any Party or Broker hereto may from time to time, by notice in writing,
designate a different address to which, or a different person or additional
persons to whom, all communications are thereafter to be made.

 

20. Duration of Offer.

 

20.1 If this offer is not accepted by Seller on or before 5:00 P.M. according to
the time standard applicable to the city of

 

Los Angeles on the date of November 30, 2004 it shall be deemed automatically
revoked.

 

20.2 The acceptance of this offer, or of any subsequent counteroffer hereto,
that creates an agreement between the Parties as described in paragraph 1.2,
shall be deemed made upon delivery to the other Party or either Broker herein of
a duly executed writing unconditionally accepting the last outstanding offer or
counteroffer.

 

21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if
initialed by both Parties).

 

THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX,
PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY
SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.
THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES PROVIDED
FOR THE BUYER’S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED
TO LIQUIDATED DAMAGES IN THE AMOUNT OF $ 200,000.00 . UPON PAYMENT OF SAID SUM
TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY
ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER.

 

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Buyer Initials

  

Seller Initials

 

22. ARBITRATION OF DISPUTES. (This Arbitration of Disputes paragraph is
applicable only if initialed by both Parties.)

 

22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO THE LIQUIDATED DAMAGES
AND/OR BUYER IS ENTITLED TO THE RETURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY
BINDING ARBITRATION BY, AND UNDER THE COMMERCIAL RULES OF THE AMERICAN
ARBITRATION ASSOCIATION (“COMMERCIAL RULES”). ARBITRATION HEARINGS SHALL BE HELD
IN THE COUNTY WHERE THE PROPERTY IS LOCATED. ANY SUCH CONTROVERSY SHALL BE
ARBITRATED BY 3 ARBITRATORS WHO SHALL BE IMPARTIAL REAL ESTATE BROKERS WITH AT
LEAST 5 YEARS OF FULL TIME EXPERIENCE IN BOTH THE AREA WHERE THE PROPERTY IS
LOCATED AND THE TYPE OF REAL ESTATE THAT IS THE SUBJECT OF THIS AGREEMENT. THEY
SHALL BE APPOINTED UNDER THE COMMERCIAL RULES. THE ARBITRATORS SHALL HEAR AND
DETERMINE SAID CONTROVERSY IN ACCORDANCE WITH APPLICABLE LAW, THE INTENTION OF
THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON
THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING. PRE-ARBITRATION DISCOVERY SHALL
BE PERMITTED IN ACCORDANCE WITH THE COMMERCIAL

 

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RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE AWARD SHALL BE
EXECUTED BY AT LEAST 2 OF THE 3 ARBITRATORS, BE RENDERED WITHIN 30 DAYS AFTER
THE CONCLUSION OF THE HEARING, AND MAY INCLUDE ATTORNEYS’ FEES AND COSTS TO THE
PREVAILING PARTY PER PARAGRAPH 16 HEREOF. JUDGMENT MAY BE ENTERED ON THE AWARD
IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY
DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT.

 

22.2 BUYER’S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL
NOT BAR SUIT IN A COURT OF COMPETENT JURISDICTION BY THE BUYER FOR DAMAGES
AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD
TO THE SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A
BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE.

 

22.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES”
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY
INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.

 

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION TO
NEUTRAL ARBITRATION.

 

 

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Buyer Initials

  

Seller Initials

 

23. Miscellaneous.

 

23.1 Binding Effect. This Agreement shall be binding on the Parties without
regard to whether or not paragraphs 21 and 22 are initialed by both of the
Parties. Paragraphs 21 and 22 are each incorporated into this Agreement only if
initialed by both Parties at the time that the Agreement is executed.

 

23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is
amended to refer to, the laws of the state in which the Property is located.

 

23.3 Time of Essence. Time is of the essence of this Agreement.

 

23.4 Counterparts. This Agreement may be executed by Buyer and Seller in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Escrow Holder, after
verifying that the counterparts are identical except for the signatures, is
authorized and instructed to combine the signed signature pages on one of the
counterparts, which shall then constitute the Agreement.

 

23.5 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT
OF THIS AGREEMENT.

 

23.6 Conflict. Any conflict between the printed provisions of this Agreement and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.

 

24. Disclosures Regarding The Nature of a Real Estate Agency Relationship.

 

24.1 The Parties and Brokers agree that their relationship(s) shall be governed
by the principles set forth in the applicable sections of the California Civil
Code, as summarized in paragraph 24.2.

 

24.2 When entering into a discussion with a real estate agent regarding a real
estate transaction, a Buyer or Seller should from the outset understand what
type of agency relationship or representation it has with the agent or agents in
the transaction. Buyer and Seller acknowledge being advised by the Brokers in
this transaction, as follows:

 

(a) Seller’s Agent. A Seller’s agent under a listing agreement with the Seller
acts as the agent for the Seller only. A Seller’s agent or subagent has the
following affirmative obligations: (1) To the Seller: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the
Buyer and the Seller: a. Diligent exercise of reasonable skills and care in
performance of the agent’s duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to
reveal to either Party any confidential information obtained from the other
Party which does not involve the affirmative duties set forth above.

 

(b) Buyer’s Agent. A selling agent can, with a Buyer’s consent, agree to act as
agent for the Buyer only. In these situations, the agent is not the Seller’s
agent, even if by agreement the agent may receive compensation for services
rendered, either in full or in part from the Seller. An agent acting only for a
Buyer has the following affirmative obligations. (1) To the Buyer: A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer.
(2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and
care in performance of the agent’s duties. b. A duty of honest and fair dealing
and good faith. c. A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Party any confidential information obtained from
the other Party which does not involve the affirmative duties set forth above.

 

(c) Agent Representing Both Seller and Buyer. A real estate agent, either acting
directly or through one or more associate licenses, can legally be the agent of
both the Seller and the Buyer in a transaction, but only with the knowledge and
consent of both the Seller and the Buyer. (1) In a dual agency situation, the
agent has the following affirmative obligations to both the Seller and the
Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the
dealings with either Seller or the Buyer. b. Other duties to the Seller and the
Buyer as stated above in their respective sections (a) or (b) of this paragraph
24.2. (2) In representing both Seller and Buyer, the agent may not without the
express permission of the respective Party, disclose to the other Party that the
Seller will accept a price less than the listing price or that the Buyer will
pay a price greater than the price offered. (3) The above duties of the agent in
a real estate transaction do not relieve a Seller or Buyer from the
responsibility to protect their own interests. Buyer and Seller should carefully
read all agreements to assure that they adequately express their understanding
of the transaction. A real estate agent is a person qualified to advise about
real estate. If legal or tax advice is desired, consult a competent
professional.

 

(d) Further Disclosures. Throughout this transaction Buyer and Seller may
receive more than one disclosure, depending upon the number of agents assisting
in the transaction. Buyer and Seller should each read its contents each time it
is presented, considering the relationship between them and the real estate
agent in this transaction and that disclosure. Brokers have no responsibility
with respect to any default or breach hereof by either Party. The liability
(including court costs and attorneys’ fees), of any Broker with respect to any
breach of duty, error or omission relating to this Agreement shall not exceed
the fee received by such Broker pursuant to this Agreement; provided, however,
that the foregoing limitation on each Broker’s liability shall not be applicable
to any gross negligence or willful misconduct of such Broker.

 

24.3 Confidential Information: Buyer and Seller agree to identify to Brokers as
“Confidential” any communication or information given Brokers that is considered
by such Party to be confidential.

 

25.    Construction of Agreement. In construing this Agreement, all headings and
titles are for the convenience of the parties only and shall not be considered a
part of this Agreement. Whenever required by the context, the singular shall
include the plural and vice versa. Unless otherwise specifically indicated to
the contrary, the word “days” as used in this Agreement shall mean and refer to
calendar days. This Agreement shall not be construed as if prepared by one of
the parties, but rather according to its fair meaning as a whole, as if both
parties had prepared it.

 

26    Additional Provisions:

 

Additional provisions of this offer, if any, are as follows or are attached
hereto by an addendum consisting of paragraphs 28 through 37. (If there are no
additional provisions write “NONE”.)

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

_________________________________________________________________________________________________________________________________________________________________________________________________________

 

 

 

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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL
REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:

 

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
AGREEMENT.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND
CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE
PROPERTY FOR BUYER’S INTENDED USE.

 

WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF
THE STATE IN WHICH THE PROPERTY IS LOCATED.

 

NOTE:

 

1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY.

2. IF THE BUYER IS A CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE
SIGNED BY TWO CORPORATE OF OFFICERS.

 

The undersigned Buyer offers and agrees to buy the Property on the terms and
conditions stated and acknowledges receipt of a copy hereof.

 

BROKER:   BUYER:

CB Richard Ellis, Inc.

 

Rexford Industrial, LLC

Attn: David M. Harding

 

By: /s/ Howard Schwimmer                        

Title: First Vice President

 

Date: 11/29/2004                                           

Address: 505 N. Brand Blvd., #100

Glendale, CA 91203

 

Name Printed: Howard Schwimmer

Telephone: (818) 502-6731

 

Title: Managing Member

Facsimile: (818) 243-6069

 

Telephone: (        )                                          

Federal ID No.                                          

 

Facsimile: (        )                                            

                       

By:                                                                   

        

Date:                                                                 

        

Name Printed:                                                  

        

Title:                                                                 

        

Address: 11601 Wilshire Blvd., # 650

Los Angeles, CA 90025

        

Telephone: (310) 966-1680

        

Facsimile: (310) 966-1690

        

Federal ID No.                                                  

 

27. Acceptance.

 

27.1 Seller accepts the foregoing offer to purchase the Property and hereby
agrees to sell the Property to Buyer on the terms and conditions therein
specified.

 

27.2 Seller acknowledges that Brokers have been retained to locate a Buyer and
are the procuring cause of the purchase and sale of the Property set forth in
this Agreement. In consideration of real estate brokerage service rendered by
Brokers, Seller agrees to pay Brokers a real estate Brokerage Fee in a sum equal
to 5 % of the Purchase Price divided in such shares as said Brokers shall direct
in writing. This Agreement shall serve as an irrevocable instruction to Escrow
Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the
account of Seller at the Closing.

 

27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to
deliver a signed copy to Buyer.

 

NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY
SELLER UNDER THIS AGREEMENT.

 

BROKER:   SELLER:

CB Richard Ellis, Inc.

 

Rowe Properties Sylmar, Inc.

Attn: Greg Geraci

 

By: /s/ Gerald M. Birnbach                            

Title: First Vice President

 

Date: 11/30/04                                                   

Address: 505 N. Brand Blvd., # 100

Glendale, CA 91203

 

Name Printed: Gerald M. Birnbach

Telephone: (818) 502-6741

 

Title: Chairman of the Board

Facsimile: (818) 243-6069

 

Telephone: (        )                                 

Federal ID No.                                              

 

Facsimile: (        )                                  

        

 

By:                                                                      

        

Date:                                                                   

        

Name Printed:                                                    

        

Title:                                              

        

Address: 2121 Gardner Street

Elliston, VA 24087

        

Telephone: (540) 444-7693

        

Facsimile: (540) 444-5014

        

Federal ID No:                                              

 

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These forms are often modified to meet changing requirements of law and needs of
the industry. Always write or call to make sure you are utilizing the most
current form: AIR Commercial Real Estate Association, 700 South Flower Street,
Suite 600, Los Angeles, CA 90017. (213)687-8777.

 

© Copyright 2000 By AIR Commercial Real Estate Association.

 

All rights reserved.

 

No part of these works may be reproduced in any form without permission in
writing.

 

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ADDENDUM TO STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS

FOR PURCHASE OF REAL ESTATE

 

This Addendum to the Standard Offer, Agreement and Escrow Instructions for
Purchase of Real Estate (Non-Residential)(this “Addendum”) is entered into by
and between Rowe Properties Sylmar, Inc. (“Seller”), and Rexford Industrial,
LLC, a California limited liability company (“Buyer”), and dated for reference
purposes only as of the date set forth in the first page of the form agreement
to which this Addendum is attached (the “Form Agreement”). The promises,
covenants, agreements and declarations contained in this Addendum are intended
to and shall have the same force and effect as if set forth in the body of the
Form Agreement. To the extent that the provisions of this Addendum are
inconsistent with the terms and conditions of the Form Agreement, the provisions
of this Addendum shall control. Except for purposes of determining whether a
conflict exists between the Form Agreement and this Addendum, the term
“Agreement” (as used herein and in the Form Agreement) shall include the
provisions of this Addendum.

 

28. AS IS:

 

Except for the express representations and warranties of Seller set forth in
Paragraph 12, Buyer is acquiring the Property “As Is” without any representation
or warranty of Seller, express, implied or statutory, as to the nature or
condition of or title to the Property or its fitness for Buyer’s intended use of
same. As of the Expected Closing Date, Buyer will be familiar with the Property
and, per Paragraph 9, is handling its own investigations to satisfy itself as to
the condition of the Property. Except for the express representations and
warranties of Seller, all risks related to condition of the property shall be
assumed by Buyer as of the Closing.

 

29. EXISTING LEASES AND TENANCY STATEMENTS (continued):

 

Buyer acknowledges that the existing lease has been terminated and that the
Current Tenant (as defined in Paragraph 12.(c) of the Form Agreement) is a
tenant at sufferance subject to the Writ of Possession. Seller reserves the
right to exercise the Writ of Possession to protect or preserve its right to
collateral for rent and other sums past due and owing and to protect and
preserve the Property. However, Seller acknowledges that Buyer intends to enter
into a lease for the Property with the Current Tenant, which lease shall
commence, if at all, on or after the date of the Closing (such lease being null,
void and of no force or effect if the Closing does not occur). If the “Current
Tenant Release Conditions” (as defined below) are satisfied, then Seller shall
immediately and automatically (without any further action by Seller, Buyer or
Current Tenant) be deemed to have released any and all claims it has, or may
have, against Current Tenant, and Seller shall no longer have any right to
pursue claims against Current Tenant; provided, however, that in no event shall
Seller be deemed to release (and Seller expressly reserves all rights with
respect to) claims for indemnity and/or defense by the Current Tenant for (i)
any liability, claim, demand, action, damage or cost (including attorneys’ fees,
costs and expenses) which Seller hereafter suffers or incurs (i) to third
parties that not affiliated with Seller and (ii) in connection with the
presence, release or abatement of Hazardous Substances now or hereafter existing
on our about the Property. Subject to Seller’s reservation of claims under the
immediately preceding sentence, Seller’s release of the Current Tenant, if
applicable, shall include, without limitation, (i) real estate taxes (estimated
to be $44,729), (ii) unpaid rent accruing prior to March 31,2004 (estimated to
be $121,995.96), and (iii) unpaid occupany/use from April 1, 2004 through and
including August 6, 2004 (estimated to be $73,500.00).

 

“Current Tenant Release Conditions” means that all of the following three
conditions have been satisfied:

 

(a) The Closing occurs;

 

(b) Buyer shall have entered into a lease with the Current Tenant with respect
to the Property, which lease shall commence, if at all, on or after the date of
the Closing (such lease being null, void and of no force or effect if the
Closing does not occur);

 

(c) Current Tenant shall pay to Seller twenty thousand dollars ($20,000.00) on
the first (1st) and fifteenth (15th) day of each and every calendar month
commencing on December 1st and continuing through and including the Closing.
Seller and Buyer agree that Current Tenant’s twenty thousand dollar ($20,000.00)
payments shall, as between Seller and Buyer, be subject to adjustment as
provided in Paragraph 11.3 of the Form Agreement as if the same were rent
payments by Current Tenant. If the Current Tenant fails to make any of the
payments described in this clause (c), then Seller shall give prompt written
notice of such failure to both Seller and the Current Tenant. If the Current
Tenant tenders payment of the delinquent payment to Seller within one (1)
business day of the date on which Current Tenant receives such written notice
from Seller, then the Current Tenant shall be deemed to have made its payment
timely for purposes of this clause (c); and

 

(d) Current Tenant shall pay to Seller at or prior to the Closing the
outstanding amounts owed for the cost of remediation of any Hazardous
Substances, including the remediation implemented to comply with the Los Angeles
Fire Department Work Plan currently in process, which cost is estimated to be
thirty thousand dollars ($30,000.00). Seller agrees that

--------------------------------------------------------------------------------

(i) Current Tenant previously paid to Seller two payments of twenty-five
thousand dollar ($25,000.00) each on November 1, 2004 and November 15, 2004 and
(ii) if the Current Tenant Release Conditions are satisfied, Seller shall apply
ten thousand dollars ($10,000.00) of such payments towards the amounts to be
paid by Current Tenant with respect to Hazardous Substances as provided in this
clause (d).

 

Seller may, in its sole and absolute discretion, waive any one or more of the
Current Tenant Release Conditions, but no waiver will be effective unless
evidenced by a written instrument executed by Seller.

 

Seller shall deliver a written certification to Buyer through Escrow at the
Closing stating whether or not the Current Tenant Release Conditions have been
satisfied or waived, which certification shall be binding on Seller. If such
certification by Seller states that the Current Tenant Release Conditions have
not been satisfied, then Seller shall upon request by Buyer (which request may
be delivered after the Closing) assign to Buyer all of Seller’s right, title and
interest in and to those claims which Buyer is legally required to possess in
order to enforce or otherwise implement the Writ of Possession (as defined in
Paragraph 9.1(h) of the Form Agreement); provided, however, that if Seller must
reserve such claims to enforce its rights against Current Tenant, then Seller
shall upon request by Buyer (which request may be delivered after the Closing)
instead enforce the Writ of Possession for Buyer’s benefit. If Seller enforces
the Writ of Possession for Buyer’s benefit, then Buyer shall reimburse Seller
for the reasonable costs and expenses of doing so.

 

30. BUYER CONTINGENCIES

 

Without limiting the provisions of Paragraph 9.1 of the Form Agreement, the
satisfaction of all of following shall also constitute “Buyer’s Contingencies”
(and Seller hereby commits to make the deliveries described in clause (r)
through and including clause (w) below, but only to the extent the materials
described in those clauses are in Seller’s possession or control):

 

(r) Within three (3) days following the Date of Agreement, Seller shall deliver
to Buyer copies of all contracts, leases and service agreements affecting the
Property;

 

(s) Within three (3) days following the Date of Agreement, Seller shall deliver
to Buyer (i) operating history statements detailing, among other things, income,
expenses and capital expenditures, (ii) a list of capital improvements
completed, (iii) copies of insurance and billing statements therefor, (iv) real
estate and personal property tax bills, and (iv) utility bills, in each case for
the calendar year which includes the Date of Agreement and calendar years 2001,
2002 and 2003;

 

(t) Within three (3) days following the Date of Agreement, Seller shall deliver
to Buyer a detailed list of all personal property used or useful in connection
with the operation of the Property, together with all personal property tax
bills, if any, applicable to such personal property (to the extent such billings
are not already required under clause (s) above);

 

(u) Within three (3) days following the Date of Agreement, Seller shall deliver
to Buyer copies of valid five-year fire sprinkler certifications and all
warranties applicable to the improvements, mechanical, life safety, HVAC, and
other systems and equipment used or useful in connection with the Property

 

(v) Within three (3) days following the Date of Agreement, Seller shall deliver
to Buyer any building plans (including, without limitation, “As-Built” plans)
and surveys;

 

(w) Within three (3) days following the Date of Agreement, Seller shall deliver
to Buyer copies of all geotechnical soils reports, environmental reports,
miscellaneous consultants’ reports, surveys and all other reports pertaining to
the Property; and

 

(x) Buyer’s confirmation by or before the Inspection Deadline of:

 

(i) the terms of the Judgment for Possession, affording Seller (and by
substitution as plaintiff, Buyer) the right to recover possession of the
Property by Writ of Execution for Possession; and

 

(ii) the assignability and assignment to Buyer (or in lieu thereof, substitution
of Buyer for Seller as plaintiff) of the Judgment for Possession and related
enforcement rights (including the Writ of Execution for Possession), or the
Buyer’s agreement to an assignment of the same, or the Buyer’s agreement to a
grant of eviction rights to Buyer similar to those set forth in the Judgment of
Seller.

 

For purposes of this Agreement, matters shall be deemed to be within Seller’s
“possession” or “control” if the particular item is in the possession of any of
Seller’s (i) principals, officers,

--------------------------------------------------------------------------------

directors, or employees (or any of their respective family members or
affiliates) or (ii) agents, representatives or independent contractors with whom
Seller has an ongoing working relationship (or has had such a relationship
within twelve months from the Date of Agreement).

 

31. INSPECTION PERIOD

 

Notwithstanding anything to the contrary contained in the Form Agreement, Buyer
shall have until twenty-one (21) days following the Date of Agreement (the
“Inspection Deadline”) to approve or disapprove the any matter concerning the
Property or this transaction (including, without limitation, the inspections
described in Paragraph 9 of the Form Agreement and the Buyer’s Contingencies
listed in Paragraph 30 of this Addendum), in Buyer’s sole and absolute
discretion. In the event that Buyer notifies Seller before the Inspection
Deadline of Buyer’s disapproval of any matter concerning the Property or this
transaction, this Agreement shall terminate, the Deposit shall immediately be
returned to Buyer, and no further obligations shall exist between the parties,
except as expressly provided in this Agreement. Notwithstanding anything to the
contrary contained in the Form Agreement, Seller shall have no right to cure any
matter disapproved by Buyer, unless Buyer consents to such cure, in its sole and
absolute discretion. The preceding sentence is not intended to impose any
obligation upon Seller to cure matters disapproved by Buyer if such obligation
to cure is not imposed elsewhere in this Agreement. Without limiting Buyer’s
other inspection rights under the Form Agreement, Seller, between the Date of
Agreement and the Closing or the earlier termination of this Agreement, shall
permit the Buyer and its representatives and consultants to access the Property
and Seller’s office(s) for the purpose of conducting Buyer’s investigation of
the Property and Seller’s books and records concerning the Property.

 

32. BUYER RELEASE:

 

Except for representations and warranties which by their terms survive closing,
Buyer releases Seller from any and all claims effective on the Closing Date.
Among those matters which survive the closing are any intentional or willful
misrepresentations or non-disclosures by Seller.

 

33. PHYSICAL INSPECTION:

 

Without limiting any other rights of inspection of Buyer pursuant to the Form
Agreement, the Buyer shall have the right to conduct such soils tests,
engineering studies and such feasibility and other studies regarding the
condition of the property as it considers prudent at a mutually convenient time
upon two (2) business days prior written notice to Seller after Buyer has named,
or caused its agents to name, Seller as an additional insured on a $2,000,000
combined, single limit, comprehensive general public liability insurance policy
issued by a licensed insurance company reasonably acceptable to Seller.

 

34. ASSIGNMENT; EXCHANGE.

 

This Agreement shall be binding upon and shall inure to the benefit of Seller
and Buyer and their respective successors and assigns. Buyer’s rights under this
Agreement shall be assignable to any entity owned or controlled by, or under
common control with, the originally named Buyer (or any persons or entities that
own or control said originally named Buyer).

 

Either party may decide to have this transaction qualify as part of a tax
deferred exchange under Section 1031 of the Internal Revenue Code, in which case
the other party agrees to cooperate with such exchange; provided, however, the
exchanging party(ies) shall indemnify and hold the non-exchanging parties
harmless from any additional third party cost or expense incurred in connection
with such exchange, and no party will be required to any way act as a purchaser
or seller of any property other than the Property. This indemnity and
hold-harmless shall survive the close of Escrow. The inability of any party to
effect an exchange shall not relieve that party of its obligation to conclude
the transactions contemplated by this Agreement. Subject to the preceding, this
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, successors and assigns.

 

35. INTERPRETATION; FACSIMILE EXCUTION.

 

This Agreement shall be deemed to have been drafted by both parties and shall
not be interpreted against any person as drafter. In addition, prior drafts of
this Agreement shall not be used in any way to interpret the provisions hereof.
A signature on this Agreement transmitted by facsimile shall be deemed the
equivalent of an original “wet” ink signature for all purposes.

 

36. CONDITION AND AVAILABILITY OF ELECTRICAL SERVICES.

 

Buyer acknowledges that all existing electrical services may or may not contain
amperage as stated on the power services panel within the Property and/or on the
marketing brochures prepared by Broker. Buyer shall satisfy itself with respect
to the presence and/or the availability of such electrical services with Buyer’s
electrical contractor and/or with the appropriate city officials or other such
applicable utilities service company.

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37. NOTICE TO OWNERS AND PROSPECTIVE TENANTS AND BUYERS OF REAL PROPERTY
REGARDING THE AMERICANS WITH DISABILITIES ACT.

 

An owner or tenant of real property may be subject to the Americans With
Disabilities Act (the “ADA”), a Federal law codified at 42 USC Section 12101 et
seq.

 

Among requirements of the ADA that could apply to your property, Title III of
the ADA requires owners and tenants of “public accommodations” to remove
barriers to access by disabled persons and provide auxiliary aid and services
for hearing, vision or speech impaired persons on or before January 26, 1992.
The regulations under Title III of the ADA are codified at 28 CFR Part 36.

 

Buyer shall satisfy itself with respect to the impact, if any, which the ADA and
the regulations, and, if appropriate, will have on the Property and Buyer’s
proposed use thereof.

 

[SIGNATURE PAGE FOLLOWS]

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BUYER:   SELLER:

REXFORD INDUSTRIAL, LLC, a

California limited liability company

 

ROWE PROPERTIES SYLMAR, INC., a

California corporation

By:  

/s/ Howard Schwimmer

--------------------------------------------------------------------------------

  By:  

/s/ Gerald M. Birnbach

--------------------------------------------------------------------------------

   

Howard Schwimmer,

Managing Member

  Name Printed:  

Gerald M. Birnbach

--------------------------------------------------------------------------------

Date:  

11/29/04

--------------------------------------------------------------------------------

  Its:  

--------------------------------------------------------------------------------

        Date:  

11/30/04

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