Exhibit 10.1
PURCHASE AND SALE AGREEMENT
REGARDING
MORENO MARKETPLACE SHOPPING CENTER
IN THE CITY OF MORENO VALLEY,
COUNTY OF RIVERSIDE

 

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PURCHASE AND SALE AGREEMENT
TABLE OF CONTENTS

     
Section 1.
  Definitions
Section 2.
  Purchase and Sale
Section 3.
  Purchase Price
Section 4.
  Deposit
Section 5.
  Liquidated Damages
Section 6.
  Conditions Precedent
Section 7.
  Representations and Warranties
Section 8.
  Indemnification
Section 9.
  Covenants
Section 10.
  AS-IS, WHERE-IS Provision
Section 11.
  Escrow
Section 12.
  Closing Funds
Section 13.
  Closing Costs
Section 14.
  Prorations
Section 15.
  Investigations
Section 16.
  Further Assurances
Section 17.
  Assignment
Section 18.
  Successors and Assigns
Section 19.
  Notices
Section 20.
  Possession
Section 21.
  Attorney’s Fees; Litigation Costs
Section 22.
  Time of the Essence
Section 23.
  Construction
Section 24.
  Integration
Section 25.
  Third-Party Rights
Section 26.
  Severability
Section 27.
  Waivers
Section 28.
  Counterparts
Section 29.
  Survival
Section 30.
  Incorporation of Exhibits
Section 31.
  Offer and Acceptance
Section 32.
  Authority of Parties
Section 33.
  Governing Law

     
EXHIBITS
   
A
  Legal Description of Real Property
   A-1
  Pictorial Representation of the Real Property
B
  Non-Foreign Affidavit of Seller
C
  Purchaser’s Termination Notice
D
  Warranty Bill of Sale

 

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PURCHASE AND SALE AGREEMENT
     THIS PURCHASE AND SALE AGREEMENT (the, “Agreement”) is entered as of this
22nd day of September 2009 (the “Effective Date”), between Moreno Marketplace,
LLC, a California limited liability company (the “Seller”), and Bill and John
Skeffington, as individuals, or any entity to which their obligations are
assigned pursuant to the terms set out in Section 17(b) of this Agreement
(collectively, the “Purchaser”).
RECITALS
     A. Seller is the owner of that certain real property located at the
northwest corner of Cactus Avenue and Moreno Beach Drive, in the City of Moreno
Valley (the “City”), county of Riverside (the “County”) and the State of
California (the “State”), being comprised of approximately 10.46 gross acres
(the “Real Property”; all of which is more particularly described in the
attached Exhibit A to this Agreement), as well as Buildings A, B, D, E, F, G and
H (individually, a “Building” and collectively, the “Buildings”) which are
located on the Real Property and in total comprise approximately 78,079 gross
square feet of retail space (collectively, the “Improvements”; all of which are
generally shown on Exhibit A-1 to this Agreement). The Real Property and the
Improvements shall collectively be referred to in this Agreement as the
“Property”.
     B. Purchaser desires to purchase the Property and Seller desires to sell
the Property on the terms and conditions in this Agreement.
     NOW THEREFORE, in exchange for the promises, covenants and commitments
contained within this Agreement (including, without limitation, those contained
within the Recitals), as well as other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties do hereby
agree as follows:
AGREEMENT
     Section 1. Definitions
As used in this Agreement, the terms hereafter set forth shall be defined as
follows:
     “Agreement” shall be defined to have the meaning contained within the
preamble.
     “Assignment of Contracts” is defined in Section 6(a)(vi) hereof.
     “Assignment of Leases” is defined in Section 6(a)(ix) hereof.
     “Business Day” means a calendar day on which banks in the City shall be
open to transact business.
     “Cash Payment” is defined in Section 3 hereof.
     “Close of Escrow” is defined in Section 11 hereof.
     “Closing Deadline” is defined in Section 11 hereof.

 

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     “Condition of Title” is defined in Section 6(a)(i) hereof.
     “Conditions Precedent” is defined in Section 6(a) hereof.
     “Deposit” is defined in Section 3 hereof
     “Due Diligence Period” is defined in Section 6(a)(i) hereof.
     “Endorsements” is defined in Section 6(a)(iv) hereof.
     “Environmental Laws” means all federal, state, local, or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, or
requirements of any government authority regulating, relating to, or imposing
liability or standards of conduct concerning any Hazardous Substance, or
pertaining to occupational health or industrial hygiene (and only to the extent
that the occupational health or industrial hygiene laws, ordinances, or
regulations relate to Hazardous Substances on, under, or about the Property),
occupational or environmental conditions on, under, or about the Property, as
now or may at any later time be in effect, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(“CERCLA”) [42 U.S.C.A. §§9601 et seq.]; the Resource Conservation and Recovery
Act of 1976 (“RCRA”) [42 U.S.C.A. §§6901 et seq.]; the Clean Water Act also
known as the Federal Water Pollution Control Act (“FWPCA”) [33 U.S.C.A. §§1251
et seq.]; the Toxic Substances Control Act (“TSCA”) [15 U.S.C.A. §§2601 et
seq.]; the Hazardous Materials Transportation Act (“HMTA”) [49 U.S.C.A. §§1801
et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 U.S.C.A. §§136 et
seq.]; the Superfund Amendments and Reauthorization Act [42 U.S.C.A. §§9601 et
seq.]; the Clean Air Act [42 U.S.C.A. §§7401 et seq.]; the Safe Drinking Water
Act [42 U.S.C.A. §§300f et seq.]; the Solid Waste Disposal Act [42 U.S.C.A.
§§6901 et seq.]; the Surface Mining Control and Reclamation Act [30 U.S.C.A.
§§1201 et seq.]; the Emergency Planning and Community Right to Know Act [42
U.S.C.A. §§11001 et seq.]; the Occupational Safety and Health Act [29 U.S.C.A.
§§655, 657]; the California Underground Storage of Hazardous Substances Act
[Health & Safety Code, §§25280 et seq.]; the California Hazardous Substances
Account Act [Health & Safety Code, §§25300 et seq.]; the California Hazardous
Waste Control Act [Health & Safety Code, §§25100 et seq.]; the California Safe
Drinking Water and Toxic Enforcement Act [Health & Safety Code, §§25249.5 et
seq.]; the Porter-Cologne Water Quality Act [Water Code, §§13000 et seq.],
together with any amendments of or regulations promulgated under the statutes
cited above and any other federal, state, or local law, statute, ordinance, or
regulation now in effect or later enacted which pertains, to occupational health
or industrial hygiene (and only to the extent that the occupational health or
industrial hygiene laws, ordinances, or regulations relate to Hazardous
Substances on, under, or about the Property), or the regulation or protection of
the environment, including ambient air, soil, soil vapor, groundwater, surface
water, or land use.
     “Escrow” is defined in Section 11 hereof.
     “Escrow Agent” is defined in Section 11 hereof.
     “Escrow Instructions” is defined in Section 4 hereof.
     “Exceptions” is defined in Section 6(a)(i) hereof.
     “Grant Deed” is defined in Section 12(a)(i) hereof.
     “Hazardous Substances” includes without limitation:
     (a) Those substances included within the definitions of “hazardous
substance,” “hazardous waste,” “hazardous material,” “toxic substance,” “solid
waste,” or “pollutant

 

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or contaminant” in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (“CERCLA”) [42 U.S.C.A. §§9601 et seq.]; the Resource
Conservation and Recovery Act of 1976 (“RCRA”) [42 U.S.C.A. §§6901 et seq.]; the
Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”)
[33 U.S.C.A. §§1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15
U.S.C.A. §§2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”)
[49 U.S.C.A. §§1801 et seq.] or under any other Environmental Law;
     (b) Those substances listed in the United States Department of
Transportation (DOT) Table [49 C.F.R. §172.101], or by the Environmental
Protection Agency (EPA), or any successor agency, as hazardous substances [40
C.F.R. Part 302];
     (c) Other substances, materials, and wastes which are or become regulated
or classified as hazardous or toxic under federal, state, or local laws or
regulations; and
     (d) Any material, waste, or substance which is (i) a petroleum or refined
petroleum product, (ii) asbestos, (iii) polychlorinated biphenyl,
(iv) designated as a hazardous substance pursuant to 33 U.S.C.A. §1321 or listed
pursuant to 33 U.S.C.A. §1317, (v) a flammable explosive, or (vi) a radioactive
material.
     “Improvements” is defined in Recital A.
     “Lender” is defined in Section 6(a)(ii) hereof.
     “Lender’s Policy” is defined in Section 6(a)(iv) hereof.
     “Loan” is defined in Section 6(a)(ii) hereof.
     “Loan Commitment” is defined in Section 6(a)(ii) hereof.
     “Loan Documents” is defined in Section 6(a)(iii) hereof.
     “Loan Shortfall” shall mean the sum of Two Million Eight Hundred Fifty
Thousand Dollars and No Cents ($2,850,000.00), which is the difference between
the Purchase Price less the aggregate of (i) the Deposit; and (ii) the maximum
Loan sum of $9,250,000.00 which is set out in Section 6(a)(ii) hereof.
     “Non-Foreign Affidavit” is defined in Section 6(a)(xii) hereof.
     “Operating Statement” is defined in Section 6(a)(xi) hereof.
     “Owner’s Policy” is defined in Section 6(a)(iv) hereof.
     “Personal Property” is defined in Section 6(a)(x) hereof.
     “Preliminary Report” is defined in Section 6(a)(i) hereof.
     “Property” is defined in Recital A.
     “Property Documents” is defined in Section 6(a)(vi) hereof.
     “Purchase Price” is defined in Section 3 hereof.
     “Purchaser” is defined in the preamble.
     “Purchaser’s Certificate” is defined in Section 12(b)(iii) hereof.

 

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     “Purchaser’s Termination Notice” is defined in Section 6(b)(ii) hereof.
     “Real Property” is defined in Recital A.
     “Rent Roll” is defined in Section 6(a)(viii) hereof.
     “Seller” is defined in the preamble.
     “Seller’s Certificate” is defined in Section 12(a)(xii) hereof.
     “Survey” is defined in Section 6(a)(vii) hereof.
     “Tenant Leases” is defined in Section 6(a)(ix) hereof.
     “Tenants” is defined in Section 10 hereof.
     “Title Company” is defined in Section 6(a)(i) hereof.
     “Title Policies” is defined in Section 6(a)(iv) hereof.
     “Warranty Bill of Sale” is defined in Section 6(a)(x) hereof.
     Section 2. Purchase and Sale
     Seller agrees to sell and Purchaser agrees to purchase the Property on the
terms and conditions in this Agreement.
     Section 3. Purchase Price
     The purchase price Purchaser shall pay to Seller for ownership of the
Property is the sum of Twelve Million Five Hundred Thousand Dollars and No Cents
($12,500,000.00; the “Purchase Price”), which shall be payable as follows:
     (a) Simultaneously with the execution of this Agreement by Purchaser,
Purchaser shall deposit with the Escrow Agent the total sum of Four Hundred
Thousand Dollars and No Cents ($400,000.00), which deposit shall serve as a good
faith deposit (the “Deposit”) against the Purchase Price. If Purchaser has not
provided Seller and Escrow Agent with Purchaser’s Termination Notice within
seven (7) calendar days after the Effective Date, then in that event one-half
(1/2) of the Deposit shall immediately become non-refundable. If Purchaser has
not provided Seller and Escrow Agent with Purchaser’s Termination Notice within
fourteen (14) calendar days after the Effective Date, then in that event the
last one-half (1/2) of the Deposit shall immediately become non-refundable.
Should Purchaser provide Seller and Escrow Agent with Purchaser’s Termination
Notice before all of the Deposit has become non-refundable and been released to
Seller, then in that event the remaining amount of the Deposit that is in the
possession of Escrow Agent shall be refundable (less any costs associated with
the assessment of fees relating to Purchaser’s cancellation of escrow and title
work) and shall be returned to Purchaser after the Escrow is cancelled and all
title work has been terminated;
     (b) No later than one day prior to the Close of Escrow, Purchaser shall
(i) deposit with the Escrow Agent the full amount of the Loan Shortfall; and
(ii) cause the Purchase Price, less the Deposit, to be paid to Escrow Agent, by
immediately available certified or wired funds, which shall be in the form of
cash or a loan that Purchaser shall theretofore have secured from a third-party
lender. In addition, at the Close of Escrow

 

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the Escrow Agent shall apply the full amount of the Deposit toward the Purchase
Price; and
     (c) In the event Seller defaults hereunder, and thereafter fails to cure
said default, then notwithstanding any provision herein to the contrary, the
full amount of the Deposit plus all interest thereon shall be returned to
Purchaser.
     Section 4. Deposit
     Escrow Agent shall be instructed to hold the Deposit in an interest-bearing
account generally utilized by Escrow Agent for such purposes. The Deposit shall
be applied to the Purchase Price upon the Close of Escrow. If Escrow does not
close because Purchaser fails to perform any of its obligations under this
Agreement, and Seller is not otherwise in default, Escrow Agent shall deliver
the Deposit and all interest to Seller as liquidated damages pursuant to the
provisions set out in Section 5. If Escrow does not close because Purchaser has
delivered to Escrow Agent and Seller a Termination Notice prior to the end of
the Due Diligence Period, then in that event Escrow Agent shall deliver that
portion of the Deposit, without demand, deduction, or offset (other than for any
non-refundable portions already released to Seller, and any Escrow or title
costs owing by Purchaser), to Purchaser following Escrow Agent’s receipt of
Purchaser’s Termination Notice. Within five (5) days of Seller’s execution of
this Agreement, Escrow Agent agrees to provide Purchaser and Seller with their
general escrow instructions which both Purchaser and Seller do hereby agree to
execute and deliver to Escrow Agent consistent with the terms of this Agreement
(the “Escrow Instructions”). Purchaser and Seller do further agree to provide
Escrow Agent with any other information, documents, or instruments that the
Escrow Agent reasonably requires.
     Section 5. Liquidated Damages
     IF THIS TRANSACTION DOES NOT CLOSE BECAUSE OF DEFAULT BY PURCHASER, AND
SELLER IS NOT OTHERWISE IN DEFAULT, SELLER SHALL BE ENTITLED TO THE FULL AMOUNT
OF THE DEPOSIT, WHICH PAYMENT SHALL BE DEEMED TO BE LIQUIDATED DAMAGES. THE
PARTIES AGREE THAT IF PURCHASER DEFAULTS AND SELLER IS NOT OTHERWISE IN DEFAULT
OR IF IN DEFAULT THEREAFTER PERFECTS A CURE OF THE DEFAULT, SELLER’S ACTUAL
DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE AND THE AMOUNT OF THE
DEPOSIT IS THE BEST ESTIMATE OF THE DAMAGES SELLER WOULD SUFFER. ACCORDINGLY,
THE AMOUNT OF THE DEPOSIT SHALL BE THE TOTAL AMOUNT SELLER IS ENTITLED TO
RECEIVE AS LIQUIDATED DAMAGES. SELLER SHALL HAVE NO RIGHT TO ADDITIONAL DAMAGES,
AND SELLER WAIVES ALL RIGHT TO AN ACTION FOR SPECIFIC PERFORMANCE OF THIS
AGREEMENT. THE PARTIES WITNESS THEIR AGREEMENT TO THIS LIQUIDATED DAMAGES
PROVISION BY INITIALING THIS SECTION 5.

         

     
 
Initials of Seller
 
 
Initials of Purchaser    

     Section 6. Conditions Precedent
     (a) Conditions Precedent to Closing. Purchaser’s obligation to purchase the
Property from Seller is subject to the following conditions precedent
(collectively, the “Conditions Precedent”), each of which are for Purchaser’s
benefit only:

 

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     (i) Title. Within seven (7) calendar days from the Seller’s execution of
this Agreement, Seller shall cause the Title Company (as hereinafter defined) to
provide Purchaser, at Seller’s expense, with a preliminary title report for the
Real Property (the “Preliminary Report”), which Preliminary Report shall be
issued by Orange Coast Title Company, whose offices are located at 3536 Concours
Avenue, Suite 120, Ontario, California 91764 (the “Title Company”; attention
Ms. Helen Johnson), together with copies of all exceptions and the documents
supporting the exceptions (collectively, the “Exceptions”) in the Preliminary
Report. Within fourteen (14) calendar days after the Effective Date (said period
commencing on the Effective Date and ending on the fourteenth (14th) calendar
day thereafter being herein defined as the “Due Diligence Period”), Purchaser
shall review the Preliminary Report and approve or disapprove of the condition
of the title reflected in the Preliminary Report (the “Condition of Title”),
which approval or disapproval must be in a writing which shall be received by
Seller and Escrow Agent prior to the end of the Due Diligence Period. Should
both the Escrow Agent and Seller not actually receive Purchaser’s written
approval or disapproval of the Preliminary Report prior to the end of the Due
Diligence Period, said non-receipt shall be deemed to be Purchaser’s acceptance
of the Property, and Purchaser does hereby expressly waive any and all rights it
may otherwise have or had to cancel the Escrow from and after that point in time
for any reason whatsoever that is associated with title to the Real Property. If
Purchaser’s notice of disapproval of the Condition of Title is received by both
Seller and Escrow Agent prior to the end of the Due Diligence Period, in that
event Seller shall have the right to either (a) terminate the escrow, cancel the
title request and direct the Escrow Agent to return the Deposit to Purchaser, or
(b) elect to try and modify the Condition of Title so as to eliminate the reason
for Purchaser’s disapproval of the Condition of Title. If Seller elects to
pursue the right granted in subparagraph (b), above, Seller shall have thirty
(30) calendar days to perfect that change and the Close of Escrow shall be
moved, on a day-for-day basis, to allow for that action. Notwithstanding
anything else to the contrary within this Agreement, after the date on which the
Seller executes this Agreement, Seller shall not alter the Condition of Title
without the express written consent of Purchaser.
     (ii) Financing. Prior to the end of the Due Diligence Period, Purchaser
shall have received, and shall provide the Escrow Agent and Seller with legible
copies of, a loan commitment (the “Loan Commitment”) from a lender that shall
have been selected by Purchaser in its sole discretion (the “Lender”), and which
Loan Commitment shall expressly state that the Lender will, at the Close of
Escrow, be ready, willing and able to fund up to a maximum of Nine Million Two
Hundred Fifty Thousand Dollars and No Cents ($9,250,000.00) of the Purchase
Price (the “Loan”). Purchaser shall be responsible for paying, in addition to
the Deposit, the Loan Shortfall, to Seller, in cash at Closing. If Purchaser
fails to deliver said Loan Commitment to Seller and Escrow Agent prior to the
end of the Due Diligence Period, said non-delivery shall be deemed to be
Purchaser’s disapproval of the Property and Escrow Agent shall thereupon
immediately terminate the Escrow and the Deposit shall be handled as provided
for in Section 3.
     (iii) Financing Documents. On or before the Close of Escrow, Purchaser
shall have received loan documents in connection with the Loan (the “Loan
Documents”) in a form and of a substance that is reasonably satisfactory to
Purchaser.

 

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     (iv) Title Policies. On or before the Close of Escrow, Purchaser shall have
received evidence that the Title Company is ready, willing, and able to issue,
upon payment of Title Company’s regularly scheduled premium, (A) an American
Land Title Association (ALTA) standard owner’s policy of title insurance,
without survey (the “Owner’s Policy”) in the face amount of the Purchase Price,
and (B) an American Land Title Association (ALTA) lender’s policy of title
insurance (the “Lender’s Policy” and together with the Owner’s Policy,
collectively, the “Title Policies”) in the original principal amount of the
Loan, each with the endorsements Purchaser and Lender may respectively require
(collectively, the “Endorsements”), showing title to the Property vested in
Purchaser, subject only to the Condition of Title, the lien of real property
taxes for the current fiscal year not yet due or payable, the lien of the Loan
Documents, and the standard preprinted exceptions and stipulations of the Title
Policies. The cost for any and all Endorsements shall be billed to and paid in
full by Purchaser, without any right of off-set, deduction or credit from the
Purchase Price or any payment from Seller.
     (v) Physical Condition of the Property. Within the Due Diligence Period,
Purchaser shall review and approve or disapprove of the physical condition of
the Property, providing both Escrow Agent and Seller with a writing setting out
Purchaser’s approval or disapproval of the Property’s condition. In the event
Escrow Agent and Seller do not actually receive Purchaser’s written approval or
disapproval of the Property’s condition prior to the end of the Due Diligence
Period, said non-receipt shall be deemed to be Purchaser’s acceptance of the
Property, and Purchaser does hereby expressly waive any and all rights it may
otherwise have, or have had, to cancel the Escrow from and after that point in
time for any reason whatsoever. Seller shall not cause the physical condition of
the Property to materially deteriorate or change after the date of the
inspection, normal wear and tear excepted, without the prior written consent of
Purchaser.
     (vi) Property Documents. Within three (3) calendar days of this Agreement,
Seller shall deliver to Purchaser copies of all permits, soils reports,
licenses, maintenance contracts, utility contracts, operating contracts,
management contracts, service contracts, and other contracts pertaining to the
Property that are still in effect as to the Property as of that day, together
with any amendments or modifications (collectively, the “Property Documents”).
Prior to the end of the Due Diligence Period, Purchaser shall review each
Property Document, providing both Escrow Agent and Seller with a writing setting
out Purchaser’s approval or disapproval of the Property Documents. In the event
Escrow Agent and Seller do not actually receive the Purchaser’s written approval
or disapproval of the Property Documents prior to the end of the Due Diligence
Period, said non-receipt shall be deemed to be Purchaser’s acceptance of the
Property Documents, and Purchaser does hereby expressly waive any and all rights
it may otherwise have or had to cancel the Escrow from and after that point in
time for any reason whatsoever. Should Purchaser approve, or be deemed to have
approved, of the Property Documents, then in that event at the Close of Escrow
(a) Seller shall assign to Purchaser all of Seller’s rights and remedies under
the Property Documents which Purchaser indicates in writing to Seller that
Purchaser wishes to assume, to the extent assignable, pursuant to an assignment
of contracts, warranties and other intangible property rights agreement; and
(b) Purchaser shall assume all of the obligations and duties owing from Seller
under the Property Documents (the “Assignment of Contracts”), which Assignment
of Contracts shall be in a form and of a substance that is reasonably
satisfactory to both Seller and Purchaser. With respect to Property Documents
that are not assigned to

 

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Purchaser, Seller shall terminate those Property Documents by delivering notices
of Purchaser’s election to terminate to those affected contracting parties.
     (vii) Survey. Purchaser shall have the right to commission a licensed
third-party to prepare an as-built survey of the Property (the “Survey”) prior
to the Close of Escrow, provided that in doing so the attainment of the Survey
does not delay or otherwise extend the Close of Escrow date set out in
Section 11 of this Agreement. Notwithstanding Purchaser’s right to commission a
Survey of the Property, if Purchaser shall elect to so act, all costs and
expenses that are in any way related (directly or indirectly) to such Survey
shall be paid for solely by Purchaser, without any right of off-set, deduction
or credit from the Purchase Price or any payment from Seller.
     (viii) Rent Roll. Within three (3) calendar days after the Seller’s
execution of this Agreement, Seller shall deliver to Purchaser a current rent
roll (the “Rent Roll”) for the Property listing each tenant at the Property,
along with the (a) name of each tenant, (b) unit or suite occupied by each
tenant, (c) monthly rent owing from each tenant, (d) amount of each tenants’
deposit, (e) amount of any prepaid rent made by any tenant, and (f) term of each
tenants’ lease. Prior to the end of the Due Diligence Period, Purchaser shall
review and approve or disapprove of the Rent Roll. Should both the Escrow Agent
and Seller not actually receive Purchaser’s written approval or disapproval of
the Rent Roll prior to the end of the Due Diligence Period, said non-receipt
shall be deemed to be Purchaser’s acceptance of the Rent Roll, and Purchaser
does hereby expressly waive any and all rights it may otherwise have or had to
cancel the Escrow from and after that point in time for any reason whatsoever.
     (ix) Tenant Leases. Within three (3) calendar days after the date of
Seller’s execution of this Agreement, Seller shall deliver to Purchaser copies
of all tenant leases, including any amendments and modifications (collectively,
the “Tenant Leases”). Prior to the end of the Due Diligence Period, Purchaser
shall review and approve or disapprove of the Tenant Leases. Should both the
Escrow Agent and Seller not actually receive Purchaser’s written approval or
disapproval of the Tenant Leases prior to the end of the Due Diligence Period,
said non-receipt shall be deemed to be Purchaser’s acceptance of the Tenant
Leases, and Purchaser does hereby expressly waive any and all rights it may
otherwise have or had to cancel the Escrow from and after that point in time for
any reason whatsoever that is related to the Tenant Leases. On or as of the
Close of Escrow, Seller shall assign all of Seller’s rights, remedies arising
under the Tenant Leases, including the right to any security deposits and
prepaid rent, to Purchaser, and Purchaser shall assume all of Seller’s duties
and obligations arising in relation to the Tenant Leases, pursuant to an
assignment and assumption of leases and security deposits (the “Assignment of
Leases”) in a form and of a substance that is reasonably satisfactory to both
Seller and Purchaser.
     (x) Warranty Bill of Sale. On or as of the Close of Escrow, Seller shall
deliver to Purchaser a warranty bill of sale (the “Warranty Bill of Sale”), by
which Seller shall be deemed to have transferred to Purchaser any and all
personal property that is, as of the Close of Escrow, owned by Seller and in
service solely related for the operation of the Property (the “Personal
Property”). Said Warranty Bill of Sale shall be in the form set out in the
attached Exhibit D.

 

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     (xi) Operating Statement. Within three (3) calendar days from the date of
the Seller’s execution of this Agreement, Seller shall deliver to Purchaser an
unaudited operating statement for the Property for the period of January 1, 2009
through August 31, 2009 (the “Operating Statement”). Prior to the end of the Due
Diligence Period, Purchaser shall review and approve or disapprove of the
Operating Statement. Should both the Escrow Agent and Seller not actually
receive Purchaser’s written approval or disapproval of the Operating Statement
prior to the end of the Due Diligence Period, said non-receipt shall be deemed
to be Purchaser’s acceptance of the Operating Statement, and Purchaser does
hereby expressly waive any and all rights it may otherwise have or had to cancel
the Escrow from and after that point in time for any reason whatsoever.
     (xii) Non-Foreign Affidavit. On or before the Close of Escrow, Seller shall
deliver to Escrow Agent the Non-Foreign Affidavit (the “Non-Foreign Affidavit”)
in the form of attached Exhibit B, executed by a duly authorized member of the
Seller.
     (xiii) Seller’s Obligations. The performance by Seller of every covenant,
condition, agreement, and promise to be performed by Seller pursuant to this
Agreement.
     (xiv) Seller’s Representations. The truth and accuracy of all Seller’s
representations and warranties that are expressly set out in this Agreement,
with the express qualification and acknowledgement by Purchaser, that if a
Seller’s statement expresses that it is “unaudited” or is being made as to an
“approximate” or “estimated” amount, or is being made “in the Seller’s belief”,
or is being made to the “best of Seller’s knowledge”, or contains any words of
similar import or effect, then in those events Seller shall not be held liable
for any inaccuracies relating to such statements, absent Purchaser’s actual
proof of Seller’s actual knowledge thereof.
     (b) Failure of Conditions Precedent. Subject to Purchaser’s rights in
Section 11 hereof, if any of the Conditions Precedent have not been fulfilled
within the applicable time periods or if Purchaser expressly disapproves, in
writing, of any Conditions Precedent pursuant to this Section 6, matters for
which Purchaser’s approval is required, or Seller defaults in its obligations
hereunder, Purchaser may do any one (1) of the following:
     (i) Waive and Close. Waive the condition or disapproval or default and
close Escrow in accordance with this Agreement, without adjustment or abatement
of the Purchase Price; or
     (ii) Terminate. Terminate this Agreement by written notice to Seller and to
Title Company (“Purchaser’s Termination Notice”) in the form shown on the
attached Exhibit C, and Seller shall be solely responsible for any escrow or
title costs associated with such termination.
          Notwithstanding the above two (2) options, should Purchaser, by its
inaction, be deemed to have waived any of its rights as to any of the Conditions
Precedent, then in that event Purchaser shall also be deemed to have elected the
waiver and closing provision set out in Section 6(b)(i).

 

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     Section 7. Representations and Warranties
     A.     Seller represents and warrants to Purchaser that as of the Close of
Escrow:
     (a) Disclosure. Seller has disclosed to Purchaser all material documents
concerning the Property that is in Seller’s actual possession; provided,
however, in doing so Seller advises Purchaser that Seller is making no
representations or warranties as to the completeness or accuracy of said
materials, and Purchaser acknowledges and agrees that Purchaser shall make its
own independent review of said materials and will subsequently make its own
determination as to whether or not to acquire the Property based solely upon its
own investigation and analyses.
     (b) Title.
     (i) Ownership. Seller is the legal and equitable owner of the Property,
with full right to convey the Property to Purchaser, subject to the approval of
KeyBank National Association (“KeyBank”), Seller’s lender in relation to the
Property.
     (ii) Encumbrances. The Property is free and clear of all liens,
encumbrances, claims, rights, demands, easements, leases, agreements, covenants,
conditions, and restrictions of any kind, except for (A) the Exceptions, (B) the
Tenant Leases and (C) the debt owing to KeyBank.
     (c) Consents and Releases. As of the Close of Escrow Seller shall have
obtained all required consents, releases, and permissions from KeyBank that may
be required to convey to Purchaser good and marketable title to the Property.
     (d) Authority. This Agreement and any applicable documents that are
contained herein as exhibits (i) have been duly authorized, executed, and
delivered by Seller; (ii) are binding obligations of Seller; (iii) to the best
of Seller’s knowledge are sufficient to transfer all of Seller’s rights to the
Property, Property Documents, Tenant Leases and Personal Property; and (iv) once
approved by KeyBank do not violate the provisions of any agreement to which
Seller is a party or which directly affects the Property. Seller further
represents that it is a limited liability company that was duly organized and
exists under the laws of the State, with its principal place of business in the
County.
     (e) Foreign Investment Real Property Tax Act. Seller is not a “foreign
person” within the meaning of 26 U.S.C.A. §1445(f)(3).
     (f) Toxic or Hazardous Waste. To the best of Seller’s present knowledge,
without having conducted any investigation of its own, the Property is free from
Hazardous Substances and is not in violation of any Environmental Laws.
     (g) Leases. The Rent Roll delivered to Purchaser by Seller is correct as of
the Effective Date and conforms to the Tenant Leases, but cautions Purchaser of
the need for the Purchaser to conduct its own independent review of the Tenant
Leases to make its own determination as to the accuracy of the Rent Roll.
     B.      Purchaser represents and warrants to Seller that as of the
Effective Date, and again as of the Close of Escrow:

 

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     (a) Consents and Releases. As of the Close of Escrow Purchaser shall have
obtained all required consents, releases, and permissions from any persons
and/or entities that may be required to accept title to the Property.
     (b) Authority. This Agreement and any applicable documents that are
contained herein as exhibits (i) have been duly authorized, executed, and
delivered by Purchaser; (ii) are binding obligations of Purchaser; and (iii) are
sufficient in form and content to assume all of Seller’s duties and obligations
arising therefrom which shall survive the Close of Escrow, including, without
limitation, the Property Documents, the Tenant Leases and the Personal Property
     (c) Buyer’s Release of Seller. Except for the express covenants,
representations and warranties of Seller set forth in this Agreement, Purchaser,
from and after the Close of Escrow, hereby waives, releases, remises, acquits
and forever discharges the Seller and Seller’s officers, directors, members, and
employees (collectively, “Seller’s Representatives”) of and from any and all
actions, suits, legal or administrative orders or proceedings, demands, actual
damages, punitive damages, loss, costs, liabilities and expenses, which concern
or in any way relate to the Property, Tenant Leases, Property Documents and/or
Personal Property, whether existing prior to, at or after such Close of Escrow,
including, without limitation, matters relating to the condition of title to the
Property, zoning, compliance of the Property, the release or threatened release
of Hazardous Materials therefrom, the condition of such Property, the
development or use of the Property; any slope failure or subsurface geologic or
groundwater condition; the design, construction, engineering or other work with
respect to the Buildings; or any act or omission by Seller or Seller’s
Representatives in connection with the Property, Tenant Leases, Property
Documents and/or Personal Property, excepting, however, the proven fraud of
Seller or Seller’s Representatives. It is the intention of the parties pursuant
to this release that any and all responsibilities and obligations of Seller, and
any and all rights, claims, rights of action, causes of action, demands or legal
rights of any kind of Purchaser, its successors, assigns or any affiliated
entity of Purchaser, arising by virtue of the Property, the Tenant Leases, the
Property Documents and/or the Personal Property, whether existing prior to, at
or after the Close of Escrow, are by this release provision declared null and
void and of no present or future force and effect as to the parties. In
connection with the above release, Purchaser expressly agrees to waive any and
all rights which said party may have under Section 1542 of the California Civil
Code which provides as follows:
          “A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.”
     Section 8. Indemnification
     Purchaser and Seller shall indemnify, defend, and hold the other harmless
from any and all liabilities, losses, and claims for damages, including without
limitation, costs and reasonable attorney’s fees, arising directly from a breach
of their express covenants that are contained within this Agreement and are
expressly stated to survive the Close of Escrow.

 

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     Section 9. Covenants
     Purchaser and Seller hereby covenant as follows:
     (a) Brokers. Other than Grubb & Ellis Company (the “Broker”), neither
Purchaser, nor Seller, has not hired any broker or other finder in relation to
Purchaser’s acquisition of the Property, and in light of that statement each of
them does hereby agree to indemnify, defend, and hold the other harmless from
any and all losses, costs, and expenses, including but not limited to attorney’s
fees and court costs, resulting from any fee or commission claim by any broker
or finder, other than the Broker, claiming through said party. Broker’s
potential for compensation shall be set out in a separate agreement and any
compensation which Seller may agree is owing to Broker at the Close of Escrow
shall be deducted from the proceeds otherwise owing to Seller at such Closing.
     (b) Tenant Leases. From and after the Effective Date, or such earlier date
as Purchaser shall approve of the Property, in writing to both Escrow Agent and
Seller, Seller agrees that it shall not modify, cancel, or amend any Tenant
Lease, or enter into any new Tenant Lease without Purchaser’s prior written
approval, which approval shall not be unreasonably withheld, delayed or denied.
     (c) Litigation. From and after the Effective Date, Seller shall verbally
notify Purchaser of any lawsuits that are on or after that date served on Seller
by any person or entity as against the Property.
     (d) Purchaser’s Disclaimer. The Property and the fixtures and personal
property contained therein, if any, are not new, and have been subject to normal
wear and tear. Purchaser understands and covenants that Seller makes no express
or implied warranty with respect to the condition of any of the Property,
fixtures or Personal Property. Purchaser further covenants that Seller has made
no oral or written representation regarding the age of the Improvements, the
size and square footage of the parcel or any Building, or the location of any
Property line, and that any apparent boundary line indicators such as driveways,
fences, hedges, walls, or other barriers may not represent the true boundary
lines, which only a surveyor can accurately determine. Purchaser does still
further covenant that if any of these issues are important to its decision to
purchase the Property, then Purchaser hereby agrees that it shall independently
investigate the Property and Personal Property. Purchaser acknowledges that it
has not relied upon any representations by Seller with respect to the condition,
status or any other aspect of the Property or the Personal Property, or the
status of permits, zoning, or code compliance in relation to the Property.
Purchaser hereby expressly agrees that it shall independently satisfy itself,
through whatever means it deems to be necessary, concerning each and all of
these issues.
     Section 10. AS-IS, WHERE-IS Provision
          Purchaser’s Acknowledgement as to the AS-IS, WHERE-IS nature of the
Sale.
          PURCHASER HEREBY EXPRESSLY ACKNOWLEDGES THAT, DURING THE DUE DILIGENCE
PERIOD, IT WILL HAVE AMPLE OPPORTUNITY TO FULLY INSPECT, EXAMINE, STUDY AND
ANALYZE TO ITS SATISFACTION ALL ASPECTS OF THE PROPERTY AND PERSONAL PROPERTY,
INCLUDING, WITHOUT LIMITATION, (I) THE SUITABILITY OR CONDITION OF THE PROPERTY
FOR ANY PURPOSE OR ITS FITNESS FOR ANY PARTICULAR USE, (II) THE PROFITABILITY
AND/OR FEASIBILITY OF OWNING, OPERATING AND/OR IMPROVING THE

 

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PROPERTY, (III) THE PHYSICAL CONDITION OF THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE CURRENT OR FORMER PRESENCE OR ABSENCE OF ENVIRONMENTAL HAZARDS
OR HAZARDOUS MATERIALS, ASBESTOS, RADON GAS, UNDERGROUND STORAGE TANKS,
ELECTROMAGNETIC FIELDS, OR OTHER SUBSTANCES OR CONDITION WHICH MAY AFFECT THE
PROPERTY OR ITS CURRENT OR FUTURE USES,
HABITABILITY, VALUE OR DESIRABILITY, (IV) THE RENTALS, INCOME, COSTS OR EXPENSES
THEREOF, (V) THE NET OR GROSS ACREAGE, USABLE OR UNUSABLE, CONTAINED THEREIN,
(VI) THE ZONING OF THE PROPERTY, (VII) THE CONDITION OF TITLE, (VIII) THE
COMPLIANCE BY THE PROPERTY WITH APPLICABLE LAWS, CODES, RULES AND REGULATIONS,
INCLUDING, WITHOUT LIMITATION, ZONING LAWS, BUILDING CODES AND ENVIRONMENTAL AND
SIMILAR LAWS, GOVERNING OR RELATING TO ENVIRONMENTAL HAZARDS OR HAZARDOUS
MATERIALS, ASBESTOS, RADON GAS, UNDERGROUND STORAGE TANKS, ELECTROMAGNETIC
FIELDS, OR OTHER SUBSTANCES OR CONDITION WHICH MAY AFFECT THE PROPERTY,
(IX) WATER OR UTILITY AVAILABILITY OR USE RESTRICTIONS, (X) GEOLOGIC/SEISMIC
CONDITIONS, SOIL AND TERRAIN STABILITY OR DRAINAGE, (XI) SEWER, SEPTIC AND WELL
SYSTEMS AND COMPONENTS, (XII) OTHER NEIGHBORHOOD OR PROPERTY CONDITIONS,
INCLUDING, WITHOUT LIMITATION, PROXIMITY AND ADEQUACY OF LAW ENFORCEMENT AND
FIRE PROTECTION, CRIME STATISTICS, NOISE OR ODOR FROM ANY SOURCES, LANDFILLS,
PROPOSED FUTURE DEVELOPMENTS, AND (XIII) ANY OTHER PAST, PRESENT OR FUTURE
MATTER RELATING TO THE PROPERTY WHICH MAY AFFECT THE PROPERTY OR ITS CURRENT OR
FUTURE USE, HABITABILITY, VALUE OR DESIRABILITY. ON THE BASIS OF SUCH
OPPORTUNITY AND TO INDUCE SELLER TO ENTER INTO THIS AGREEMENT WITH PURCHASER,
PURCHASER REPRESENTS AND WARRANTS TO SELLER THAT, (1) PURCHASER IS RELYING
SOLELY ON PURCHASER’S OWN INVESTIGATION OF THE PROPERTY AND PERSONAL PROPERTY,
AND ITS REVIEW OF SUCH INFORMATION AND DOCUMENTATION (INCLUDING, WITHOUT
LIMITATION, THE PROPERTY DOCUMENTS) IN DETERMINING WHETHER OR NOT TO PURCHASE
THE PROPERTY AND PERSONAL PROPERTY, (2) ANY AND ALL INFORMATION MADE AVAILABLE
TO PURCHASER OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER WITH
RESPECT TO THE PROPERTY AND/OR PERSONAL PROPERTY WAS OBTAINED FROM A VARIETY OF
SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION, AND (3) EXCEPT AS MAY BE EXPRESSLY SET
FORTH TO THE CONTRARY ELSEWHERE WITHIN THIS AGREEMENT, SELLER DOES NOT MAKE ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE PROPERTY OR PERSONAL PROPERTY, OR ANY RELATED MATTERS
INCLUDING, BUT NOT LIMITED TO, THE MATTERS REFERENCED IN THIS SECTION, AND

 

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THAT THE PROPERTY AND PERSONAL PROPERTY IS BEING SOLD TO PURCHASER, AND THAT
PURCHASER IS ACCEPTING THE PROPERTY AND PERSONAL PROPERTY IT THEIR RESPECTIVE
AND COLLECTIVE “AS IS”, “WHERE-IS” CONDITION, WITHOUT ANY REPRESENTATIONS OR
WARRANTIES OF ANY TYPE OR KIND FROM SELLER. IN THIS REGARD, PURCHASER ALSO
ACKNOWLEDGES THAT, DUE TO ITS PREVIOUS REAL ESTATE EXPERIENCE, IT IS
KNOWLEDGEABLE ABOUT THE EFFECT AND IMPACT OF AN “AS IS”, “WHERE-IS” CLAUSE SUCH
AS SET FORTH IN THIS SECTION 10, AND IS INSERTING ITS INITIALS, BELOW, IN
ACKNOWLEDGEMENT OF ALL THE STATEMENTS CONTAINED WITHIN THIS SECTION 10.

         

     
 
Seller’s Initials
 
 
Purchaser’s Initials    

     Section 11. Escrow
     Upon Seller’s execution of this Agreement, Seller shall establish an escrow
for the sale of the Property to Purchaser (the “Escrow”) at the office of Orange
Coast Title Company, whose office is located at 3536 Concours Avenue, Suite 120,
Ontario, California 91764 (the “Escrow Agent”) attention Ms. Irene Genders,
whose contact numbers are (a) telephone — 909-987-5433; (b) facsimile —
909-297-2547. If the Escrow Agent is unwilling or unable to perform, Seller
shall designate another escrow agent. Upon (i) the Grant Deed being submitted
for recordation by the Escrow Agent and/or Title Company, and (ii) the Purchase
Price (including the Deposit) being confirmed as having been received by Seller
via wire transfer, the occurrence of said events shall be defined as being the
“Close of Escrow”, and the Escrow Agent and Title Company shall perform all
other tasks required of them as a result of the Close of Escrow. Unless Seller
shall otherwise expressly provide to the contrary through a subsequent writing
which Seller shall deliver to both the Escrow Agent and Purchaser, the Close of
Escrow shall occur on the Business Day that is five (5) days after the end of
the Due Diligence Period (said date being defined as, the “Closing Deadline”).
Should Escrow not Close by the Closing Deadline due to Purchaser’s default or
inactions, then in that event Seller alone shall have the option to either
(x) extend the Escrow for such period of time as is necessary to perfect the
Close, or (y) terminate the Escrow and, so long as Seller is not then in default
under this Agreement, pursuant to a writing that Purchaser shall have
theretofore delivered to both the Escrow Agent and Seller advising of such
Seller’s default, in which event the Deposit shall be deemed to be Liquidated
Damages in accordance with the provisions set out in Section 5 of this
Agreement.
     Section 12. Closing Funds
     On or before Close of Escrow, Seller and Purchaser shall deposit with
Escrow Agent the following documents and funds and Escrow Agent shall close
Escrow as follows:
     (a) Seller’s Deposits. Seller shall deposit with Escrow Agent the
following:
     (i) Deed. The original executed and acknowledged Grant Deed conveying the
Property to Purchaser (the “Grant Deed”);
     (ii) Non-Foreign Affidavit. The original Non-Foreign Affidavit executed by
Seller;

 

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     (iii) Property Documents. The originals of all Property Documents;
     (iv) Assignment of Contracts. The original Assignment of Contracts;
     (v) Assignment of Leases. The original Assignment of Leases;
     (vi) Warranty Bill of Sale. The original Warranty Bill of Sale;
     (vii) Tenant Leases. The original Tenant Leases;
     (viii) Escrow Instructions. The Escrow Instructions executed by Seller; and
     (ix) Additional Documents. Any other documents or funds required of Seller
to in order to close Escrow in accordance with this Agreement.
     (b) Purchaser’s Deposits. On or before the Close of Escrow, Purchaser shall
deposit with Escrow Agent the following:
     (i) Deed of Trust. Any deed of trust Purchaser may need to have recorded in
order to perfect the interests of the Lender pursuant to the transaction that is
described within this Agreement.
     (ii) Cash Payment. Cash in the amount of the Purchase Price, less the
proceeds from any Loan. The sum paid into Escrow by the Purchaser shall include
the Loan Shortfall sum;
     (iii) Closing Costs. Additional cash in the amount necessary to pay
Purchaser’s share of closing costs, as set forth in Section 13 hereof;
     (iv) Escrow Instructions. The Escrow Instructions executed by Purchaser;
and
     (v) Additional Documents. Any other documents or funds required of
Purchaser to close Escrow in accordance with this Agreement.
Section 13. Closing Costs
     (a) Seller’s Costs. Seller shall pay the title insurance premium for (i) a
standard American Land Title Association standard owner’s policy of title
insurance, without a survey or any endorsements of any kind; (ii) one-half (1/2)
of the Title Company’s fees in relation to the Escrow; (iii) all of the real
property transfer taxes and documentary transfer taxes payable upon recordation
of the Grant Deed; and (iv) any sales, use, and ad valorem taxes connected with
the Close of Escrow.
     (b) Purchaser’s Costs. Purchaser shall pay (i) one-half (1/2) of Title
Company’s fees in any way relating to the Escrow; (ii) the title insurance
premium for the Lender’s Policy, including any and all endorsements; (iii) the
additional cost of the title insurance premium for a Survey, extended owner’s
policy of title insurance, and/or any endorsements of any kind; and (iv) the
costs of recording any deed of trust associated with a Loan.
     (c) Loan Costs. Purchaser shall pay all costs of any kind and amount
relating to the Loan Commitment and the Loan, including without limitation, all
fees (including attorneys’ fees), costs, and points. Purchaser’s costs and fees
in relation to this provision shall not be limited in any manner, nor shall the
cost of such costs and/or

 

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fees be justification for Purchaser’s disapproval of the Property during the Due
Diligence Period.
     Section 14. Prorations
     The following receipts, income, debts and expenses are to be prorated
between the Seller and Purchaser as of the Close of Escrow, as follows:
     (a) Current Rent. Current rent shall be prorated as of the Close of Escrow
when and as collected.
     (b) Rent Arrears. Seller shall assign the rent arrearages to Purchaser,
Purchaser hereby agrees that it shall then pay rent such arrearages to Seller
when and as collected, less Purchaser’s reasonable and detailed out-of-pocket
collection charges.
     (c) Security Deposits. Security deposits paid by tenants shall be fully
credited to Purchaser as of the Close of Escrow.
     (d) Utility Charges. Purchaser will cause all utility and water meters to
be read on the date of the Close of Escrow, and will provide Seller and Escrow
Holder with a copy of whatever writing those utility providers may give to
Purchaser to verify that such utilities have been turned off in the name of
Seller and turned on in the name of Purchaser as of the Close of Escrow.
Provided that Purchaser acts in accordance with the above requirements of this
Section 14(d), then in that event Seller shall be responsible for the cost of
all utilities and water used prior to the Close of Escrow.
     (e) Other Prorations. Liability for real property taxes, assessments,
Property operation expenses, insurance premiums, to the extent Purchaser elects
to retain them at the actual pay-rate, and other recurring costs shall be
prorated as of the Close of Escrow.
     Section 15. Investigations
     Prior to the end of the Due Diligence Period, Purchaser shall have the
right to conduct any investigations of the Property as Purchaser desires,
including without limitation, soils conditions, engineering, and accessibility.
Purchaser shall indemnify, defend, and hold Seller harmless from all
liabilities, costs, and expenses resulting from Purchaser’s and/or agents or
representatives of Purchaser’s, investigations, studies and tests regarding the
Property and/or Personal Property. If Purchaser disturbs the physical condition
of the Property, and Escrow does not close due to Purchaser’s election or
default, Purchaser shall restore the Property, at its sole cost and expense, to
the condition existing prior to Purchaser’s disturbing of the Property. The
provisions of this Section 15 shall survive the Close of Escrow or any
termination of the Escrow and shall be fully enforceable as against the
Purchaser and all persons and entities who make up the Purchaser, without
qualification or limitation of any nature.
     Section 16. Further Assurances
     Whenever requested by the other party, each party shall execute,
acknowledge, and deliver any further conveyances, assignments, confirmations,
satisfactions, releases, approvals, consents, and any other instruments and
documents as the Escrow Agent may deem to be necessary, expedient, or proper, to
complete any conveyance, transfer, sale, or assignment contemplated by this
Agreement. Each party does further agree to do any other acts and to execute,
acknowledge, and deliver any documents the Escrow Agent may require in order to
carry out the intent and purposes of this Agreement.

 

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     Section 17. Assignment
     (a) Seller’s Right to Assign. Seller shall have the right, power and
authority to assign this Agreement or any portion of this Agreement, or to
delegate any duties or obligations arising under this Agreement, voluntarily,
involuntarily, or by operation of law, without Purchaser’s prior written
consent, so long as such actions are being directed by KeyBank. Other than as
required by KeyBank, Seller shall not have the right to do any of the things
noted in this Section 17(a), without the prior written consent of Purchaser.
     (b) Purchaser’s Right to Assign. Except as otherwise provided in this
Agreement, Purchaser shall have no right, power, or authority to assign this
Agreement or any portion of this Agreement or to delegate any duties or
obligations arising under this Agreement, voluntarily, involuntarily or by
operation of law, except as may be expressly provided for in this Section 17(b),
without the Seller’s prior written consent, which may be granted or denied in
Seller’s sole discretion. Notwithstanding this provision, Seller does hereby
agree to cooperate with Purchaser in consummating this sale as a part of any
Internal Revenue Code Section 1031 exchange transaction to which the Purchaser
may be a party; provided that if Seller is called on to so act, Purchaser does
hereby further agree that in so acting (i) Seller shall not incur any costs or
expenses of any kind, Purchaser hereby covenanting and agreeing to have all such
costs paid for, directly by Purchaser as they are incurred, and (ii) the Close
of Escrow shall not be delayed, nor shall the Closing Deadline be extended, in
any manner whatsoever. Purchaser shall also have the right to assign this
Agreement to an entity in which the Purchaser owns more than fifty percent
(50.0%), or is directly controlled by Purchaser.
     Section 18. Successors and Assigns
     Without waiver of the provisions of Section 17 hereof, all of the rights,
benefits, duties, liabilities, and obligations of the parties shall inure to the
benefit of, and be binding upon, their respective successors and assigns.
     Section 19. Notices
     All notices to be given under this Agreement shall be in writing and mailed
postage prepaid by certified or registered mail, return receipt requested, or by
personal delivery (albeit by overnight mail via a reputable regional overnight
mail carrier, or otherwise) to the address indicated below or at other places
designated by Purchaser or Seller in a written notice given to the other.
Notices shall be deemed served on the earlier of: (a) four (4) days after the
date of mailing, or (b) upon personal delivery.

             
 
  To Purchaser:   Bill and John Skeffington    
 
           
 
     
 
   
 
           
 
     
 
   
 
      Attn: Mr.
 
   
 
      Telephone: (714) 540-1700    
 
      Facsimile: (714) 540-1709    

 

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  To Seller:   Moreno Marketplace, LLC    
 
      1809 Excise Avenue, Suite #208    
 
      Ontario, California 91761    
 
      Attn: Chief Legal Officer    
 
      Telephone: (909) 544-5000    
 
      Facsimile: (909) 544-5035    
 
                To Escrow Agent:   To the address set forth in Section 11 of
this Agreement.

     Section 20. Possession
     Possession of the Property shall transfer to Purchaser at the Close of
Escrow, subject to Purchaser’s rights of investigation during the Due Diligence
Period, as well as the rights of all tenants-in-possession at any time during
the existence of this Agreement.
     Section 21. Attorney’s Fees; Litigation Costs
     If any legal action or other proceeding, including arbitration, mediation,
or an action for declaratory relief, is brought to enforce or interpret this
Agreement, or because of a dispute, breach, default, or misrepresentation in
connection with this Agreement, the prevailing party (as determined by the
person or panel presiding over such proceeding) shall be entitled to recover
their reasonable attorney’s fees and other costs, in addition to any other
relief that may be granted. “Prevailing party” includes (a) a party who
dismisses an action in exchange for sums allegedly due; (b) the party that
receives performance from the other party of an alleged breach of covenant or a
desired remedy, if it is substantially equal to the relief sought in an action;
or (c) the party determined to be prevailing by the person or panel presiding
over such proceeding.
     Section 22. Time of the Essence
     Time is of the essence in this Agreement and every provision contained in
this Agreement, and the interpretation of this provision shall be construed in
its broadest scope in the event of the use of this provision in any dispute
between the parties or any interpretation of this Agreement.
     Section 23. Construction
     The titles and headings of the Sections contained within this Agreement are
intended solely for reference purposes and are not intended to, nor shall they,
modify, explain, or construe any provision of this Agreement. All references to
sections, recitals, and the preamble shall, unless otherwise stated, refer to
the Sections, Recitals, and Preamble set out in this Agreement. In construing
this Agreement, the singular form shall include the plural and vice versa, and
the word “and” shall include the words “or” and “and/or”, and the words “he”,
“she”, “it” and “they” shall be deemed to be interchangeable wherever found and
used. This Agreement shall not be construed as if it had been prepared by one of
the parties, but rather shall be construed recognizing that both parties
actively participated in the negotiation and preparation of this Agreement.
Furthermore, each of the parties have had the opportunity to seek the guidance
and counsel of one or more attorneys of their sole choosing and each party in
entering into this Agreement does acknowledge that they are entering into it
with the guidance and counsel of their attorneys or that they have

 

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elected, on their own, to enter into this Agreement without the guidance and
counsel of attorneys of their sole choosing.
     Section 24. Integration
     This Agreement, all attached exhibits, and all related documents referred
to in this Agreement, are intended to, and shall, constitute the entire
agreement between the parties with regard to the subject matter set out in this
Agreement. Each party does further acknowledge that there the other party has
not made, nor are they relying upon, any oral or parole agreements which are not
expressly set forth in this Agreement or the related documents being executed in
connection with this Agreement. This Agreement may not be modified, amended, or
otherwise changed except by a writing executed by the party to be charged.
     Section 25. Third-Party Rights
     Nothing in this Agreement, express or implied, is intended to, nor shall
it, confer upon any person or entity, other than the parties to this Agreement
and their respective successors, heirs and assigns, any rights, privileges,
standing or remedies.
     Section 26. Severability
     If any term or provision of this Agreement is hereafter determined to be
invalid or unenforceable, the remainder of this Agreement shall not be affected
and shall be interpreted in such a manner as to give full force and effect to
the remaining portions of this Agreement in accordance with the terms and
conditions set out in this Agreement.
     Section 27. Waivers
     No waiver or breach of any one or more provisions of this Agreement shall
be deemed to be a waiver of any one or more other provisions set out in this
Agreement. Furthermore, no waiver made, or deemed made, shall be valid unless it
is in writing and executed by the waiving party. No extension of time for
performance of any obligation or act shall be deemed an extension of time for
any other obligation or act, whether similar or dissimilar in nature.
     Section 28. Counterparts
     This Agreement may be executed in one or more counterparts, each of which
when so executed shall be deemed an original and all of which when taken
together shall constitute one and the same instrument. As such, the execution of
this Agreement shall be deemed to have occurred, and this Agreement shall be
enforceable and effective, upon the execution of this Agreement, in counterpart
or in one document, by Seller and Purchaser.
     Section 29. Survival
     Each of Purchaser’s and Seller’s representations and warranties set out in
Section 7 of this Agreement, and elsewhere where expressly so stated, shall
survive the Close of Escrow and the delivery and recordation of the Deed.
     Section 30. Incorporation of Exhibits
     All exhibits which are attached to this Agreement are hereby expressly made
a part of, and are incorporated into, this Agreement by reference.

 

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     Section 31. Offer and Acceptance
     Seller has delivered two (2) copies of this Agreement to Purchaser on
Monday, September 21, 2009. Based on that fact, the delivery of those copies of
this Agreement to Purchaser shall not be deemed to have constituted an offer by
Seller, or any other person or entity, to sell the Property or the Personal
Property, or any part thereof, to Purchaser, unless and until Seller shall have
signed both of those copies, or another original of this Agreement which Seller
shall have delivered to Purchaser. Purchaser does hereby further acknowledge and
agree that it understands the affect of this Section 31 on it and as it relates
to Seller, and that it is not relying on the submittal of this Agreement, by
Seller, as being an offer to sell the Property and/or Personal Property to it
and will not seek to enforce this Agreement, before it is signed by Seller, as
against the Seller.
     Section 32. Authority of Parties
     All persons executing this Agreement on behalf of a party are hereby
warranted by such party as being duly qualified to act on their behalf and by
their signatures to lawfully bind such party to the provisions set out in this
Agreement.
     Section 33. Governing Law
     This Agreement shall be governed by, and construed in accordance with, the
laws of the state of California, without regard to any conflicts of law or
diversity issues.
[The remainder of this page has been intentionally left blank]

 

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     IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement (i) as of the Effective Date as to
Purchaser, and (ii) as of the date set out immediately following its signature
block, if such a signature is provided, on behalf of the Seller.

             
 
  SELLER:        
 
                Moreno Marketplace, LLC, a California limited liability company
   
 
           
 
  By:   Guardian Commercial Real Estate, L.P., its Sole Member    
 
           
 
  By:   Guardian Realty GP, LLC, a Delaware Limited liability company, its
Co-General Partner    
 
           
 
  By:   /s/ James P. Previti    
 
  Name:  
 
JAMES P. PREVITI    
 
  Its:   CEO    
 
  Dated:   OCT. 1, 2009    
 
                PURCHASER:    
 
                Bill and John Skeffington, individuals    
 
           
 
  By:   /s/ Bill Skeffington    
 
  Name:   Bill Skeffington    
 
           
 
  By:   /s/ John Skeffington    
 
  Name:  
 
John Skeffington    

 

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EXHIBIT A
LEGAL DESCRIPTION OF THE REAL PROPERTY
All that certain real property located in Riverside County, California described
as follows:
Lot 8, together with the southerly 103.07 feet of Lot 1, in Block 132 of Map
No. 1 of Bear Valley and Alessandro Company, as per Map recorded in Book 11 Page
10 of Maps, in the Office of the County Recorder of San Bernardino County,
California.
Said property is also shown as Parcel B of Lot Line Adjustment No. 980, recorded
on February 27, 2007, as Instrument No. 2007-134113, in the Official Records of
Riverside County, California.

 

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EXHIBIT A-1
PICTORIAL REPRESENTATION OF THE REAL PROPERTY
(to be supplied, by Seller, during the Due Diligence Period)
Purchaser has acknowledged and agreed, in the Agreement which is hereby
reaffirmed, that the values and numbers contained within this Exhibit are not
being certified by Seller as being accurate or true, and as such Purchaser shall
conduct its own investigations to determine what it believes the values and
numbers actually are in relation to the Real Property and will make its
determination regarding whether or not to acquire the Property based solely upon
its own investigations, studies and tests which in any way impact on or affect
any aspect of the Property

 

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EXHIBIT B
NON-FOREIGN AFFIDAVIT OF SELLER
(to be provided by the Escrow Agent)

 

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EXHIBIT C
PURCHASER’S TERMINATION NOTICE
(to be provided by Purchaser during the Due Diligence Period)

 

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EXHIBIT “D”
WARRANTY BILL OF SALE
     This Warranty Bill of Sale (“Bill of Sale”) is executed as of [date] by
Moreno Marketplace, LLC, a California limited liability company (“Seller”) in
favor of Bill and John Skeffington, as individuals (collectively, the
“Purchaser”).
RECITALS
                    A. Seller and Purchaser have entered into an Agreement of
Purchase and Sale dated [date] (the “Purchase Agreement”), in which Purchaser
has agreed to purchase improved real property known as Moreno Marketplace
shopping center, located in the City of Moreno Valley, County of Riverside,
State of California (the “Property”), more particularly described in Exhibit
“1”, which is attached hereto and incorporated into this Bill of Sale.
                    B. Pursuant to the Purchase Agreement, Seller has agreed to
transfer to Purchaser all Seller’s rights in all fixtures contained on the
Property, together with certain personal property described in Exhibit “2”,
which is attached hereto and incorporated into this Bill of Sale (collectively,
the “Personal Property”).
          NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Seller agrees as follows:
SECTION 1. TRANSFER
               Seller transfers to Purchaser all of Seller’s right, title, and
interest in the Personal Property.
SECTION 2. SELLER’S COVENANT
               Seller covenants to Purchaser that Seller has good and marketable
title to the Personal Property, free of all liens, and has the right to transfer
the Personal Property to Purchaser.
SECTION 3. ATTORNEY’S FEES
               If any suit or action is instituted to enforce the rights of
either party under this Bill of Sale, the successful party, as adjudicated by a
court of law or other arbiter of such action, shall be entitled to its
reasonable attorneys’ fees and court costs.
SECTION 4. GOVERNING LAW
               This Bill of Sale shall be governed by, and construed in
accordance with, California law, notwithstanding any conflicts of law issues
which may otherwise exist.
               Seller has executed this Bill of Sale as of the date first above
written.

                  “SELLER”
   
 
                MORENO MARKETPLACE, LLC    
 
           
 
  By:        
 
  Name:  
 
   
 
  Its:  
 
   
 
     
 
   

 

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EXHIBIT “1”
LEGAL DESCRIPTION
All that certain real property located in Riverside County, California described
as follows:
Lot 8, together with the southerly 103.07 feet of Lot 1, in Block 132 of Map
No. 1 of Bear Valley and Alessandro Company, as per Map recorded in Book 11 Page
10 of Maps, in the Office of the County Recorder of San Bernardino County,
California.
Said property is also shown as Parcel B of Lot Line Adjustment No. 980, recorded
on February 27, 2007, as Instrument No. 2007-134113, in the Official Records of
Riverside County, California.

 

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EXHIBIT “1”
LIST OF PERSONAL PROPERTY BEING SOLD
(to be supplied during Due Diligence)