Exhibit 10.3

SALE AGREEMENT

[Claremont Medical Plaza, 1601 Monte Vista Drive, Claremont CA]

This Sale Agreement (“Agreement”) made and entered into as of November 9, 2012
(“Effective Date”), by and among Claremont Venture I, L.P., a California limited
partnership (“Seller”) and MMIC Acquisition Corporation, a Florida corporation
(“Buyer”). For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound hereby the
parties hereto agree as follows:

1.          Definitions.    In addition to other words and terms defined
elsewhere in this Agreement, as used herein the following words and terms shall
have the following meanings, respectively, unless the context hereof otherwise
clearly requires:

Broker - CBRE

Cancellation Procedures – Where invoked in this Agreement: (i) Buyer shall be
entitled to a return of the Deposit; (ii) the parties shall split equally any
remaining, escrow and title cancellation fees; and (iii) all obligations under
this Agreement shall terminate except for the parties’ obligations under
Sections 5.1.3, 5.3 and 10, and any Seller liability where the Cancellation
Procedures arose from a Seller default.

Closing - the consummation of the purchase of the Property in accordance with
the terms of this Agreement.

Closing Date – January 8, 2013.

Contingency Time – 8:00 p.m. Pacific time on December 12, 2012.

County – Los Angeles County, California.

Deposit - (i) $100,000 (“First Deposit”), to be delivered to Escrow Holder
within 2 business days after mutual execution and delivery of this Agreement;
plus (ii) $300,000, to be delivered to Escrow Holder within 2 business days
after the Contingency Time (“Second Deposit”); plus (iii) all interest earned
thereon while in Escrow.

Escrow Holder – First American Title Insurance Company.

Hazardous Materials - any substance, chemical, waste or material that is or
becomes regulated by any federal, state or local governmental authority because
of its toxicity, infectiousness, radioactivity, explosiveness, ignitability,
corrosiveness or reactivity, Including asbestos or asbestos containing material,
toxic mold and fungus, the group of compounds known as polychlorinated
biphenyls, flammable explosives, oil, petroleum or any refined petroleum
product.

Improvements - the building and other improvements located on the Land,
Including all fixtures, furniture, equipment, appliances and other types and
items of personal property affixed thereto, located thereon and used in
connection with the operation of the Property, and owned by Seller, but
excluding any personal property owned by any tenants under the Leases..

 

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Exhibit 10.3

 

Including (or variations thereof) - including, but without limitation.

Indemnify - indemnify, defend (with counsel reasonably acceptable to
indemnitee), protect and hold harmless.

Land - those certain parcels of land described in the form Deed attached hereto
as Exhibit A, together with all of the tenements, hereditaments and
appurtenances belonging to or in any way appertaining to such real property, and
all of Seller’s right, title and interest in and to (i) any and all real
property lying in the bed of any street, road or avenue, open or proposed, in
front of or adjoining such real property to the center line thereof, (ii) any
strips and gores of land adjacent to, abutting or used in connection with such
real property, and (iii) any easements and rights appurtenant to such real
property.

Lease - each lease and amendment delivered pursuant to Section 5.1.1 or executed
after the Effective Date in accordance with Section 7.1.

Permits - federal, state and local governmental consents, waivers,
authorizations, licenses, approvals and permits required for the occupancy,
management, leasing, maintenance and operation of the Land and Improvements.

Permitted Exceptions - (1) current taxes and assessments not yet due and
payable; (2) all matters in the PTR and any surveys delivered by Seller pursuant
to Section 5.1.1 or obtained by Buyer or in any PTR supplements delivered to
Buyer prior to the Contingency Time; (3) the possessory rights of tenants, as
tenants only without any rights to purchase the Property; (4) any exception to
title caused by Buyer or expressly approved in writing by Buyer; (5) any matters
of record recorded prior to the effective date of the PTR and set forth in the
PTR; (6) any matters disclosed in any supplements or amendments to the PTR
delivered to Buyer prior to the Contingency Time; and (7) any matters which
Buyer could have discovered on or before the Contingency Time by a proper
survey. Notwithstanding anything to the contrary, Permitted Exceptions shall not
include any Removed Exceptions Nothing contained herein shall prohibit or limit
Buyer in any way from objecting to any or all of such Permitted Exceptions
pursuant to Sections 4, 5.7(b) and 5.7(d).

Possession – means a document either (i) in the actual, physical possession of
Seller or its employees, or (ii) within the possession of an agent to or
consultant of Seller and who has a contractual obligation to deliver such
document to Seller upon demand or which Seller is legally entitled to obtain
from a non-governmental third party without expense.

Property - the Land and the Improvements, Permits, and the interest of Seller in
the Leases.

Property Conditions - Any matter whatsoever relating to the Property or this
Agreement or of concern to Buyer, Including: title; the environmental condition
of the Property (Including the presence or absence of Hazardous Materials in, on
or about the Property and Including: claims, liabilities and contribution,
reimbursement and indemnity rights relating to the presence, discovery or
removal of any Hazardous Materials in, at, about or under any Property, or for,
connected with or arising out of any and all claims or causes of action based
thereon

 

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Exhibit 10.3

 

Including any claims made under CERCLA or other similar environmental laws,
whether state or Federal, providing for contribution); water, soil, pest and
geological conditions of the Property; the financial condition of the Property;
the suitability of the Property or any and all activities and/or uses which may
be conducted thereon; the compliance of or by the Property with any and all
laws, rules, ordinances or regulations of any applicable governmental authority
or body (Including environmental, zoning, building codes, and the status of any
development or use rights respecting the Property); the habitability,
merchantability, marketability, profitability or fitness for a particular
purpose of the Property; or the physical condition of the Improvements,
Including construction defects, deferred maintenance or other adverse physical
conditions or defects.

Purchase Price - Nineteen Million Two Hundred Fifty Thousand Dollars
($19,250,000), subject to increase to up to $19,650,000 per Section 7.1.1.

PTR - a title commitment for the Property issued by Escrow Holder, including the
best available copies of underlying documents, agreeing to issue to Buyer an
Owner’s ALTA extended coverage (subject to a survey exception unless Buyer
delivers to Escrow Holder an acceptable survey) title insurance policy in the
total amount of the Purchase Price insuring fee simple title to the Property.

Removed Exceptions - (1) any mortgages, deeds of trust, mechanics liens and
other voluntary monetary liens other than the lien for taxes not yet due and
payable; (2) any lien for assessments under any CC&Rs or other document of
record other than those assessments which are not yet due and payable and which
shall be prorated at Closing, as applicable; (3) any Title Defects which Seller
elects to cure per Sections 4, 5.7(b) or 5.7(d); and (4) any recorded judgment
liens.

Reserved Matters – Claims by Buyer against Seller for fraud or for breach of any
covenants, representations or warranties of Seller expressly set forth in this
Agreement and not waived or terminated pursuant to Sections 5.5, 5.7.1, 11.2 or
13.10.

Seller’s Knowledge - the actual knowledge of Clayton M. Corwin as of the date
the representation is made and without any duty of discovery, investigation,
inquiry or inspection; notwithstanding the reference to such person, such person
shall have no liability to Buyer hereunder or otherwise. Such person,
notwithstanding being named above, is not a party to, and has no personal
liability under, this Agreement.

2.          Purchase and Sale of the Property.    Subject to the terms,
provisions and conditions set forth herein, Seller hereby agrees to sell the
Property to Buyer, and Buyer hereby agrees to purchase the Property from Seller.

3.          Purchase Price for Property.    The Purchase Price for the Property
shall be payable in the following manner:

3.1        Deposit.

3.1.1     Buyer shall deliver each portion of the Deposit to Escrow Holder when
required under the “Deposit” definition. If any portion of the Deposit is not
paid when required and

 

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Exhibit 10.3

 

remains unpaid three (3) days after receipt (or deemed receipt per Section 12)
by Buyer of written notice of such default, then Buyer shall be in material
default and Seller may terminate this Agreement effective upon written notice to
Buyer, whereupon the liquidated damages provisions of Section 11.1 shall apply.

3.1.2       If the Agreement is terminated pursuant to Section 5.5 before the
Contingency Time, the Deposit (or so much thereof as has been actually
deposited) shall be immediately returned to Buyer without objection by Seller.
After the Contingency Time, the Deposit (or so much thereof as has been actually
deposited) shall be either: (i) credited against the Purchase Price at Closing;
or (i) retained by Seller as liquidated damages pursuant to Section 11.1; or
(iii) returned to Buyer if this Agreement is terminated prior to Closing
pursuant to Section 5.7.1 or otherwise as may be set forth in this Agreement.

3.2        Balance of Purchase Price. The balance of the Purchase Price,
increased or decreased by any closing costs and prorations allocable to Buyer as
provided below, shall be paid in full by a wire transfer by Buyer to Escrow
Holder in immediately available federal funds, when and as provided in
Section 6.2.1.

4.          Title Review; Survey.    Escrow Holder is hereby instructed to
prepare and deliver the PTR to Buyer with a copy to Seller within seven
(7) business days of the Effective Date. Buyer may cause a new survey of the
Property to be prepared at its own expense by a registered land surveyor duly
licensed in the State of California (the “Survey”). Buyer shall have the right
to disapprove any aspect of title and Survey (including, without limitation,
exceptions appearing the in the PTR or Survey) before the Contingency Time
pursuant to this Section 4. Before the Contingency Time, Buyer may notify Seller
in writing of any defects or objections to the title appearing in the PTR
(including any PTR Schedule B-1 requirements which Buyer wishes to require
Seller to satisfy) or the Survey (“Title Defects”), provided that Buyer need not
notify Seller of Removed Exceptions, and provided that Buyer rights shall
include the right to object to any Permitted Exceptions. Any failure by Buyer to
provide such notice shall be deemed Buyer’s approval of the PTR and Survey. No
later than three (3) days after receipt of Buyer’s notice of Title Defects,
Seller shall provide written notice to Buyer of those Title Defects which Seller
elects in its sole discretion to cure (which shall become thereby additional
Removed Exceptions); provided that if Seller fails or elects not to deliver such
written notice by the earlier of such 3 day period or the Contingency Time, then
Seller shall be deemed to have elected not cure any such Title Defects. If
Seller elects not to cure any Title Defects, or is deemed to have elected not to
cure any Title Defects, Buyer shall have the absolute right to terminate this
Agreement per Section 5.5.

5.          Inspection and Contingencies.

5.1        Due Diligence Documents.

5.1.1     Specific Deliveries.   Within two (2) business days after the opening
of Escrow, Seller shall deliver to Buyer copies of the following documents (“Due
Diligence Documents”):

 

  (1)

The most recent survey of the Property in Seller’s Possession (“Old Survey”).

 

  (2)

All written environmental, engineering, seismic, soils and other physical
reports commissioned by Seller or otherwise, pertaining to the Property and in
Seller’s Possession.

 

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Exhibit 10.3

 

  (3)

All Leases currently in effect.

 

  (4)

The 2009, 2010, 2011 and (to be delivered upon completion around mid November)
year to date through October 31, 2012 operating statements of Seller for the
Property in such form as is customarily maintained by Seller.

 

  (5)

All contracts relating to the maintenance and operation of the Property
(“Service Contracts”); excluding, however, any property management contracts
with affiliates of Seller, any insurance policies and any sale or leasing
brokerage listing agreements, none of which will be assigned to Buyer at the
Closing.

 

  (6)

2010, 2011-2012 tax bills.

 

  (7)

The last four months’ rent rolls on the current form used by Seller.

 

  (8)

Copies of utility bills for the current month.

 

  (9)

Insurance claim loss history for the last 3 years.

 

  (10)

Certificates of Occupancy, or governmental equivalent, for the Property and all
Tenant spaces, in Seller’s Possession.

 

  (11)

Floor plans, site plan and unit location for the Property, in Seller’s
Possession.

 

  (12)

Any NHD (defined in Section 5.4) in Seller’s Possession.

5.1.2     Other Records.   In addition to the above documents, on one
(1) business day advance notice from Buyer, Seller shall, to the extent in
Seller’s Possession, provide access to all of Seller’s books and records
relating exclusively to the Property (but excluding any privileged information,
work product, marketing studies, appraisals and information relating to Seller
itself), to be inspected and copied by the Buyer at the offices of the property
manager during regular business hours, Including tenant lease correspondence and
files.

5.1.3     Return of Documents.   If this Agreement is terminated prior to
Closing for any reason, then promptly following such termination, Buyer shall
return to Seller, within five (5) business days after termination: (i) all
original Due Diligence Documents and copies made by Buyer or transferees thereof
from Buyer; and (ii) copies of all third party reports and studies relating to
the Property and received by Buyer, but without any representation or warranty
by Buyer.

5.2         Inspections.      Until Closing, Buyer, through its agents,
employees and independent contractors (“Buyer’s Agents”), has the right to enter
the Land and Improvements, for the purpose of inspecting the same and
performing, at its sole cost and expense, environmental, engineering and other
inspection or tests thereon as Buyer deems necessary in its sole discretion.
Buyer agrees to provide Seller with at least 24 hours’ notice prior to

 

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Exhibit 10.3

 

performing any such inspections or tests.. Buyer shall have no right to perform
any invasive testing or borings without Seller’s prior written consent which may
be withheld in Seller’s sole and absolute discretion. Seller shall have the
right to have one or more of its agents or representatives accompany Buyer or
Buyer’s Agents at all times while Buyer or Buyer’s Agents are on the Property.
As a condition to any entry, Buyer shall provide Seller with sufficient evidence
to show that Buyer and Buyer’s Agents, who are to enter upon the Property, are
adequately covered by a general commercial liability insurance policy insuring
against any and all liability arising out of Buyer’s or Buyer’s Agents’ entry
upon and Inspection of the Property, Including any loss or damage to the
Property, with coverage in the amount of not less than $1,000,000 per
occurrence. Such insurance shall name Seller as an additional insured.

5.3        Indemnity.      Buyer Indemnifies Seller, and its employees, agents
and consultants, against any loss, damage or liability caused by Buyer or its
employees or agents solely arising or connected with said inspections and/or
testing by Buyer’s Agents, Including any mechanics’ or materialmen’s liens,
attorneys’ fees and court costs incurred in connection with the defense of said
claims, except for those matters which are merely discovered by Buyer during
such inspections.

5.4        Natural Hazards Disclosure.   Buyer waives receipt and review of a
Natural Hazards Disclosure for the Property (“NHD”) in connection with the
following California Code Sections: Government Code Sections 8589.4 (Dam Failure
Inundation Areas); 8589.3 (Special Flood Hazard Area); Government Code Sections
51183.4, 51183.5 (Fire Hazard Severity Zone); Public Resources Code
Section 2621.9 (Earthquake Fault Zone); Public Resources Code Section 2694
(Seismic Hazard Zone); and Public Resources Code Section 4136 (Wildland Area);
and California Civil Code Section 1102.3.

5.5        Contingency Time Disapproval.    Buyer may terminate this Agreement
for no reason or for any reason (Including as a result of Buyer’s review and
investigations under Sections 4, 5.1 or 5.2 or because Buyer disapproves
Exhibits E or F) by delivery of written notice of such termination on or before
the Contingency Time. If Buyer fails, or elects not, to terminate this Agreement
by the Contingency Time, then upon the Contingency Time, all of the conditions
in Sections 4, 5.1 and 5.2, and Buyer’s right to terminate per this Section 5.5,
shall be deemed waived and shall terminate. If Buyer terminates this Agreement
by the Contingency Time pursuant to this Section, the Cancellation Procedures
shall apply.

5.6        Omitted.

5.7        Buyer Closing Conditions.    The following are conditions to Closing
for Buyer’s benefit, unless they have been waived by Buyer:

(a)         Default.   As a Buyer Closing condition, Seller shall not be in
material default of any Seller pre-Closing covenant or any Section 8
representation and warranty.

(b)         Survey.   Provided Buyer orders a Survey within five (5) calendar
days after the Effective Date but is unable to receive such Survey by the
Contingency Time, then if Buyer thereafter receives the Survey and it discloses
additional title exceptions not disclosed in the PTR or the Old Survey ("Survey
Exception"), then Buyer may disapprove any Survey Exception by written notice to
Seller within five (5) business days after receipt of the Survey

 

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Exhibit 10.3

 

("Survey Notice"); provided that Buyer's failure to timely object shall be
deemed Buyer's approval of such Survey Exceptions. Upon receipt of a timely
Survey Notice, Seller shall within three (3) business days either (i) covenant
to remove such Survey Exception by Closing; or (ii) elect not to do so; provided
that Seller's failure to timely object shall be deemed Seller's election under
subsection (ii). If Seller elects not to remove a Survey Exception, then Buyer
may terminate this Agreement within three (3) business days of Seller's election
or deemed election of Subsection (ii), in which case Section 5.7.1 shall apply,
provided that if Buyer fails to timely terminate then the Survey Exception shall
be deemed a Permitted Exception.

(c)         Title Policy.  As a Buyer Closing condition, Escrow Holder shall be
committed to issue at the Closing with respect to the Property an original 2006
ALTA extended coverage (with a survey exception unless Buyer delivers to Escrow
Holder an acceptable Survey) owner’s policy of title insurance, in the amount of
the Purchase Price, subject to no exceptions other than the Permitted
Exceptions.

(d)         PTR Supplements.    If after the Contingency Time Escrow Holder
delivers any supplement to the PTR disclosing additional title exceptions first
arising after the effective date of the PTR ("New Exception"), then Buyer may
disapprove any New Exception by written notice to Seller within five
(5) business days after receipt of the supplemental report ("Additional PTR
Notice"); provided that Buyer's failure to timely object shall be deemed Buyer's
approval thereof. Upon receipt of a timely Additional PTR Notice, Seller shall
within three (3) business days either (i) covenant to remove such New Exception
by Closing; or (ii) elect not to do so; provided that Seller's failure to timely
object shall be deemed Seller's election under subsection (ii). If Seller elects
not to remove a New Exception, then Buyer may terminate this Agreement within
three (3) business days of Seller's election or deemed election of Subsection
(ii), in which case Section 5.7.1 shall apply, provided that if Buyer fails to
timely terminate then the New Exception shall be deemed a Permitted Exception.

(e)         Condemnation.    As a Buyer Closing condition, Buyer shall not have
received notice after the Contingency Time of a pending or threatened action,
suit or proceeding to condemn or take all or any part of the Property under the
power of eminent domain (“Condemnation”) either: (a) which substantially impairs
access to the Improvements; or (b) results in the termination of any Leases in
the Property. Seller shall promptly notify Buyer of any pending or threatened in
writing Condemnation which Seller discovers after the Effective Date. If a
Condemnation occurs after the Effective Date and prior to Closing but Buyer
nonetheless waives this condition, then upon the Closing, Seller shall deliver
to Buyer all Condemnation awards received and assign the right to Buyer to any
future Condemnation awards. Notwithstanding any Condemnation, there shall be no
reduction in the Purchase Price.

(f)         Casualty.  Seller assumes all risk and liability, damage to or
injury occurring to the Property and/or Improvements by fire, storm, accident or
any other casualty or cause until the Closing has been consummated. If the
Property and/or Improvements or any part thereof, suffers any damages prior to
the Closing from fire or other casualty, Seller shall promptly notify Buyer of
such damage. If such damage is not Material, then upon Closing the proceeds of
all insurance covering such damage (less the portion used to repair and less any
portion retained by Seller’s lender) and post-closing rent loss insurance shall
be assigned by Seller to Buyer at Closing and the Purchase Price shall be
reduced by the amount of any deductible and any insurance proceeds retained by
Seller’s lender. If such damage is Material, then Buyer shall

 

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Exhibit 10.3

 

have the option to: (x) terminate this Agreement whereupon the Deposit shall be
returned to Buyer and the Cancellation Procedures shall apply; or (y) elect to
proceed to Closing without Seller repairing such damage, consummate the Closing,
in which case the proceeds of all insurance covering such damage (less any
portion retained by Seller’s lender) and post-closing rent loss insurance shall
be assigned by Seller to Buyer at Closing and the Purchase Price shall be
reduced by the amount of any deductible and any insurance proceeds retained by
Seller’s lender. For purposes hereof, “Material” shall be deemed to mean a
damage: (i) resulting in termination of one or more Leases; (ii) for which the
repair cost exceeds $285,000, as reasonably estimated by Seller’s contractor
reasonably approved by Buyer; or (iii) the repair time exceeds 3 months from
building permit, as reasonably estimated by Seller’s contractor reasonably
approved by Buyer. Seller agrees to provide to Buyer copies of all claims,
correspondence, and damage reports and such other information as reasonably
requested by Buyer, submitted to or received by Seller in connection with said
casualty.

(g)         Estoppels.    On or before three (3) business days after the
Contingency Time, Seller shall prepare and deliver to all tenants an estoppel
certificate in the AIREA estoppel form and consistent with the information
specified on the Section 5.1.1 rent roll. As conditions to Closing for Buyer’s
benefit: (i) Buyer shall have received such executed estoppels dated not earlier
than December 1, 2012 from Pomona Valley Hospital Medical Center (“PVH”) and
from other tenants aggregating (with PVH) at least 85% of the rented area of the
Property, either in the AIREA form or in such form as is required by the
applicable Lease; and (ii) no returned estoppels shall have any material,
adverse, information added thereto. All estoppels returned shall be deemed
acceptable to Buyer unless specifically disapproved in writing by the earlier of
the Closing or five (5) business days after receipt. For the remainder of the
rented area not covered by estoppels to be returned per Subsection (i), Seller
shall deliver on or before three (3) business days prior to Closing estoppels in
the form of Exhibit C (“Seller Estoppels”); provided that Seller’s liability
under a Seller Estoppels shall terminate upon receipt after Closing of a tenant
estoppel which complies with Subsections (i) and (ii) of this subsection (g).

(b)         Rep Changes.    As a Buyer Closing condition, no Material Change
(other than those which are timely Cured) shall have occurred. The term “Change”
means the discovery by Buyer (Including as a result of notice from Seller) after
the Contingency Time and before the Closing that any Section 8 representation
and warranty (excluding Sections 8.6.1 and 8.9.1) was true on the Effective Date
but became untrue by Closing. The term “Material” means that the Change has, or
if uncertain or unliquidated is reasonably expected to have, an adverse
financial impact on Buyer exceeding $20,000. Seller covenants to deliver prompt
written notice of any Change known to Seller’s Knowledge. Upon a Material
Change, Buyer shall give Seller written notice thereof and Seller shall have the
option, but not the duty, to correct the underlying facts so as to cure such
Material Change (“Cure”) within five (5) business days after such notice (and
such Cure might include a reasonable indemnification of Buyer by Seller as to
unliquidated matters in form, scope and content acceptable to Buyer). Seller’s
election not, or failure, to Cure shall not constitute a Seller default unless
such Change also constitutes a Seller default under Section 7.

5.7.1     Failure.    Upon failure of a Section 5.7 condition, Buyer may
terminate this Agreement. Upon the Closing, all conditions in Section 5.7, and
any default described in Section 5.7(a) of which Buyer has actual knowledge as
of the Closing shall be deemed waived by Buyer. If Buyer timely terminates this
Agreement pursuant to this Section, the Cancellation Procedures shall apply.

 

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Exhibit 10.3

 

6.          CLOSING

6.1        Opening of Escrow.    Escrow shall be opened upon delivery of the
First Deposit and a fully signed copy of this Agreement to the Escrow Holder.
The Deposit and any other funds delivered to Escrow Holder shall be deposited by
Escrow Holder in an insured interest bearing account as designated by Buyer.
Escrow Holder is hereby directed to disburse funds held by it in accordance with
the terms and provisions of this Agreement, or as otherwise directed in a
writing signed by both Buyer and Seller, or their legal counsel described in the
Section 12 notice provisions. These instructions shall be irrevocable and shall
supersede any conflicting provision in Escrow Holder's general conditions or in
any escrow instructions executed upon Escrow Holder's request. This Agreement
shall constitute escrow instructions to Escrow Holder. Notwithstanding anything
contained herein to the contrary, prior to the Contingency Time, this escrow
shall constitute a “sole order” escrow, meaning that if Buyer shall timely
deliver a termination notice to Seller and Escrow Holder on or prior to the
Contingency Time as provided in Section 5.2 above, Escrow Holder shall
immediately refund the Deposit to Buyer.

6.2        Closing Date.    Provided the Section 5.7 conditions have been
satisfied or waived and the Section 6.3 deliveries have been made, the Closing
shall occur on the Closing Date; provided, however, that if the Closing Date
falls on a Saturday, Sunday or holiday the Closing shall occur on the next
business day thereafter. The Closing shall take place through escrow at the
Escrow Holder's office or at such other place and time as the parties shall
mutually agree.

6.2.1     Buyer and Seller instruct Escrow Holder not to record the Deed and
otherwise consummate the Closing on any given day unless: (i) all deliveries
pursuant to Sections 6.3 have been made by the time required; (ii) Escrow Holder
is prepared to record the Deed; and (iii) Escrow Holder is ready, willing and
able to disburse Seller’s proceeds as directed by Seller by wire transfer no
later than Noon Pacific time on the day of recordation. If Escrow Holder cannot
comply with such conditions, then Escrow shall not Close that day but shall be
postponed to the next business day, with all Section 6.4 amounts re-prorated;
provided that any such extension beyond the scheduled Closing Date shall require
the approval of Buyer and Seller and shall not constitute a waiver of any
default by a party for failing to timely consummate the Closing.

6.3        Closing Deliveries.

6.3.1     By Seller.    On or before one (1) day prior to the Closing, Seller
shall deliver or cause to be delivered to Escrow Holder the following, fully
executed and acknowledged by Seller as applicable:

 

  (1)

A grant deed in the form of Exhibit A, attached hereto (“Deed”).

 

  (2)

Duplicate originals of the Assignment and Bill of Sale in the form of Exhibit B
(“Assignment”).

 

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Exhibit 10.3

 

  (3)

A FIRPTA affidavit and California Form 590 RE, in a form prepared by Escrow
Holder (“Affidavit”).

 

  (4)

Escrow Holder’s settlement statement.

 

  (5)

Duplicate originals of the property management and leasing agreement executed by
StoneCreek Company in the form of Exhibit F (“PMA”).

 

  (6)

All Seller Estoppels required under Section 5.7(g).

 

  (7)

The Holdback Agreement, if applicable per Section 7.1.1

 

  (8)

Any other monies, documents, instruments, records, correspondence or agreements
called for hereunder that have not previously been delivered to Buyer.

6.3.2     By Buyer.    On or before one (1) day prior to the Closing (except as
noted below), Buyer shall deliver, or cause to be delivered, to Escrow Holder
the following, fully executed and acknowledged by Buyer as applicable:

 

  (1)

The Purchase Price (less the Deposit previously delivered), to be received by
Escrow Holder by wire transfer no later than 9:00 a.m. Pacific time on the
Closing Date.

 

  (2)

Duplicate originals of the Assignment.

 

  (3)

The amounts allocated to Buyer in Sections 6.5 and Section 6.6.

 

  (4)

Escrow Holder’s settlement statement.

 

  (5)

Duplicate originals of the PMA.

 

  (6)

The Holdback Agreement, if applicable per Section 7.1.1

 

  (7)

Any other monies, documents, instruments, records, correspondence or agreements
called for hereunder that have not previously been delivered to Seller.

6.4        Closing Procedures.

6.4.1     Recordings.     Upon receipt of the funds and instruments described in
this Section 6 and written notice to proceed from Buyer and Seller, Escrow
Holder shall record the Deed, and record all other documents, including deeds of
reconveyance, necessary for title to the Property to be conveyed to Buyer free
and clear of all liens and encumbrances and other matters of record, except for
the Permitted Exceptions.

6.4.2     Deliveries.    Escrow Holder shall immediately (i) deliver to Buyer: a
conformed copy of the Deed; the original Assignment, PMA, and Holdback Agreement
if applicable; the

 

Stonecreek\Claremont\PSA-10    10   

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Exhibit 10.3

 

original Affidavit; and any other documents delivered into escrow by Seller; and
(ii) deliver to Seller: the Purchase Price less the Deposit, Seller's share of
prorations set forth in Section 6.5, and Seller's Closing Costs set forth in
Section 6.6; the PMA and the Holdback Agreement, if applicable, and any other
documents delivered into escrow by Buyer.

6.4.3     Ex-Escrow Deliveries.    Promptly following the Closing, Seller shall
deliver to Buyer outside of Escrow (to be delivered at the Seller’s property
management office) all of the following in Seller’s Possession: keys to the
Improvements; the original Leases and Lease files, including any tenant
correspondence; Service Contracts; Permits.

6.5        Prorations.     At Closing, the following prorations shall be
computed and apportioned between Buyer and Seller as of the date of Closing
based on the ratio of the number of days in the period for which such charges
are paid to the number of days in such period (i) before but not including the
date of Closing and (ii) including and from and after the date of Closing:

6.5.1     Rents and CAM Reimbursements.    The parties shall prorate the
following: Lease rents and Lease expense reimbursements ("Rents"): (i) due for
the month in which the Closing occurs ("Closing Month"); and (ii) otherwise
collected prior to the Closing. The parties shall not prorate the following
until collected: Rents which are past due prior to the Closing Month
("Receivables"). Rents collected after Closing by Buyer shall be allocated:
first to Buyer to the extent of collection costs; next to Buyer to the extent of
Rents applicable to the post-Closing period and then due and payable; next to
Seller to the extent of Receivables; and the remainder to Buyer. Seller shall
retain the right to commence collection actions for Receivables (without any
right to terminate leases or evict tenants).

6.5.2     Expenses.    Water, sewer and utility charges and any other amounts
payable under any Service Contracts, annual permits and/or inspection fees.
Seller and Buyer shall cooperate to ensure that utilities are not cut off at
Closing, by either transferring to Buyer utility services on the Closing Date,
or coordinating to concurrently terminate Seller, and commence Buyer, utilities.

6.5.3     Security Deposits.    The amount of any security or other deposits
under the Leases specified in the Assignment shall be credited against the
Purchase Price and Seller shall retain such deposits.

6.5.4     Taxes.  Real and personal property taxes and assessments on the
Property shall be prorated on the actual number of days elapsed.

6.5.5     Leasing Costs.    For any Lease amendment, extension or new lease
executed after the Effective Date in compliance with Sections 7.1 and 7.1.1
(except for Seller TILC described therein), at Closing Buyer shall assume all
obligations to pay or incur brokerage commissions, tenant improvement costs and
allowances and other tenant inducements ("Lease Costs"), and reimburse Seller
for all Lease Costs paid to date. All of such Lease Costs must be disclosed to
Buyer no later than five (5) Business Days prior to the Contingency Time. Seller
shall be and remain responsible for all brokerage commissions and tenant
improvement costs and allowances due on or before Closing with respect to any
Lease executed on or before the Effective Date.

 

Stonecreek\Claremont\PSA-10    11   

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Exhibit 10.3

 

6.5.6    Non-Prorated Items.  The following items shall not be prorated:
insurance premiums.

6.5.7    Re-prorations.    Seller and Buyer hereby agree that if any of the
Section 6.5 prorations cannot be calculated accurately as of the Closing Date,
then the same shall be estimated (based on current information then known, such
as the most recent tax bills) for the purposes of Closing and within thirty
(30) days after the Closing Date, or as soon thereafter (but in no event shall
re-prorations under Sections 6.5.2, 6.5.4 and 6.5.5 occur more than 90 days
after the Closing) as sufficient information is available to permit the parties
to effectively calculate such prorations, either party owing the other party a
sum of money based on such subsequent prorations shall pay such sum to the other
party within ten (10) days after such calculations.

6.6       Closing Costs.    Seller shall pay: (1) documentary transfer tax;
(2) costs of removing any lien, assessment or encumbrance required to be
discharged hereunder in order to convey title to the Property as herein
provided; (3) the cost of a 2006 ALTA standard coverage policy of title
insurance in the amount of the Purchase Price; (4) 50% of the Escrow Holder’s
escrow fees; and (5) such other costs and expenses related to the acquisition of
the Property normally paid by a seller in the County. Buyer shall pay: (a) Deed
recordation costs; (b) all costs of title insurance other than that described in
Subsection (3) Including premiums for extended coverage, any surveys obtained by
Buyer and any endorsements; (c) 50% of the Escrow Holder’s Escrow fees; (d) the
cost of any studies conducted by Buyer during Buyer’s due diligence; and
(e) such other costs and expenses related to the acquisition of the Property
normally paid by a buyer in the County.

7.        Seller’s Escrow Period Covenants.    Commencing on the Effective Date
and continuing until the Closing or earlier termination of the Agreement, Seller
covenants as follows:

7.1       Leases and Service Contracts.  After the Contingency Time, Seller
agrees not to amend or terminate any Leases or Service Contracts or enter into
any new leases or service contracts which cannot be canceled as of Closing.
Seller shall promptly deliver (and in all events at least five (5) business days
prior to the Contingency Time) copies of all Lease and Service Contract
terminations and amendments and new leases and service contracts executed before
the Contingency Time.

7.1.1    Suite 200 Lease.  Notwithstanding the above, Seller shall have the
absolute right to sign a lease for Suite 200, containing approximately 1,934
rentable sq. ft., within the following parameters and subject to the following
conditions (“Approved Lease”) prior to Closing:

Base Rent:  At least $2.00/month/per rentable sq. ft. (“RSF”).

Rent Start Date: The rent start date must occur by December 31, 2013. The period
from Closing until the rent start date is the “No Rent Period”.

TILC:  Landlord’s cost of moving allowances, leasing commissions, tenant
improvement costs and allowances (“TILC”) shall not exceed $130,000 plus any
portion Seller elects to pay (“Seller TILC”).

 

Stonecreek\Claremont\PSA-10    12   

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Exhibit 10.3

 

Form:  The Approved Lease shall be in substantially the form attached hereto as
Exhibit G, subject to such other changes (“Form Change”) requested by the tenant
and agreed to by Seller, and which changes are commercially customary and
reasonable for a landlord to concede under the current medical office building
lease practice in the area in which the Property is located (“Reasonable Form
Changes”). Seller shall deliver the final form of the Approved Lease to Buyer
when completed. Buyer shall have two (2) business days from receipt to indicate
Buyer’s approval of the Reasonable Form Changes to the final Approved Lease, and
if Buyer does not respond to Seller within such 2-business day period, Buyer
shall be deemed to have approved such final Approved Lease (it being
acknowledged by Buyer, for avoidance of doubt, that Buyer shall have no right to
object to or approve the basic terms of the Approved Lease as stated above, or
any terms already provided in the lease form attached as Exhibit G). Buyer shall
in any event not unreasonably withhold approval of the Reasonable Form Changes
and shall act in good faith regarding its review and approval of the final
Approved Lease.

(a)         If an Approved Lease is executed prior to Closing, then:
(1) Purchase Price shall increase by the sum of $400,000 minus $2.00 per rsf for
the No Rent Period (“No Rent Credit”); and (2) Seller will pay all Seller TILC
or grant Buyer a credit for Seller TILC at Closing in which case Buyer shall
assume such obligation.

(b)         If an Approved Lease is not executed by Closing, then: (1) the
parties shall deliver the Holdback Agreement in the form of Exhibit E; and
(2) Buyer will deposit with Escrow Agent the $400,000 (“Holdback”) per the
Holdback Agreement; and (3) Buyer shall retain Clayton M. Corwin, a California
licensed broker (“Agent”) as Buyer’s exclusive agent to lease Suite 200 for a
period of 9 months after Closing pursuant to a leasing agreement to be mutually
and reasonably agreed upon. The Holdback (less the No Rent Credit and any Seller
TILC) will be delivered to Seller (and the No Rent Credit and Seller TILC will
be delivered to Buyer) if: (A) Agent delivers to Buyer within such period either
(i) an Approved Lease executed by the tenant, or (ii) a new lease for Suite 200
reasonably acceptable to Buyer, or (B) Seller directly leases or otherwise
removes the Suite 200 premises from the market thus impairing Agent’s ability to
deliver an Approved Lease. Otherwise, the Holdback shall be returned to Buyer.
Buyer shall reasonably cooperate with Agent’s efforts to lease Suite 200 during
such period, and Agent shall likewise keep Buyer informed of the leasing status
for Suite 200.

7.2.        Condition of Property.  Seller shall lease, manage and maintain the
Property consistent with its current operating practices. Seller shall maintain
the Improvements in accordance with Seller’s normal operating practices,
Including repair or replacement of any mechanical, electrical or plumbing
equipment which first breaks and ceases functioning after the Contingency Time
(“Breaks”). Notwithstanding the above, Seller shall have no obligation (a) to
repair damage from casualty events, (b) to repair normal wear and tear items, or
(c) any obligation to expend more than $20,000 (except for Breaks) for any
correction of defects or deferred maintenance (whether or not such expenditure
would have normally been incurred in accordance with Seller’s normal operating
practices). If, after the Effective Date and prior to Closing, Seller receives
any Gov’t Notices or discovers to Seller’s Knowledge any Breaks (excluding those
repaired by Closing), then Seller will promptly notify Buyer of same.

 

Stonecreek\Claremont\PSA-10    13   

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Exhibit 10.3

 

7.3        Title.  After the Effective Date, Seller shall not cause, permit or
suffer any new monetary liens on the Property except for those expressly allowed
as Permitted Exceptions. After the Effective Date, and except for memoranda of
leases permitted by Section 7.1, Seller shall not cause or expressly permit any
documents to be recorded adversely affecting title to the Property which will
not be removed by Closing. By Closing, Seller shall remove all Removed
Exceptions.

8.          Seller Representations and Warranties.      Seller makes the
following representations and warranties as of the Effective Date and again,
subject to Changes, as of the Closing Date:

8.1        Seller is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of California. Seller will keep I
full force and effect through the Closing Date its legal existence and all
licenses and franchises necessary for the conduct of its business. Seller has
obtained all necessary authorizations and consents to enable it to execute and
deliver this Agreement and to consummate the transaction contemplated hereby.
This Agreement and the other documents to be executed by Seller hereunder will
have been duly entered into by Seller and will constitute legal, valid and
binding obligations of Seller enforceable in accordance with their respective
terms.

8.2        Seller is not a “foreign person” within the meaning of
Section 1445(f) (3) of the Internal Revenue Code of 1986, as amended.

8.3        The execution, delivery and performance of this Agreement and the
Closing hereunder will not conflict with any agreement, partnership agreement,
any other organizational papers or any amendments thereof, contract or law
applicable to Seller nor constitute a default under any agreement or instrument
to which Seller is a party or by which Seller or the Property are bound.

8.4        Seller has not: (1) made a general assignment for the benefit of
creditors; (2) filed any voluntary petition in bankruptcy; (3) received notice
of the appointment of a receiver to take possession of all or substantially all
of its assets; (4) received notice of the attachment or other judicial seizure
of all or substantially all of its assets; (5) admitted in writing its inability
to pay its debts as they come due; or (6) made an offer of settlement, extension
or composition to its creditors generally.

8.5        There is no unsatisfied judgment, litigation, arbitration or
administrative proceeding served upon Seller or, to Seller’s Knowledge pending
or threatened in writing against Seller, with respect to the Property or this
Agreement.

8.6        Seller has received no written notice from any governmental authority
with jurisdiction over the Property (“Gov’t Notices”) alleging any current
violation of any laws applicable to the Property.

8.6.1     Seller has received no Gov’t Notices notifying Seller of a special
assessments for public improvements against the Property, whether pending or
threatened, Including those for construction of sewer and water lines or mains,
street lights, streets, sidewalks and curbs.

 

Stonecreek\Claremont\PSA-10    14   

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Exhibit 10.3

 

8.7        Seller has not generated, manufactured, stored or disposed of
Hazardous Materials (other than de minimis amounts customarily and properly used
in connection with the maintenance of the Property) on the Property in violation
of applicable law and which are required by law to be remediated or removed. To
Seller’s Knowledge, there are no Hazardous Materials or underground storage
tanks in, on or under the Property in violation of applicable law.

8.8        All Seller Estoppels delivered at Closing shall be true and correct.

8.9        Seller has received no written notice alleging a Seller default
remaining uncured under any Service Contract.

8.9.1    Seller has given no written notice alleging a third party default
remaining uncured under any Service Contract.

8.10      Except for Leasing Costs per Section 6.5.5 and TILC per Section 7.1.1,
there are no sums due as leasing commissions or brokerage or finders fees in
connection with any of the Leases for which Buyer will become liable upon
Closing.

8.11      Seller has not received any written notices from any insurance company
which has issued a policy with respect to any portion of the Property, by any
board of fire underwriters, or from any governmental authority, alleging any
zoning, building, fire or health code violations in respect to the Property.

8.12      Seller has not granted to any person or entity any option or other
right to purchase to the Property.

8.13      Seller has commenced no real property tax reduction proceedings
pending with respect to the Property.

8.14      Seller has not commenced and pending, or threatened in writing, any
construction or construction defect litigation against any contractor, engineer
or architect with respect to the Property, which has not been resolved to
Seller’s satisfaction.

8.15      To Seller’s knowledge, Seller is not: (i) identified on any
governmental terrorist list or (ii) in violation of any applicable law, rule or
regulation relating to anti-money laundering or anti-terrorism, Including any
applicable law, rule or regulation related to transaction business with
prohibited persons or the requirements of any Anti-Terrorism Law.

9.          Buyer Representations.  Buyer represents and warrants as of the
Effective Date and again as of the Closing as follows:

9.1        Buyer has obtained all necessary authorizations and consents to
enable it to execute and deliver this Agreement and to consummate the
transaction contemplated hereby. This Agreement and the other documents to be
executed by Buyer hereunder will have been duly entered into by Buyer and will
constitute legal, valid and binding obligations of Buyer enforceable in
accordance with their respective terms.

 

Stonecreek\Claremont\PSA-10    15   

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

Exhibit 10.3

 

9.2        The execution, delivery and performance of this Agreement and the
Closing hereunder will not conflict with any agreement, contract or law
applicable to Buyer nor constitute a default under any agreement or instrument
to which Buyer is a party or by which Buyer is bound.

9.3        Buyer has not (i) made a general assignment for the benefit of
creditors; (ii) filed any voluntary petition in bankruptcy against it;
(iii) received notice of the appointment of a receiver to take possession of all
or substantially all of its assets; (iv) received notice of the attachment or
other judicial seizure of all or substantially all of its assets; (v) admitted
in writing its inability to pay its debts as they come due; or (vi) made an
offer of settlement, extension or composition to its creditors generally.

9.4        INTENTIONALLY DELETED..

9.5        Except for the Reserved Matters: (1) Seller has not made (and
specifically negates and disclaims) any representations or warranties, promises,
covenants, agreements or guarantees of any kind, character or nature whatsoever,
whether express, implied or otherwise, oral, written, of, as to, concerning or
relating to any Property Conditions; (2) by the Contingency Time, Buyer will
have examined, reviewed and inspected all Property Conditions and other matters
which, in Buyer’s judgment, bear upon the Property and its value and suitability
for Buyer’s purposes; (3) upon Closing, Buyer will acquire the Property solely
on the basis of its own physical and financial examinations, review and
inspections and the title insurance protection afforded by the owner’s title
policy; and (4) upon Closing, Buyer shall assume the risk that Property
Conditions, may not have been revealed by Buyer’s investigations. Except for the
Reserved Matters, upon the Closing: (a) Buyer represents, warrants, acknowledges
and agrees that upon the Closing, Buyer will be purchasing the Property on an
“AS IS, WHERE IS, WITH ALL FAULTS” basis, without representation or warranty of
any kind, character or nature, express, implied or otherwise; and (b) Buyer
releases Seller and all of Seller’s members, agents and affiliates from, and
waives any and all liability, claims, demands, damages and costs (Including
attorneys’ fees and expenses) of any and every kind or character, known or
unknown, for, arising out of, or attributable to, any and all Property
Conditions, Including: claims, liabilities and contribution, reimbursement and
indemnity rights relating to the presence, discovery or removal of any Hazardous
Materials in, at, about or under any Property, or for, connected with or arising
out of any and all claims or causes of action based thereon Including any claims
made under CERCLA or other similar environmental laws, whether state or Federal,
providing for contribution. Except for Reserved Matters, the parties intend that
the foregoing release shall be effective with respect to all matters, past and
present, known and unknown, suspected and unsuspected. Buyer realizes and
acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to losses, damages, liabilities, costs and expenses which
are presently unknown, unanticipated and unsuspected, and Buyer further agrees
that the waivers and releases herein have been negotiated and agreed upon in
light of that realization and that Buyer nevertheless hereby intends to release,
discharge and acquit Seller from any such unknown losses, damages, liabilities,
costs and expenses. In furtherance of this intention, the Buyer hereby expressly
waives any and all rights and benefits conferred upon it by the provisions of
California Civil Code Section 1542, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

Stonecreek\Claremont\PSA-10    16   

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Exhibit 10.3

 

The Buyer acknowledges that the foregoing acknowledgments, releases and waivers
Including the waiver of the provisions of California Civil Code Section 1542
were expressly bargained for.

Buyer’s Initials:  /s/ WSR        

10.          Brokerage Commissions.  Seller shall pay a real estate commission
to Seller's Broker pursuant to a separate agreement. Except for Broker, Seller
and Buyer each represent and warrant that no other real estate commission,
broker’s fee or finder's fee is payable in connection with the transaction
contemplated by this Agreement. Seller Indemnifies Buyer from and against any
and all liabilities, claims, demands, damages, or costs of any kind (Including
attorneys’ fees, costs and expenses) arising from or connected with any broker’s
or finder’s fee or commission or charge (“Broker Claims”) claimed to be due by
Broker or any person arising from or by reason of the conduct of Seller with
respect to this transaction. Buyer Indemnifies Seller from and against any and
all Broker Claims claimed to be due by any person (other than Broker) arising
from or by reason of the conduct of Buyer with respect to this transaction. The
provisions of this Section shall survive the Closing hereunder.

11.          Defaults.

11.1        Buyer Default.  IF ESCROW FAILS TO CLOSE DUE TO BUYER’S DEFAULT
UNDER THIS AGREEMENT (INCLUDING A DEFAULT UNDER SECTION 3.1.1), SELLER WILL BE
DAMAGED AND WILL BE ENTITLED TO COMPENSATION FOR THOSE DAMAGES. SUCH DAMAGES
WILL, HOWEVER, BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN FOR THE
FOLLOWING REASONS: (1) THE DAMAGES SELLER WOULD BE ENTITLED TO IN A COURT OF LAW
WILL BE BASED IN PART ON THE DIFFERENCE BETWEEN THE ACTUAL VALUE OF THE PROPERTY
AT THE TIME SET FOR THE CLOSING AND A PURCHASE PRICE FOR THE PROPERTY AS SET
FORTH IN THIS AGREEMENT; (2) PROOF OF THE AMOUNT OF SUCH DAMAGES WILL BE BASED
ON OPINIONS OF VALUE OF THE PROPERTY, WHICH CAN VARY IN SIGNIFICANT AMOUNTS; AND
(3) IT IS IMPOSSIBLE TO PREDICT AS OF THE DATE ON WHICH THIS AGREEMENT IS MADE
THE EXTENT TO WHICH THE VALUE OF THE PROPERTY WILL INCREASE AS OF THE DATE SET
FOR THE CLOSING. BUYER DESIRES TO LIMIT THE AMOUNT OF DAMAGES FOR WHICH BUYER
MIGHT BE LIABLE SHOULD BUYER BREACH THIS AGREEMENT AS AFORESAID. BUYER AND
SELLER WISH TO AVOID THE COST AND LENGTHY DELAYS WHICH WOULD RESULT IF SELLER
FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR A BREACH OF THIS AGREEMENT.
THEREFORE, IF ESCROW FAILS TO CLOSE DUE TO A BUYER DEFAULT AS DESCRIBED ABOVE,
THE SUM THEN REPRESENTED BY THE DEPOSIT (WHETHER THEN HELD BY ESCROW HOLDER,
SELLER OR BOTH) SHALL BE DEEMED TO CONSTITUTE A REASONABLE ESTIMATE OF SELLER’S
DAMAGES UNDER THE PROVISIONS OF SECTION 1671 OF THE CALIFORNIA CIVIL CODE, AND
SELLER’S SOLE AND EXCLUSIVE REMEDY IN THE EVENT OF THE FAILURE TO CLOSE ESCROW
RESULTING FROM A BUYERS DEFAULT

 

Stonecreek\Claremont\PSA-10    17   

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

Exhibit 10.3

 

SHALL BE LIMITED TO SUCH AMOUNTS AND SELLER SHALL HAVE NO RIGHT TO AN ACTION FOR
SPECIFIC PERFORMANCE OF ANY PROVISIONS OF THIS AGREEMENT. IN CONSIDERATION OF
THE PAYMENT OF SUCH LIQUIDATED DAMAGES, SELLER WILL BE DEEMED TO HAVE WAIVED ALL
OTHER CLAIMS FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY INCLUDING ANY RIGHTS
SELLER MAY HAVE PURSUANT TO SECTION 1680 OR SECTION 3389 OF THE CALIFORNIA CIVIL
CODE. BY INITIALING THIS PROVISION IN THE SPACES BELOW, SELLER AND BUYER EACH
SPECIFICALLY AFFIRM THEIR RESPECTIVE AGREEMENTS CONTAINED HEREIN AND AGREE THAT
SUCH SUM IS A REASONABLE SUM CONSIDERING THE CIRCUMSTANCES AS THEY EXIST ON THE
DATE OF THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING, THE PAYMENT OF LIQUIDATED
DAMAGES TO SELLER PURSUANT TO THE FOREGOING SHALL NOT RELEASE BUYER OF ITS
INDEMNITY OBLIGATION SET FORTH IN SECTIONS 5.3 AND 10, BUYER’S OBLIGATION TO PAY
ITS SHARE OF ESCROW CANCELLATION FEES IN ACCORDANCE WITH THE PROVISIONS HEREIN
OR, IF NECESSARY FOR ATTORNEYS’ FEES TO ENFORCE THIS PROVISION.

 

 SELLER’S INITIALS: /s/ CMC  

  

BUYER’S INITIALS:  /s/ WSR

11.2      Seller Default.  If Seller defaults under any of the terms of this
Agreement prior to Closing and if such default is not cured within ten (10) days
after receipt by Seller of written notice from Buyer, Buyer shall be entitled as
the sole and exclusive remedy of Buyer to either: (1) terminate this Agreement,
receive a refund of the Deposit, and commence an action for reimbursement of
Buyer’s reasonable out-of-pocket costs not to exceed $400,000 incurred in
connection with performing Property due diligence; or (2) commence an action for
specific performance. In no event shall Buyer be entitled to actual, punitive or
consequential damages. Upon Closing, Buyer waives all Seller defaults known to
Buyer.

11.2.1   If Seller defaults in any post-Closing covenant or in any Section 8
representation or warranty that survives Closing or Seller Estoppel, subject to
Sections 13.9 and 13.10, Buyer shall be entitled to seek actual damages in an
amount not exceeding an amount equal to $400,000 Including any award for
attorneys fees and costs. In no event shall Buyer be entitled to punitive or
consequential or other actual damages.

12.        Notices.  All notices, elections, requests and other communication
hereunder shall be in writing and shall be deemed given (a) when personally
delivered or delivered by reputable overnight courier service; or (b) two
(2) business days after being deposited in the United States mail, postage
prepaid, certified or registered, or (c) when sent by facsimile before 5:00 p.m.
Pacific time on a business day (as evidenced by a confirmation slip from
sender’s fax machine showing the transmission date and time and recipient’s fax
number) and otherwise on the next business day. Phone and email addresses are
provided for convenience only and shall not constitute effective notice. Notices
shall be addressed as follows (or to such other person or at such other address,
of which any party hereto shall have given written notice as provided herein):

 

If to Seller:

  

Clayton M. Corwin

  

StoneCreek Company

  

30212 Tomas, Suite 300

  

Rancho Santa Margarita CA 92688

  

Phone

 

949 709 8080

  

Fax

 

949 709 8081

  

Email ccorwin@stonecreekcompany.com

 

Stonecreek\Claremont\PSA-10    18   

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

Exhibit 10.3

 

 

cc:

  

Milburn A. Matthews, Esq.

  

Coontz & Matthews LLP

  

30900 Rancho Viejo Road, Suite 230

  

San Juan Capistrano CA 92675-1776

  

Phone

  

949 240 3040

  

Fax

  

949 240 7540

  

Email

  

mibs@coontzmatthews.com

If to Buyer:

  

MMIC Acquisition Corporation

  

1307 W 6th Street, Suite 214

  

Corona CA 92882

  

Attn: Paul Sandler

  

Phone

  

951 520 0471

  

Fax

  

805 456 0334

  

Email

  

psandler@montecitomac.com

Cc:

  

William S. Rogers, Jr., Esq.

  

Beavers/Rogers Law & Advisory Group, LLC

  

500 Jesse Jewell Parkway, Suite 300

  

Gainesville, GA 30501

  

Phone

  

678 928 5275

  

Fax

  

770 534 8689

  

Email

  

brogers@beaversrogers.com

If to Escrow Holder:

  

First American Title Insurance Company

  

5 First American Way

  

Santa Ana CA 92707:

  

Escrow Officer: Ryan Hahn

  

Phone

  

714 250 8394

  

Fax

  

714 242 7478

  

Email

  

rhahn@firstam.com

13.        Miscellaneous Provisions

13.1      Binding Effect; Assignment.  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 fully assignable;
provided that such assignment shall be subject to a written assignment executed
by assignor and assignee in the form of Exhibit D which shall have been
delivered to Seller and Escrow Holder at least five (5) business days prior to
Closing.

13.2      Captions.  The several headings and captions of the sections and
subsections used herein are for convenience of reference only, and shall in no
way be deemed to limit, define or restrict the substantive provisions of this
Agreement.

 

Stonecreek\Claremont\PSA-10    19   

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Exhibit 10.3

 

13.3.      Entire Agreement; No Recording.    This Agreement constitutes the
entire agreement of Buyer and Seller with respect to the purchase and sale of
the Property, and supersedes any prior or contemporaneous agreement with respect
thereto. No amendment or modification of this Agreement shall be binding upon
the parties unless made in writing and signed by both Seller and Buyer. This
Agreement shall not be recorded by any party and, if recorded by any party, the
other party hereto may immediately terminate all of its obligations under this
Agreement, and the party who recorded the Agreement shall pay all reasonable
costs and attorneys’ fees in removing this Agreement of record.

13.4      Time of Essence.  Time is of the essence with respect to the
performance of all the terms, conditions and covenants of this Agreement.

13.5      Governing Law.  This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws and customs of
the State of California.

13.6      Counterparts.  This Agreement and any amendments may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement and any amendments may be executed and then delivered by fax or PDF
scan by email which shall constitute effective execution and delivery.

13.7      Tax-Deferred Exchange.  Buyer and/or Seller (“Exchangor”), at its
option, may close the transfer of the Property as an exchange of real property
qualifying under Section 1031 of the Internal Revenue Code of 1986, as amended
(which may include distribution of Property tenancy-in-common interests to
beneficial owners from Seller in redemption of their interest in Seller). If the
Exchangor so elects, then (i) the Exchangor may delegate its obligations and
assign its rights under this Agreement to a deferred exchange intermediary (an
"Intermediary"); (ii) such delegation and assignment shall in no way reduce,
modify or otherwise affect the obligations of Exchangor pursuant to this
Agreement; (iii) Exchangor shall remain fully liable for its obligations under
this Agreement as if such delegation and assignment shall not have taken place;
(iv) Intermediary shall have no liability to the other party, notwithstanding
such delegation and assignment; and (v) the Closing of the transfer of the
Property shall be undertaken by direct deed from Seller to Buyer.

13.8      Confidentiality.  Buyer acknowledges that it is in the best interest
of Buyer and Seller to maintain the confidentiality of the terms and provisions
of this Agreement and the materials relating thereto. Except as otherwise
provided herein, Buyer shall not disclose any of the terms or provisions of this
Agreement prior to the Closing to any person or entity not a party to this
Agreement, nor, prior to the Closing shall Buyer issue any press release or make
any public statement relating to this Agreement or Buyer’s intended use of the
Property, and Buyer shall keep all materials provided or made available to Buyer
by Seller, and all materials generated by Buyer in the course of conducting its
inspections, review of books and records, and other due diligence activities
relating to the Property (Including matters relating to the environmental
condition of the Property), whether obtained through documents, oral or written
communications, or otherwise, (collectively, the “Information”), in the
strictest confidence.

 

Stonecreek\Claremont\PSA-10    20   

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Exhibit 10.3

 

Under no circumstances shall any of the Information be used for any purpose
other than the investigation of the Property in connection with its purchase by
Buyer and contemplated under this Agreement. Buyer shall cause the
confidentiality obligations set forth in this Section to be agreed to by its
attorneys, auditors, lenders, equity partners, consultants, accountants and any
other third parties which Buyer may employ or with which Buyer may work in
connection with this transaction and the investigations contemplated hereunder,
each of whom shall be exceptions to the non-disclosure provisions hereof.

13.9      Survival.    The following shall survive the Closing and delivery of
the Deed indefinitely: (1) Buyer Section 9 representations and warranties;
(2) any Buyer or Seller indemnifications expressly set forth in this Agreement
or the Assignment; and (3) any Buyer or Seller covenants in this Agreement which
expressly survive the Closing or are specified to be performed post-Closing. All
Seller Section 8 representations and warranties, Seller Estoppels shall survive
Closing for a period of six months after the recordation of the Deed and will
thereupon terminate except to the extent of any claims expressly specified in a
lawsuit then filed and served or delivered per the Section 12 notice provisions
(provided that such delivery shall not constitute effective service of process).
Except as provided above, upon completion of the Closing all other liability and
obligations of Buyer and Seller shall terminate.

13.10    Limitation on Seller's Liability.    Buyer acknowledges and agrees that
its recourse against Seller under this Agreement for a default by Seller
hereunder is limited to the remedies set forth in Section 11.2 and any other
remedies expressly set forth in this Agreement, and in no event shall Buyer seek
or attempt to obtain any recovery or judgment against any other assets (if any)
of Seller, or against any of Seller’s direct or indirect members, partners,
directors, officers, employees or shareholders.

13.11    Attorney Fees.  If any action is instituted between any one or more of
Buyer, Seller and Escrow Holder in connection with the enforcement of this
Agreement or any provision hereof, the party prevailing in such action shall be
entitled to recover from the other party all of its reasonable costs in bringing
such action, Including reasonable attorney fees.

14.    Equity Participation Right.  Pursuant to the terms set forth below, Buyer
shall offer to Seller (assignable to Seller’s partners, with the requirement
that such partners form a single investment entity) the right to become a
member, partner or shareholder (the “Seller Investment Opportunity”) in the
partnership or limited liability company entity formed by the principals of
Buyer (“Montecito Partnership Entity”) and Buyer’s institutional equity partner
(“Equity Partner”) to be a single purpose entity to which Buyer will assign this
Agreement at or prior to Closing and which will be the fee simple owner of the
Property (the “SPE”) . The Seller Investment Opportunity shall be in a joint
venture to be formed by Seller’s investors, as a single entity (“Seller’s
Investors”), and the Montecito Partnership Entity (such joint venture being
referred to as the “Seller/Montecito Investment Entity”), which Seller/Montecito
Investment Entity shall be the partner in the SPE with the Equity Partner.
Seller’s Investment Opportunity shall be limited to a maximum of $500,000 of
cash equity (“Seller’s Equity”) invested in the Seller/Montecito Partnership
Entity. Seller’s Equity shall be pari passu with the Montecito Partnership
Entity’s property level economic rights solely arising from the Montecito
Partnership Entity’s cash contributions to the SPE (including preferred returns,
if any, and a prorata share of profit distributions, but specifically excluding
any additional “promote” or acquisition, disposition, management, leasing or
other fees paid or payable to the Montecito Partnership

 

Stonecreek\Claremont\PSA-10    21   

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

Exhibit 10.3

 

Entity or an affiliate thereof) but shall specifically exclude any voting,
governance, approval, management or other rights under the SPE governing
documents (including, without limitation, the right to participate in, or
trigger, any buy/sell rights under such SPE governing documents) (such SPE
governing documents being referred to as the “SPE Governing Documents”) It is
understood and agreed that the Seller Investment Opportunity is intended for all
purposes to be a passive investment in the Seller/Montecito Investment Entity
and SPE, and the Seller/Montecito Partnership Entity governing documents and the
SPE Governing Documents shall so reflect. Seller agrees to accept the terms and
conditions of the Seller/Montecito Partnership Entity governing documents and
the SPE Governing Documents (as negotiated by the Montecito Partnership Entity
Principals), so long as such documents reflect the pari passu nature of the
Seller Investment Opportunity, and such documents do not material and adversely
affect the return on Seller’s Equity as provide above or as stated and accepted
in the term sheet as provided below. Buyer shall present Seller with the details
of the Seller Investment Opportunity via a written term sheet no later than ten
(10) business days following the Effective Date. Seller shall accept or reject
the Seller Investment Opportunity in writing within five (5) days of receipt.
Failure of Seller to respond to the Seller Investment Opportunity within the
required 5-day period shall constitute rejection of the Seller Investment
Opportunity by Seller’s Investors. Upon Seller’s rejection, or deemed rejection,
of the Seller Investment Opportunity, Seller and Seller’s Investors shall be
deemed to have fully and completely waived any rights to participate in the
investment with the Montecito Partnership Entity or in the SPE as contemplated
herein, and this transaction shall close without such participation by Seller’s
Investors in any manner. If Seller accepts such Seller Investment Opportunity,
such acceptance shall be deemed a binding obligation of Seller’s Investors to
invest the Seller’s Equity at Closing. In the event Seller’s Investors fail or
refuse to contribute Seller’s Equity as required at Closing, Buyer shall have
the unilateral right, at Buyer’s sole option, to (i) close this transaction
without Seller’s Equity, with no liability whatsoever to Seller or Seller’s
Investors, or (ii) extend the Closing for up to a maximum of 60 days to allow
Buyer time to replace Seller’s Equity .

 

Initials:   /s/ CMC           /s/ WSB      

\\\\\

[signature page follows]

 

Stonecreek\Claremont\PSA-10    22   

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Exhibit 10.3

 

In witness whereof, the parties hereto have executed this Agreement as of the
Effective Date.

 

  Seller:    

Claremont Venture I, L.P., a California limited partnership

      By: Claremont Manager, Inc., a California corporation, General Partner

 

By:

 

/s/ Clayton M. Corwin

 

 Clayton M. Corwin, President

 

  Buyer:    

MMIC Acquisition Corporation, a Florida corporation

 

By:

 

/s/ William S. Rogers

Title:

 

William S. Rogers, V.P.

Acceptance:  The undersigned hereby accepts its appointment as Escrow Holder
under the terms of the foregoing Agreement and agrees to follow the terms and
provisions thereof as its escrow instructions in connection with the
contemplated transactions.

 

First American Title Insurance Company

By:

 

 

   

Ryan Hahn, Escrow Officer

 

Date: November      , 2012

LIST OF EXHIBITS

A

Grant Deed

B

Assignment and Bill of Sale

C

Seller Estoppel

D

Sale Agreement Assignment

E

Holdback Agreement

F

PMA

G

Suite 200 draft lease

 

Stonecreek\Claremont\PSA-10    23   

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Exhibit 10.3

 

Exhibit A - GRANT DEED

RECORDING REQUESTED BY AND

WHEN RECORDED MAIL TO AND

MAIL TAX STATEMENTS TO:

       

       

       

       

 

 

(Above Space For Recorder's Use Only)

GRANT DEED

In accordance with Section 11932 of the California Revenue and Taxation Code,
Grantor has declared the amount of transfer tax which is due by a separate
statement which is not being recorded with this Grant Deed.

For a valuable consideration, receipt of which is hereby acknowledged, Claremont
Venture I, L.P., a California limited partnership, hereby grants to       , a
      , the real property described as follows:

[      – insert legal description from PTR upon receipt]

This conveyance is subject to: non-delinquent taxes and assessments; all matters
whether or not of record; and any matters which could be ascertained by a proper
inspection or survey of such real property.

 

Dated: December       , 2012

   

Claremont Venture I, L.P., a California limited partnership

   

By: Claremont Manager, Inc., a California corporation, General Partner

     

By:

 

 

       

 Clayton M. Corwin, President

 

STATE OF

 

 

 

)

 

SS

  

COUNTY OF

 

 

 

)

    

 

On                                  before me,
                                        , Notary Public, personally appeared
                            

 

who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies) and that
by his/her/their signature(s) on the instrument the person(s) or the entity upon
behalf of which the person(s) acted, executed the instrument.

 

Stonecreek\Claremont\PSA-10    24   

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

Exhibit 10.3

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

Signature

 

 

This area for official notarial seal.      

 

Stonecreek\Claremont\PSA-10    25   

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Exhibit 10.3

 

Exhibit B-Assignment and Bill of Sale

This Assignment and Bill of Sale (“Assignment”) is made as of December       ,
2012 between Claremont Venture I, L.P., a California limited partnership
(“Seller”), and       , a        (“Buyer”).

1.          Seller is the owner of that certain real property known as Claremont
Medical Plaza, 1601 Monte Vista Drive, Claremont CA (“Land”). Seller hereby
assigns, transfers, sets over and conveys to Buyer all of Seller’s right, title
and interest in, to and under:

(1)        The existing leases of any of the Land or improvements thereon
(“Leases”), including without limitation the leases described on the rent roll
in Schedule A.

(2)        All security deposits described in Schedule B (“Deposits”).

(3)        The contracts described in Schedule C (“Service Contracts”) without
any representation or warranty as to their assignability.

(4)        All federal, state and local governmental consents, waivers,
authorizations, licenses, approvals and permits required for the occupancy,
management, leasing, maintenance and operation of the Land and improvements
(“Permits”).

(5)        All of Seller’s right, title and interest in (i) any tangible
personal property located on or in the Land and improvements thereon and used
exclusively in the operation thereof; and (ii) any intangible personal property
relating exclusively to the Land and improvements thereon (“Personalty”).

2.          Buyer accepts the Leases, Deposits, Service Contracts, Permits and
Personalty. Buyer assumes all obligations under the Leases and Service Contracts
arising on and after the date hereof and all obligations to the tenants under
the Leases with respect to return of the Deposits pursuant to such Leases.

3.          This Assignment is made by Seller on an “as is, where is” basis, and
without any representation or warranty whatsoever except that Seller represents
and warrants Buyer has the right to convey the Leases and Deposits to Buyer.
Schedules A, B and C are hereby incorporated herein by this reference. This
Assignment is binding upon and inures to the benefit of Seller and Buyer and
their respective heirs, executors, administrators, successors and assigns. This
Assignment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

In witness whereof, Seller and Buyer have executed this Assignment as of the
above date.

 

Seller:    

Claremont Venture I, L.P., a California limited partnership

   

By: Claremont Manager, Inc., a California corporation, General Partner

     

By:

 

 

       

Clayton M. Corwin, President

Buyer:    

      

           

 

Stonecreek\Claremont\PSA-10    26   

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Exhibit 10.3

 

Exhibit C - Form of Seller Estoppel

This Certificate is made as of December       , 2012 by Claremont Venture I,
L.P., a California limited partnership (“Seller”) for the benefit of       
(“Buyer” LOGO [g469236symbol_new.jpg] ), Buyer’s prospective lender(s), and
their successors and assigns, and is made pursuant to that certain Sale
Agreement dated November 9, 2012, as may have been amended (“Sale Agreement”).
All capitalized terms not otherwise defined herein shall have the meaning
specified in the Sale Agreement. Seller represents and warrants as follows,
subject to Sale Agreement Sections 5.5, 5.7.1, 11.2, 13.9 and 13.10.

1.          The following documents constitute the lease (“Lease”) between
Seller as landlord (“Landlord”), and Tenant with respect to Suite       
(“Premises”) at       , California:       . A correct and complete copy of the
Lease is attached hereto. The Lease constitutes the entire agreement between
Landlord and Tenant with respect to the Premises and is in full force and
effect. The Lease has not been modified, changed, altered or amended in any
respect except as attached hereto. Except as specified in the Lease: (a) Tenant
has made no agreements with Landlord or its agent or employees concerning free
rent, partial rent, rebate of rental payments or any other type of rental or
other concession except as expressly set forth in the Lease; and (b) Tenant has
no option or preferential right: (i) to lease or occupy additional space;
(ii) to purchase all or any part of the Premises or any right or interest with
respect to the Premises; or (iii) to renew or extend the term of the Lease.

2.           Monthly base rent is $      , and is paid through the month of
      .

              Monthly installments of estimated CAM reimbursements are $      

              Security Deposit is $      .

              Lease term expires       , subject to the extension options in the
Lease.

No other rent has been paid more than one month in advance. To Seller’s
Knowledge, Tenant has no claim or defense against Landlord under the Lease and
is asserting no offsets or credits against either the rent or Landlord.

3.          To Seller’s Knowledge, Tenant has accepted possession of the
Premises. All improvements to be constructed on the Premises by Landlord have
been completed and any tenant construction allowances have been paid in full. To
Seller’s Knowledge, all conditions of the Lease to be performed by Landlord and
necessary to the enforceability of the Lease have been satisfied.

4.          To Seller’s Knowledge, as of this date, there exists no default
under the Lease by Landlord or Tenant. To Seller’s Knowledge, no claim,
controversy, dispute, quarrel or disagreement exists between Tenant and
Landlord. Seller has not received written notice from tenant alleging any
uncured Seller default under the Lease.

 

Dated December       , 2012

   

Claremont Venture I, L.P., a California limited partnership

   

By:  Claremont Manager, Inc., a California corporation, General Partner

       

By:

           

    Clayton M. Corwin, President

 

Stonecreek\Claremont\PSA-10    27   

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Exhibit 10.3

 

Exhibit D - SALE AGREEMENT ASSIGNMENT

This Sale Agreement Assignment ("Assignment") is made as of        by and
between       , a        ("Assignor") and       , a        ("Assignee"), and is
made with respect to the Sale Agreement by and between Assignor and Claremont
Venture I, L.P., a California limited partnership ("Seller") dated November 9,
2012, as amended        ("PSA"). For good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:

Assignor hereby assigns to Assignee all of Assignor's right, title and interest
in and to the PSA, the escrow created pursuant to the PSA, any Deposits (as
defined in the PSA) in such escrow or held by Seller, and all other rights and
assets appurtenant to any of the above ("Assets").

Assignee hereby accepts the Assets and assumes all of Assignor's obligations
under the PSA, whether arising before or after the date of this Assignment.
Assignor acknowledges that it is not released (as a result of such assignment or
for any other reason) from any PSA obligations, whether arising before or after
the date of this Assignment. All of Assignor’s knowledge with respect to the
Property is hereby attributed to Assignee, which is deemed to have such same
knowledge.

Upon deliver hereto to Seller, Buyer’s address per PSA Section 12 is hereby
changed to:        [Alternatively - Buyer’s address per PSA Section 12 remains
unchanged.]

In witness whereof, the undersigned have executed this Assignment as of the
above date.

 

Assignor:

   

      , a       

      By:                                                                       
                          Title:                            
                                                          

Assignee:

   

          , a       

      By:                                                                       
                          Title:                            
                                                          

 

Stonecreek\Claremont\PSA-10    28   

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Exhibit 10.3

 

EXHIBIT E - HOLDBACK ESCROW AGREEMENT

This Holdback Escrow Agreement (“Agreement”) is entered into by and among
Claremont Venture I, L.P., a California limited partnership (“Seller”),       
(“Buyer”), and FIRST AMERICAN TITLE INSURANCE COMPANY (“FATCO”) effective
December       , 2012

Recitals

Seller and Buyer entered into that certain Sale Agreement dated November 9,
2012, as amended        (“PSA”), pursuant to which Buyer agrees to pay Seller up
to $400,000 (“Holdback”) in additional purchase price contingent upon certain
leasing activity in Claremont Medical Center, more particularly described in the
PSA (“Property”). Pursuant to the PSA, at Closing Buyer has agreed to deposit
into an escrow per this Agreement the Holdback to be held by FATCO and paid to
Seller and/or returned to Buyer per the PSA. FATCO agrees to act as escrow
holder to hold, administer, invest and disburse the Holdback on the terms and
conditions herein set forth.

NOW, THEREFORE, in consideration of the foregoing and in consideration of the
mutual covenants of the parties herein contained, which each of the parties
acknowledges is adequate and sufficient, the parties hereto agree as follows:

1.          Definitions.  All capitalized terms used herein, unless otherwise
herein defined, shall have the meanings given them in the PSA.

2.          Appointment.  Buyer and Seller hereby appoint FATCO to serve as
escrow holder for the purposes set forth herein, and FATCO accepts such
appointment.

3.          Acknowledgment of Receipt.  FATCO hereby acknowledges receipt of the
Holdback delivered by Seller to FATCO from FATCO Escrow No. NCS       .

4.          Administration of Holdback.  FATCO hereby agrees to hold and
administer the Holdback pursuant to the terms and conditions of this Agreement.
The Holdback shall not be commingled.

5.          Conditions Precedent to Disbursement.  The Holdback shall be
disbursed as follows:

(1)   The Holdback (less the No Rent Credit and any Seller TILC) will be
delivered to Seller (and the No Rent Credit and Seller TILC will be delivered to
Buyer) if either (A) Agent delivers to Buyer by September 30, 2013 either (i) an
Approved Lease executed by the tenant, or (ii) a lease for Suite 200 reasonably
acceptable to Buyer, or (B) Seller leases or otherwise removes the Suite 200
premises from the market thus impairing Agent’s ability to deliver an Approved
Lease (and if Buyer and Seller disagree on whether a lease for Suite 200 should
be “reasonably” acceptable to Buyer, or whether any event described in
Subsection (B) has occurred, then such dispute shall be submitted to binding
arbitration pursuant to PSA Section 15 (“Arbitration”); or

(2)  The Holdback shall be disbursed to Buyer directly if the conditions to
delivery in (1) above are not satisfied, by the later of September 30, 2013 or
entry of the arbitrator’s award in any Arbitration pending (and of which FATCO
has been given notice) on September 30, 2013 (“Pending Arbitration”).

 

Stonecreek\Claremont\PSA-10    29   

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Exhibit 10.3

 

Any disbursement shall be subject to confirmation in writing by Buyer and Seller
All disbursements made under this Agreement shall be made by wire transfer (if
the recipient gives FATCO such instructions, and otherwise by cashier’s check
and delivered to the specified recipient via U.S. Postal Service, regular mail,
or at Seller’s request, by wire transfer.

6.          Term.  This Agreement shall terminate upon the earlier to occur of:
(i) agreement of Buyer and Seller; (ii) disbursement of the entire Holdback, in
which case any remaining interest accrued on the Holdbacks shall be distributed
to the party entitled to the Holdback; or (iii) the later of October 10, 2013 or
entry of the arbitrator’s award in any Pending Arbitration, whereupon FATCO
shall either: (a) deliver the remainder of the Holdback pursuant to a written
agreement between Buyer and Seller; or (b) interplead and deliver the deliver
the remainder of the Holdback to the court.

7.          Indemnification of FATCO.  If this Agreement or any matter relating
hereto shall become the subject of any litigation or controversy, Buyer and
Seller shall, jointly and severally, indemnify, defend (with counsel
satisfactory to FATCO) and hold FATCO free and harmless from any loss or
expense, including attorneys’ fees, that may be suffered by it by reason thereof
other than as a result of FATCO’s breach of this Agreement, negligence or
willful misconduct. In the event conflicting demands are made or notices served
upon FATCO with respect to this Agreement, or if there shall be uncertainty as
to the meaning or applicability of the terms of this Agreement, Buyer and Seller
expressly agree that FATCO may (but will not be required to) file a suit in
interpleader and to obtain an order from the court requiring Buyer and Seller to
interplead and litigate their several claims and rights among themselves. Upon
the filing of the action in interpleader and the deposit of the Holdbacks into
the registry of the court, FATCO shall be fully released and discharged from any
obligations imposed upon it by this Agreement with respect to the amount so
deposited with the court. Alternatively, FATCO may continue to hold the Holdback
in escrow until directed by written agreement of the parties hereto or by a
court order.

8.          Liability.  FATCO shall not be liable for the sufficiency or
correctness as to form, manner, execution or validity of any instrument
deposited with it, nor as to the identity, authority or rights of any person
executing such instrument. It is agreed that the duties of the FATCO are purely
ministerial in nature, and that FATCO’s duties hereunder shall be limited to the
safekeeping of the Holdbacks and documents received by it as FATCO, and for
their disposition in accordance with the terms of this Agreement. The FATCO may
seek the advice of independent legal counsel in the event of any dispute or
question as to the construction of any of the provisions of this Agreement or
its duties hereunder, and it shall incur no liability and shall be fully
protected in respect of any action taken or suffered by it except for FATCO’s
negligence or willful misconduct.

9.          Maintenance of Confidentiality By FATCO.  Except as may otherwise be
required by law or by this Agreement, FATCO shall maintain in strict confidence
and not disclose to anyone the existence of this Agreement, the Contract, the
identity of the parties to the foregoing, the amount of the Purchase Price, the
provisions of this Agreement or the Contract or any other information concerning
the transactions contemplated hereby or by the Contract, without the prior
written consent of Buyer and Seller.

 

Stonecreek\Claremont\PSA-10    30   

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Exhibit 10.3

 

10.        Investment of Holdbacks.

(a)        FATCO shall invest and reinvest the Holdback at the written
instruction of Buyer in governmentally insured interest-bearing accounts as
Buyer shall direct. The investment of the Holdback shall be at the sole risk of
Buyer. All interest shall accrue to the benefit of Buyer, shall not increase the
amount of the Holdback, and shall be paid to Buyer periodically. Buyer shall
provide the FATCO with a taxpayer identification number.

(b)        FATCO is not and shall not be responsible for maintaining the value
of any investment or providing investment counseling. In addition, FATCO is not
to be held responsible for any loss of principal or interest which may be
incurred as a result of making the investments or redeeming said investments for
the purposes of this Agreement.

11.        Notices.  The notice provisions in the PSA are hereby incorporated
herein by this reference. Buyer’s, Seller’s and FATCO’s addresses are set forth
in the PSA.

12.        Miscellaneous.  This Agreement may not be assigned by any party
without the consent of the other parties. This Agreement shall be construed
under and governed by the laws of the State of California and, in the event that
any provision hereof shall be deemed illegal or unenforceable, said provision
shall be severed herefrom and the remainder of this Agreement shall be enforced
in accordance with the intent of the parties as herein expressed. This Agreement
may not be amended or altered except by an instrument in writing executed by all
the parties hereto. Buyer shall pay any reasonable fees charged by FATCO for its
services hereunder and Seller shall not be responsible for any fees of FATCO.
This Agreement may be executed in multiple counterparts and by the parties on
separate counterparts, each of which shall be deemed to be an original and all
of which shall together constitute one and the same agreement. The parties may
execute and deliver this Agreement, Draw Notices and Objections by forwarding
signed facsimile or scanned email copies of this Agreement. Such facsimile
signatures shall have the same binding effect as original signatures, and the
parties hereby waive any defense to validity based on any such copies or
signatures.

In witness whereof, the parties have executed this Agreement as of the above
date.

 

Buyer:

   

        

Seller:

   

Claremont Venture I, L.P., a California limited partnership

   

By: Claremont Manager, Inc., a California corporation, General Partner

     

By:

           

Clayton M. Corwin, President

FATCO:

   

First American Title Insurance Company

     

By:

           

Ryan Hahn, Escrow Officer

 

Stonecreek\Claremont\PSA-10    31   

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Exhibit 10.3

 

Exhibit F - PMA

PROPERTY MANAGEMENT AGREEMENT

Claremont Medical Plaza – 1601 Monte Vista Avenue, Claremont, California

This Property Management Agreement ("Agreement") is made as of
                        ,          ("Effective Date"), between StoneCreek
Investment Corporation, a California corporation dba StoneCreek Company
("Manager") and                                                        , a
                                            ("Owner").

 

Recitals

Owner owns Claremont Medical Plaza, located at 1601 Monte Vista Ave., Claremont,
CA 91711, a 48,984 +/- square foot medical office building (the “Property”).

Now therefore, the parties, for and in consideration of the promises and mutual
covenants, representations and warranties set forth in this Agreement, agree as
follows:

1.          Appointment.  Owner hires Manager as the property manager for the
Property, and Manager agrees to perform such services.

2.          Manager Duties.

2.1        General.  Manager, through Manager's designated employees and agents,
shall generally perform the services of a property manager in accordance with
this Agreement and as determined from time to time by Owner and otherwise in the
scope and quality generally comparable with the services performed by
professional medical office building managers in the Claremont area. Manager
shall at all times conform to policies and programs established and approved by
Owner. Manager shall be subject to the direction of Owner as agreed to at a
meeting or in a writing signed by Owner. Manager shall keep Owner informed as to
all matters of concern to the Property.

2.2        Specific Duties.  Without limiting the above, Manager's duties shall
include the following plus such other duties reasonably requested by Owner from
time to time:

2.2.1     Maintenance.  Manager shall periodically inspect the Property to
advise Owner of any maintenance and repairs that are necessary, and upon Owner's
direction, Manager shall supervise such maintenance and repair. Manager shall
submit for bid and negotiate contracts for periodic maintenance services, and
shall direct and supervise the performance of such services.

2.2.2     Construction.  Manager shall manage installation of tenant
improvements and the maintenance and repair of the Property (including major
construction, rehabilitation and betterments) and repair or replace improvements
due to wear, tear and casualty, including without limitation:

 

  (1)

Selection and supervision of design and engineering consultants;

 

  (2)

supervision of tenant improvement design and construction;

 

Stonecreek\Claremont\PSA-10    32   

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Exhibit 10.3

 

 

  (3)

supervision of capital improvements;

 

  (4)

the inspection of the progress of repairs and maintenance, and supervision of
the verification of the materials and labor being expended;

 

  (5)

obtaining the necessary receipts, releases, waivers, discharges and assurances
to keep the Property free from mechanics' and materialmen's liens and other
claims; and posting and recording notices of non-responsibility in connection
with construction performed by tenants;

 

  (6)

requiring that all contractors and subcontractors performing work on the
Property maintain insurance as specified by Owner from time to time; and

 

  (7)

obtaining and maintaining all governmental permits and approvals necessary for
use, operation and maintenance of the Property (provided that no permit or
approval creating a burden or obligation on the Owner will be enforceable
without Owner's signature); and obtaining temporary and permanent certificates
of occupancy for Property tenant improvements.

2.2.3     Marketing and Leasing.  Subject to Owner's direction, Manager shall
retain broker(s) to market and lease space in the Property. Manager shall
negotiate leases, subject to Owner’s final approval. Unless otherwise agreed to
by Owner, Manager shall not act as a broker to conduct the above and shall not
be paid any fees or commissions except as specified in Section 4.3.

2.2.4     Tenant Relations.  Manager shall supervise the moving in and out of
tenants. Manager shall interface with tenants in an effort to maintain good
tenant relations between tenants and Owner, and shall handle all tenant requests
and complaints. Manager will assist Owner in the collection of delinquent rents
and eviction efforts if necessary, including the serving of three day notices
and the like, and appearance at trial if necessary in any Owner-tenant
litigation.

2.2.5     Budget and Accounting.  Manager shall set up a bank account in Owner’s
name, with Manager having signatory authority (“Account”). Manager shall deposit
all Property receipts of any type or source into the Account. Manager shall
prepare periodic operating budgets for the Property for Owner's review and
approval (“Budget”). Manager shall pay directly from the Account any and all
expenditures pursuant to the Budget (including Section 4 fees and expenses
payable to Manager), provided that Manager may exceed any specific line item in
the Budget by up to 10% in the event of an emergency threatening imminent danger
to person or property. Manager shall prepare and deliver quarterly and annual
accounting reports on a cash basis along with a comparison to Budget.

2.2.6     Special Projects and Services.  Manager shall conduct any special
assignments as requested by Owner and not customarily within the scope of daily
property management functions, subject to an approved budget for such services.
Examples of such services are property tax appeals; accounting, audit, and tax
compliance; and market, financial, and Property disposition analysis.

2.2.7     Competition.  Manager manages or intends to manage other properties in
the vicinity of the Property.

 

Stonecreek\Claremont\PSA-10    33   

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Exhibit 10.3

 

2.3        Independent Contractor.  Manager is acting hereunder as an
independent contractor. Within reasonable limits and subject to the needs of
tenants and third parties doing business in and on the Property, Manager shall
determine when and how to perform Manager's services hereunder. Manager may
delegate any duties hereunder to Manager's employees or agents. All payroll and
related expenses for Manager's employees concerning the Property shall be
incurred by Owner, as described in the Budget. Manager, at Manager's expense,
shall provide all office facilities necessary to perform Manager's duties
hereunder.

2.4        Indemnification.  Manager indemnifies, defends, protects and holds
harmless Owner from any claim, loss, cost, penalty or expense incurred as a
result of the violation of law by, or the gross negligence or willful misconduct
of, Manager or Manager's employees and agents. Owner indemnifies, defends,
protects and holds harmless Manager from any claim, loss, cost, penalty or
expense incurred as a result of: (1) the violation of law by, or the negligence
or willful misconduct of, Owner or Owner’s employees, contractors and agents;
(2) the ownership or operation of the Property, except as a result of Manager’s
default or the gross negligence or willful misconduct of Manager or its
employees and agents.

3.          Term.  The term of this Agreement shall continue until the earlier
of: (1) 90 days after written notice of termination by Manager; (2) the date
Owner ceases to own the Property; (3) a material default by Manager hereunder
which is not cured within 30 days after written notice from Owner; or (4) three
(3) years from the Effective Date. On and after termination, Manager shall
reasonably assist Owner in transferring management duties and Property files to
Owner or the new manager, subject to payment by Owner to Manager for Manager’s
time and expenses in connection therewith, according to Manager’s fee schedule.

Notwithstanding the above, expiration of the term in the prior paragraph shall
only apply to Sections 2.1, 2.2 (excluding 2.2.3 with respect to the right to
seek to let Suite 200 and the PVH Extension). Manager’s rights under
Section 2.2.3 to seek to let Suite 200 and the Section 5 provisions applicable
thereto shall continue through 2013, unless terminated by the mutual approval of
Manager and Owner. Manager’s rights under Section 2.2.3 to seek the PVH
Extension, Section 4.3(3), and the Section 5 provisions applicable thereto,
shall continue through 2015, unless terminated by the mutual approval of Manager
and Owner.

4.          Management Fees.

4.1        Owner shall pay Manager during the term hereof the greater of $4,500
per month or 4.5% of the gross monthly collections generated from the Property.
This fee is payable monthly in arrears within ten (10) days after the end of
each month.

4.2        Owner shall pay Manager 5% of all construction costs relating to
tenant improvements, capital improvements, and casualty repairs. This fee is
payable monthly in arrears within ten (10) days after the end of each month.

4.3        Owner shall pay Manager leasing commissions as follows:

 

  (1)

for new tenants where a landlord broker is entitled to a commission, 1% of the
aggregate base rents including tenant-reimbursed operating expenses for the
term;

 

Stonecreek\Claremont\PSA-10    34   

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Exhibit 10.3

 

 

  (2)

3% of the aggregate base rents including tenant-reimbursed operating expenses
for the first 5 years, and 1.5% for any lease term periods thereafter for any:
(i) new leases for which Owner is not required to pay Owner’s listing broker;
and (ii) renewal leases and exercised option extensions.

 

  (3)

4% of the aggregate base rents including tenant-reimbursed operating expenses
for any extension executed by December 31, 2015 of the existing lease term by
Pomona Valley Hospital Medical Center for all or any portion of its premises at
the Property (“PVH Extension”).

These fees are payable one-half at lease execution, and one-half at occupancy.

4.4        Manager shall be entitled to reimbursement for un-reimbursed,
out-of-pocket costs paid by Manager on an arm's-length basis to unrelated
parties. In addition, Owner shall reimburse Manager for reasonable lunch
expenses with tenants incurred to maintain a good tenant relationship and not
more often than quarterly with any one tenant.

5.          General Provisions

5.1        Notice.  All notices, elections, requests and other communication
hereunder shall be in writing and shall be deemed given (a) when personally
delivered or delivered by reputable overnight courier service; or (b) two
(2) business days after being deposited in the United States mail, postage
prepaid; or (c) when sent by facsimile before 5:00 p.m. Pacific time on a
business day and otherwise on the next business day (as evidenced by a
confirmation slip from sender’s fax machine showing the transmission date and
time and recipient’s fax number) are sent pursuant to Subsections (a) or
(b) above on the same business day as faxing. Phone and email addresses are
provided for convenience only and shall not constitute effective notice. Notices
shall be addressed as follows (or to such other person or at such other address,
of which any party hereto shall have given written notice as provided herein):

 

Manager:

  

StoneCreek Company

    

30212 Tomas, Suite 300

     Rancho Santa Margarita CA 92688     

Attn: Clayton M. Corwin

    

Phone

 

(949) 709-8080

    

Fax

 

(949) 709-8081

    

Email

 

ccorwin@stonecreekcompany.com

Owner:

  

 

    

 

    

 

    

 

    

 

    

 

    

 

    

 

 

5.2        Entire Agreement.  This Agreement shall constitute the entire
agreement of the parties. All prior or contemporaneous agreements between the
parties, whether written or oral, are merged herein and shall be of no force and
effect.

 

Stonecreek\Claremont\PSA-10    35   

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Exhibit 10.3

 

5.3        Amendment and Waivers.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both parties. No
waiver of any of the provisions of this Agreement shall be deemed to constitute
a waiver of any other provisions, whether or not similar, nor shall any waiver
constitute a continuing waiver. No waiver shall be binding unless executed in
writing by the party making the waiver.

5.4        Governing Law.  This Agreement is executed in and intended to be
performed in the State of California, and the laws of that state shall govern
its interpretation and effect.

5.5        Severability.  The parties hereto agree that if any paragraph,
section, sentence, clause or phrase contained in this Agreement shall become
illegal, null or void or against public policy, for any reason, or shall be held
by any court of competent jurisdiction to be incapable of being construed or
limited in a manner to make it enforceable, or is otherwise held by such court
to be illegal, null or void or against public policy, the remaining paragraphs,
sections, sentences, clauses or phrases contained in this Agreement shall not be
affected thereby.

5.6        Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Neither the Manager's rights nor obligations under this Agreement
shall be assignable.

5.7        Counterparts.  For the convenience of the parties hereto, this
Agreement may be executed in any number of identical original counterparts, each
of which shall for all purposes be deemed an original, and all of such
counterparts shall together constitute but one and the same agreement.

5.8        Attorneys' Fees.  Should any party institute any action, proceeding,
suit, arbitration, appeal or other similar proceeding or other non-judicial
dispute resolution mechanism ("Action") to enforce or interpret this Agreement
or any provision hereof, for damages by reason of any alleged breach of this
Agreement or of any provision hereof, or for a declaration of rights hereunder,
the prevailing party in such Action shall be entitled to receive from the other
party(s) all reasonable attorneys' fees, accountants' fees, expert witness fees,
and any and all other similar fees, costs and expenses incurred by the
prevailing party in connection with the Action and preparations therefor
("Fees"). If any party files for protection under, or voluntarily or
involuntarily becomes subject to, any chapter of the United States Bankruptcy
Code or similar state insolvency laws, any other party shall be entitled to any
and all Fees incurred to protect such party's interest and other rights under
this Agreement, whether or not such action results in a discharge.

 

Stonecreek\Claremont\PSA-10    36   

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Exhibit 10.3

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
Effective Date.

 

MANAGER:

 

StoneCreek Investment Corporation, a California corporation, dba StoneCreek
Company

By:

 

 

 

 Clayton M. Corwin

   

 President

 

OWNER:

 

 

 

,

a

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

Stonecreek\Claremont\PSA-10    37   

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Exhibit 10.3

 

Exhibit F Suite 200 lease draft

 

Stonecreek\Claremont\PSA-10    38