AGREEMENT OF PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
 
By and Between
 
REGENCY CENTERS, L.P.,
a Delaware limited partnership
 
as Seller
 
and
 
RETAIL OPPORTUNITY INVESTMENTS CORP.,
 
a Delaware corporation
 
as Buyer
 
 
Dated as of December 30, 2009
 
 
Santa Ana Downtown Plaza Santa Ana, California
 
Retail Opportunity Investment Corp./Regency
Santa Ana Downtown Plaza.P&S Agt
(v8 – Final)

 
 

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AGREEMENT OF PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
(Regency - Santa Ana Downtown Plaza)
 
THIS AGREEMENT OF PURCHASE AND SALE AND ESCROW INSTRUCTIONS ("Agreement") is
made as of December 30, 2009 ("Agreement Date"), by and between REGENCY CENTERS,
L.P., a Delaware limited partnership ("Seller"), and RETAIL OPPORTUNITY
INVESTMENTS CORP., a Delaware corporation ("Buyer").
 
RECITALS
 
A. Seller is the current owner of the Property (as defined in Section 2).
 
B. Buyer desires to purchase and Seller is willing to sell the Property on the
terms and conditions of this Agreement.
 
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer and Seller agree as follows:
 
AGREEMENT
 
1. Certain Basic Definitions. For purposes of this Agreement, the following
terms shall have the following definitions:
 
1.1"Additional Deposit" means the amount of Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00), to be deposited with Escrow Holder pursuant to
Section 2.2.2. The Additional Deposit shall be non-refundable to Buyer subject
to the terms of this Agreement.
 
1.2"Agreement Date" means the date first set forth above in this Agreement.
 
1.3"Buyer's Address" means:
 
Retail Opportunity Investments Corp.
3 Manhattanville Road, Second Floor
Purchase, New York 10577
Attn: Mr. Richard Schoebel
Telephone No.: (914) 272-8080
Facsimile No.: (914)272-8088
Email: rschoebel@roireit.net
 
With copies to:
 
Bouza, Klein & Kaminsky
950 S. Flower Street, Suite 100
 
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Santa Ana Downtown Plaza.P&S Agt
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Los Angeles, California 90015
Attention: Michael J. Kaminsky, Esq.
Telephone No.: (213) 488-0675, ext. 6
Facsimile No.: (213) 488-1361
E-Mail: mkaminsky@b2klaw.com
 
1.4"Closing" means the date the Grant Deed to Buyer is recorded in the Official
Records of the County in which the Real Property is located.
 
1.5"Closing Date" means the date on which Closing actually occurs.
 
1.6"Due Diligence Period" means that period commencing on the Opening of Escrow
and expiring at 5:00 p.m. (Pacific time) on the twenty-first (21st) day
following the earlier to occur of (a) the Agreement Date, or (b) the date on
which the Due Diligence Items were delivered to Buyer, which date is hereby
acknowledged and agreed to be December 29, 2009. If the Due Diligence Period
expires on a weekend or legal holiday, it shall automatically be extended to the
next business day).
 
1.7"Escrow Holder" means First American Title Insurance Company.
 
1.8"Escrow Holder's Address" means:
 
First American Title Insurance Company
National Commercial Services
777 South Figueroa Street, 4th Floor
Los Angeles, CA 90017
Attention: Ms. Carolyn J. Marcial
Telephone No.: (213) 271-1728
Facsimile No.: (818) 450-0132
E-mail: cmarcial@firstam.com
 
1.9"Estoppel Certificates" is defined in Section 3.3.7.
 
1.10           "Excluded Items" means all proprietary, privileged or
confidential information of Seller relating to the Property, including but not
limited to, Seller's internal financial analysis, Seller's credit analysis and
collection plans, materials relating to Seller's cost to acquire the Property
and any documents or communications subject to the attorney/client privilege.
 
1.11           "Initial Deposit" means the amount of Two Hundred Fifty Thousand
and No/100 Dollars ($250,000.00), to be deposited with Escrow Holder pursuant to
Section 2.2.1.
 
1.12           "Leases" means those certain lease agreements set forth in
Schedule 1.14.
 
 
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1.13          "Outside Closing Date" means January 28, 2010.
 
1.14          "Purchase Price" means the sum of Nineteen Million and No/100
Dollars ($19,000,000.00).
 
1.15          "Scheduled Closing Date" means that date which is five (5) days
after the expiration of the Due Diligence Period.
 
1.16"Seller's Address" means:
 
Regency Centers, L.P.
c/o Regency Centers, Inc.
915 Wilshire Boulevard, Suite 2200
Los Angeles, California 90017
Attention: Mr. T.R. Gregory
Telephone No.: (213) 553-2200
Facsimile No.: (213) 624-2280
E-mail Address: TRGregory@regencycenters.com
 
With copies to:
Kennerly, Lamishaw & Rossi LLP
707 Wilshire Boulevard, Suite 1400
Los Angeles, California 90017
Attention: Robert L. Madok, Esq.
Telephone No.: (213) 426-2090
Facsimile No.: (213) 312-1266
E-Mail: robertmadok@klrfirm.com
 
1.17          "Shopping Center" means the shopping center located at 301 – 431
East First Street, Santa Ana, California, commonly known as the Santa Ana
Downtown Plaza, which is located within the Real Property is located.
 
1.18"Tenants" mean those certain tenants under the Leases.
 
1.1"Title Company" means First American Title Insurance Company.
 
1.2"Title Company Address" means:
 
First American Title Insurance Company
National Commercial Services
777 South Figueroa Street, 4th Floor
Los Angeles, California 90017
Attn: Mr. Jimmy B. Morada
Telephone No.: (213) 271-1700 ext. 1770
 
 
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Facsimile No.: (818) 337-7155
Email: jbmorada@firstam.corn
 
2. Sale of Property: Purchase Price.
 
2.1Sale of Property. Subject to the terms, covenants and conditions of this
Agreement, Seller shall sell to Buyer, and Buyer shall purchase from Seller:
 
(a) that certain real property located in the City of Santa Ana, County of
Orange, State of California which is more particularly described in Exhibit "A"
(the "Real Property");
 
(b) all buildings and other improvements located on the Real Property (the
"Improvements"); and
 
(c) all right, title and interest of Seller in and to the Real Property
including, without limitation, the Leases and all other agreements demising
space in or providing for the use or the occupancy of the land or Improvements
and any permits, approvals, operating permits, plans, specifications, licenses,
entitlements, surveys, warranties, guaranties and all other contracts and
agreements and all intangible property and rights relating to the Real Property,
Improvements or personal property, if any (collectively, the "Contracts"), to
the extent the Contracts are assignable (the Real Property, the Improvements and
the Contracts are collectively referred to herein as the "Property").
 
2.2 Purchase Price. The Purchase Price shall be payable as follows:
 
2.2.1 Initial Deposit. The Initial Deposit shall be delivered by Buyer to Escrow
Holder within three (3) business days of Buyer's and Seller's mutual execution
of this Agreement and delivery of a fully executed copy thereof to Escrow
Holder. Such Initial Deposit shall be made in the form of a wire transfer made
payable to the order of Escrow Holder, and shall be deposited by Escrow Holder
pursuant to the provisions of Section 3.1 below ("Opening of Escrow"). In the
event that the Initial Deposit is not timely delivered to Escrow Holder as
provided above, this Agreement shall, at the option of Seller, be deemed to be
null and void and of no further force or effect.
 
2.2.2 Additional Deposit. Unless Buyer terminates this Agreement prior to the
expiration of the Due Diligence Period pursuant to Section 3.5 below, the
Additional Deposit shall be delivered by Buyer to Escrow Holder by 5:00 p.m.
Pacific time on the day on which the Due Diligence Period expires. The
Additional Deposit shall be deposited by Escrow Holder pursuant to the
provisions of Section 3.1 below. By making the Additional Deposit, Buyer shall
be deemed to have waived its right to terminate this Agreement during the Due
Diligence Period pursuant to Section 3.5 below. The Initial and Additional
Deposits shall collectively be referred to as the "Deposit." The Deposit shall
be applicable to the Purchase Price at Closing.
 
 
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Santa Ana Downtown Plaza.P&S Agt
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2.2.3 Refundability of Deposit. In the event that Buyer terminates this
Agreement prior to the expiration of the Due Diligence Period pursuant to
Section 3.5 below, the Initial Deposit shall be refunded to Buyer in accordance
with said Section 3.5. If Buyer does not terminate this Agreement prior to the
expiration of the Due Diligence Period prior to the expiration of the Due
Diligence Period, the Initial Deposit and the Additional Deposit shall become
non-refundable to Buyer and shall be retained by Seller if this Agreement is
terminated on account of a default by Buyer or a failure of Buyer's condition to
Close hereunder or if the Close of Escrow does not occur by the Scheduled
Closing Date for any reason, subject to the terms of Section 9.2 hereof or any
other provisions of this Agreement which specifically provide for the return of
the Deposit to Buyer.
 
2.2.4 Closing Payment at Closing. On or before the Closing Date as required by
the Escrow Holder to Close Escrow on the Closing Date, Buyer shall pay to Escrow
Holder a sum equal to (a) the Purchase Price, less (b) the Deposit, plus (c) the
amount of any items chargeable to Buyer under this Agreement (including Buyer's
share of closing costs, fees and expenses) (the "Closing Payment").
 
2.2.5 Interest on Deposits. All funds received from or for the account of Buyer
shall be deposited by Escrow Holder in an interest-bearing account with a
federally insured state or national bank ("Account") located in California. All
interest accrued on the Initial and Additional Deposits shall be credited to
Buyer.
 
2.2.6 Independent Consideration. Contemporaneous with Buyer's execution and
delivery of this Agreement, Buyer has delivered to Seller and Seller hereby
acknowledges the receipt of One Hundred Dollars ($100.00) ("Independent Contract
Consideration"), which amount the parties bargained for and agreed as
consideration for Buyer's exclusive right to inspect and purchase the Property
pursuant to this Agreement and for Seller's execution, delivery and performance
of this Agreement. The Independent Contract Consideration is in addition to and
independent of any other consideration or payment provided in this Agreement, is
nonrefundable, and is fully earned and shall be retained by Seller
notwithstanding any other provision of this Agreement.
 
3. Escrow; Closing Conditions.
 
3.1 Escrow. Upon the execution of this Agreement by Buyer and Seller, and the
acceptance of this Agreement by Escrow Holder in writing, this Agreement shall
constitute the joint escrow instructions of Buyer and Seller to Escrow Holder to
open an escrow ("Escrow") for the consummation of the sale of the Property to
Buyer pursuant to the terms of this Agreement. Upon Escrow Holder's receipt of
the Deposit and Escrow Holder's written acceptance of this Agreement, Escrow
Holder is authorized to act in accordance with the terms of this Agreement. Upon
the Close of Escrow, Escrow Holder shall pay any sum owed to Seller with
immediately available federal funds. Escrow Holder shall pay any sum owed to
Buyer or Seller with
 
 
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immediately available federal funds. Escrow Holder is designated the "real
estate reporting person" for purposes of Section 6045 of the Internal Revenue
Code of 1986, as amended and Treasury Regulation 1.6045-4, and any instructions
or settlement statement prepared by Escrow Holder shall so provide. Escrow
Holder shall be responsible for filing Form 1099-S with the Internal Revenue
Service.
 
3.2Closing Date. The Escrow shall occur ("Close of Escrow") on the Scheduled
Closing Date, provided that all conditions to the Close of Escrow set forth in
this Agreement have been satisfied or waived in writing by the party intended to
be benefited thereby. In the event that the Closing does not occur by the
Outside Closing Date, this Agreement shall automatically terminate and be of no
further force or effect, except with respect to any provisions of this Agreement
that expressly survive the Close of Escrow and/or termination of this Agreement.
 
3.3Buyer's Conditions to Closing. The Close of Escrow is subject to and
contingent on the satisfaction of the following conditions or the waiver of the
same by Buyer in writing:
 
3.3.1 Inspection. Buyer's approval, in its sole discretion, of the physical
condition of the Property at Buyer's sole cost and expense prior to the
expiration of the Due Diligence Period. Notwithstanding the foregoing, Buyer's
right to inspect the Property pursuant to the terms of this Agreement shall, at
all times, be subject to Seller's inspection rights under the Leases.
 
(a) Buyer shall have the right to commence Buyer's physical inspection of the
Property immediately: (i) after Buyer's and Seller's execution of this
Agreement; (ii) after Seller has confirmed to Buyer that the Tenants have been
notified of Buyer's commencement of the physical inspection of the Property; and
(iii) after Seller's receipt of written evidence that Buyer has procured the
insurance required by Section 3.3.1(c) of this Agreement. Buyer's physical
inspection of the Property shall be conducted during normal business hours at
times mutually acceptable to Buyer and Seller, but in all events upon no less
than one (1) business days' written request from Buyer to Seller. No invasive
testing or boring with respect to the Property shall be conducted by Buyer or
Buyer's representatives. Seller shall provide to Buyer copies of all
environmental reports relating to the Property in Seller's possession.
 
(b) Buyer acknowledges that prior to the expiration of the Due Diligence Period:
(i) Buyer has or will have conducted such surveys and inspections, and made such
percolation, geologic, environmental and soils tests and other studies of the
Property; and (ii) Seller shall provide Buyer with adequate opportunity to make
such inspection of the Property (including an inspection for zoning, land use,
environmental and other laws, regulations and restrictions) as Buyer shall, in
Buyer's discretion, deem necessary or advisable as a condition precedent to
Buyer's purchase of the Property and to determine the physical, environmental
and land use characteristics of the Property (including, without limitation, its
subsurface) and its suitability for Buyer's
 
 
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intended use.
 
(c) Buyer shall obtain or cause its consultants to obtain, at Buyer's sole cost
and expense prior to commencement of any investigative activities on the
Property, a policy of commercial general liability insurance covering any and
all liability of Buyer and Seller with respect to or arising out of any
investigative activities. Such policy of insurance shall be an occurrence policy
and shall have liability limits of not less than One Million Dollars and No/100
($1,000,000.00) combined single limit per occurrence for bodily injury, personal
injury and property damage liability. Such insurance policy shall name Seller,
its successors and assigns and such other entities as Seller shall designate as
additional insureds including, without limitation, the Tenants, and shall be in
form and substance and issued by an insurance company reasonably satisfactory to
Seller.
 
Buyer shall protect, indemnify, defend and hold the Property, Seller and
Seller's officers, directors, partners, members, fiduciaries, participants,
affiliates, employees, representatives, invitees, agents and contractors free
and harmless from and against any and all claims, damages, liens, stop notices,
liabilities, losses, costs and expenses, including reasonable attorneys' fees
and court costs (collectively, "Liabilities"), resulting from Buyer's inspection
and testing of the Property, including, without limitation, repairing any and
all damages to any portion of the Property, arising out of or related (directly
or indirectly) to Buyer's conducting such inspections, surveys, tests, and
studies, even if such Liabilities are caused by the concurrent negligence of
Seller. Notwithstanding anything to the contrary contained in this Agreement,
Buyer's indemnification obligations as set forth herein shall not apply to any
claims, costs, losses, liabilities, damages or expenses, to the extent incurred
by Seller as a result of a condition existing at the Property prior to any entry
by Buyer onto the Property, except to the extent such pre-existing condition was
worsened by any act or omission of Buyer, its agents or contractors.
 
(d) Buyer shall keep the Property free and clear of any mechanics' liens or
materialmen's liens related to Buyer's right of inspection and the activities
contemplated by Section 3.3.1 of this Agreement. Buyer's indemnification
obligations set forth herein shall survive the Close of Escrow and shall not be
merged with the Deed, and shall survive the termination of this Agreement and
the Close of Escrow.
 
(e) Buyer hereby covenants that it shall comply with all the terms and
conditions set forth in the Leases and shall use its commercial reasonable
efforts not to interfere or disturb the Tenants or the Tenants' rights, duties
and obligations under the Leases.
 
(f) It is understood by the parties that, except to the extent otherwise
specifically provided herein, Seller does not make any representation or
warranty, express or implied, as to the accuracy or completeness of any
information contained in Seller's files or in the documents produced by Seller,
including, without
 
 
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limitation, any environmental audit. Buyer acknowledges, except to the extent
otherwise specifically provided herein, that Seller and Seller's affiliates
shall have no responsibility for the contents and accuracy of such disclosures,
and Buyer agrees that the obligations of Seller in connection with the purchase
of the Property shall be governed by this Agreement irrespective of the contents
of any such disclosures or the timing or delivery thereof.
 
3.3.2 Title Policy. The Title Company's issuance of the Buyer's Title Policy (or
mark-up thereof with promise of delivery within thirty (30) days) complying with
the requirements of Section 3.7.2 below; provided, however, the issuance of
endorsements requested by Buyer shall not be a condition precedent to Buyer's
obligation to proceed with the Close of Escrow unless such endorsements are for
the purpose of removing disapproved title exceptions that Seller has agreed to
attempt to remove at or prior to the Close of Escrow.
 
3.3.3 Covenants. Seller having performed and satisfied all agreements and
covenants required hereby to be performed by Seller prior to or at the Close of
Escrow.
 
3.3.4 Title Commitment. Buyer's approval, in its sole discretion, by the
expiration of the Due Diligence Period of the following (collectively,
"Commitment"): (i) a current title commitment for the Real Property issued by
the Title Company; (ii) copies of all underlying title documents described in
such title commitment; and (iii) the Existing Survey (defined below), if any, or
any update thereto obtained by Buyer if Buyer so elects, prior to the expiration
of the Due Diligence Period.
 
(a) Seller shall deliver (or cause to be delivered) to Buyer the Commitment and,
if possessed by Seller, an ALTA Property survey ("Existing Survey"). Buyer, at
its sole discretion, cost and expense, shall have the right to commission an
updated survey (the "Updated Survey"). In the event Buyer timely objects in
writing to matters on the Commitment, the Existing Survey and the Updated Survey
in accordance with the approval procedures set forth in Section 3.4 herein,
Seller shall have the right, but not the obligation, to notify Buyer in writing
within five (5) calendar days after the date of Seller's receipt of the Buyer's
notice that Seller desires to have until Closing in which to remove or to cure,
or to agree to remove or to cure some or all of the disapproved items to Buyer's
reasonable satisfaction. Seller's notice may limit such attempts to cure or
remove to exclude payment of money or taking any judicial action. Seller's
failure to deliver such notice to Buyer within such five (5) day period with
respect to any disapproved item shall be deemed to be an election by Seller not
to attempt to remove or to cure such items. Notwithstanding the foregoing,
Seller agrees to remove prior to or concurrently with the Close of Escrow any
mortgages or deeds of trust encumbering the Real Property, any liens for
delinquent taxes, judgment liens, or mechanic's liens arising out of work
performed or materials supplied to the Real Property by Seller, but in all
events excluding the lien for taxes, not yet due and payable. In connection
therewith, Seller shall have the option, in Seller's sole discretion and without
 
 
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Buyer's consent, of curing Buyer's objection to any mechanic's lien encumbering
the Property or a portion thereof in the face amount of Fifty Thousand and
No/100 Dollars ($50,000.00) or less by the posting of a bond by a reputable
bonding company reasonably acceptable to Buyer, provided that Buyer shall have
reasonable approval rights with respect to the form, terms, and amount of the
bond so posted. Buyer shall be deemed to have approved all exceptions not
objected to by Buyer or to which objections have been waived by Buyer pursuant
to Section 3.3.4(b) below.
 
(b) If Seller elects not to attempt to remove or to cure some or all of the
disapproved items pursuant to Section 3.3.4 (a) to Buyer's reasonable
satisfaction, or if Seller has agreed to attempt to remove or cure some or all
of such disapproved items and is unable to or has failed to remove or cure the
same, then Buyer shall have, as Buyer's sole and exclusive remedy, the right
exercisable on or before three (3) business days after Seller's election or
deemed election (or prior to Close of Escrow if Seller elects but is unable or
fails to remove or cure such disapproved item) either (i) to waive such
exceptions to title, and proceed to take title to the Property without any
deduction or offset in the Purchase Price, or (ii) to terminate this Agreement
and the Escrow by giving written notice of such termination to Seller and to
Escrow Holder in which event Buyer and Seller shall have no further liability to
the other hereunder except for those provisions that specifically survive the
termination of this Agreement and the Deposit shall be returned to Buyer.
Buyer's failure to provide Seller or Escrow Holder with written notice of
termination within said three (3) business day period shall constitute Buyer's
election under clause (i) above.
 
3.3.5 Due Diligence Items. Seller shall deliver to Buyer the due diligence items
set forth in Schedule 3.3.5 (the "Due Diligence Items"). Seller acknowledges
Buyer may desire to discuss or otherwise inquire about the Due Diligence Items
with various governmental entities and utilities, any contracts with Tenants and
third parties. In this regard, Buyer is permitted to contact all necessary third
parties and discuss with such third parties governmental records, contracts with
Tenants and other Due Diligence Items; provided, however, that (a) Buyer first
obtains Seller's reasonable consent and Seller is first given a reasonable
opportunity to be present at such contact or discussions at a time and location
specified by Buyer in writing, and (b) Buyer shall take no action or enter into
any agreement, document, dealing, cooperation or any other matter without
Seller's prior written consent (to be withheld in Seller's sole discretion)
that: (i) would create liability on Seller; (ii) would be binding on Seller
prior to the Close of Escrow; or (iii) would be binding on Seller if the Close
of Escrow does not occur.
 
3.3.6 Representations and Warranties. All representations and warranties of
Seller contained in this Agreement shall be true and correct as of the date made
and as of the Close of Escrow with the same effect as though such
representations and warranties were made at and as of the Close of Escrow.
 
3.3.7 Tenant Estoppel Certificates. During the Due Diligence Period, Seller
shall deliver to each Tenant under the Leases, other than the "Default
 
 
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Tenants" (defined below) a tenant estoppel certificate substantially in the form
either: (i) attached Exhibit "G"; or (ii) as required to be delivered by a
tenant under the subject Lease (the "Tenant Estoppel Certificates"). The
"Default Tenants" are those known as "Grace's Flowers," "Panderia Ensenada," and
"Chiqui's Beauty." Seller shall use its commercially reasonable efforts (at no
expense to Seller unless the subject Lease specifically requires Seller to pay
for an estoppel processing fee) to procure from each Tenant an executed Tenant
Estoppel Certificate, provided that Seller shall have no liability whatsoever to
Buyer if for any reason it is unable to procure an executed Tenant Estoppel
Certificate from one or more Tenants. Without limiting the foregoing, in the
event Seller is unable to obtain a Tenant Estoppel Certificate from those
Tenants identified as "Food For Less," "FAMSA," McDonald's, Taco Bell, and not
less than fifty percent (50%) of the Tenants identified on Schedule 3.3.7,
expressly excluding the Default Tenants (said 50% of the Tenants listed on
Schedule 3.3.7, along with Food For Less, FAMSA, McDonald's, and Taco Bell,
collectively the "Estoppel Tenants"), Buyer shall have the right to terminate
this Agreement by written notice to Seller delivered prior to the expiration of
the Due Diligence Period. In no event shall Seller be in default hereunder for
its failure to obtain Tenant Estoppel Certificates from any Tenants, but the
delivery of Tenant Estoppel Certificates from all of the Estoppel Tenants shall
be a condition precedent to Buyer's obligation to purchase the Property pursuant
to this Agreement (which may be waived by Buyer in writing prior to the
expiration of the Due Diligence Period; failure of Buyer to terminate this
Agreement or permit this Agreement to terminate prior to the expiration of the
Due Diligence Period shall be deemed Buyer's waiver of the aforesaid condition
precedent). If, by the end of the Due Diligence Period (a) Seller fails to
timely deliver Tenant Estoppel Certificates from all of the Estoppel Tenants, or
(b) Buyer reasonably disapproves any Tenant Estoppel Certificate from any of the
Estoppel Tenants, and Seller cannot cause such tenant(s) to execute substitute
Tenant Estoppel Certificate which is reasonably satisfactory to Buyer prior to
the expiration of the Due Diligence Period, Buyer may either (i) terminate this
Agreement by delivering written notice to the Seller and the Escrow Holder of
its election of the same, or (ii) waive the requirement that Seller obtain
Tenant Estoppel Certificates from those Estoppel Tenants from whom Seller has
not yet obtained the same and proceed to the Closing notwithstanding Seller's
failure to deliver the subject Tenant Estoppel Certificates. If Buyer terminates
this Agreement in accordance with the foregoing, the entire Deposit shall be
immediately returned to Buyer (without the need for any additional instructions
by either party hereto), and thereafter neither party shall have any further
rights or obligations hereunder, except as specifically provided in this
Agreement. Notwithstanding the foregoing, to the extent Seller is unable,
despite the exercise of reasonable diligence, to obtain a Tenant Estoppel
Certificate from one or more of the Estoppel Tenants, and any other Tenant that
is not a Default Tenant, on or before the expiration of the Due Diligence
Period, Seller shall execute and deliver to Buyer Seller estoppel certificates
substantially in the form of Exhibit "H" ("Seller Estoppel Certificates") at
Closing for all such Tenants which are not Default Tenants and from which Seller
was not able timely to obtain a Tenant Estoppel Certificate. To the extent
Seller receives Tenant Estoppel Certificates from any such Tenants after the
Close of Escrow and delivers such certificates to Buyer, or Buyer receives an
estoppel certificate
 
 
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from any such Tenant, the Seller Estoppel Certificate previously delivered by
Seller for such Tenant shall be deemed null and void as to each such Tenant
Estoppel Certificate received by Buyer after the Close of Escrow. The provisions
of this Section 3.3.7 shall survive the Close of Escrow.
 
3.3.8 Damage or Destruction. Buyer shall not have elected, pursuant to the terms
of Section 6, to terminate this Agreement.
 
3.4 Approval Procedure. Buyer shall notify Seller of Buyer's approval, if at
all, of the matters described in Sections 3.3.1, 3.3.4, 3.3.5, and 3.3.7 by
written notice delivered to Seller and Escrow Holder by the expiration of the
Due Diligence Period. Buyer's failure to approve any of the matters described in
Sections 3.3.1, 3.3.4, 3.3.5, and 3.3.7 by the expiration of the Due Diligence
Period in the manner described shall be deemed Buyer's disapproval of such
matters, this Agreement shall automatically terminate and Escrow Holder shall
immediately release the Deposit to Buyer without the need for any further
instructions. Provided Buyer provides the foregoing approval notice prior to the
expiration of the Due Diligence Period, in no event shall Buyer have the right
to disapprove any such item(s) after the expiration of the Due Diligence Period.
 
3.5 Termination Upon Disapproval. If Buyer disapproves, in its sole discretion,
of any aspect of its review of the Property pursuant to Section 3.3.1, 3.3.4,
3.3.5, or 3.3.7 above, Buyer shall have the right to terminate this Agreement by
written notice delivered to Seller no later than the expiration of the Due
Diligence Period. Upon termination of this Agreement pursuant to this Section
3.5 or pursuant to Section 6: (a) each party shall promptly execute and deliver
to Escrow Holder such documents as Escrow Holder may reasonably require to
evidence such termination; (b) Escrow Holder shall return all documents to the
respective parties who delivered such documents to Escrow; (c) Escrow Holder
shall remit the Deposit to Buyer; (d) Buyer and Seller shall each pay one-half
(½) of Escrow Holder's escrow cancellation fees, if any; (e) Buyer shall return
to Seller all Due Diligence Items in Buyer's possession relating to the
Property; and (f) the respective obligations of Buyer and Seller under this
Agreement shall terminate; provided, however, notwithstanding the foregoing,
Buyer's indemnity obligations under Section 3.3.1(d) shall survive any such
termination of this Agreement, and the termination of this Agreement shall not
release any other indemnity obligation of Buyer ("Surviving Indemnity").
 
3.6 Seller's Conditions to Closing. The obligations of Seller to consummate the
transactions provided for herein are subject to and contingent upon the
satisfaction of the following conditions or the waiver of same by Seller in
writing:
 
3.6.1 Covenants. Buyer having performed and satisfied all agreements and
covenants required hereby to be performed by Buyer prior to or at the Close of
Escrow.
 
3.6.2 Representations and Warranties. All representations and
 
 
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warranties of Buyer contained in this Agreement shall be materially true and
correct as of the date made and as of the Close of Escrow with the same effect
as though such representations and warranties were made at and as of the Close
of Escrow.
 
3.6.3 Payment of Purchase Price. Buyer shall have timely deposited into Escrow
the Additional Deposit and the Cash Payment.
 
3.7 Title and Title Insurance.
 
3.7.1 Deed. Seller shall convey title to the Real Property to Buyer by grant
deed in the form of Exhibit "B" attached hereto ("Deed").
 
3.7.2 Buyer's Title Policy. At the Close of Escrow, Escrow Holder shall cause
the Title Company to issue an ALTA 1992 Owner's Policy of Title Insurance with
an insured amount equal to the Purchase Price containing no exceptions other
than as approved by Buyer pursuant to this Agreement ("Buyer's Title Policy").
Notwithstanding the foregoing, if Buyer does not provide the Title Company with
a current ALTA Survey, Buyer's Title Policy shall be a CLTA 1992 Owner's Policy
of Title Insurance.
 
3.8 Closing Costs and Charges.
 
3.8.1 Seller's Costs. Seller shall pay: (a) one-half (½) of Escrow Holder's fees
in connection with the Escrow; (b) all documentary transfer taxes, other taxes;
and (c); the premium for a standard coverage CLTA Owner's Title Policy insuring
Buyer's title in an amount equal to the Purchase Price.
 
3.8.2 Buyer's Costs. Buyer shall pay: (a) one-half (½) of the Escrow Holder's
fees in connection with the Escrow; (b) the portion of the premium for Buyer's
Title Policy equal to the premium attributable to the ALTA extended coverage;
(c) all recording fees payable in connection with the transfer of the Property;
and (d) all costs associated with any endorsements to Buyer's Title Policy.
 
3.8.3 Other Costs. All other costs, if any, shall be apportioned in the
customary manner for real property transactions in Orange County.
 
3.9 Deposit of Documents and Funds by Seller. Not later than one (1) business
day prior to the Closing Date, Seller shall deposit the following items into
Escrow each of which shall be duly executed and acknowledged by Seller where
appropriate:
 
3.9.1 The Deed;
 
3.9.2 Three (3) counterparts of the Assignment and Assumption of Leases, a form
of which is attached hereto as Exhibit "C" (the "Assignment and Assumption of
Leases");
 
 
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3.9.3 Three (3) counterparts of the General Assignment and Assumption, a form of
which is attached hereto as Exhibit "D" (the "General Assignment and
Assumption");
 
3.9.4 The Certification of Non-Foreign Status in the form of Exhibit "E"
("FIRPTA");
 
3.9.5 Notice to Tenants in the form of Exhibit "F" ("Notice to Tenants");
 
3.9.6 Seller's closing statement prepared by Escrow Holder; and
 
3.9.7 Other documents that may reasonably be required by Escrow Holder to close
the Escrow in accordance with this Agreement.
 
Additionally, outside of Escrow, in connection with the Closing, Seller shall
deliver or cause to be delivered to Buyer, to the extent that Seller possesses
the same, original copies of all Leases and all other licenses, permits, and
governmental certificates and approvals relating to the Property, keys, if any,
in Sellers possession to locks on the Property.
 
3.10 Deposit of Documents and Funds by Buyer. Not later than one (1) business
day prior to the Closing Date, Buyer shall deposit the following items into
Escrow each of which shall be duly executed and acknowledged by Buyer where
appropriate:
 
3.10.1 The Closing Payment;
 
3.10.2 Three (3) counterparts of the Assignment and Assumption of Leases;
 
3.10.3 Three (3) counterparts of the General Assignment and Assumption;
 
3.10.4 Buyer's closing statement prepared by Escrow Holder;
 
3.10.5 Notice to Tenants; and

 
3.10.6 All other funds and documents including all appropriate authority
documents and certificates as may reasonably be required by Escrow Holder to
close the Escrow in accordance with this Agreement.
 
3.10.7 The parties hereto shall jointly deposit any required transfer
declarations or declarations of value and mutually agreed closing statements.
 
3.11 Delivery of Documents and Funds at Closing. Provided that all conditions to
closing set forth in this Agreement have been satisfied or, as to any
 
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condition not satisfied, waived by the party intended to be benefited thereby,
on the Scheduled Closing Date Escrow Holder shall conduct the Closing by
recording or distributing the following documents and funds in the following
manner:
 
3.11.1 Recorded Documents. Record the Deed in the Official Records of Orange
County.
 
3.11.2 Buyer's Documents. Deliver to Buyer: (a) the original Buyer's Title
Policy; (b) the original FIRPTA; (c) an original counterpart of the Assignment
and Assumption of Leases; (d) an original counterpart of the General Assignment
and Assumption executed by Seller and Buyer; and (e) a counterpart copy of the
Buyer's closing statement.
 
3.11.3 Seller's Documents. Deliver to Seller a counterpart or original (as
applicable) of every document delivered to Buyer, and the Seller's closing
statement.
 
3.11.4 Purchase Price. Deliver to Seller the Purchase Price and such other
funds, if any, as may be due to Seller by reason of credits under this
Agreement, less all items chargeable to Seller under this Agreement and less the
Holdback Amounts as defined in Section 3.12.5 below.
 
3.12 Prorations and Adjustments.
 
3.12.1 Generally. If any expenses are not determinable on the Close of Escrow,
at the earliest possible opportunity following the Close of Escrow, Seller and
Buyer shall make any interim and final adjustments. The provisions of this
Section 3.12 shall survive the Close of Escrow.
 
3.12.2 Taxes. Escrow Holder shall prorate real property taxes and assessments on
the Property as of the Close of Escrow for the current fiscal year based on the
most current official real property tax information available from the County
Assessor's office where the Real Property is located or other assessing
authorities. If real property tax and assessment figures for the current fiscal
year are not available, real property taxes shall be prorated based on the real
property taxes for the previous fiscal year. Seller shall pay any real property
taxes attributable to the period of Seller's ownership of the Property and, if
appropriate, reprorate taxes when the actual tax bills are available. Seller
reserves the right to meet with governmental officials and to contest any
reassessment concerning or affecting Seller's obligations under this Section
3.12.2.
 
3.12.3 Utility Costs and Deposits. Seller shall notify all water, gas, electric
and other utility companies servicing the Property (collectively, "Utility
Companies") of the sale of the Property to Buyer and shall request that all
Utility Companies send Seller a final bill for the period ending on the last day
prior to the Close of Escrow. Buyer shall notify all Utility Companies servicing
the Property that as of the Close of Escrow, Buyer shall own the Property and
that all utility bills for the period
 
 
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commencing on the Close of Escrow are to be sent to Buyer. If any of the Utility
Companies sends Seller or Buyer a bill for a period in which the Close of Escrow
occurs, Buyer and Seller shall prorate such bills outside the Escrow. In
connection with such proration, it shall be presumed that utility charges were
uniformly incurred during the billing period.
 
3.12.4 Rentals. Rent and other payments, including without limitation any
additional rent and percentage rent, which are payable pursuant to the Leases,
applicable to the time period in which the Close of Escrow occurs, and have been
received by Seller prior to the Closing Date, shall be pro-rated on a per diem
basis as of the Closing Date. Seller shall use its commercially reasonable
efforts to resolve, prior to the Closing Date, any rent arrearages arising under
Leases for the period prior to the Closing Date; however, if any such arrearages
exist at Closing, Buyer shall pay to Seller any rent actually collected after
Closing which is applicable to the period preceding the Closing Date in
accordance with this Section 3.12.4. All rent, including any delinquent rent,
collected by Buyer after Closing shall be applied first to the current month's
rent, second to unpaid, past due rent accruing after the Closing Date, and third
to the unpaid rent accruing prior to the Closing Date (and such pre-Closing rent
collected by Buyer shall be paid to Seller within ten (10) days after Buyer's
receipt thereof). In no event shall delinquent rent be prorated. During the
twelve (12) month period following Closing, Buyer shall bill tenants for any
rent arrearages in respect of the period prior to the Closing Date and shall use
its commercially reasonable efforts to collect same, provided that Buyer shall
not be required to incur any other cost or commence any legal proceeding in
order to collect such arrearage. Any prepaid rentals including with respect to
operating expenses shall be credited to Buyer as of the Close of Escrow. Buyer
shall be credited and Seller shall be debited with an amount equal to all rent
abatements and rent concessions applicable to periods after the Close of Escrow.
Seller shall retain the right to take action to collect any delinquent rents or
other amounts owing Seller applicable to the period prior to the Closing Date,
except with to the extent Seller is deemed to have waived its right to do so
with respect to that Tenant commonly known as "Sports Plus" pursuant to Section
3.12.5 below.
 
3.12.5 Security Deposits. At the Close of Escrow, Buyer shall receive a credit
against the Purchase Price in an amount equal to the aggregate of Tenant
security deposits identified in Schedule 1.14 attached hereto or such lesser
amount as is set forth in a Tenant Estoppel Certificate delivered by the subject
Tenant pursuant to this Agreement, subject to the offsets for Grace's Flowers,
Panaderia Ensenada, Chiquis Beauty, and Sports Plus as outlined below. Seller
and Buyer acknowledge that, as of the Agreement Date, the following Tenants are
delinquent in the payment of rent: (i) Grace's Flowers; (ii) Panaderia Ensenada;
(iii) Chiquis Beauty; and (iv) Sports Plus. With respect Grace's Flowers, Seller
shall be permitted to apply the entire security deposit paid by such Tenant to
pre-Closing delinquent rents, so long as the space leased to such Tenant is
vacant and Seller has legal rights to such space at the time of Closing. With
respect to each of Panaderia Ensenada and Chiquis Beauty, Seller shall have the
option of (A)
 
 
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delivering the space leased to each such Tenant vacant at Closing with Seller
having legal rights to such space at the time of Closing, and retaining such
Tenant's security deposit to the extent necessary to cover such Tenant's
delinquencies, (B) if the space occupied by such Tenant is not vacant as of the
Closing Date, so long as Seller has filed or caused to be filed unlawful
detainer actions against such Tenant prior to Closing, retaining such Tenant's
security deposit to the extent necessary to cover such Tenant's delinquencies,
in which event, upon Closing, Seller shall assign its rights in any such actions
to Buyer and shall remain responsible for all actual, reasonable out-of-pocket
costs incurred by Buyer in completing such eviction process following the
Closing, or (C) crediting Buyer at Closing with the full amount of the security
deposits for such Tenant as set forth on Schedule 1.14 attached hereto, in which
event Seller shall have no further obligation whatsoever with respect to any
eviction process relating to such Tenant. With respect to Sports Plus, Seller
shall have the option of (I) delivering the space leased to Sports Plus vacant
at Closing and retaining Sports Plus' security deposit to the extent necessary
to cover Sports Plus' delinquencies or completely settling any ongoing rent
dispute with Sports Plus by the Closing, or (II) crediting Buyer at Closing with
the full amount of the security deposit set forth in Sports Plus' Lease and
waiving all further rights to proceed against Sports Plus for any pre-Closing
delinquent rental amounts following the Closing. As of the Agreement Date, the
amount of Tenant security deposits which are set forth in the Leases and other
written agreements between Seller and the subject Tenant, along with the
portions thereof that have been applied by Seller against Tenant delinquencies,
are set forth on Schedule 1.14 attached hereto.
 
3.12.6 Adjustments for Common Area Expenses.
 
(a) The phrase "Common Area Expenses" shall mean all costs, expenses and other
amounts (including, but not limited to, taxes and insurance costs) incurred in
connection with the repair, maintenance and operation of the common areas of the
Shopping Center. All Common Area Expenses for the calendar year 2010 shall be
prorated as of the Close of Escrow based upon amounts budgeted by Seller for
such calendar year, and there shall be no additional post-closing reconciliation
of such amounts following the Close of Escrow.
 
(b) To the extent that payments by Tenants to reimburse Seller for Common Area
Expenses are adjusted under the terms of the Leases at the end of calendar year
2009 ("Adjustment Period") to reflect the actual Common Area Expenses incurred
for such Adjustment Period, the following provisions shall apply:
 
(i) Within ninety (90) days following the end of the Adjustment Period and
following the Close of Escrow, Seller shall compute the actual Common Area
Expenses for such Adjustment Period. Seller shall submit the adjustment
statements required by the Leases to the Tenants, with Buyer's cooperation as
reasonably requested by Seller.
 
(ii)  Seller shall promptly remit to applicable
 
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Tenants the total amount of any overpayments by such Tenants attributable to the
Adjustment Period. Seller shall be responsible for collecting any underpayments
of Common Area Expenses for the Adjustment Period, provided that to the extent
that Buyer receives any underpayments of Common Area Expenses from Tenants
attributable to the Adjustment Period, Buyer shall promptly remit the same to
Seller. Buyer covenants to use its commercially reasonable efforts to enforce,
and to cooperate with Seller in enforcing, the provision in the Leases requiring
reimbursement of Common Area Expenses during the Adjustment Period but shall not
be required to give any notices to pay/perform or quit (provided that demand
letters are expressly not excluded) or otherwise terminate any Lease or litigate
for the recovery of such sums. Notwithstanding the foregoing, nothing herein
shall preclude Seller from, and Seller hereby reserves the right to, seek to
makes demands upon (including, without limitation, threats of litigation)
Tenants for amounts owing under any Lease relating to claims arising prior to
the Closing Date, provided that Seller shall only pursue litigation with respect
to any Tenant (i) with respect to which Tenant has commenced such litigation
prior to the Closing Date, or (ii) which has vacated its Premises in the
Shopping Center prior to the Closing Date, and Buyer shall cooperate with
Seller's efforts to so recover, provided that Buyer shall not be required to
incur any out-of-pocket cost or expense in connection with any such cooperation.
 
3.12.7 Leasing Commissions. Seller shall be responsible for the payment of all
leasing commissions and the costs of all tenant improvement work and all other
tenant concessions with respect to Leases executed prior to the expiration of
the Due Diligence Period. Buyer shall be responsible for the payment of leasing
commissions and the cost of all tenant improvement work and all other tenant
concessions for leases executed on and after the expiration of the Due Diligence
Period. In addition, Buyer shall receive a credit to the Purchase Price at
Closing in the amount equal to any unpaid leasing commissions or tenant
improvements for any unleased space at the Property as of the Closing Date.
 
3.12.8 Prorations. All prorations shall be made as of the Closing Date on the
basis of the actual days of the month in which the Close of Escrow occurs. Such
date shall be an income and expense day for Buyer. Seller shall be responsible
for all expenses of the Property applicable to the period prior to the Close of
Escrow and Buyer shall be responsible for all expenses applicable to the period
from and after the Close of Escrow.
 
4. Delivery and Possession. Seller shall deliver possession of the Property to
Buyer at the Close of Escrow, subject to the rights of the Tenants under the
Leases and their sublessee(s) and occupant(s), if any.
 
5. Commissions. Except for James J. Manarino of James Manarino and Associates,
Inc., representing Buyer (whose commission Buyer covenants to pay pursuant to
separate agreement between Buyer and such broker), Buyer and Seller each
represent and warrant to the other that there are no commissions, finder's fees
or
 
 
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brokerage fees arising out of the transactions contemplated by this Agreement.
Each party shall indemnify and hold the other party harmless from and against
any and all liabilities, claims, demands, damages, costs and expenses,
including, without limitation, reasonable attorneys' fees and court costs, in
connection with claims for any such commissions, finders' fees or brokerage fees
arising out of each such party's conduct or the inaccuracy of the foregoing
representation and/or warranty of such party. Seller's representations and
warranties in this Section 5 are not subject to the limitations of Section 7 of
this Agreement. This Section 5 shall survive the Closing.
 
6. Damage or Destruction: Condemnation.
 
6.1 Major Damage. Buyer shall have the right to terminate thisAgreement if all
or a material part of the Property is destroyed without fault of Buyer or a
material part of the Property is taken by eminent domain. For purposes of this
Section 6, (a) a taking by eminent domain of a portion of the Property shall be
deemed to affect a "material part" of the Property if the estimated value of the
portion of the Property taken exceeds $300,000, and (b) the destruction of a
"material part" of the Property shall be deemed to mean an insured or uninsured
casualty to the Property following Buyer's inspection of the Property and prior
to the Close of Escrow having an estimated cost of repair which equals or
exceeds $300,000. If Buyer does not terminate this Agreement and the transaction
closes hereunder, any insurance proceeds or condemnation proceeds shall be
payable to Buyer, whether or not the "material part" threshold is met.
 
6.2Definitions. The phrase "estimated value" shall mean an estimate obtained
from a M.A.I. appraiser, who has at least five (5) years experience evaluating
property located in the County where the Real Property is located, similar in
nature and function to that of the Property, selected by Seller and approved by
Buyer, and the phrase "estimated cost of repair" shall mean an estimate obtained
from an independent contractor selected by Seller and reasonably approved by
Buyer.
 
6.3Notice; Credit to Buyer. Buyer shall give written notice of Buyer's election
to terminate or proceed with this Agreement under the Act within ten (10) days
after Buyer's receipt of written notice from Seller of any damage to or
condemnation of the Property which entitles Buyer to terminate this Agreement.
Upon timely delivery of such termination notice, Escrow Holder shall remit the
Deposit to Buyer. If Buyer does not give such notice, then this Agreement shall
not terminate. If Buyer elects to proceed with this Agreement and purchase the
Property, there shall be no reduction in the Purchase Price, but Seller shall,
at Close of Escrow, assign to Buyer (a) any insurance proceeds payable with
respect to such damage plus an amount equal to the applicable deductible, or (b)
the entire award payable with respect to such condemnation proceeding, whichever
is applicable.
 
7. Seller's Representations and Warranties.
 
7.1.1 Representations and Warranties. It is expressly
 
 
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understood and agreed that all liability of Seller for breach of the
representations and warranties contained in this Section 7 shall terminate if no
written claim of breach, specifying the representation or warranty allegedly
breached and the supporting evidence for the alleged breach, shall be delivered
to Seller on or prior to the date which is twelve (12) months following the
Closing Date. Seller represents and warrants to Buyer that as of the date of
this Agreement and as of the Closing Date:
 
7.1.2 Seller is duly organized, validly existing, and in good standing under the
laws of the State of its formation.
 
7.1.3 Seller has the full power and authority to execute, deliver and perform
its obligations under this Agreement.
 
7.1.4 This Agreement and all agreements, instruments and documents herein
provided to be executed by Seller are and as of the Closing will be duly
authorized, executed and delivered by and are and will be binding upon Seller.
 
7.1.5 Seller has received no notice of any pending or threatened proceedings,
eminent domain or condemnation which would affect the Property, or a portion
thereof, and Seller has not been involved, and has no current actual knowledge
of any other party being involved, in any settlement discussion with any
governmental agency regarding a sale of the Property in lieu of condemnation.
 
7.1.6 Except as otherwise set forth in Schedule 7.1.6, attached hereto, Seller
has no additional knowledge as to the environmental or geotechnical condition of
the Property and Seller lacks any actual knowledge of any Hazardous Materials on
the Property. "Hazardous Materials" shall mean any hazardous substance,
pollutant or contaminant regulated under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq.
("CERCLA"); oil and petroleum products and natural gas, natural gas liquids,
liquefied natural gas, and synthetic gas useable for fuel; pesticides regulated
under Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136
et seq. ("FIFRA"); asbestos, PCBs and other substances regulated under TSCA;
source material, special nuclear material and byproduct materials regulated
under the Atomic Energy Act; and industrial process and pollution control wastes
whether or not hazardous within the meaning of RCRA.
 
7.1.7 Except as otherwise set forth in Schedule 7.1.7 attached hereto, Seller
has not received notice that it is nor to its actual knowledge is now a party to
any litigation, arbitration or other proceedings ("Litigation") with respect to
the Property and Seller shall give to Buyer prompt notice of the institution of
any Litigation prior to the Closing Date after Seller has received written
notice of the same.
 
7.1.8 Neither the execution of this Agreement and the instruments to be executed
or delivered by Seller pursuant to this Agreement nor the consummation by Seller
of the transactions contemplated by this Agreement will: (i)
 
 
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conflict with, or result in a breach of, the terms, conditions or provisions of,
or constitute a default, or result in a termination of any agreement or
instrument to which Seller is a party; (ii) violate any restriction to which
Seller is subject; (iii) constitute a violation of any applicable code,
resolution, law, statute, regulation, ordinance, judgment, rule, decree or
order; or (iv) result in the creation of any lien, charge or encumbrance upon
the Property or any part thereof, except as provided herein and the Continuing
Obligations described in Section 34 below.
 
7.1.9 Seller has not: (i) made a general assignment for the benefit of
creditors; (ii) filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by Seller's creditors; (iii) suffered the
appointment of a receiver to take possession of all or substantially all of
Seller's assets; (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Seller's assets; or (v) admitted in writing its
inability to pay its debts as they come due.
 
7.1.10 The Leases described on Schedule 1.14 constitute all of the leases
affecting the Property as of the Agreement Date, and Seller has received no
notice from any Tenant under any of the Leases that Seller is in monetary
default or material non-monetary default under any of such Leases that remains
uncured as of the Agreement Date. To the extent that Seller has delivered a
default notice to any Tenant under any of the Leases which remains uncured as of
the Agreement Date, such Tenants in default are set forth on Schedule 1.1.4.
 
7.1.11 Except as set forth on Schedule 7.1.11 attached hereto, Seller has
received no written notice from any governmental authority having jurisdiction
over the Property stating that Seller is currently not in compliance with
applicable laws and ordinances that remains uncorrected or uncured as of the
Agreement Date.
 
7.1.12 Other than those which are either (a) cancelable on thirty (30) days'
notice without payment of any fees, or (b) expressly assumed by Buyer in writing
at the Closing, other than the Leases or instruments appearing in the public
records, there are no Contracts or other agreements relating to the Property
which will be in force on the Closing Date, and Seller is not in monetary
default or material non-monetary default thereunder that remains uncured.
 
7.1.13 The rent roll applicable as of the Agreement Date delivered to Buyer, and
the operating statements that have been/will be provided to Buyer by Seller
pursuant to this Agreement for the calendar years 2007, 2008, and 2009, are to
Seller's actual knowledge true and correct in all material respects. At Closing,
Seller will deliver to Buyer an updated certified rent roll (current to within
five (5) days of the Closing Date) that will be true and correct in all material
respects.
 
7.1.14 To Seller's actual knowledge, (i) the documents and files delivered or
made available to Buyer contain any and all notices of violations received by
the Seller with respect to the Property from and after January 1, 2007, and (ii)
all licenses,
 
 
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approvals, permits and certificates from all applicable governmental authorities
or private parties necessary for all Property alterations completed by the
Seller costing in excess of twenty-five thousand dollars ($25,000) in any single
instance from and after January 1, 2007 were obtained prior to the commencement
of such alterations (expressly excluding any alterations performed by any Tenant
or other occupant of the Property.
 
7.1.15 Seller is not currently obligated to sell the Property to any party or
entity other than Buyer, nor do there exist any rights of first refusal or
options to purchase the Property.
 
7.2Limitations on Seller's Representations and Warranties.
Except as expressly herein otherwise provided, the representations and
warranties of Seller set forth in this Agreement shall be true in all material
aspects on and as of the Closing Date as if those representations and warranties
were made on and as of such time, subject to any qualifications thereof made by
Seller in a written notice delivered to Buyer within five (5) days after Seller
obtains new knowledge or information with respect thereto that would cause
Seller to change such representations or warranty but no later than three (3)
days prior to the Closing Date. The representations and warranties made to
"Seller's current actual knowledge" or "Seller's actual knowledge" in this
Agreement, or in any certificate or document executed and delivered by Seller
pursuant to this Agreement, are (i) limited to the actual knowledge of TR
Gregory, Doug Schaffer and Steve Hargrave without any obligation or duty to
inquire or make any independent investigation regarding the subject matter of
such representations and warranties, and (ii) do not encompass any imputed or
constructive knowledge. Buyer acknowledges that TR Gregory, Doug Schaffer and
Seller's property or asset manager responsible for the Property are named solely
for the purpose of defining and narrowing the scope of Seller's knowledge and
not for the purpose of imposing any liability on such individuals or creating
any duties running from such individuals or any of Seller's members to Buyer.
Buyer covenants that it will bring no action of any kind against such
individuals related to or arising out of the representations and warranties set
forth in Section 7.1 of this Agreement provided the foregoing will not preclude
an action by Buyer against Seller for breach of the foregoing representations or
warranties. Except for those set forth in this Section 7, there are no other
representations or warranties of Seller, express or implied.
 
7.3Buyer's Remedies For Seller's Breach of Representations and Warranties.
 
7.3.1 Pre-Closing Remedies. If at or prior to the Closing, (A) Buyer shall
become aware (whether through its own efforts, by written notice from Seller or
any other third party) that any of the representations or warranties made herein
by Seller are untrue, inaccurate or incorrect and shall give Seller notice
thereof at or prior to the Closing, or (B) Seller shall notify Buyer that a
representation or warranty made herein by Seller is untrue, inaccurate or
incorrect, then Seller may, in its sole discretion, elect by notice to Buyer to
adjourn the Closing one or more times for up to ten (10) days in the aggregate
in order to cure or correct such untrue, inaccurate or incorrect representation
or
 
 
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warranty. If Buyer's damages as a result of such representations or warranties
being untrue, inaccurate or incorrect are, in the aggregate, less than $50,000,
and such misrepresentations or breaches of warranty are not cured or corrected
by Seller on or before the Closing Date (whether or not the Closing is adjourned
as provided above), Buyer shall nevertheless be deemed to, and shall, waive such
misrepresentations or breaches of warranty and shall consummate the transactions
contemplated hereby without any reduction of or credit against the Purchase
Price. If Buyer's damages as a result of such representations or warranties
being untrue, inaccurate or incorrect are, in the aggregate, greater than
$50,000, and such misrepresentations or breaches of warranty are not cured or
corrected by Seller on or before the Closing Date (whether or not the Closing is
adjourned as provided above), then Buyer, as its sole remedy for any and all
such untrue, inaccurate or incorrect representations or warranties, shall elect
either (x) to waive such misrepresentations or breaches of warranties and
consummate the transactions contemplated hereby without any reduction of or
credit against the Purchase Price, or (y) to terminate this Agreement by notice
given to Seller on or before the Closing Date, in which event, this Agreement
shall be terminated and neither party shall have any further rights, obligations
or liabilities hereunder, except for the surviving Indemnities.
 
7.3.2 Post-Closing Remedies. Notwithstanding anything contained in this
Agreement to the contrary, in the event the Closing occurs, Buyer hereby
expressly waives, relinquishes and releases any right or remedy available to it
at law, in equity or under this Agreement to make a claim against Seller for
damages that Buyer may incur, or to rescind this Agreement and the transactions
contemplated hereby, as the result of any of Seller's representations or
warranties being untrue, inaccurate or incorrect if (1) Buyer knew that such
representation or warranty was untrue, inaccurate or incorrect at the time of
the Closing and Buyer nevertheless closes title hereunder, or (2) Buyer's
damages as a result of such representations or warranties being untrue,
inaccurate or incorrect are, in the aggregate, less than $50,000. Buyer shall be
"deemed to have known" that a representation or warranty was untrue, inaccurate
or incorrect at the time of the Closing if any Property Information furnished or
made available to or otherwise obtained by Buyer contains express information
which is inconsistent with such representation or warranty.
 
7.4Ceiling on Liability. Notwithstanding anything contained herein to the
contrary, if the Closing shall have occurred and Buyer or Seller shall not have
waived, relinquished and released all rights or remedies available to it at law,
in equity or otherwise as provided hereunder, the aggregate liability of either
party arising pursuant to or in connection with the representations, warranties,
covenants and other obligations (whether express or implied) of such party in
this Agreement and/or any documents executed by such party in connection with
this Agreement (including, without limitation, the Deed, the Assignment and
Assumption of Leases, and the General Assignment), shall not exceed $1,000,000
in the aggregate. The provisions of this Section 7.4 shall survive the Closing.
 
8. Buyer's Representations and Warranties. Buyer represents and warrants to
 
 
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Seller that as of the date of this Agreement and as of the Closing Date:
 
8.1 Buyer is duly organized, validly existing, and in good standing under the
laws of the state of its formation;
 
8.2 Buyer has the full power and authority to execute, deliver and perform
Buyer's obligations under this Agreement;
 
8.3 This Agreement and all agreements, instruments and documents herein provided
to be executed by Buyer are and as of the Closing will be duly authorized,
executed and delivered by and are and will be binding upon Buyer; and
 
8.4 The execution and delivery of this Agreement and the performance of its
obligations hereunder by Buyer will not conflict with, result in a breach of or
constitute a default under any of the terms, conditions or provisions of any
agreement or instrument to which the Buyer is a party or by which it is bound,
or any order or decree applicable to Buyer.
 
9. Default.
 
9.1 LIQUIDATED DAMAGES - DEPOSIT. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS AGREEMENT, IF BUYER HAS NOT TERMINATED THIS AGREEMENT PRIOR TO
THE EXPIRATION OF THE DUE DILIGENCE PERIOD AND IF THE SALE OF THE PROPERTY TO
BUYER IS NOT CONSUMMATED FOR ANY REASON OTHER THAN SELLER'S DEFAULT UNDER THIS
AGREEMENT OR AS OTHERWISE EXPRESSLY CONTEMPLATED TO RESULT IN THE RETURN OF THE
DEPOSIT TO BUYER, SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS SELLER'S
LIQUIDATED DAMAGES. THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE AND
EXTREMELY DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLER AS A
RESULT OF BUYER'S FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO
THIS AGREEMENT, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS
AGREEMENT, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENTS A
REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH
FAILURE, PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT LIMIT SELLER'S RIGHTS
TO RECEIVE REIMBURSEMENT FOR ATTORNEYS' FEES, NOR WAIVE OR AFFECT SELLER'S
RIGHTS AND BUYER'S INDEMNITY OBLIGATIONS UNDER OTHER SECTIONS OF THIS AGREEMENT.
THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTION 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER
PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676, AND 1677. THE PARTIES
HAVE SET FORTH THEIR INITIALS BELOW TO INDICATE THEIR AGREEMENT
 
 
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WITH THE LIQUIDATED DAMAGES PROVISION CONTAINED IN THIS SECTION. SELLER AGREES
ITS RIGHT TO OBTAIN THE DEPOSIT AS LIQUIDATED DAMAGES SHALL BE SELLER'S SOLE AND
EXCLUSIVE REMEDY HEREUNDER AT LAW OR EQUITY ON ACCOUNT OF BUYER'S DEFAULT
HEREUNDER.

/s/ EB
 
/s/ ST
 
SELLER'S INITIALS
 
BUYER'S INITIALS
 

 
9.2 Buyer's Pre-Closing Remedies. In the event Seller fails to perform any act
required to be performed by Seller pursuant to this Agreement on or before the
Closing or a condition to Closing has not been satisfied before the Closing,
then Buyer shall execute and deliver to Seller written notice of such breach or
non-satisfaction of condition, which notice shall set forth complete information
about the nature of the breach or non-satisfaction of condition. Seller shall
have a period of (10) days to cure such breach or satisfy such condition if such
non-satisfaction can be completed by Seller. If such breach or non-satisfaction
remains uncured beyond the ten (10) day period described above, then Buyer's
sole and exclusive remedy shall be either: (i) to terminate this Agreement and
the Escrow, in which event the Deposit shall be returned to Buyer; (ii) commence
and pursue an action for specific performance; or (iii) give Seller notice that
Buyer elects to waive such breach or failure of condition and to Close Escrow;
provided, however, if Seller's breach resulted from the willful act or omission
of Seller, in connection with such termination, Seller shall be obligated to
reimburse Buyer an amount equal to Buyer's actual reasonable out-of-pocket third
party costs and expenses incurred in connection with its contemplated
acquisition of the Property, not to exceed Fifty Thousand Dollars ($50,000).
 
9.3 Post-Closing Remedies of Seller. If after the Closing, Buyer fails to
perform its obligations which expressly survive the Closing pursuant to this
Agreement, then Seller may exercise any remedies available to it at law or in
equity, in any order it deems appropriate in its sole and absolute discretion,
including but not limited to seeking specific performance or damages. In such
event, the liquidated damages provisions contained in Section 9.1 shall not
limit Seller's damages.
 
9.4 Post-Closing Remedies of Buyer. If after the Closing, Seller fails to
perform its obligations which expressly survive the Closing pursuant to this
Agreement, then, subject to the limitations contained in Section 7.3.2, Buyer
may exercise any remedies available to it at law or in equity in any order it
deems appropriate in its sole and absolute discretion including, but not limited
to, seeking specific performance or damages.
 
10. Attorneys' Fees. If any action or proceeding is commenced by either party to
enforce their rights under this Agreement or to collect damages as a result of
the breach of any of the provisions of this Agreement, the prevailing party in
such action or proceeding, including any bankruptcy, insolvency or appellate
proceedings, shall be
 
 
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entitled to recover all reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees and court costs, in addition to any other
relief awarded by the court.
 
11. Notices. All notices, demands, approvals, and other communications provided
for in this Agreement shall be in writing and shall be effective upon the
earliest of the following to occur: (a) when delivered to the recipient; (b) one
(1) business day after deposit with a nationally recognized overnight-guaranteed
delivery service; (c) by facsimile with delivery of an original to the other
party by overnight mail, but effective upon fax; or (d) upon receipt or refusal
of receipt after deposit in a sealed envelope in the United States mail, postage
prepaid by registered or certified mail, return receipt requested, addressed to
the recipient as set forth below. All notices to Seller shall be sent to
Seller's Address. All notices to Buyer shall be sent to Buyer's Address. All
notices to Escrow Holder shall be sent to Escrow Holder's Address. If the date
on which any notice to be given hereunder falls on a Saturday, Sunday or legal
holiday, then such date shall automatically be extended to the next business day
immediately following such Saturday, Sunday or legal holiday. The foregoing
addresses may be changed by written notice given in accordance with this
Section.
 
12. Amendment; Complete Agreement. All amendments and supplements to this
Agreement must be in writing and executed by Buyer and Seller. This Agreement
contains the entire agreement and understanding between Buyer and Seller
concerning the subject matter of this Agreement and supersedes all prior
agreements, terms, understandings, conditions, representations and warranties,
whether written or oral, made by Buyer or Seller concerning the Property or the
other matters which are the subject of this Agreement. This Agreement has been
drafted through a joint effort of the parties and their counsel and, therefore,
shall not be construed in favor of or against either of the parties.
 
13. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California.
 
14. Severability. If any provision of this Agreement or application thereof to
any person or circumstance shall to any extent be invalid or unenforceable, the
remainder of this Agreement (including the application of such provision to
persons or circumstances other than those to which it is held invalid or
unenforceable) shall not be affected thereby, and each provision of this
Agreement shall be valid and enforced to the fullest extent permitted by law.
 
15. Counterparts, Headings and Defined Terms. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one agreement. The headings to sections of this Agreement are
for convenient reference only and shall not be used in interpreting this
Agreement.
 
16.  Time of the Essence. Time is of the essence of this Agreement.
 
 
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17. Waiver. No waiver by Buyer or Seller of any of the terms or conditions of
this Agreement or any of their respective rights under this Agreement shall be
effective unless such waiver is in writing and signed by the party charged with
the waiver.
 
18. Third Parties. This Agreement is entered into for the sole benefit of Buyer
and Seller and their respective permitted successors and assigns. No party other
than Buyer and Seller and such permitted successors and assigns shall have any
right of action under or rights or remedies by reason of this Agreement.
 
19. Additional Documents. Each party agrees to perform any further acts and to
execute and deliver such further documents which may be reasonably necessary to
carry out the terms of this Agreement.
 
20. Independent Counsel. Buyer and Seller each acknowledge that: (i) they have
been represented by independent counsel in connection with this Agreement; (ii)
they have executed this Agreement with the advice of such counsel; and (iii)
this Agreement is the result of negotiations between the parties hereto and the
advice and assistance of their respective counsel. The fact that this Agreement
was prepared by Seller's counsel as a matter of convenience shall have no import
or significance. Any uncertainty or ambiguity in this Agreement shall not be
construed against Seller because Seller's counsel prepared this Agreement in its
final form.
 
21. Condition of Property. Buyer represents and warrants that, as specified in
Section 3.3.1 hereof, Buyer has, or shall have inspected and conducted tests and
studies of the Property, and that Buyer is familiar with the general condition
of the Property. Buyer understands and acknowledges that the Property may be
subject to earthquake, fire, floods, erosion, high water table, dangerous
underground soil conditions, hazardous materials and similar occurrences that
may alter its condition or affect its suitability for any proposed use. Except
to the extent otherwise specifically provided herein, Seller shall have no
responsibility or liability with respect to any such occurrence. Except to the
extent otherwise specifically provided herein, Buyer represents and warrants
that Buyer is acting, and will act only, upon information obtained by Buyer
directly from Buyer's own inspection of the Property. Seller hereby makes no
claims, representations or warranties as to the suitability or lack of
suitability of the Property for any proposed or intended use, or availability or
lack of availability of (a) permits or approvals of governmental or regulatory
authorities, or (b) easements, licenses or other rights with respect to any such
proposed or intended use of the Property shall not affect the rights or
obligations of the Buyer hereunder.
 
22. Property "AS IS."
 
22.1 No Side Agreements or Representations. No person acting on behalf of Seller
is authorized to make, and by execution hereof, Buyer acknowledges that no
person has made any representation, agreement, statement, warranty, guarantee or
promise regarding the Property or the transaction contemplated herein or the
zoning, construction, physical condition or other status of the Property except
as may be
 
 
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expressly set forth in this Agreement. No representation, warranty, agreement,
statement, guarantee or promise, if any, made by any person acting on behalf of
Seller which is not contained in this Agreement will be valid or binding on
Seller.
 
22.2 AS IS CONDITION. BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR SELLER'S
EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 7 HEREIN, SELLER HAS
NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (I) VALUE;
(II) THE INCOME TO BE DERIVED FROM THE PROPERTY; (III) THE SUITABILITY OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON,
INCLUDING THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE PROPERTY; (IV) THE
HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY; (V) THE MANNER, QUALITY, STATE OF REPAIR OR
LACK OF REPAIR OF THE PROPERTY; (VI) THE NATURE, QUALITY OR CONDITION OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (VII) THE
COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY;
(VIII) THE MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY; (IX) COMPLIANCE WITH ANY ENVIRONMENTAL
PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATION, ORDERS OR
REQUIREMENTS, INCLUDING BUT NOT LIMITED TO, TITLE III OF THE AMERICANS WITH
DISABILITIES ACT OF 1990, CALIFORNIA HEALTH & SAFETY CODE, THE FEDERAL WATER
POLLUTION CONTROL ACT, THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE
U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS
AMENDED, THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER
ACT, THE SAFE DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT,
THE TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE
FOREGOING; (X) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR
ADJACENT TO THE PROPERTY; (XI) THE CONTENT, COMPLETENESS OR ACCURACY OF THE DUE
DILIGENCE ITEMS OR PRELIMINARY REPORT REGARDING TITLE; (XII) THE CONFORMITY OF
THE IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY
PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO BUYER; (XIII)
THE CONFORMITY OF THE PROPERTY TO PAST,
 
 
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CURRENT OR FUTURE APPLICABLE ZONING OR BUILDING REQUIREMENTS; (XIV) DEFICIENCY
OF ANY UNDERSHORING; (XV) DEFICIENCY OF ANY DRAINAGE; (XVI) THE FACT THAT ALL OR
A PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE;
(XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS
AFFECTING THE PROPERTY; OR (XVIII) WITH RESPECT TO ANY OTHER MATTER. BUYER
FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO
INSPECT THE PROPERTY AND REVIEW INFORMATION AND DOCUMENTATION AFFECTING THE
PROPERTY, BUYER IS, EXCEPT FOR SELLER'S REPRESENTATIONS AND WARRANTIES CONTAINED
IN SECTION 7 HEREIN, RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND
REVIEW OF SUCH INFORMATION AND DOCUMENTATION, AND NOT ON ANY INFORMATION
PROVIDED OR TO BE PROVIDED BY SELLER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT
ANY INFORMATION MADE AVAILABLE TO BUYER OR PROVIDED OR TO BE PROVIDED BY OR ON
BEHALF OF SELLER WITH RESPECT TO THE PROPERTY, BY A THIRD PARTY INCLUDING,
WITHOUT LIMITATION, THE PROPERTY EVALUATION REPORT, WAS OBTAINED FROM A VARIETY
OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION. BUYER AGREES TO FULLY AND IRREVOCABLY
RELEASE ALL SUCH SOURCES OF INFORMATION AND PREPARERS OF INFORMATION AND
DOCUMENTATION AFFECTING THE PROPERTY WHICH WERE RETAINED BY SELLER FROM ANY AND
ALL CLAIMS THAT THEY MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND
PREPARERS OF INFORMATION FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE,
DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH INFORMATION OR DOCUMENTATION
(EXCEPT FOR CLAIMS BASED ON A DIRECT RELATIONSHIP WITH ANY SUCH SOURCES OR
PREPARERS). EXCEPT FOR SELLER'S REPRESENTATIONS AND WARRANTIES AS SET FORTH IN
SECTION 7 HEREIN, SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY,
OR THE OPERATION THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,
SERVANT OR OTHER PERSON. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE
MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN
IS MADE ON AN "AS IS" CONDITION AND BASIS WITH ALL FAULTS, AND THAT SELLER HAS
NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS EXCEPT AS MAY
OTHERWISE BE EXPRESSLY STATED HEREIN. BUYER REPRESENTS, WARRANTS AND COVENANTS
TO SELLER THAT, EXCEPT FOR SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES AND
COVENANTS SPECIFIED IN THIS AGREEMENT, BUYER IS RELYING SOLELY UPON BUYER'S OWN
 
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INVESTIGATION OF THE PROPERTY.
     
/s/ EB
 
/s/ ST
 
SELLER'S INITIALS
 
BUYER'S INITIALS
 

 
23. Governmental Approvals. Nothing contained in this Agreement shall be
construed as authorizing Buyer to apply for a zone change, variance, subdivision
maps, lot line adjustment, or other discretionary governmental act, approval or
permit with respect to the Property prior to the Close of Escrow, and Buyer
agrees not to do so without Seller's prior written approval, which approval may
be withheld in Seller's sole and absolute discretion. Buyer agrees not to submit
any reports, studies or other documents, including, without limitation, plans
and specifications, impact statements for water, sewage, drainage or traffic,
environmental review forms, or energy conservation checklists to any
governmental agency, or any amendment or modification to any such instruments or
documents prior to the Close of Escrow unless first approved by Seller, which
approval Seller may withhold in Seller's sole discretion other than reports
mandated by law based upon any discovery of facts or conditions by Buyer at the
Property. Buyer's obligation to purchase the Property shall not be subject to or
conditioned upon Buyer's obtaining any variances, zoning amendments, subdivision
maps, lot line adjustment or other discretionary governmental act, approval or
permit.
 
24. Release. Buyer shall rely solely upon Buyer's own knowledge of the Property
based on its investigation of the Property and its own inspection of the
Property in determining the Property's physical condition. Except as may relate
to any breach of a representation or warranty made by Seller contained in
Section 7 herein, or the fraudulent act or omission of Seller or any partner,
officer, director, employee or agent of Seller, Buyer and anyone claiming by,
through or under Buyer hereby waives its right to recover from and fully and
irrevocably releases Regency Centers, L.P. and Regency Centers Corporation and
their respective members, employees, officers, directors, partners,
shareholders, fiduciaries, representatives, agents, servants, attorneys,
affiliates, parent, subsidiaries, successors and assigns, and all persons,
firms, corporations and organizations acting in their behalf ("Released
Parties") from any and all claims that it may now have or hereafter acquire
against any of the Released Parties for any costs, loss, liability, damage,
expenses, demand, action or cause of action arising from or related to any
construction defects, errors, omissions or other conditions, latent or
otherwise, including environmental matters, affecting the Property, or any
portion thereof. This release includes claims of which Buyer is presently
unaware or which Buyer does not presently suspect to exist which, if known by
Buyer, would materially affect Buyer's release to Seller. Buyer specifically
waives the provision 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
EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN TO HIM
 
 
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   MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR."

 
In this connection and to the fullest extent permitted by law, Buyer hereby
agrees, represents and warrants that Buyer realizes and acknowledges that
factual matters now unknown to it may have given or may hereafter give rise to
causes of action, claims, demands, debts, controversies, damages, costs, losses
and expenses which are presently unknown, unanticipated and unsuspected, and
Buyer further agrees, represents and warrants that the waivers and releases
herein have been negotiated and agreed upon in light of that realization and
that, as a material portion of the consideration given to Seller by Buyer in
exchange for Seller's performance hereunder, Buyer nevertheless hereby intends
to release, discharge and acquit Seller from any such unknown causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses which
might in any way be included.
 
Seller has given Buyer material concessions regarding this transaction in
exchange for Buyer agreeing to the provisions of this Section 24. Seller and
Buyer have each initialed this Section 24 to further indicate their awareness
and acceptance of each and every provision hereof.
 

       
/s/ ST
 
/s/ EB
 
BUYER'S INITIALS
 
SELLER'S INITIALS
 

 
25. No Partnership Relationship. The relationship between Seller and Buyer
arising from this Agreement shall not constitute in any manner or form a
partnership or joint venture relationship between the parties hereto.
 
26. Assignment. Buyer shall neither assign its rights nor delegate its
obligations hereunder without obtaining Seller's prior written consent, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing, by
written notice to Seller delivered no later than three (3) business days prior
to the Scheduled Closing Date, Buyer shall have the right to assign this
Agreement to an affiliate which is wholly owned or controlled by, or controls,
or is under common control with Buyer provided, however, Buyer shall provide
Seller with a true and correct copy of such assignment prior to the Close of
Escrow evidencing the assignment and the relationship between Buyer and Buyer's
assignee. In no event shall any assignment relieve Buyer from its obligations
under this Agreement. Any other purported or attempted assignment or delegation
without obtaining Seller's prior written consent shall be void and of no effect.
 
27. Successors and Assigns. Subject to the restrictions on transfer set forth in
Section 26 hereof, this Agreement shall be binding upon and inure to the benefit
of the heirs, successors and assigns of the parties hereto. In no event shall
Buyer have any right to delay or postpone the Close of Escrow to create a
partnership, corporation or other form of business association or to obtain
financing to acquire title to the Property or to coordinate with any other sale,
transfer, exchange or conveyance.
 
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28. Exhibits. Each reference to a Section or Exhibit in this Agreement shall
mean the sections of this Agreement and the exhibit attached to this Agreement,
unless the context requires otherwise. Each such exhibit is incorporated herein
by this reference.
 
29. No Reservation of Property. The preparation and/or delivery of unsigned
drafts of this Agreement shall not create any legally binding rights in the
Property and/or obligations of the parties, and Buyer and Seller acknowledge
that this Agreement shall be of no effect until it is duly executed by both
Buyer and Seller. Buyer understands and agrees that Seller shall have the right
to continue to market the Property and/or to negotiate with other potential
purchasers of the Property until the expiration of the Due Diligence Period and
the satisfaction or waiver in writing of all conditions to the obligations of
Buyer under this Agreement.
 
30. Counterparts and Facsimile. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together, shall
constitute on and the same instrument. This Agreement will be considered to be
executed and delivered by a party when an original or facsimile copy of the
Agreement, bearing every signature indicated for that party, has been received
by the other party. A party delivering this Agreement by facsimile transmission
will promptly deliver an original, bearing the party's original signature, to
the other party.
 
31. Business Day. If the day for performance of any act required under this
Agreement falls on a Saturday, Sunday or legal holiday, then the day for such
performance shall be the next following regular business day.
 
32. Indemnifications.
 
32.1 Buyer's Indemnifications. Buyer shall hold harmless, indemnify and defend
Seller and its affiliates from and against: (i) any and all obligations,
liabilities, claims, liens or encumbrances whether direct, contingent or
consequential, in any way related to the Property and arising or accruing on or
after the Closing Date or in any way related to or arising from any negligent
act by Buyer at any time or times on or after the Closing Date, including,
without limitation, any claim arising or accruing under the Leases on or after
the Closing Date; (ii) any loss or damage to Seller resulting from any breach or
default of Buyer under this Agreement or any of the documents described herein;
and (iii) all costs and expenses, including attorneys' fees, related to an
action, suits or judgments incident to any of the foregoing.
 
32.2 Seller's Indemnifications. Seller shall hold harmless, indemnify and defend
Buyer and its affiliates from and against: (i) any and all obligations,
liabilities, claims, liens or encumbrances whether direct, contingent or
consequential, in any way related to the Property and arising or accruing prior
to the Closing Date or in any way related to or arising from any negligent act
by Seller at any time or times prior to the Closing Date, including, without
limitation, any claim arising or accruing under the Leases prior to the Closing
Date; (ii) any loss or damage to Buyer resulting from any breach or default of
Seller under this Agreement or any of the documents described
 
 
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herein; and (iii) all costs and expenses, including attorneys' fees, related to
an action, suits or judgments incident to any of the foregoing.
 
33. Operations of Property. Seller, from the date hereof through the Closing
Date, shall continue to manage and maintain the Property in the same manner as
it does as of the date hereof. From and after the expiration of the Due
Diligence Period, Seller shall not, except as required pursuant to the Leases,
without Buyer's prior written consent, which consent may be withheld in Buyer's
sole and absolute discretion, make any alterations, improvements, additions or
capital expenditures, amend or enter into any new contracts or agreements
pertaining to the Property which would survive the Closing.
 
34. Natural Hazard Disclosure Statement. Buyer shall have the right to obtain
from the Title Company, at Buyer's sole cost and expense, a Natural Hazard
Disclosure Statement (the "Natural Hazards Disclosures Statement"). As of the
Close of Escrow, to the extent permitted by Law, Buyer shall be deemed to have
knowingly, voluntarily and intentionally waived the right to the disclosures
("Natural Hazards Disclosures") set forth in: (a) California Government Code
Section 8589.3 (a special flood area); (b) California Government Code Section
8589.4 (dam failure inundation area); (c) California Government Code Section
51183.5 (earthquake fault zone); (d) California Public Resources Code Section
2621.9 (seismic hazard zone); (e) California Public Resources Code Section 4136
(wildland fire area); and (f) California Public Resources Code Section 2694
(high fire severity area). Buyer acknowledges and represents that it has
extensive experience acquiring and conducting due diligence for commercial
properties. This waiver by Buyer includes, to the extent permitted by Law, any
remedies Buyer may have for Seller's nondisclosure of the Natural Hazards
Disclosures. Seller has not verified, and Seller is not obligated to verify, the
information contained in the Natural Hazards Disclosures. Seller makes no
representation or warranty, express or implied, as to the truth or accuracy of
any information contained in the Natural Hazards Disclosures. ANY NATURAL
HAZARDS DISCLOSED BY THE NATURAL HAZARDS DISCLOSURES OR THE NATURAL HAZARDS
DISCLOSURES STATEMENT MAY LIMIT THE BUYER'S ABILITY TO DEVELOP THE PROPERTY, TO
OBTAIN INSURANCE, OR TO RECEIVE ASSISTANCE AFTER A DISASTER. THE MAPS ON WHICH
THESE DISCLOSURES ARE BASED ESTIMATE WHERE NATURAL HAZARDS EXIST. THEY ARE NOT
DEFINITIVE INDICATORS OF WHETHER OR NOT THE PROPERTY WILL BE AFFECTED BY A
NATURAL DISASTER. BUYER MAY WISH TO OBTAIN PROFESSIONAL ADVICE REGARDING THESE
HAZARDS AND OTHER HAZARDS THAT MAY AFFECT THE PROPERTY
 
35. Notices. From and after the date hereof, Seller covenants and agrees to
promptly deliver to Buyer true, correct and complete copies of any and all
notices, correspondence or other written communication received by Seller from
Tenants under the Leases.
 
 
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36. Survival. The covenants, agreements, representations and warranties made
herein shall, subject to Section 7.1, survive the Closing and the delivery of
the Deed and this Agreement and shall, subject to Section 26 hereof, extend to
the respective successors, heirs and assigns of Seller and Buyer.
 
37. Confidentiality. Prior to the Closing, all information and documents
delivered or furnished by Seller to Buyer regarding the Property including, but
not limited to the Due Diligence Items and the Leases, and all information
obtained by Buyer with respect to this transaction shall be held in strictest
confidence by Buyer and shall not be released to any party except the advisor to
Buyer and its attorneys, consultants, and contractors engaged by Buyer with
respect to the potential purchase of the Property.
 
38. Tax Deferred Exchange. Buyer and Seller hereby agree to cooperate with each
other and shall execute any and all documents reasonably necessary, in the form
reasonably approved by the both parties, which shall assign all of such party's
right, title and interest in and to this Agreement to an intermediary, which
intermediary shall complete the sale/purchase of the Property, in order to
accommodate a tax-deferred exchange for such party pursuant to the provisions of
Section 1031 of the Internal Revenue Code of 1986, as amended provided, however
neither party shall incur additional costs, expenses or liabilities in assisting
the party with the tax-deferred exchange other than for review of the exchange
documents, such exchange shall not delay the Closing, neither party shall be
released or relieved of or from its obligations under this Agreement by reason
of any assignment to an intermediary pursuant to this Section 38, and neither
party be required to take title to other real property.
 
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IN WITNESS WHEREOF, Buyer and Seller do hereby execute this Agreement as of the
date first written above.
 
SELLER:
 
REGENCY CENTERS, LP., a Delaware limited partnership
 
By:          Regency Centers Corporation,
a Florida corporation,
its general partner
 
By: /s/ Erwin Bucy
 
Name: Erwin Bucy
Its: SVP
 
BUYER:
 
RETAIL OPPORTUNITY INVESTMENT CORP.,
a Delaware corporation
 
By: /s/ Stuart Tanz
Name: Stuart Tanz
Its: C.E.O.

 
Acceptance by Escrow Holder
 
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the
instructions contained therein.
 
Dated: January 4, 2010
 
 
FIRST AMERICAN TITLE INSURANCE COMPANY
 
By: /s/ Carolyn Marcial
Name: Carolyn Marcial
Its: National Escrow Department, Escrow Officer
 
 
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