# **Exhibit 10.31**

 

AMERICANSPECTRUM REALTY, INC.

1800 EAST DEERE AVENUE

SANTA ANA, CA 92705

 

 

August 30, 2001

 

 

Villa Redondo, LLC

c/o CGS Real Estate Company, Inc.

1800 East Deere Avenue

Santa Ana, California 92705

 

 

                Re:          Agreement and Plan of Merger BetweenAmerican Spectrum Realty, Inc. and Villa Redondo LLC

 

Gentlemen:

 

                The following setsforth our agreement with respect to the Amendment of the Agreement and Plan ofMerger (the “Agreement”) dated August 6, 2000.

 

                In accordance withthe Agreement, Villa Redondo LLC (“Villa Redondo”) was to be merged with andinto American Spectrum Realty, Inc. or American Spectrum Realty OperatingPartnership, L.P. (the “Operating Partnership”).  The parties have determined that it would be in the bestinterests of the parties if, instead of a merger, American Spectrum Realty,Inc. acquired all of the membership interests of Villa Redondo LLC from CGSReal Estate Company, Inc. (“CGS”), its sole member.   Accordingly, the parties have agreed to amend the Agreement asfollows:

 

                1.             CGS, the sole member of VillaRedondo, will assign all of its right, title and interest in and to all of themembership interests in Villa Redondo to the Operating Partnership.  CGS represents that it owns all of themembership interests in Villa Redondo free and clear of all liens, claims andencumbrances and has full power and authority to execute and deliver thisagreement and perform its obligations hereunder.

 

                2.             The closing of the transfer(“Transfer”), pursuant to the Agreement, shall take place simultaneously withthe execution of this letter agreement.

 

                3.             At the closing, CGS shall deliver tothe Operating Partnership an assignment, assigning all of its right, title andinterest in and to the membership interests in Villa Redondo to the OperatingPartnership.

 

 

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                4. At the closing,the Operating Partnership shall deliver to CGS certificates certifying thatthey are the owner of 358,666 Operating Partnership Units in the OperatingPartnership, representing the Exchange Value (as defined in the finalProspectus/Consent Solicitation Statement) of Villa Redondo of  $5,380,000 divided by $15.  In the event that the property owned byVilla Redondo LLC is sold prior to the consummation of the Consolidation for apurchase price (after repayment of debt) less than the Exchange Value, then CGSshall return to the Operating Partnership a number of Operating Partnershipunits equal to the difference between the Exchange Value and such purchaseprice (after repayment of debt), divided by $15.

 

                5.             Each of CGS and the OperatingPartnership shall execute a signature page to the Operating PartnershipAgreement admitting CGS as a partner in the Operating Partnership.

 

                6.             Each of CGS and the OperatingPartnership shall execute all other instruments which may be necessary ordesirable to reflect the admission of CGS as a partner in the OperatingPartnership and to reflect the admission of the Operating Partnership as thesole member of Villa Redondo.

 

                7.             Except as modified hereby, theAgreement shall remain in full force and effect.  All defined terms used herein and not otherwise defined shallhave the meaning set forth in the Agreement.

 

                Please confirm youracceptance of and agreement with the foregoing by executing a copy of thisletter in the space provided below.

 
|   | AMERICAN SPECTRUM REALTY    |
|--------|-----------------------------|
|   | OPERATING PARTNERSHIP, L.P. |
|   |                        |   |
|   | BY:                         | AMERICAN SPECTRUM REALTY, INC. |
|   |                        |
|   | By:                         |   |   |
|        |                             |  |  |  |

 

 

Accepted and Agreed to as of

this 30th Day of August, 2001

 

 
| CGS REAL ESTATE COMPANY, INC. |
|-------------------------------|
|                          |
| By:                           |   |   |
|                          |
| VILLA REDONDO LLC             |
|                          |
| By:                           |   |   |
|                               |  |  |  |

 

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