**Exhibit 10**.**428**

 

**FIRSTAMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS**

 

THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROWINSTRUCTIONS (this “**Amendment**”) isentered into as of October 20, 2004 by and between Donahue Schriber RealtyGroup, L.P., a Delaware limited partnership (“**Seller**”),and Inland Real Estate Acquisitions, Inc., an Illinois corporation (“**Buyer**”).

 

RECITALS:

 

A.                                   Seller and Buyer entered into that certainPurchase and Sale Agreement and Joint Escrow Instructions dated as of September 2,2004 (the “**Agreement**”;capitalized terms used but not defined in this Amendment shall have themeanings given to them in the Agreement) with respect to the property known asPlaza at River Lakes located in Bakersfield, California.

 

B.                                     Seller and Buyer now desire to acknowledgecertain matters with respect to the Agreement, and to amend the Agreement, asset forth herein.

 

NOW, THEREFORE, in consideration of the premises and for other good andvaluable consideration, Buyer and Seller agree as follows with respect to theAgreement:

 

1.             Waiver ofContingencies; Reduction of Purchase Price; Coldwell Banker Credit.  October 20, 2004 is acknowledged to be theDecision Date, and Buyer’s execution and delivery of this Amendment (effectiveupon receipt of a faxed counterpart executed by Seller) constitutes Buyer’swaiver of all rights to terminate the Agreement (i) on or before the DecisionDate, or (ii) in accordance with Section 4.7 of the Agreement (Buyer herebyacknowledges it has received and approved estoppels from the Majors as well asMinors occupying at least 75% of the remaining leased space at the Property notoccupied by the Major).  Seller herebyconfirms it shall deliver Seller Estoppels as required by the last sentence ofSection 4.7 of the Agreement.  ThePurchase Price is hereby reduced by the sum of $400,000.00 and accordingly isthe sum of Seventeen Million Dollars ($17,000,000.00).  Seller agrees that, at Closing, Seller shallprovide Buyer with a credit against the Purchase Price in the amount of $92,338.00(less any amount thereof allocable to the period prior to Closing), by reasonof prepaid rent paid to Seller by Coldwell Banker, plus a credit against thePurchase Price in the amount of the Monthly Smoothie Rent allocable to theperiod from the Closing Date through October 30, 2004, plus a credit againstthe Purchase Price in the amount of the Monthly Quick One Rent allocable to theperiod from the Closing Date through November 30, 2004.

 

2.                                       Escrowfor Planet Smoothie.  Seller hasentered into a lease (the “**Smoothie****Lease**”)dated July 14, 2004 with Addis Enterprises, Inc. (“**Smoothie**”)****covering a portion of the Propertyas more particularly described therein (the “**Smoothie Premises**”).  Smoothie has not yet finished its tenantimprovements as required by the Smoothie Lease nor has Smoothie obtained thecertificate of occupancy to be issued by the City of Bakersfield (the “**SmoothieCertificate**”) upon Smoothie’s

 

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completionof such tenant improvements.  Pursuant tothe Smoothie Lease, Seller is obligated to pay $19,500 to Smoothie for tenantimprovements (the “**Smoothie TIs**”),****and $5,215 to the broker owed the same (the “**Broker**”)****for leasing commissions (the “**Smoothie****Commissions**”) Pursuant to the Smoothie Lease,commencing November 1, 2004 Smoothie is obligated to pay to the landlordthereunder the sum of $2,459 per month for base tent and $653.12 per month forestimated operating expenses (the sum of the foregoing amounts, being$3,112.12, is herein called the “**Monthly Smoothie Rent**”).** **AtClosing, Seller shall deposit into escrow, with Escrow Holder, the sum of$56,018.16 (“**Smoothie Escrowed Funds**”)****withrespect to the Smoothie Lease (said sum equals the product of the MonthlySmoothie Rent times eighteen (18), plus the Smoothie TIs and plus the SmoothieCommission).  The Smoothie TI’s (or theapplicable portion thereof) shall be released to Buyer (for immediate releaseto Smoothie) upon Buyer’s delivery of Buyer’s written certification (“**Buyer’sSmoothie Certification**”)****toSeller and Escrow Holder that Smoothie is entitled to the Smoothie TIs (or thespecified portion thereof) pursuant to Article VII of Exhibit B to theSmoothies Lease.  The Smoothie Commissionshall be disbursed by Escrow Holder to Broker upon receipt of Buyer’s SmoothieCertification.  If Smoothie shall nothave paid the Monthly Smoothie Rent due for November 2004 prior to November 8,2004, commencing November 8, 2004,, and on the same day of each monththereafter until the earlier of (i) the date Smoothie shall have commencedpaying the Monthly Smoothie Rent, or (ii) the date of the issuance of theSmoothie Certificate and the date Smoothie shall have taken possession of theSmoothie Space (whichever is later), the Smoothie Monthly Rent shall bepromptly disbursed to Buyer from the Escrowed Funds upon Buyer’s delivery ofwritten certification to Escrow Holder and Seller that Smoothie has not yetpaid the Smoothie Monthly Rent then due.  In the event that, after Buyer shall have beenpaid the Smoothie Monthly Rent (or any portion thereof) out of the SmoothieEscrowed Funds for any particular month, Buyer should receive payment of all orany portion of the Smoothie Monthly Rent from Smoothie for such month, Buyershall immediately remit the same to Seller.  Upon the later to occur of (i) issuance of theSmoothie Certificate, and (ii) the date Smoothie commences paying the MonthlySmoothie Rent (Buyer agrees to enforce the Smoothie Lease with respect thereto),the Smoothie Escrowed Funds still being held by Escrow Holder and notpreviously disbursed by Escrow Holder pursuant to this Section 3 shall bepromptly disbursed to Seller.  Buyeragrees to notify Seller in writing promptly upon Buyer acquiring knowledge ofthe issuance of the Smoothie Certificate and promptly upon Smoothie takingpossession of the Smoothie Space and payment of the Smoothie Monthly Rent.

 

3.                                       Escrow for Quick One.  Sellerhas entered into a lease (the “**Quick One Lease**”)dated May 21, 2004 with Anher Corporation (“**Quick One**”)****covering a portion of the Propertyas more particularly described therein (the “**Quick One Premises**”). ** **QuickOne has not yet finished its tenant improvements as required by the Quick OneLease nor has Quick One obtained the certificate of occupancy to be issued bythe City of Bakersfield (the “**Quick One Certificate**”)****upon Quick One’s completion of suchtenant improvements.  Pursuant to theQuick One Lease, Seller is obligated to pay $21,000 to Quick One for tenant improvements(the “**QuickOne TIs**”), and $3,750 to the broker owed such amount forleasing commissions (the “**Quick One Commissions**”),****Pursuant to the Quick One Lease,commencing November 1, 2004 Quick One is obligated to pay to the landlordthereunder the sum of $2,505 per month for base rent and $720,000 per month forestimated operating expenses (the sum of the foregoing amounts, being$3,225.00, is herein called

 

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the “**Monthly Quick One Rent**”).  At Closing, Seller shall deposit into escrow,with Escrow Holder, the sum of $58,050.00 (the “**Quick OneEscrowed Funds**”) with respect to the Quick One Lease (said sumequals the product of the Monthly Quick One Rent times eighteen (18), plus theQuick One TIs and plus the Quick One Commission).  The Quick One TI’s (or the applicable portionthereof) shall be released to Buyer (for immediate release to Quick One) uponBuyer’s delivery of Buyer’s written certification (“**Buyer’sQuick One Certification**”) to Seller and Escrow Holder that Quick Oneis entitled to the Quick One TIs (or the specified portion thereof) pursuant toArticle VII of Exhibit B to the Quick Ones Lease.  The Quick One Commission shall be disbursed byEscrow Holder to Broker upon receipt of Buyer’s Quick One Certification.  If Quick One shall not have paid the MonthlyQuick One Rent due for December 2004 prior to December 8, 2004,commencing December 8, 2004, and on the same day of each month thereafteruntil the earlier of (i) the date Quick One shall have commenced paying theMonthly Quick One Rent, or (ii) the date of the issuance of the Quick OneCertificate and the date Quick One shall have taken possession of the Quick OneSpace (whichever is later), the Quick One Monthly Rent shall be promptly disbursedto Buyer from the Escrowed Funds upon Buyer’s delivery of written certificationto Escrow Holder and Seller that Quick One has not yet paid the Quick OneMonthly Rent then due.  In the eventthat, after Buyer shall have been paid the Quick One Monthly Rent (or anyportion thereof) out of the Quick One Escrowed Funds for any particular month.  Buyer should receive payment of all or anyportion of the Quick One Monthly Rent from Quick One for such month, Buyershall immediately remit the same to Seller.  Upon the later to occur of (i) issuance of theQuick One Certificate, and (ii) the date Quick One commences paying the MonthlyQuick One Rent (Buyer agrees to enforce the Quick One Lease with respectthereto), the Quick One Escrowed Funds still being held by Escrow Holder andnot previously disbursed by Escrow Holder pursuant to this Section 4 shallbe promptly disbursed to Seller.  Buyeragrees to notify Seller in writing promptly upon Buyer acquiring knowledge ofthe issuance of the Quick One Certificate and promptly upon Quick One takingpossession of the Quick One Space and payment of the Quick One Monthly Rent.

 

5.*                                      *Holdbackfor Cingular Wireless.  Seller hasentered into a Site Access Telecommunications License Agreement Ground SpaceSite (the “**Cingular Lease**”) dated October 8,2004 with Pacific Bell Wireless, LLC (“**Cingular**”) withrespect to the Property.  Pursuant to theCingular Lease, commencing the “Commencement Date” (as defined in the CingularLease), Cingular is obligated to pay to the landlord thereunder the sum of$1,750 per month (the “**Monthly Cingular Rent**”). Seller and Buyer acknowledge thatCingular may not have obtained the governmental permits (the “**Permits**”) required to operate its business pursuant to theCingular Lease prior to the Closing.  AtClosing, Seller shall deposit into escrow, with Escrow Holder, the sum of$284,037.11 (the “**Cingular Escrowed Funds**”)with respect to the Cingular Lease (the Purchase Price payable by Buyer shallbe the source of the Cingular Escrowed Funds).  Upon written confirmation from Cingular thatit has obtained the Permits (if Cingular refuses to confirm in writing thatCingular has obtained the Permits, Cingular’s commencement of its businessoperations on the Property pursuant to the Cingular Lease shall be deemedCingular’s written confirmation that it has obtained the Permits), the CingularEscrowed Funds shall be released to Seller.  Buyer and Seller agree to exert diligent goodfaith efforts to obtain such written confirmation.  If Cingular terminates the Cingular Leasepursuant to Section 16.10 thereof prior to the release of the CingularFunds to

 

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Seller,upon such termination the Cingular Escrowed Funds shall be delivered to Buyer.  Prior to release of the Cingular EscrowedFunds to Seller, all Monthly Cingular Rent paid to Buyer shall be promptlyremitted to Seller.

 

6.                                       Agreement in Effect.  Theterms and provisions of this Amendment shall control over any inconsistentterms and provisions of the Agreement.  Except as amended hereby, the partiesacknowledge and agree that the Agreement is in full force and effect inaccordance with its terms.  If requiredby Escrow Holder, Buyer and Seller shall enter into a separate escrow agreementwith Escrow Holder to implement the post-Closing elements of this Amendment,provided such escrow agreement is not in conflict with this Amendment.  This Amendment may be executed incounterparts, each of which shall be an original and both of which, together,shall constitute one and the same instrument.

 

SIGNATURES ON NEXT PAGE

 

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IN WITNESS WHEREOF, the partieshave duly executed this Amendment as of the day and year first above written.

 
| SELLER: | Donahue  Schriber Realty Group, L.P., a Delaware limited  partnership                 |
|---------|---------------------------------------------------------------------------------------|
|    |                                                                                  |
|    | By:  Donahue Schriber Realty Group, Inc., a Maryland  corporation its general partner |
|    |                                                                                  |
|    | By:                                                                                   | /s/ Patrick S. Donahue |
|    |                                                                                  |
|    | Name:                                                                                 |  Patrick S. Donahue |
|    |                                                                                  |
|    | Title:                                                                                |  President |
|    |                                                                                  |
|    | By:                                                                                   | /s/ Dirk Van Wyk |
|    |                                                                                  |
|    | Name:                                                                                 |  Dirk Van Wyk |
|    |                                                                                  |
|    | Title:                                                                                |  Vice President |
|    |                                                                                  |
|    |                                                                                  |
| BUYER:  | Inland  Real Estate Acquisitions, Inc., an Illinois corporation                       |
|    |                                                                                  |
|    | By:                                                                                   | /s/ Karen M. Kautz |
|    |                                                                                  |
|    | Name:                                                                                 |  Karen M. Kautz |
|    |                                                                                  |
|    | Title:                                                                                |  Vice President |
|         |                                                                                       |  |  |  |  |  |

 

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**PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS**

 

THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROWINSTRUCTIONS (this “**Agreement**”) isentered into as of September 2, 2004 by and between Donahue SchriberRealty Group, L.P., a Delaware limited partnership (“**Seller**”),and Inland Real Estate Acquisitions, Inc., an Illinois corporation (“**Buyer**”).

 

RECITALS:

 

A.                                   Seller is the owner of certain real propertyimproved as a**retail center knownas Plaza at River Lakes located in Bakersfield, California.

 

B.                                     Buyer desires to purchase that property, andSeller desires to sell that property, on the terms and conditions contained inthis Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreementscontained in this Agreement, Buyer and Seller agree as follows:

 

1.  PURCHASEAND SALE

 

1.1  Agreement to Buy and Sell. Subject to all of the terms andconditions of this Agreement, Seller hereby agrees to sell and convey to Buyerand Buyer hereby agrees to acquire and purchase from Seller the following(collectively, the “**Property**”):

 

1.1.1  All of Seller’s right, title and interest inand to that certain parcel of real property described on) Exhibit “A”attached hereto, together with all of Seller’s rights, privileges and easementsappurtenant thereto (collectively, the “**Land**”);

 

1.1.1  All of Seller’s right, title and interest inand to all improvements, structures, equipment and fixtures located on or underthe Land (collectively, the “**Improvements**”)(the Land and Improvements are herein collectively called the “**Project**”);

 

1.1.2  All of Seller’s right, title and interest inand to all tangible personal property, if any, located on or affixed to theProject and used in connection with the ownership, operation, use or maintenanceof the Project, and all intangible property, if any, owned or held by Sellerthat pertains to the ownership, maintenance, use or operation of the Project,including but not limited to the Project’s name (collectively, the “**Personal Property**”);

 

1.1.3  All of Seller’s interest in any leases orother agreements demising space in or providing for the use or occupancy of anyportion of the Project (collectively, the “**Leases**”); and

 

1.1.4  All of Seller’s right, title and interest inand to any and all service contracts, maintenance agreements, warranties,guaranties, permits and licenses and other contracts and agreements relating tothe Property, if any, which continue in full force and effect beyond the

 

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“Closing” (as defined below) (collectively, the “**Contracts**”), to the extent the Contracts are assignable.  The Property does not include cash, anyinsurance claims (except to the extent Section 4.5 is applicable), or anyother claims against third parties.

 

1.2  Purchase Price.  The purchase price to be paid by Buyer toSeller for the Property shall be the sum of Seventeen Million Four HundredDollars ($17,400,000) (the “**Purchase Price**”).

 

1.3  Payment of Purchase Price.  ThePurchase Price shall be payable as follows:

 

1.3.1  Withintwo (2) business days after the “Effective Date” (as defined below), Buyershall deliver to Stewart Title Insurance Company (“**EscrowHolder**” or the “**Title Company**”),in immediately available funds, the sum of Four Hundred Thousand Dollars ($400,000)(said sum, together with any interest earned thereon while held by EscrowHolder, is herein called the “**Deposit**”).  Escrow Holder shall deposit the Deposit intoan interest-bearing account satisfactory to Buyer pending disbursement inaccordance with the terms of this Agreement.  Unless Buyer terminates this Agreement bydelivery of written notice of termination (the “**TerminationNotice**”) to Seller and Escrow Holder on or before the date (the “**Decision Date**”) that is thirty (30) days after the EffectiveDate, the Deposit shall be non-refundable after the Decision Date, except inthe event of Seller’s material default and except as otherwise expressly hereinprovided, and shall be applied to the Purchase Price at Closing.

 

1.3.2  Notlater than 10:00 am Pacific time on the “Closing Date” (as defined below), Buyershall deposit into Escrow, by wire transfer of federal funds, the balance ofthe Purchase Price, subject to adjustment by reason of any applicableprorations and the allocation of closing costs described below.

 

2.  OPENINGOF ESCROW

 

2.1  Escrow; Escrow Holder.  Withintwo (2) business days after Seller shall have executed this Agreement, Sellershall open an escrow (the “**Escrow**”) withEscrow Holder at 505 N.  Brand Blvd.,Ste. 800, Glendale, CA 91203, Attn: Josette Loaiza, by delivering an executedcopy of this Agreement to Escrow Holder.  The date the Escrow is opened pursuant to thepreceding sentence is herein called the “**Effective Date**”. Escrow Holder shall promptly adviseBuyer and Seller of the Effective Date.

 

2.2  Escrow Instructions.  Theterms and conditions set forth in this Agreement shall constitute both anagreement between Seller and Buyer and escrow instructions for Escrow Holder.  Seller and Buyer shall promptly execute anddeliver to Escrow Holder any separate or additional escrow instructionsrequested by Escrow Holder that are consistent with the terms of thisAgreement.  Any separate or additionalinstructions shall not modify or amend the provisions of this Agreement unless otherwiseexpressly set forth by mutual consent of Buyer and Seller.  Asused in this Agreement, “**Closing**” shallmean the recordation (or the commitment of the Title Company to do so to the satisfactionof Buyer) of the “Deed” (as defined below) in the Official Records of KernCounty, California and the payment of the Purchase Price to Seller.

 

2.3  Closing Date.  Escrowshall close on or before the date (the “**Closing Date**”)that is thirty-five (35) days after the Effective Date.

 

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3.  ACTIONS PENDING CLOSING 

 

3.1  Buyer’s Review of Title.

 

3.1.1  Sellershall cause the Title Company, promptly after the Effective Date, to deliver toBuyer a copy of a current preliminary title report or commitment for title insurance(as well as a copy of each exception referenced therein) showing the conditionof title to the Property (the “**Title Report**”).  Upon receipt from Buyer of funds sufficientto pay for a survey of the Property, Seller shall engage a surveyor to preparea survey of the Property (the “**Survey**”) that meetsthe requirements set forth on Schedule 3.1.1 hereof.  Seller is ordering the Survey as an accommodationto Buyer, and in no event shall Seller be in breach or default by reason of thecontents, or timing of delivery, of the Survey.

 

3.1.2  Buyershall have until the later of five (5) days after receipt of the Title Report andSurvey or twenty five (25) days after the Effective Date ((the “**Title Date**”) within which to deliver to Seller writtennotice of Buyer’s disapproval of title as shown on the Title Report and Survey(those title matters identified on the Title Report and Survey and timelydisapproved in writing by Buyer are hereafter called the “**DisapprovedExceptions**”).  Buyer’s failureto deliver such notice to Seller on or before the Title Date shall constituteBuyer’s approval of the condition of title as shown on the Title Report and Survey.

 

3.1.3  Sellershall notify Buyer in writing within three (3) business days after Seller’s receiptof Buyer’s notice of Disapproved Exceptions that: (a) Seller will remove suchDisapproved Exceptions from title as of or before Closing; or (b) Seller willnot remove any or certain specified Disapproved Exceptions from title.  Seller’s failure to address any DisapprovedExceptions in any notice, or failure to give a notice as to any DisapprovedExceptions, shall constitute Seller’s statement that it will not remove suchDisapproved Exceptions from title.

 

3.1.4  IfSeller does not provide Buyer with written notice that it shall remove all DisapprovedExceptions from title, Buyer shall have the right to terminate this Agreementby delivery of written notice of termination in accordance with Section 3.3on or before the Decision Date, as Buyer’s sole and exclusive remedy.  Buyer’s failure to provide such notice oftermination on or before the Decision Date shall constitute Buyer’s waiver ofits disapproval of the Disapproved Exceptions.  In the case of Buyer’s waiver (or deemedwaiver) of Disapproved Exceptions, Seller shall have no obligation to remove orotherwise address such Disapproved Exceptions from title, and such waivedDisapproved Exceptions shall be deemed approved.  If Buyer elects to terminate this Agreementpursuant to this Section 3.1.4, the provisions of Section 3.3 shallapply.  Except for the DisapprovedExceptions Seller removes or covenants to remove, the exceptions to title shownby the Title Report and Survey and any encumbrance arising from the acts ofBuyer are called the “**Permitted Exceptions**”in this Agreement.  In no event shall anymortgage or judgment liens be Permitted Exceptions, and Seller shall cause thesame to be removed at or before Closing.  Should a supplemental Title Report be issuedby the Title Company after the date of the original Title Report disclosingadditional title exceptions that adversely affect the condition of title to theProperty, then the Title Date shall, if applicable, be extended to the datethat is three (3) business days after Buyer’s receipt of the supplemental TitleReport, and if necessary, the Closing Date shall be automatically

 

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extended to the extent necessary to accommodate theapproval procedures of Section 3.1.3 and this Section 3.1.4.

 

3.2  Buyer’s Review of theProperty; Agreements.  Promptly afterthe Effective Date, Seller shall provide Buyer with copies of (or makeavailable to Buyer for review at the Project) the items reflected on Schedule 3.1attached hereto (collectively, the “**Due Diligence Documents**”). Notwithstanding the foregoing or anyother provision hereof to the contrary, (i) Seller’s responsibility to provideDue Diligence Documents shall be limited to those Due Diligence Documents inSeller’s (or its property manager’s) possession (without limiting theforegoing, those items that are marked “not in our possession” on Schedule 3.1shall not be provided), (ii) Seller shall not be required to generate reportsor analyses not typically prepared (or reflecting information not typicallyreflected) in Seller’s ordinary course of business, and (iii) the Due DiligenceDocuments are provided as an accommodation to Buyer and Seller expresslydisclaims any and all representations and warranties regarding the same.  On or before the Decision Date, Buyer shall havereviewed the foregoing and prepared, obtained, reviewed (or shall have chosennot to have prepared, obtained or reviewed) and approved, among other things,all other reports of investigations of the Property, including, such soil,environmental, geological and engineering tests and reports, and otherinspections of the Property as Buyer shall deem necessary in order to determinewhether the Property is suitable for Buyer’s intended use, as well asinvestigated (or chosen not to have investigated) all zoning requirements,federal, state and local laws, ordinances, rules, regulations, permits,licenses, approvals and orders applicable to the Property.  Pursuant to and subject to the requirements ofSection 3.5 of this Agreement, Buyer may enter onto the Property for thepurpose of conducting its inspection (the “**Inspection**”) ofthe Property; provided, however, without first obtaining Seller’s prior writtenconsent, which consent will not be unreasonably withheld, Buyer shall onlyconduct a visual inspection, with no right to conduct any physical testing,boring, sampling or removal (collectively “**Physical Testing**”)of any portion of the Property.  If Buyerwishes to conduct any Physical Testing of the Property, Buyer shall submit awork plan to Seller prior to the Decision Date for Seller’s prior writtenapproval, which work plan Seller may modify, limit or disapprove in itsreasonable discretion.  If, on the basisof the review and the Inspection described in this Section 3.2, or if forany other reason or no reason, Buyer determines that the Property is notsuitable for Buyer’s intended use, then Buyer may terminate this Agreement by deliveringthe Termination Notice to Seller and Escrow Holder on or before the DecisionDate.  Buyer’s failure to deliver theTermination Notice to Seller and Escrow Holder on or before the Decision Dateshall constitute Buyer’s approval of the aforementioned items and of thecondition of the Property.

 

3.3  Buyer’s Termination.  If Buyer elects to terminate this Agreement inaccordance with Sections 3.1.4 or 3.2, Buyer shall deliver the TerminationNotice to Seller and Escrow Holder on or before the Decision Date.  If Buyer elects to terminate this Agreement inaccordance with Sections 4.4 or 4.5, then on or before the dates specifiedtherein, Buyer shall deliver a Termination Notice to Seller and Escrow Holderthat Buyer elects to terminate this Agreement pursuant to said Sections.  Buyer’s failure to timely deliver suchtermination notice pursuant to said Sections of this Agreement shall constituteBuyer’s waiver of Buyer’s right to terminate this Agreement pursuant to said Sections. If Buyer timely elects to terminate thisAgreement pursuant to Sections 3.1.4, 3.2, 4.4 or 4.5, Escrow Holder shalldeliver the Deposit to Buyer, less fifty percent (50%) of any Escrow terminationfee, and Escrow Holder shall return to the depositor thereof any othermaterials

 

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previously placed in Escrow and remaining in Escrow; and neither partyshall thereafter have any further rights or obligations under this Agreementunless expressly provided otherwise herein.

 

3.4  No Processing.  Without Seller’s prior written consent, untilthe Closing, Buyer shall not make any application to any governmental agencyfor any permit, approval, license or other entitlement for the Property or theuse or development thereof.

 

3.5  Access to Property.

 

3.5.1  Subjectto the rights of existing tenants of the Property (“**Tenants**”),whom Buyer hereby agrees not to interview or question without having providedSeller and Seller’s Broker (as defined below) with at least 24 hours priorwritten notice of its intention to do so during such interview, Seller herebygrants to Buyer and Buyer’s representatives, agents, employees and contractors(collectively, “**Buyer’s Agents**”) a nonexclusivelicense to enter onto the Property solely for the purpose of conducting Buyer’sInspection.  Any Inspection work shall beat the sole cost and expense of Buyer.  Thelicense created under this Section 3.5.1 shall expire on termination ofthis Agreement.  At least forty-eight(48) hours prior to any entry and Inspection, Buyer shall provide Seller withsufficient evidence to show that Buyer and Buyer’s Agents, who are to enterupon the Property, are adequately covered by policies of insurance issued by acarrier reasonably acceptable to Seller insuring Buyer and Seller against anyand all liability arising out of Buyer’s or Buyer’s Agents’ entry upon andInspection of the Property, including without limitation any loss or damage tothe Property, with coverage in the amount of not less than $1,000,000 peroccurrence.

 

3.5.2  Buyeragrees to keep the Property free from any liens arising out of any work performed,materials furnished or obligations incurred by or on behalf of Buyer or Buyer’sAgents with respect to any Inspection or Physical Testing of the Property.  If any such lien shall at any time be filed,Buyer shall cause the same to be discharged of record within twenty (20) days thereafterby satisfying the same or, if Buyer in its discretion and in good faithdetermines that such lien should be contested, by recording a bond.  Failure by Buyer to discharge such lien shallbe a material breach of this Agreement and Seller may terminate this Agreementby written notice thereof to Buyer.

 

3.5.3  Buyershall, at its sole cost and expense, comply with all applicable federal, state andlocal laws, statutes, rules, regulations, ordinances, or policies in conductingthe Inspection and the Physical Testing.

 

3.5.4  Buyerhereby agrees to hold harmless, protect, defend and indemnify, and hereby releases,Seller and its trustees, officers, directors, employees, contractors, agents,subsidiaries and affiliates, and its and their respective successors andassigns (collectively, the “**Indemnitees**”)and the Property from and against any and all claims, demands, causes ofaction, losses, liabilities, liens, encumbrances, costs or expenses (includingwithout limitation reasonable attorneys’ fees and litigation costs) arising outof, connected with or incidental to: (a) any injuries to persons (including death)or property (real or personal), or (b) any mechanics’, workers’ or other lienson the Property, by reason of or relating to the work or activities conductedon the Property by Buyer or Buyer’s Agents.  The provisions of this Section 3.5.4shall survive any termination of this Agreement and shall not be limited in anyway by any other terms of this Agreement.

 

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3.5.5  In no event shall Buyer orBuyer’s Agents have the right to place any materials or equipment on theProperty (including, without limitation, signs or other advertising material)until after the Closing has occurred.

 

3.5.6  Buyershall, at its sole cost and expense, clean up and repair the Property, in whatevermanner necessary, after Buyer’s or Buyer’s Agents’ entry thereon so that theProperty shall be returned to the same condition that existed prior to Buyer’sor Buyer’s Agents’ entry thereon.

 

4.  ADDITIONALAGREEMENTS OF THE PARTIES

 

4.1  Seller’s Representationsand Warranties.  Seller herebyrepresents, warrants and covenants to and agrees with Buyer as follows:

 

4.1.1  Sellerhas the legal right, power and authority to own the Property and to enter intoand consummate the transactions contemplated by this Agreement, and thisAgreement and all instruments, documents and agreements to be executed bySeller in connection herewith are, or when delivered shall be, duly authorized,executed and delivered by Seller and are, or when delivered shall be, valid,binding and enforceable obligations of Seller.

 

4.1.2  Thereare no pending or, to Seller’s knowledge, threatened legal proceedings, administrativeactions, or pending governmental investigation of any kind or characteradversely affecting the Project or Seller’s interest therein.

 

4.1.3  ToSeller’s knowledge and except as may be disclosed in the Due Diligence Documents,Seller has received no written notice from any government authority of anyviolation of any statute, ordinance, code or regulation with respect to theProject, which violation has not been corrected.

 

4.1.4  ToSeller’s knowledge and except as may be disclosed in the Due Diligence Documents,Seller has received no written notice that the Project is in violation of anyfederal, state and local laws, ordinances and regulations applicable to theProject with respect to “Hazardous Materials” (as defined below), nor to Seller’sknowledge have any Hazardous Materials been or are currently being produced,disposed of, used or stored on or under the Property in violation of applicablelaw.

 

4.1.5  Selleris not required to obtain any consents or approvals to consummate the transactionscontemplated in this Agreement.

 

4.1.6  To Seller’sknowledge, the copies of the Leases and Contracts delivered to Buyer (or madeavailable to Buyer) for its review are true and correct copies of the Leasesand Contracts and are all of the Leases and Contracts affecting the Property.

 

4.1.7  As usedherein, “**to Seller’s knowledge**” and phrases ofsimilar import means the actual (not constructive and without attribution)conscious knowledge, without undertaking, and without any duty to undertake,any investigation or inquiry, of Deborah Hawthorne and Dirk Van Wyk, whichindividuals are the employees of Seller (or its affiliates) with theoperational/asset

 

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disposition responsibility for the Project.  It is expressly agreed and understood that inno event shall Buyer be entitled to bring any action(s) for damages orotherwise against such individuals.  Inthe event Seller or Buyershould become aware of any facts or circumstances prior to the Closing Date that should render any of Seller’srepresentations and warranties that are limited to Seller’s knowledge no longeraccurate, the party first becoming so aware shall promptly notify the otherparty Buyer in writing, and Buyer shall have the right, as its sole andexclusive remedy, to terminate this Agreement by written notice to Seller andEscrow Holder delivered within seven (7) days after receipt of Seller’s noticeor first becoming aware of such facts, in which case this Agreement shallterminate in accordance with Section 3.3.  This Section 4.1.7 shall supersede anyinconsistent provision of this Agreement.

 

4.2  Buyer’s Representations and Warranties.  Buyerhereby represents, warrants and covenants to and agrees with Seller as follows:

 

4.2.1  Buyer’sInvestigation and Release.  (a) Buyer acknowledges that, except as explicitlyset forth herein, there are no representations or warranties of any kindwhatsoever, express or implied, made by Seller in connection with thisAgreement, the purchase of the Property by Buyer, the Contracts, the Leases,the physical condition of the Property or whether the Property complies withapplicable laws or is appropriate for Buyer’s intended use; (b) prior to theDecision Date Buyer shall have (or shall have chosen not to have) fullyinvestigated the Property (including the Leases and Contracts) and all matterspertaining thereto; (c) Buyer is not relying on any statement or representationof Seller, its agents or its representatives nor on any information supplied bySeller, its agents or its representatives; (d) Buyer, in entering into thisAgreement and in completing its purchase of the Property, is relying, and shallrely, entirely on its own investigation of the Property based on its extensiveexperience in and knowledge of real property in the areas where the Property islocated; (e) Buyer is aware (or has chosen not to be aware) of all zoningregulations, other governmental requirements, legal, site and physicalconditions, and other matters affecting the use and condition of the Property;(f) Buyer’s decision to purchase the Property on the terms and conditionshereof has been, and at all times shall be, made solely and exclusively inreliance on Buyer’s own review, inspection and investigation of the Property(including the Leases and Contracts) and of materials, documents, informationand studies relating to the Property; (g) **BUYER****SHALL PURCHASE THE PROPERTY IN ITS**“**AS IS**”**CONDITION AS OFTHE DATE OF CLOSING.  **Without limiting the foregoing,Buyer acknowledges that Buyer has accepted full responsibility for assuring theProperty complies at Closing with all applicable laws, rules, regulations,orders and ordinances, and in the event any such laws, rules, regulations,orders or ordinances impose any pre-Closing obligations upon Seller, Sellershall have the right to (i) perform the same at Buyer’s expense and the costthereof shall be added to the Purchase Price at Closing, if Seller is obligatedby law to perform the same prior to Closing, and/or (ii) require Buyer toexecute and deliver at Closing any documentation requested by Seller orrequired by governmental authorities confirming Buyer has accepted suchresponsibility and indemnifying Seller against the same.

 

4.2.2  Authority.  Buyer has the power and authority to own theProperty and to consummate the transactions contemplated by this Agreement.  This Agreement and all instruments, documentsand agreements to be executed by Buyer in connection herewith are or whendelivered shall be duly authorized, executed and delivered by Buyer and arevalid, binding and enforceable

 

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obligations of Buyer.  Each individual executing this Agreement onbehalf of Buyer represents and warrants to Seller that he or she is dulyauthorized to do so.

 

4.2.3  Consents.  Buyer is not required to obtain any consentsor approvals to consummate the transactions contemplated in this Agreement.

 

4.3  Reaffirmation.  The representations and warranties of Sellerand Buyer set forth in Sections 4.1 and 4.2 are true and correct as of the dateof this Agreement and shall be true and correct as of the Closing.  The Closing shall constitute each party’sreaffirmation of those representations and warranties as of the Closing, andeach party shall execute and deliver at Closing a document (a “**Reaffirmation Certificate**”) reaffirming such representationsand warranties.

 

4.4  Condemnation. If, prior to Closing, any portion of theProperty shall be condemned or become the subject of any pending or threatenedcondemnation action, Seller shall promptly notify Buyer thereof.  This Agreement shall remain in full force andeffect, regardless of such condemnation or threatened or pending action, and ifany condemnation award is received by Seller prior to Closing, the amount ofsuch award shall be applied as a credit against the Purchase Price.  Any condemnation awards received by Seller onor after Closing shall be promptly delivered by Seller to Buyer.  Notwithstanding the foregoing, in the eventsuch condemnation involves 5% or more of the Land or the Improvements oraffects any of the existing access points to the Property, Buyer shall beentitled to terminate this Agreement by written notice thereof to Seller givenwithin five (5) business days after Buyer shall have been notified of suchcondemnation, whereupon the Deposit (to the extent previously delivered toEscrow Holder) shall be returned to Buyer.  Buyer’s failure to timely deliver such noticeto Seller within such five (5) business day period shall constitute Buyer’selection to proceed to Closing.

 

4.5  Damageor Destruction.  In the event of anydamage to or destruction of the Property prior to the Closing, Seller shallpromptly notify Buyer thereof and the Closing shall nevertheless occur as otherwiseprovided for in this Agreement, except Seller shall assign to Buyer upon theClosing all insurance proceeds paid or payable to Seller in connection withsuch occurrences.  Seller shall have noobligation to repair such damage or destruction.  Notwithstanding the foregoing, if such damage ordestruction to the Property shall cost more than $ 100,000 to repair, thenSeller shall promptly so notify Buyer and within five (5) business days afterreceipt of such notice, Buyer shall deliver written notice to Seller and EscrowHolder, electing either: (a) to proceed with this transaction and Closing inaccordance with this Agreement notwithstanding such damage or destruction; or(b) to terminate this Agreement in accordance with the terms of Section 3.3.  Buyer’s failure to deliver either of suchnotices to Seller and Escrow Holder within such five (5) business day periodshall constitute Buyer’s election to proceed to Closing under clause (a).

 

4.6  Tenant Lease Amendments;Management of Property.  Selleragrees to promptly provide Buyer with a copy of all proposed amendments toexisting Leases, and all proposed new Leases, of any portion of the Propertyproposed to be executed after the Effective Date and before the date (the “**Stop Date**”) that is seven (7) days prior to the DecisionDate for Buyer’s review, but in no event shall Buyer have any right to approvethe same, and Buyer’s failure to terminate this Agreement on or before theDecision Date shall constitute Buyer’s deemed approval of all such Leaseamendments and new Leases.  From andafter the Stop Date, Buyer shall not execute any amendments to any

 

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existing Leases, or any new Leases, without Buyer’s prior writtenconsent.  Upon the Closing, Buyer shallreimburse Seller for, or assume Seller’s obligations with respect to, allleasing commissions paid or payable by Seller and/or tenant improvementobligations of Seller with respect to all Lease amendments and new Leasesapproved (or deemed approved) by Buyer pursuant to this Section 4.6 (exceptSeller shall be responsible for all such expenses related to any such leasewith Cingular Wireless, and Seller shall be responsible for any leasingcommissions payable with respect to any Leases that are renewed or extendedbefore the Closing Date).  Subject todamage or destruction, or other matters outside of Seller’s control, Selleragrees to continue to manage the Property until Closing in the same manner itis currently managing the Property (in no event shall Seller have anyobligation to make capital repairs, replacements or improvements, nor to causethe Property to comply with applicable laws).  Prior to Closing, and for a reasonable periodof time thereafter, Seller agrees to reasonably cooperate with Buyer and Buyer’saccountants to facilitate Buyer’s evaluations and required reports, includingat least a one-year audit of the books and records of the Property, which auditshall conclude with the execution by Seller of a letter in the form attachedhereto as Schedule 4.6 (Seller confirms that the representations in such letterare, to Seller’s knowledge, correct as of the date of execution of thisAgreement, but Seller reserves the right to revise such letter to reflect thestate of Seller’s knowledge at the time Seller is requested to execute suchletter).

 

4.7  EstoppelCertificates.  Seller agrees to promptly exert good faithefforts to obtain estoppel certificates (“**Estoppels**”) andsubordination, non-disturbance and attornment agreements (“**SNDAs**”),on Seller’s form or on such other reasonable forms as Buyer shall deliver toSeller within five (5) days after the Effective Date, from the Tenants.  Seller shall not be in default hereunder byreason of the unavailability, or contents, of any Estoppel or SNDA.  Subject to the further terms of this Section4.7, Buyer shall have the right to terminate this Agreement pursuant to Section3.3 if prior to Closing Seller shall be unable to obtain Estoppels approved byBuyer executed by (i) Ralph’s (the “**Major**”), plus(ii) other tenants (the “**Minors**”) which,in the aggregate, occupy at least seventy five percent (75%) of the remainingleased space at the Property not counting the space leased by the Major.  Buyer shall be deemed to have approved eachEstoppel delivered to it by Seller unless Buyer shall have delivered writtennotice to Seller objecting to such Estoppel within four (4) days after Seller’sdelivery of such Estoppel to Buyer.  Buyer shall have no right to object to, andshall be deemed to have approved, any Estoppel executed on a form set forth in,or stipulated by, the applicable lease that does not reflect a default bylandlord or tenant and that does not contain any information materiallyinconsistent with the information set forth in the applicable lease to which itpertains.  Buyer shall have no right to terminatethis Agreement by reason of the unavailability, or contents, of any SNDAs.  Seller agrees to execute and deliver to Buyerat Closing a “Seller Estoppel” with respect to those Minors as to which Sellerhas been unable to obtain an executed Estoppel, but each Seller Estoppel shallbe limited “to Seller’s knowledge” (as defined in Section 4.1.7).

 

4.8  HazardousMaterial Waiver.  Buyer, on behalf of itself, its successorsand assigns, hereby releases Indemnitees from and against any and allliabilities, claims, demands, suits, judgments, causes of action (including,but not limited to, causes of action arising under the ComprehensiveEnvironmental Response Compensation and Liability Act of 1980, 42 U.S.C. §§9601 et. seq.), losses, costs, damages, injuries, penalties,enforcement actions, fines, taxes, remedial actions, removal and disposalcosts, investigation and remediation costs and expenses (including, withoutlimit, attorneys’ fees, litigation, arbitration and administrative proceedingcosts,

 

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expert and consultant fees and laboratory costs),sums paid in settlement of claims, whether direct or indirect, known orunknown, arising out of, related in any way to, or resulting from or inconnection with, in whole or in part, the presence or suspected presence ofHazardous Materials (defined below) in, on, under, or about the Property.

 

“**Hazardous Material(s)**” means any chemical, substance,material, controlled substance, object, condition, waste living organisms orcombination thereof which is or may be hazardous to human health or safety orto the environment due to his radioactivity, ignitability, corrosivity,reactivity, explosivity, toxicity, carcinogenicity, mutagenicity,phytotoxicity, infectiousness or other harmful or potentially harmfulproperties or effects, including, without limitation, petroleum hydrocarbonsand petroleum products, lead, asbestos, radon, polychlorinated biphenyls (PCBs)and all of those chemicals, substances, materials, controlled substances,objects, conditions, wastes, living organisms or combinations thereof which arenow or become in the future listed, defined or regulated in any manner by anyfederal, state or local law based upon, directly or indirectly, such propertiesor effects.

 

5.  CLOSING

 

5.1  DepositsInto Escrow.

 

5.1.1  Atleast one (1) business day prior to the Closing Date, Seller shall deposit intoEscrow:

 

(a)  Agrant deed conveying the Project to Buyer (the “**Deed**”),subject to the Permitted Exceptions;

 

(b)  Anaffidavit or qualifying statement which satisfies the requirements of Section1445 of the Internal Revenue Code of 1986, as amended, and the regulationsthereunder (the “**Non-Foreign Affidavit**”), and a “WithholdingExemption Certificate, Form 593”, pursuant to the California Revenue andTaxation Code stating either the amount of withholding required from Seller’sproceeds or that Seller is exempt from such withholding requirement (the “**Certificate**”).

 

(c)  Anoriginal bill of sale and assignment (the “**Bill of Sale**”),duly executed by Seller, assigning and conveying to Buyer all of Seller’sright, title and interest in and to the Personal Property.  The Bill of Sale shall be in the form of Exhibit“B” attached hereto;

 

(d)  Anoriginal assignment and assumption agreement (the “**Assignmentand Assumption Agreement**”) duly executed by Seller assigning all ofSeller’s right, title and interest in and to the Leases and the Contracts.  The Assignment and Assumption Agreement shallbe in the form of Exhibit “C” attached hereto; and

 

(e)  Aletter to each Tenant (the “**Tenant Letters**”)advising the Tenant of the sale of the Property, the transfer of the Tenant’ssecurity deposit to Buyer and of the name and address of Buyer (or its propertymanager).

 

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5.1.2  On orbefore 10:00 a.m.  Pacific time or theClosing Date, Buyer shall deposit into Escrow:

 

(a)  Fundsin accordance with the provisions of Section 1.3.2;

 

(b)  Buyer’sReaffirmation Certificate;

 

(c)  Anoriginal counterpart of the Assignment and Assumption Agreement duly executedby Buyer; and

 

(d) the Tenant Letters.

 

5.1.3  Sellerand Buyer shall each deposit such other instruments and funds as are reasonablyrequired by Escrow Holder or otherwise required to close Escrow and consummatethe sale of the Property in accordance with the terms of this Agreement,including but not limited to documents required under Section 5.4.1.

 

5.2  Prorations.

 

5.2.1  Rentalsfrom Leases (including fixed monthly rentals and other periodic rentals, additionalrentals, percentage rentals, operating cost pass-throughs and other sums andcharges payable by the tenants), prepaid rentals and prepaid payments(collectively, “**Rent**”) shall, subject to thefurther provisions hereof, be prorated on the basis that Buyer shall receive acredit for all security deposits actually held by Seller and for all Rent whichSeller has actually received before the Closing which is allocable to theperiod after the Closing.  Seller shallnot receive a credit for any Rent Seller has not received as of the Closingthat is allocable to the period prior to the Closing.  If Buyer shall collect any such Rent(including without limitation percentage rent) after the Closing, Buyer shallpromptly pay the same to Seller, after application of the same to any rent duefrom the applicable Tenant after the Closing.

 

5.2.2  Realestate taxes shall be prorated as of the Closing on the basis of the most recentassessed valuation of and rates and multiplier applicable to the Property.  If prorations are not made on the basis of thecurrent tax year or if supplemental taxes are assessed after the Closing for theperiod prior to the Closing, the parties shall make any necessary adjustmentafter Closing by cash payment upon demand to the party entitled thereto so thatSeller shall have borne all taxes allocable to the period prior to the Closing(including all supplemental taxes which are allocable to the period prior toClosing) and Buyer shall bear all taxes allocable to the period after theClosing (including all supplemental taxes which arc allocable to the periodafter the Closing).

 

5.2.3  Sellershall endeavor to have all of its utility accounts with respect to the Propertyclosed out effective as of the Closing Date; if such close-out is not possible,utilities shall be prorated as of the Closing (with the assumption that utilitycharges were uniformly incurred during the billing period in which the Closingoccurs).

 

5.2.4  Commonarea and maintenance charges, property taxes, insurance and other operatingcost pass-throughs payable by Tenants which accrue as of the Closing Date, butwhich are

 

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notthen due and payable (collectively, the “**Operating Expenses**”),shall not be prorated, except as herein provided.  Buyer shall receive and retain any OperatingExpenses paid by Tenants on or after the Closing Date and Seller shall receiveand retain any Operating Expenses paid by Tenants prior to the Closing Date;provided, however, that any monthly or periodic deposits or payments ofestimated Operating Expenses with respect to the month in which the Closingoccurs received by Seller prior to the Closing Date or by Buyer on or after theClosing Date shall be prorated as of the Closing Date.  Buyer and Seller shall prorate at Closing,actual Operating Expenses collected by Seller from Tenants prior to Closingwith actual Operating Expenses paid by Seller with respect to such period, sothat if there are any rebates owing to Tenants for the period of Seller’sownership, Seller shall pay Buyer the amount of such rebates at Closing, and ifthe Tenants owe the landlord any additional amounts for Operating Expenses withrespect to the period of Seller’s ownership, Buyer shall promptly pay Sellerthe amount so owed to the landlord upon Buyer’s receipt of the same (and Buyershall exert diligent good faith efforts to collect the same).  Any prorations under this Agreement based uponmonthly amounts shall be based upon a thirty (30) day month; any prorationsunder this Agreement based upon annual amounts shall be based upon a 366 dayyear.

 

5.3  Paymentof Closing Costs.

 

5.3.1  ClosingCosts Borne by Seller.  Seller shall bear and Escrow Holder shall dischargeon Seller’s behalf out of the sums payable to Seller hereunder (a) one-half ofEscrow Holder’s fee, (b) the Kern County documentary transfer taxes, (c) allcosts and expenses of the Owner’s Policy (except Buyer shall pay all costsattributable to any endorsements, any extended coverage and any deletion of thesurvey exception from the policy), and (d) any additional charges payable inaccordance with common escrow practices in Kern County, California.

 

5.3.2  ClosingCosts Borne by Buyer.  Buyer shalldeposit with Escrow Holder for disbursement by Escrow Holder (a) one-half ofEscrow Holder’s fee, (b) all costs and expenses of the Owner’s Policy not borneby Seller, (c) the recording fees and documentary transfer fees not borne bySeller required in connection with the transfer of the Property to Buyer, and(d) any additional charges payable in accordance with common escrow practicesin Kern County, California.

 

5.4  Closingof Escrow.

 

5.4.1  Pursuantto Section 6045 of the Internal Revenue and Taxation Code, Escrow Holder shallbe designated the “closing agent” hereunder and shall be solely responsible forcomplying with the tax reform act of 1986 with regard to reporting allsettlement information to the Internal Revenue Service.

 

5.4.2  EscrowHolder shall hold the Closing on the Closing Date if: (i) it has received in atimely manner all the funds and materials required to be delivered into Escrowby Buyer and Seller; and (ii) it has received assurances satisfactory to itthat, effective as of the Closing, the Title Company will issue to Buyer, itsstandard coverage CLTA title insurance policy in the amount of the PurchasePrice, insuring Buyer as the owner of the Property, subject only to thePermitted Exceptions (the “**Owner’s Policy**”).

 

5.4.3  ToClose the Escrow, Escrow Holder shall:

 

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(a)  Causethe Deed to be recorded and thereafter mailed to Buyer, and deliver the Owner’sPolicy, Bill of Sale, Assignmentand Assumption Agreement (executed by Seller) and Non-Foreign Affidavit and Certificateto Buyer; and

 

(b)  Deliverto Seller the Buyer’s Reaffirmation Certificate, the Assignment and AssumptionAgreement (executed by Buyer), and by wire transfer of federal funds, funds inthe amount of the Purchase Price, plus or less any net debit or credit toSeller by reason of the prorations and allocations of closing costs providedfor in this Agreement.

 

5.5  Failureto Close; Cancellation.  If EscrowHolder is not in a position to Close the Escrow on the Closing Date, then thisAgreement shall terminate (and if Buyer is in default the Deposit shall be paidto Seller), except that no such termination shall relieve either party of liability for any failure to comply withthe terms of this Agreement.

 

**5**.**6  LIQUIDATEDDAMAGES****.  ****BUYER AND SELLER AGREE THAT IN THE****EVENT****OF****A****MATERIAL DEFAULT OR BREACHHEREUNDER BY BUYER (INCLUDING**,**WITHOUTLIMITATION**,**ANY DEFAULT OR BREACHBY BUYER WHICH RESULTS IN THE FAILURE OF ESCROW TO CLOSE)**,**THE DAMAGES TO SELLER WOULD BE EXTREMELY DIFFICULTAND IMPRACTICABLE TO ASCERTAIN**,**AND THAT THEREFORE THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES TOSELLER**,**SUCH DAMAGES INCLUDINGCOSTS OF NEGOTIATING AND DRAFTING OF THIS AGREEMENT**,**COSTS OF COOPERATING IN SATISFYING CONDITIONS TOCLOSING**,**COSTS OF SEEKING ANOTHERBUYER UPON BUYER’S DEFAULT**,**OPPORTUNITY COSTS IN**,**AND CARRYINGCOST ASSOCIATED WITH**,**KEEPING THEPROPERTY OUT OF THE MARKETPLACE**,**AND OTHER COSTS INCURRED IN CONNECTION HEREWITH.  ACCORDINGLY**,**BUYER AND SELLER AGREE THAT**,**EXCEPT FOR ANY DAMAGES**,**COSTS AND****EXPENSES****INCURRED IN CONNECTION WITH OR RESULTING FROM BUYER’S DEFAULT**,**OR BREACH OF ITS INDEMNITY OBLIGATIONS UNDER SECTIONS3**.**5 AND 6**.**16 (WHICH DAMAGES**,**COSTS AND EXPENSES SHALL SURVIVE ANY CLOSING ORTERMINATION OF THIS AGREEMENT AND ARE NOT LIMITED BY THIS SECTION 5**.**6)**,**RECEIPT AND RETENTION OF THE DEPOSIT SHALL BE THE SOLE DAMAGES OF SELLER****IN****THE****EVENT****OF****ANY****BREACH OR DEFAULT BY BUYER HEREUNDER**.

 
|   | /s/  PSD/[ILLEGIBLE]    |   | /s/  [ILLEGIBLE]       |   |
|--------|-------------------------|--------|------------------------|--------|
|   | Seller’s  Initials |   | Buyer’s  Initials |   |

 

5.7  Seller’sBreach.  In the event of a materialbreach by Seller hereunder, Buyer’s remedies shall be limited to (i)termination of this Agreement and the return to it of the Deposit, or (ii)specific performance of this Agreement.  Buyerexpressly waives and releases any right to sue Seller for damages.

 

5.8  Possession.  Subject to the Permitted Exceptions and therights of the Tenants, possession of the Property shall be delivered to Buyerupon Closing.

 

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6.  GENERALPROVISIONS

 

6.1  Counterparts. This Agreement may be executed incounterparts, each of which shall be deemed an original, but all of which,taken together, shall constitute one and the same instrument.

 

6.2  Entire Agreement.  This Agreement contains theentire integrated agreement between the parties respecting the subject matterof this Agreement and supersedes all prior and contemporaneous understandingsand agreements, whether oral or in writing, between the parties respecting thesubject matter of this Agreement.

 

6.3  LegalAdvice; Neutral Interpretation; Headings.  Each party has received independent legaladvice from its attorneys with respect to the advisability of executing thisAgreement and the meaning of the provisions hereof.  The provisions of this Agreement shall beconstrued as to their fair meaning, and not for or against any party based uponany attribution to such party as the source of the language in question.  Headings used in this Agreement are forconvenience of reference only and shall not be used in construing thisAgreement.

 

6.4  Choiceof Law.  This Agreement shall begoverned by the laws of the State of California.

 

6.5  Severability. If any term, covenant, condition orprovision of this Agreement, or the application thereof to any person orcircumstance, shall to any extent be held by a court of competent jurisdictionto be invalid, void or unenforceable, the remainder of the terms, covenants, conditionsor provisions of this Agreement, or the application thereof to any person orcircumstance, shall remain in full force and effect and shall in no way beaffected, impaired or invalidated thereby.

 

6.6  Waiverof Covenants, Conditions or Remedies. The waiver by one party of the performance of any covenant, condition orpromise under this Agreement shall not invalidate this Agreement nor shall itbe considered a waiver by it of any other covenant, condition or promise underthis Agreement.  The waiver by Either orboth parties of the time for performing any act under this Agreement shall notconstitute a waiver of the time for performing any other act or an identical actrequired to be performed at a later time.  The exercise of any remedy provided in thisAgreement shall not be a waiver of any consistent remedy provided by law, andthe provision in this Agreement for any remedy shall not exclude otherconsistent remedies unless they are expressly excluded.

 

6.7  Exhibits.  All exhibits to which reference is made inthis Agreement are deemed incorporated in this Agreement.

 

6.8  Amendment.  ThisAgreement may be amended at any time by the written agreement of Buyer andSeller.  All amendments, changes,revisions and discharges of this Agreement, in whole or in part, and from timeto time, shall be binding upon the parties despite any lack of legal consideration,so long as the same shall be in writing and executed by the parties hereto.

 

6.9  Relationshipof Parties.  The parties agree that their relationship isthat of seller and buyer, and that nothing contained herein shall constituteeither party the agent or legal representative of the other for any purposewhatsoever, nor shall this Agreement be deemed to create any form of businessorganization between the parties hereto, nor is either party granted any rightor authority to

 

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assumeor create any obligation or responsibility on behalf of the other party, norshall either party be in any way liable for any debt of the other.

 

6.10  NoThird Party Benefit.  This Agreementis intended to benefit only the parties hereto and no other person or entityhas or shall acquire any rights hereunder.

 

6.11  Timeof the Essence.  Time shall be of theessence as to all dates and times of performance, whether contained herein orcontained in any escrow instructions to be executed pursuant to this Agreement,and all escrow instructions shall contain a provision to this effect.

 

6.12  FurtherActs.  Each party agrees to performany further acts and to execute, acknowledge and deliver any documents, whichmay be reasonably necessary to carry out the provisions of this Agreement.

 

6.13   Recordation.  Buyer shall not record this Agreement, anymemorandum of this Agreement, any assignment of this Agreement or any otherdocument that would cause a cloud on the title to the Property.

 

6.14  Assignment. Upon written notice to Seller, Buyershall be entitled to assign Buyer’s rights and delegate its obligationshereunder to a third party controlled by Buyer, but no such assignment shallrelease Buyer of any liability hereunder.  Each party agrees to cooperate with the otherparty in competing an exchange qualifying for nonrecognition of gain underInternal Revenue Code §1031 and the applicable provisions of the CaliforniaRevenue and Taxation Code (“**Exchange**”), andeach party reserves the right to convert this transaction to an Exchange at anytime before the Closing Date.  If eitherparty does elect to complete an Exchange, the other party shall execute allescrow instructions, documents, agreements or instruments reasonably requestedby the first party to complete the Exchange; provided, however, that the otherparty shall incur no additional liabilities, expenses or costs (other than itsattorneys fees in reviewing customary Exchange documentation) as a result of orconnected with such Exchange, and shall not be required to take title to anyother property.  Notwithstanding that thetransaction contemplated hereby should be effected as an Exchange through athird party as a qualified IRC §1031 intermediary, all obligations,representation, warranties and indemnities made by Buyer shall run to Seller,and all obligations, representations, warranties and indemnities made by Sellershall run to Buyer, despite the fact that an intermediary or other third partyfacilitating a party’s tax-deferred exchange was substituted hereunder for thatparty.  Subject to the foregoing, thisAgreement shall be binding upon and shall inure to the benefit of thesuccessors and assigns of the parties to this Agreement.

 

6.15  Attorneys’Fees.  In the event of any litigationinvolving the parties to this Agreement to enforce any provision of thisAgreement, to enforce any remedy available upon default under this Agreement,or seeking a declaration of the rights of either party under this Agreement,the prevailing party shall be entitled to recover from the other such attorneys’fees and costs as may be reasonably incurred, including the costs of reasonableinvestigation, preparation and professional or expert consultation incurred byreason of such litigation.  All otherattorneys’ fees and costs relating to this Agreement and the transactionscontemplated hereby shall be borne by the party incurring the same.

 

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6.16  Brokers. Pursuant to separate agreement, Sellershall pay CB Richard Ellis (“**Seller’s Broker**”),a brokerage commission for its services as broker in this transaction if, asand when the Closing occurs (and Seller understands that Seller’s Broker has anagreement with Buyer’s broker, CB Richard Ellis, to pay CB Richard Ellis aportion of such commission at Closing).  Buyer and Seller each represent and warrant tothe other that, except as stated in the preceding sentence (a) they have notdealt with any brokers or finders in connection with the purchase and sale ofthe Property, and (b) insofar as such party knows, no broker or other person isentitled to any commission or finder’s fee in connection with the purchase andsale of the Property.  Seller and Buyereach agree to indemnify and hold harmless the other against any loss,liability, damage, cost, claim or expense incurred by reason of any brokeragefee, commission or finder’s fee which is payable or alleged to be payable toany broker or finder because of any agreement, act, omission or statement ofthe indemnifying party.  The provisionsof this Section 6.16 shall not be limited in any way by any terms of thisAgreement.

 

6.17  Mannerof Giving Notice.  All notices anddemands which either party is required or desires to give to the other shall begiven in writing by personal delivery, express courier service or by telecopyfollowed by next day delivery of a hard copy to the address or telecopy numberset forth below for the respective party, provided that if any party givesnotice of a change of name, address or telecopy number, notices to that partyshall thereafter be given as demanded in that notice.  All notices and demands so given shall beeffective upon receipt by the party to whom notice or a demand is being given.

 
| To Buyer:                             |   | To  Seller:                          |
|---------------------------------------|--------|--------------------------------------|
| Inland Real Estate Acquisitions, Inc. |   | Donahue  Schriber Realty Group, L.P. |
| 2901 Butterfield Road                 |   | 200  E. Baker Street, Suite 100      |
| Oak Brook, IL 60523                   |   | Costa  Mesa, CA 92626                |
| Attn.: Mark Youngman                  |   | Attn.:  Dirk Van Wyk                 |
| Telephone: 630-218-4948               |   | Telephone:  (714) 545-1400           |
| Fax: 630-218-4935                     |   | Fax:  (714) 545-4222                 |
|                                  |   |                                 |
| With a copy to:                       |   | With  a copy to:                     |
|                                  |   | David  Greenman                      |
|                                  |   | 18800  Von Karman Avenue, Suite 100  |
|                                  |   | Irvine,  CA 92612                    |
|                                  |   | Telephone:  (949) 224-0338           |
|                                  |   | Fax:  (949) 224-0339            |

 

6.18  Survival. The terms and provisions of thisAgreement shall survive the Closing and the consummation of the transactionscontemplated by this Agreement or the termination of this Agreement for anyreason without the conveyance of the Property to Buyer.

 

SIGNATURES ON NEXT PAGE

 

16

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as ofthe day and year first above written.

 
| SELLER:    |   | Donahue Schriber Realty  Group, L.P., a Delaware limitedpartnership                   |
|------------|--------|---------------------------------------------------------------------------------------|
| ** ** |   |                                                                                  |
| ** ** |   | By:  Donahue Shriber Realty Group, Inc., a Maryland  corporation its general  partner |
| ** ** |   |                                                                                  |
| ** ** |   | By:                                                                                   | /s/ Patrick S. Donahue |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | Name:                                                                                 | Patrick S. Donahue |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | Title:                                                                                | President |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | By:                                                                                   | /s/  Dirk Van Wyk |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | Name:                                                                                 | Dirk  Van Wyk |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | Title:                                                                                | Vice President |   |
| ** ** |   |                                                                                  |
| BUYER:     |   | Inland  Real Estate Acquisitions, Inc., an Illinois corporation                       |
| ** ** |   |                                                                                  |
| ** ** |   | By:                                                                                   | /s/ Mark Youngman |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | Name:                                                                                 | Mark Youngman |   |
| ** ** |   |                                                                                  |   |   |
| ** ** |   | Title:                                                                                | Vice President |   |
|            |        |                                                                                       |  |  |  |  |

 

JOINDER OF ESCROW HOLDER

 

Escrow Holder executes this Agreement for the purpose of agreeing toserve as escrow agent with respect to the Deposit and closing in accordancewith this Agreeement.

 
| ** ** |   | STEWART TITLE GUARANTY COMPANY |
|------------|--------|--------------------------------|
| ** ** |   |                           |
| ** ** |   |                           |
| ** ** |   | By:                            | /s/ Josette Loaiza |   |
| ** ** |   |                           |
| ** ** |   | Name:                          | Josette Loaiza |   |
| ** ** |   |                           |
| ** ** |   | Title:                         | Commercial Escrow Officer |   |
|            |        |                                |  |  |  |

 

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