**Exhibit 10.437**

 

REINSTATEMENT OF AND AMENDMENT TO PURCHASE AND

SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

 

THISREINSTATEMENT OF AND AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROWINSTRUCTIONS (this “**Amendment**”) isentered into as of November 4, 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.                                   Sellerand Buyer entered into that certain Purchase and Sale Agreement and Joint EscrowInstructions dated as of October 11, 2004 (as previously amended in writing,the “**Agreement**”; capitalized terms used butnot defined in this Amendment shall have the meanings given to them in theAgreement) with respect to the property known as Placentia Village Center locatedin Placentia, California. Buyer terminated the Agreement in accordance with itsterms on November 3, 2004.

 

B.                                     Sellerand Buyer now desire to reinstate the Agreement, to acknowledge certain matterswith respect to the Agreement, and to amend the Agreement, as set forth herein.

 

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

 

1.                                       Reinstatement;Waiver of Contingencies; Reduction of Purchase Price; Closing Date. TheAgreement is hereby reinstated in accordance with its terms, as amended by thisAmendment. November 3, 2004 is acknowledged to have been the Decision Date, andBuyer’s execution and delivery of this Amendment (effective upon receipt of afaxed counterpart executed by Seller) constitutes Buyer’s waiver of all rightsto terminate the Agreement on or before the Decision Date. Due to the amount ofscheduled rent under the November 1, 2004 lease (the “**CallenderLease**”) between Landlord and Marie Callender Pie Shops Inc. lease(the “**Callender**”), the Purchase Price ishereby reduced by the sum of $35,000.00 and accordingly is the sum of TwentyFour Million Eight Hundred Sixty Five Thousand Dollars ($24,865,000.00).Notwithstanding any other provision of the Agreement to the contrary, ifCallender does not execute and deliver an extension of the Callender Leaseprior to Closing, in substantially the form of the extension previouslydelivered to Buyer, Buyer shall have the right to terminate the Agreement andhave the Deposit returned to it. The Closing Date shall be November 10, 2004;provided, however, if Buyer has the right to terminate the Agreement onNovember 10, 2004 pursuant to the previous sentence or in accordance withSection 4.7 of the Agreement, Seller shall have the right to extend the ClosingDate until November 16, 2004 to enable Seller to attempt to obtain more Estoppols(and a CC&R Estoppel, if applicable, and the executed Callender Leaseextension, if applicable).

 

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2.                                       Escrowfor Callender. Pursuant to Exhibit C of the Callender Lease, Seller is to provideCallender with a tenant improvement allowance in the amount of up to $100,000.At Closing, Seller shall deposit into escrow, with Escrow Holder, the sum of$100,000 (the “**Callender Funds**”). The CallendarFunds (or the applicable portion thereof) shall be released to Buyer (for immediaterelease to Callender) upon Buyer’s delivery of Buyer’s written certification (“**Buyer’s Callender Certification**”) to Seller and EscrowHolder that Callender is entitled to the Callender Funds (or the specifiedportion thereof) pursuant to Exhibit C of the Callender Lease.  Once Callender has obtained all of theCallender Funds to which it is entitled under Exhibit C to the Callender Lease,any remaining balance of the Callender Funds still held by Escrow Holder shallbe released to Seller.

 

3.                                       Escrowfor Huntington. Seller has entered into a lease (the “**HuntingtonLease**”) dated September 7, 2004 with S&E Learning, Inc. (“**Huntington**”) covering a portion of the Property as moreparticularly described therein (the “**Huntington Premises**”).Huntington has not yet finished its tenant improvements as required by theHuntington Lease nor has the “**Commencement Date**”(as defined in the Huntington Lease) occurred. Pursuant to the HuntingtonLease, Seller is obligated to pay $25,000 to Huntington for tenant improvements(the “**Huntington TIs**”), and $16,520 to thebroker owed the same (the “**Broker**”) forleasing commissions (the “**Huntington Commissions**”).Pursuant to the Huntington Lease, on the Commencement Date, Huntington is obligatedto pay to the landlord thereunder the sum of $5,451.58 per month for base rent(for the 1st 12months, to be increased by 3% for the 2nd**12 monthsand $1,355.00 per month for estimated operating expenses (the sum of theforegoing amounts, being $6,806.58, not taking into consideration the 3%increase, is herein called the “**Monthly Huntington Rent**”).At Closing, Seller shall deposit into escrow, with Escrow Holder, the sum of$207,328.29 (the “**Huntington Funds**”)with respect to the Huntington Lease (said sum equals the product of theMonthly Huntington Rent times twenty four (24), plus the Huntington TIs andplus the Huntington Commission). The Huntington TIs (or the applicable portionthereof) shall be released to Buyer (for immediate release to Huntington) uponBuyer’s delivery of Buyer’s written certification (“**Buyer’s HuntingtonCertification**”) to Seller and Escrow Holder that Huntington isentitled to the Huntington TIs (or the specified portion thereof) pursuant toArticle VII of Exhibit B to the Huntington’s Lease. The Huntington Commissionshall be disbursed by Escrow Holder to Broker upon the Commencement Date.Commencing the Closing Date, and on the eighth (8th) day of each monththereafter until the Commencement Date, the Huntington Monthly Rent (or aprorated portion thereof for the month of Closing and the month theCommencement Date occurs) shall be promptly disbursed to Buyer from the HuntingtonFunds upon Buyer’s delivery of written certification to Escrow Holder andSeller that Huntington has not yet paid the Huntington Monthly Rent then due. Inthe event that, after Buyer shall have been paid the Huntington Monthly Rent(or any portion thereof) out of the Huntington Funds for any particular month,Buyer should receive payment of all or any portion of the Huntington MonthlyRent from Huntington for such month, Buyer shall immediately remit the same toSeller. Upon the Commencement Date, the Huntington Funds still being held byEscrow Holder and not previously disbursed by Escrow Holder pursuant to this Section3 shall be promptly disbursed to Seller. Buyer agrees to notify Seller inwriting promptly upon the Commencement Date.

 

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4.                                       BaskinRobbins and Beauty Avenue. Seller agrees to use diligent good faith effortsto extend the existing Baskin Robbins lease prior to Closing. Seller furtheragrees that Seller shall not, for a period of 2 years after the Closing, leasespace in Seller’s adjacent shopping center to the tenant at the Property doingbusiness as “Beauty Avenue”.

 

5.                                       Agreementin Effect. The terms and provisions of this Amendment shall control over anyinconsistent terms and provisions of the Agreement. Except as amended hereby,the parties acknowledge and agree that the Agreement is in full force andeffect in accordance with its terms. If required by Escrow Holder, Buyer and Sellershall enter into a separate escrow agreement withEscrow Holder to implement the post-Closing elements of this Amendment,provided such escrow agreement is not in conflict with this Amendment. ThisAmendment may be executed in counterparts, each of which shall be an originaland both of which, together, shall constitute one and the same instrument.

 

IN WITNESSWHEREOF, the parties have duly executed this Amendment as of the day and yearfirst 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/ G. Joseph Cosenza |   |
|    |                                                                                  |
|    | Name:                                                                                 | G. JOSEPH  COSENZA |   |
|    |                                                                                  |
|    | Title:                                                                                | PRESIDENT |   |
|         |                                                                                       |  |  |  |  |  |  |  |  |

 

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**PURCHASE AND****SALE AGREEMENT**

**AND JOINT ESCROW INSTRUCTIONS**

 

THIS PURCHASEAND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “**Agreement**”)is entered into as of October 11,2004 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.                                   Selleris the owner of certain real property improved as a retail center known as PlacentiaVillage Center located in Placentia, California.

 

B.                                     Buyerdesires to purchase that property, and Seller desires to sell that property, onthe terms and conditions contained in this Agreement.

 

NOW,THEREFORE, in consideration of the mutual covenants and agreements contained inthis Agreement, Buyer and Seller agree as follows:

 

1.               PURCHASEAND SALE

 

1.1                   Agreementto Buy and Sell. Subject to all of the terms and conditions of thisAgreement, Seller hereby agrees to sell and convey to Buyer and Buyer herebyagrees to acquire and purchase from Seller the following (collectively, the “**Property**”):

 

1.1.1        All of Seller’sright, title and interest in and to that certain parcel of real propertydescribed on Exhibit “A” attached hereto, together with all of Seller’srights, privileges and easements appurtenant thereto (collectively, the “**Land**”);

 

1.1.1                        Allof Seller’s right, title and interest in and to all improvements, structures, equipmentand fixtures located on or under the Land (collectively, the “**Improvements**”) (the Land and Improvements are hereincollectively called the “**Project**”);

 

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

 

1.1.3                        Allof Seller’s interest in any leases or other agreements demising space in or providingfor the use or occupancy of any portion of the Project (collectively, the “**Leases**”); and

 

1.1.4                        Allof Seller’s right, title and interest in and to any and all service contracts, maintenanceagreements, warranties, guaranties, permits and licenses and other contractsand agreements relating to the Property, if any, which continue in full forceand 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,any insurance claims (except to the extent Section 4.5 is applicable), or anyother claims against third parties.

 

1.2                   PurchasePrice. The purchase price to be paid by Buyer to Seller for the Propertyshall be the sum of Twenty Four Million Nine Hundred Thousand Dollars($24,900,000) (the “**Purchase Price**”).

 

1.3                   Payment ofPurchase Price.   The Purchase Price shall be payable asfollows:

 

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 Five Hundred Thousand Dollars($500,000) (said sum, together with any interest earned thereon while held byEscrow Holder, is herein called the “**Deposit**”).    Escrow Holder shall deposit the Depositinto an interest-bearing account satisfactory to Buyer pending disbursement inaccordance with the terms of this Agreement. Unless Buyer terminates thisAgreement by delivery of written notice of termination (the “**Termination Notice**”) to Seller and Escrow Holder on orbefore October 27, 2004 (the “**Decision Date**”),the Deposit shall be non-refundable after the Decision Date, except in theevent of Seller’s “Default” (as defined below) that occurs or continues afterthe Decision Date and except as otherwise expressly herein provided, and shallbe applied to the Purchase Price at Closing. As used herein, Seller’s “Default”shall not be deemed to have occurred unless Seller shall be in defaulthereunder and shall not have cured such default within five (5) days afterwritten notice from Buyer.

 

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.               OPENING OFESCROW

 

2.1                   Escrow;Escrow Holder. Within two (2) business days after Seller shall haveexecuted this Agreement, Seller shall open an escrow (the “**Escrow**”)with Escrow Holder at 505 N. Brand Blvd., Ste. 800, Glendale, CA 91203, Attn:Josette Loaiza, by delivering an executed copy of this Agreement to EscrowHolder. The date the Escrow is opened pursuant to the preceding sentence is hereincalled the “**Effective Date**”. Escrow Holdershall promptly advise Buyer and Seller of the Effective Date.

 

2.2                   EscrowInstructions. The terms and conditions set forth in this Agreement shallconstitute both an agreement between Seller and Buyer and escrow instructionsfor Escrow Holder. Seller and Buyer shall promptly execute and deliver toEscrow Holder any separate or additional escrow instructions requested byEscrow Holder that are consistent with the terms of this Agreement. Any separateor additional instructions shall not modify or amend the provisions of thisAgreement unless otherwise expressly set forth by mutual consent of Buyer andSeller. As used in this Agreement, “**Closing**” shallmean the recordation (or the commitment of the Title Company to do so to the

 

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satisfaction of Buyer) of the “Deed” (as defined below) in the OfficialRecords of Orange County, California and the payment of the Purchase Price toSeller.

 

2.3                   Closing Date.Escrow shall close on or before November 1, 2004 (the “**Closing Date**”).

 

3.               ACTIONS PENDING CLOSING

 

3.1                   Buyer’sReview of Title.

 

3.1.1                        Prior toexecution of this Agreement Seller has delivered to Buyer a copy of a currentpreliminary title report or commitment for title insurance (as well as a copyof each exception referenced therein) showing the condition of title to theProperty (the “**Title Report**”), and a survey ofthe Property (the “**Survey**”).Seller shall cooperate with Buyer in connection with obtaining an update of theSurvey, but in no event shall Seller be in breach or default by reason of thecontents, or timing of delivery of the update, of the Survey.

 

3.1.2                        Buyershall have until October 25, 2004 (the “**Title Date**”)within which to deliver to Seller written notice of Buyer’s disapproval oftitle as shown on the Title Report and Survey (those title matters identifiedon the Title Report and Survey and timely disapproved in writing by Buyer arehereafter called the “**Disapproved Exceptions**”).Buyer’s failure to deliver such notice to Seller on or before the Title Dateshall constitute Buyer’s approval of the condition of title as shown on the TitleReport and Survey.

 

3.1.3                        Sellershall notify Buyer in writing within two (2) 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’sfailure to address any Disapproved Exceptions in any notice, or failure to givea notice as to any Disapproved Exceptions, shall constitute Seller’s statementthat it will not remove such Disapproved 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 3.3 onor before the Decision Date, as Buyer’s sole and exclusive remedy. Buyer’sfailure to provide such notice of termination on or before the Decision Dateshall constitute Buyer’s waiver of its disapproval of the Disapproved Exceptions.In the case of Buyer’s waiver (or deemed waiver) of Disapproved Exceptions,Seller shall have no obligation to remove or otherwise address such DisapprovedExceptions from title, and such waived Disapproved Exceptions shall be deemedapproved. If Buyer elects to terminate this Agreement pursuant to this Section3.1.4, the provisions of Section 3.3 shall apply. 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 any mortgage or judgment liens be PermittedExceptions, and in no event shall any exceptions created by Seller after theEffective Date that materially adversely affect title to the Property bePermitted Exceptions, and Seller shall cause the same to be removed at orbefore Closing. Should a supplemental Title Report be issued by the TitleCompany after the date of the original Title Report disclosing additional titleexceptions that

 

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adversely affect the condition of title to the Property, then the TitleDate shall, if applicable, be extended to the date that is three (3) businessdays after Buyer’s receipt of the supplemental Title Report, and if necessary,the Closing Date shall be automatically extended to the extent necessary toaccommodate the approval procedures of Section 3.1.3 and this Section 3.1.4.

 

3.2                   Buyer’sReview of the Property; Agreements. Seller has provided Buyer with copiesof (or make available to Buyer for review at the Project) the items reflectedon Schedule 3.1 attached hereto (collectively, the “**DueDiligence Documents**”). Notwithstanding the foregoing or any other provisionhereof to the contrary, (i) Seller’s responsibility to provide Due DiligenceDocuments shall be limited to those Due Diligence Documents in Seller’s (or itsproperty manager’s) possession (without limiting the foregoing, those itemsthat are marked “not in our possession” on Schedule 3.1 shall not be provided),(ii) Seller shall not be required to generate reports or analyses not typicallyprepared (or reflecting information not typically reflected) in Seller’s ordinarycourse of business, and (iii) the Due Diligence Documents are provided as anaccommodation to Buyer and, except for any representations and warrantiesexpressly set forth in this Agreement, Seller expressly disclaims any and allrepresentations and warranties regarding the same. On or before the DecisionDate, Buyer shall have reviewed the foregoing and prepared, obtained, reviewed(or shall have chosen not 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 andreports, and other inspections of the Property as Buyer shall deem necessary inorder to determine whether the Property is suitable for Buyer’s intended use,as well as investigated (or chosen not to have investigated) all zoningrequirements, federal, state and local laws, ordinances, rules, regulations,permits, licenses, approvals and orders applicable to the Property. Pursuant toand subject to the requirements of Section 3.5 of this Agreement, Buyer mayenter onto the Property for the purpose of conducting its inspection (the “**Inspection**”) of the Property; provided, however, withoutfirst obtaining Seller’s prior written consent, which consent will not beunreasonably withheld, Buyer shall only conduct a visual inspection, with noright to conduct any physical testing, boring, sampling or removal(collectively “**Physical Testing**”) of any portionof the Property. If Buyer wishes to conduct any Physical Testing of theProperty, Buyer shall submit a work plan to Seller prior to the Decision Datefor Seller’s prior written approval, which work plan Seller may modify, limitor disapprove in its reasonable discretion. If, on the basis of the review andthe Inspection described in this Section 3.2, or if for any other reason or noreason, Buyer determines that the Property is not suitable for Buyer’s intendeduse, then Buyer may terminate this Agreement by delivering the TerminationNotice to Seller and Escrow Holder on or before the Decision Date. Buyer’sfailure to deliver the Termination Notice to Seller and Escrow Holder on orbefore the Decision Date shall constitute Buyer’s approval of theaforementioned items and of the condition of the Property.

 

3.3                   Buyer’sTermination. If Buyer elects to terminate this Agreement in accordance withSections 3.1.4 or 3.2, Buyer shall deliver the Termination Notice to Seller andEscrow Holder on or before the Decision Date. If Buyer elects to terminate thisAgreement in accordance with Sections 4.4 or 4.5, then on or before the datesspecified therein, Buyer shall deliver a Termination Notice to Seller andEscrow Holder that Buyer elects to terminate this Agreement pursuant to saidSections. Buyer’s failure to timely deliver such termination notice pursuant tosaid Sections of this Agreement shall constitute Buyer’s waiver of Buyer’sright to terminate this Agreement pursuant to said Sections. If Buyer timelyelects to terminate this Agreement pursuant to Sections 3.1.4, 3.2, 4.1.7,

 

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4.3, 4.4, 4.5 or 4.7, Escrow Holder shall deliver the Deposit to Buyer,less fifty percent (50%) of any Escrow termination fee, and Escrow Holder shallreturn to the depositor thereof any other materials previously placed in Escrowand remaining in Escrow; and neither party shall thereafter have any furtherrights or obligations under this Agreement unless expressly provided otherwiseherein.

 

3.4                   NoProcessing. Without Seller’s prior written consent, until the Closing,Buyer shall not make any application to any governmental agency for any permit,approval, license or other entitlement for the Property or the use ordevelopment thereof.

 

3.5                   Access toProperty.

 

3.5.1                        Subject tothe 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 be at the sole cost and expense of Buyer.The license created under this Section 3.5.1 shall expire on termination ofthis Agreement. At least forty-eight (48) hours prior to any entry andInspection, Buyer shall provide Seller with sufficient evidence to show thatBuyer and Buyer’s Agents, who are to enter upon the Property, are adequatelycovered by policies of insurance issued by a carrier reasonably acceptable toSeller insuring Buyer and Seller against any and all liability arising out ofBuyer’s or Buyer’s Agents’ entry upon and Inspection of the Property, includingwithout limitation any loss or damage to the Property, with coverage in theamount of not less than $1,000,000 per occurrence.

 

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. Ifany such lien shall at any time be filed, Buyer shall cause the same to bedischarged of record within twenty (20) days thereafter by satisfying the sameor, if Buyer in its discretion and in good faith determines that such lienshould be contested, by recording a bond. Failure by Buyer to discharge suchlien shall be a material breach of this Agreement and Seller may terminate thisAgreement by 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                        Buyer hereby agrees to holdharmless, protect, defend and indemnify, and hereby releases, Seller and itstrustees, officers, directors, employees, contractors, agents, subsidiaries andaffiliates, and its and their respective successors and assigns (collectively,the “**Indemnitees**”) and the Property from andagainst any and all claims, demands, causes of action, losses, liabilities,liens, encumbrances, costs or expenses (including without limitation reasonableattorneys’ fees and litigation costs) arising out of, connected with orincidental to: (a) any injuries to persons (including death) or property (realor personal), or (b) any mechanics’, workers’ or other liens on the Property, byreason of or relating to the work or activities conducted on the Property byBuyer or Buyer’s

 

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Agents. The provisions of this Section 3.5.4 shall survive anytermination of this Agreement and shall not be limited in any way by any otherterms of this Agreement.

 

3.5.5                        Inno event shall Buyer or Buyer’s Agents have the right to place any materials orequipment on the Property (including, without limitation, signs or otheradvertising 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’sRepresentations and Warranties. Seller hereby represents, warrants andcovenants to and agrees with Buyer as follows:

 

4.1.1                        Seller hasthe legal right, power and authority to own the Property and to enter into andconsummate the transactions contemplated by this Agreement, and this Agreementand all instruments, documents and agreements to be executed by Seller inconnection herewith are, or when delivered shall be, duly authorized, executedand delivered by Seller and are, or when delivered shall be, valid, binding andenforceable obligations of Seller.

 

4.1.2                        There areno 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                        To Seller’sknowledge and except as may be disclosed in the Due Diligence Documents, Sellerhas received no written notice from any government authority of any violationof any statute, ordinance, code or regulation with respect to the Project,which violation has not been corrected.

 

4.1.4                        To Seller’sknowledge and except as may be disclosed in the Due Diligence Documents, Sellerhas received no written notice that the Project is in violation of any federal,state and local laws, ordinances and regulations applicable to the Project withrespect to “Hazardous Materials” (as defined below), nor to Seller’s knowledgehave any Hazardous Materials been or are currently being produced, disposed of,used or stored on or under the Property in violation of applicable law.

 

4.1.5                        Seller isnot 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.To Seller’s knowledge all of the Leases and Contracts are in full force andeffect and there are no defaults by any party thereto under the Leases andContracts. To Seller’s knowledge, except as may be set forth on the rent roll

 

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that is a part of the Due Diligence items, Seller has received nonotice of a current default by the landlord or tenant under any Leases ineffect on the Effective Date or of any tenant’s intention to vacate itspremises or discontinue its operations at the Property. Upon the Closing Date,there will be no unpaid leasing commissions or tenant improvement costs withrespect to any of the Leases (except to the extent such tenant improvementcosts may arise in the future pursuant to a Lease if, for example, a tenantwere to renew its Lease and thereby be entitled to tenant improvements).

 

4.1.7                        Asused herein, “**to Seller’s knowledge**” and phrasesof similar 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 the operational/assetdisposition responsibility for the Project. It is expressly agreed andunderstood that in no event shall Buyer be entitled to bring any action(s) fordamages or otherwise against such individuals. In the event Seller or Buyershould become aware of any facts or circumstances prior to the Closing Datethat should render any of Seller’s representations and warranties that arelimited to Seller’s knowledge no longer accurate, the party first becoming soaware shall promptly notify the other party in writing, and Buyer shall havethe right, as its sole and exclusive remedy, to terminate this Agreement bywritten notice to Seller and Escrow Holder delivered within seven (7) daysafter receipt of Seller’s notice or first becoming aware of such facts, in whichcase this Agreement shall terminate in accordance with Section 3.3. ThisSection 4.1.7 shall supersede any inconsistent provision of this Agreement.

 

4.2                   Buyer’sRepresentations and Warranties.   Buyer hereby represents, warrants and covenants to and agrees withSeller as follows:

 

4.2.1                        Buyer’sInvestigation and. Release. (a) Buyer acknowledges that, except asexplicitly set forth herein, there are no representations or warranties of anykind whatsoever, 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 THEPROPERTY IN ITS “AS IS” CONDITION AS OF THE DATE OF CLOSING.** Withoutlimiting the foregoing, Buyer acknowledges that Buyer has accepted fullresponsibility for assuring the Property complies at Closing with allapplicable laws, rules, regulations, orders and ordinances, and in the eventany such laws, rules, regulations, orders or

 

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ordinances impose any pre-Closing obligations upon Seller, Seller shallhave the right to (i) perform the same at Buyer’s expense and the cost thereofshall be added to the Purchase Price at Closing, if Seller is obligated by lawto perform the same prior to Closing, and/or (ii) require Buyer to execute anddeliver at Closing any documentation requested by Seller or required bygovernmental authorities confirming Buyer has accepted such responsibility andindemnifying 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, documents and agreements to be executed byBuyer in connection herewith are or when delivered shall be duly authorized,executed and delivered by Buyer and are valid, binding and enforceable obligationsof Buyer. Each individual executing this Agreement on behalf of Buyerrepresents and warrants to Seller that he or she is duly authorized 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 and shall bea condition of Buyer’s obligation to Close this transaction (except if Buyershall have received written notice from Seller pursuant to Section 4.1.7 of anyfacts or circumstances prior to the Closing Date that should render any ofSeller’s representations and warranties that are limited to Seller’s knowledgeno longer accurate, or if Buyer itself shall have become aware of any facts orcircumstances prior to the Closing Date that should render any of Seller’srepresentations and warranties that are limited to Seller’s knowledge no longeraccurate, the foregoing condition to Closing shall be deemed waived after theexpiration of the seven-day period referenced in Section 4.1.7).   Subject to Section 4.1.7, the Closing shallconstitute each party’s reaffirmation of those representations and warrantiesas of the Closing, and each party shall execute and deliver at Closing adocument (a “**Reaffirmation Certificate**”)reaffirming such representations and warranties, which shall survive theClosing.

 

4.4                   Condemnation.If, prior to Closing, any portion of the Property shall be condemned or becomethe subject of any pending or threatened condemnation action, Seller shallpromptly 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. Anycondemnation awards received by Seller on or after Closing shall be promptlydelivered by Seller to Buyer. Notwithstanding the foregoing, in the event suchcondemnation involves 5% or more of the Land or the Improvements or affects anyof the existing access points to the Property or permits a tenant to terminateits Lease or abate or reduce its rent, Buyer shall be entitled to terminate thisAgreement by written notice thereof to Seller given within five (5) businessdays after Buyer shall have been notified of such condemnation, whereupon theDeposit (to the extent previously delivered to Escrow Holder) shall be returnedto Buyer. Buyer’s failure to timely deliver such notice to Seller within suchfive (5) business day period shall constitute Buyer’s election to proceed to Closing.

 

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4.5                   Damageor Destruction. In the event of any damage to or destruction of theProperty prior to the Closing, Seller shall promptly notify Buyer thereof andthe Closing shall nevertheless occur as otherwise provided for in thisAgreement, except Seller shall assign to Buyer upon the Closing all insuranceproceeds paid or payable to Seller in connection with such occurrences. Sellershall have no obligation to repair such damage or destruction. Notwithstandingthe foregoing, if such damage or destruction to the Property shall cost morethan $100,000 to repair, or permits a tenant to terminate its Lease or abate orreduce its rent, then Seller shall promptly so notify Buyer and within five (5)business days after receipt of such notice, Buyer shall deliver written noticeto Seller and Escrow Holder, electing either: (a) to proceed with thistransaction and Closing in accordance with this Agreement notwithstanding suchdamage or destruction; or (b) to terminate this Agreement in accordance withthe terms of Section 3.3. Buyer’s failure to deliver either of such notices toSeller and Escrow Holder within such five (5) business day period shallconstitute Buyer’s election to proceed to Closing under clause (a), in whichevent Seller shall assign to Buyer upon the Closing all insurance proceeds paidor payable to Seller in connection with such occurrences and credit Buyer withall deductibles or self-insured amounts applicable to such occurrences.

 

4.6                   TenantLease Amendments; Management of Property. Seller agrees to promptly provideBuyer with a copy of all proposed amendments to existing Leases, and allproposed new Leases, of any portion of the Property proposed to be executedafter the Effective Date and before the date (the “**Stop Date**”)that is seven (7) days prior to the Decision Date for Buyer’s review, but in noevent shall Buyer have any right to approve the same, and Buyer’s failure toterminate this Agreement on or before the Decision Date shall constitute Buyer’sdeemed approval of all such Lease amendments and new Leases. From and after theStop Date, Seller shall not execute any amendments to any existing Leases, orany new Leases, without Buyer’s prior written consent. Upon the Closing, Buyershall reimburse 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 any leasing commissions payable with respect toany Leases that are renewed or extended before 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 areasonable period of time thereafter, Seller agrees to reasonably cooperatewith Buyer and Buyer’s accountants to facilitate Buyer’s evaluations andrequired reports, including at least a one-year audit of the books and recordsof the Property, which audit shall conclude with the execution by Seller of aletter in the form attached hereto as Schedule 4.6 (Seller confirms that therepresentations in such letter are, to Seller’s knowledge, correct as of thedate of execution of this Agreement, but Seller reserves the right to revisesuch letter to reflect the state of Seller’s knowledge at the time Seller isrequested to execute such letter).

 

4.7                   EstoppelCertificates. Seller agrees to promptly exert good faith efforts to obtainestoppel 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. Sellershall not be in default hereunder by reason of the unavailability, or contents,of any Estoppel or SNDA (but Seller shall act

 

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in good faith with respect to any defaults of Seller alleged by anyTenant in 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 three (3) business days prior to Closing Seller shall be unable toobtain Estoppels approved by Buyer executed by (i) Office Max, Bank of America,Marie Callender’s, Ross Dress for Less and Silk Pavillion (collectively, the “**Majors**”), plus (ii) other tenants (the “**Minors**”)which, in the aggregate, occupy at least seventy five percent (75%) of theremaining leased space at the Property not counting the space leased by theMajors, plus, if applicable, any owner’s association or similar authority underany active, recorded covenants, conditions and restrictions affecting theProperty (a “**CC&R Estoppel**”). Buyer shallbe deemed to have approved each Estoppel delivered to it by Seller unless Buyershall have delivered written notice to Seller objecting to such Estoppel withinfour (4) days after Seller’s delivery of such Estoppel to Buyer. Buyer shallhave no right to object to, and shall be deemed to have approved, any Estoppelexecuted on a form set forth in, or stipulated by, the applicable lease thatdoes not reflect a default by landlord or tenant and that does not contain anyinformation materially inconsistent with the information set forth in theapplicable lease to which it pertains. 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 Buyer at Closing a “Seller Estoppel”with respect to those Majors and Minors and any CC&R Estoppel as to whichSeller has been unable to obtain an executed Estoppel (or CC&R Estoppel),but each Seller Estoppel shall be limited “to Seller’s knowledge” (as definedin Section 4.1.7). Buyer shall further have the right to terminate thisAgreement and to obtain a return of its Deposit if any Tenant shall, on theClosing Date, be delinquent, beyond any applicable grace period set forth inits Lease, in paying its monthly rent due under its Lease.

 

4.8                   HazardousMaterial Waiver. Buyer, on behalf of itself, its successors and assigns,hereby releases Indemnitees from and against any and all liabilities, claims,demands, suits, judgments, causes of action (including, but not limited to,causes of action arising under the Comprehensive Environmental Response Compensationand Liability Act of 1980, 42 U.S.C. §§ 9601 et. seq.), losses,costs, damages, injuries, penalties, enforcement actions, fines, taxes,remedial actions, removal and disposal costs, investigation and remediationcosts and expenses (including, without limit, attorneys’ fees, litigation,arbitration and administrative proceeding costs, expert and consultant fees andlaboratory costs), sums**paid insettlement of claims, whether direct or indirect, known or unknown, arising outof, related in any way to, or resulting from or in connection with, in whole orin part, the presence or suspected presence of Hazardous Materials (definedbelow) in, on, under, or about the Property.

 

“**Hazardous Material(s)**” means anychemical, substance, material, controlled substance, object, condition, wasteliving organisms or combination thereof which is or may be hazardous to humanhealth or safety or to 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.

 

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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 shallbe 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. TheAssignment and Assumption Agreement shall be in the form of Exhibit “C”attached hereto (at or before Closing, Seller shall terminate all Contracts asto which Buyer shall have directed Seller in writing to terminate);

 

(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); and

 

(f)                                    Seller’sReaffirmation Certificate (subject to Section 4.1.7), and any certificates ofoccupancy and zoning letters with respect to the Property in Seller’spossession not previously delivered to Buyer (Seller has no obligation toobtain any such certificates of occupancy or zoning letters).

 

5.1.2                        On or before 10:00 a.m. Pacifictime or the Closing 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

 

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(d)                                 theTenant 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 and closingstatements.

 

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 shall not receive a credit for any Rent Sellerhas not received as of (the Closing that is allocable to the period prior tothe Closing. If Buyer shall collect any such Rent (including without limitationpercentage rent) after the Closing allocable to the period prior to theClosing, Buyer shall promptly pay the same to Seller, after application of thesame to any rent due from 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. Ifprorations are not made on the basis of the current tax year or if supplementaltaxes are assessed after the Closing for the period prior to the Closing, theparties shall make any necessary adjustment after Closing by cash payment upondemand to the party entitled thereto so that Seller shall have borne all taxesallocable to the period prior to the Closing (including all supplemental taxeswhich are allocable to the period prior to Closing) and Buyer shall bear alltaxes allocable to the period after the Closing (including all supplementaltaxes which are allocable to the period after 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 not then due and payable (collectively, the “**Operating****Expenses**”), shall not be prorated, except as hereinprovided. Buyer shall receive and retain any Operating Expenses paid by Tenantson or after the Closing Date and Seller shall receive and retain any OperatingExpenses paid by Tenants prior to the Closing Date; provided, however, that anymonthly or periodic deposits or payments of estimated Operating Expenses withrespect to the month in which the Closing occurs received by Seller prior tothe Closing Date or by Buyer on or after the Closing Date shall be prorated asof the Closing Date. Buyer and Seller shall prorate at Closing, actualOperating Expenses collected by Seller from Tenants prior to Closing withactual Operating Expenses paid by Seller with respect to such period, so thatif there are any rebates owing to Tenants for the period of Seller’s ownership,Seller shall pay Buyer the amount of such rebates at Closing, and if theTenants owe the landlord any additional amounts for Operating Expenses withrespect to the period of Seller’s ownership,

 

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Buyer shall promptly pay Seller the amount so owed to the landlord uponBuyer’s receipt of the same (and Buyer shall exert diligent good faith effortsto collect the same but shall not required to terminate any Lease or evict anyTenant in connection therewith). 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 Orange 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 Orange County, California.

 

5.3.2                        ClosingCosts Borne by Buyer. Buyer shall deposit with Escrow Holder for disbursementby Escrow Holder (a) one-half of Escrow Holder’s fee, (b) all costs andexpenses of the Owner’s Policy not borne by Seller, (c) the recording fees anddocumentary transfer fees not borne by Seller required in connection with thetransfer of the Property to Buyer, and (d) any additional charges payable inaccordance with common escrow practices in Orange 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:

 

(a)                                  Causethe Deed to be recorded and thereafter mailed to Buyer, and deliver the Owner’sPolicy, Bill of Sale, Assignment and Assumption Agreement (executed by Seller)and Non-Foreign Affidavit and Certificate (and any additional documentsdelivered pursuant to Section 5.1.1) to 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.

 

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5.5                   Failureto Close; Cancellation. If Escrow Holder is not in a position to Close theEscrow on the Closing Date, then this Agreement shall terminate (and if Buyeris in default the Deposit shall be paid to Seller), except that no suchtermination shall relieve either party of liability for any failure to complywith the terms of this Agreement.

 

5.6**                   LIQUIDATEDDAMAGES. BUYER AND SELLER AGREE THAT IN THE****EVENT OF A MATERIAL DEFAULT OR BREACH HEREUNDER BYBUYER (INCLUDING, WITHOUT LIMITATION, ANY DEFAULT OR BREACH BY BUYER WHICHRESULTS IN THE FAILURE OF ESCROW TO CLOSE), THE DAMAGES TO SELLER WOULD BEEXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN, AND THAT THEREFORE THEDEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES TO SELLER, SUCH DAMAGESINCLUDING COSTS OF NEGOTIATING AND DRAFTING OF THIS AGREEMENT, COSTS OFCOOPERATING IN SATISFYING CONDITIONS TO CLOSING, COSTS OF SEEKING ANOTHER BUYERUPON BUYER’S DEFAULT, OPPORTUNITY COSTS IN, AND CARRYING COST ASSOCIATED WITH,KEEPING THE PROPERTY OUT OF THE MARKETPLACE, AND OTHER COSTS INCURRED INCONNECTION HEREWITH. ACCORDINGLY, BUYER AND SELLER AGREE THAT, EXCEPT FOR ANYDAMAGES, COSTS AND EXPENSES INCURREDIN CONNECTION WITH OR RESULTING FROM BUYER’S DEFAULT, OR BREACH OF ITSINDEMNITY OBLIGATIONS UNDER SECTIONS 3.5 AND 6.16 (WHICH DAMAGES, COSTS AND EXPENSES SHALL SURVIVE ANY CLOSING OR TERMINATION OF THIS AGREEMENT AND ARE NOTLIMITED BY THIS SECTION 5.6), RECEIPT AND RETENTION OF THE DEPOSIT SHALL BE THESOLE DAMAGES OF SELLER IN THE EVENTOF ANY BREACH OR DEFAULT BY BUYER HEREUNDER.**

 
|   | /s/ P.D.[ILLEGIBLE]    |   | /s/ [ILLEGIBLE]       |   |
|--------|------------------------|--------|-----------------------|--------|
|   | Seller’s Initials |   | Buyer’s Initials |

 

5.7                   Seller’sBreach. In the event of a material breach by Seller hereunder, Buyer’s remediesshall be limited to (i) termination of this Agreement and the return to it ofthe Deposit, or (ii) specific performance of this Agreement, except that afterClosing Seller shall remain liable for damages caused by Seller’s intentionalwrongful actions in breach of this Agreement and for any damages for any breachof Seller’s representations and warranties that Buyer does not discover priorto Closing (in order for Buyer to recover any damages for any such breach,Buyer shall be required to allege and prove that at least one of theindividuals referenced in Section 4.1.7 had actual conscious knowledge of thefalsity of such representation and warranty when made, and Buyer shall berequired to file a lawsuit against Seller with respect thereto not later thannine (9) months after the Closing Date). Except as expressly set forth in thepreceding sentence, Buyer expressly waives and releases any right to sue Sellerfor damages.

 

5.8                   Possession.Subject to the Permitted Exceptions and the rights of the Tenants, possessionof the Property shall be delivered to Buyer upon Closing.

 

6.               GENERALPROVISIONS

 

6.1                   Counterparts.This Agreement may be executed in counterparts, each of which shall

 

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be deemed an original, but all of which, taken together, shallconstitute one and the same instrument.

 

6.2                   EntireAgreement. This Agreement contains the entire integrated agreement betweenthe parties respecting the subject matter of this Agreement and supersedes allprior and contemporaneous understandings and agreements, whether oral or inwriting, between the parties respecting the subject matter of this Agreement.

 

6.3                   Legal Advice;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 thisAgreement shall be construed as to their fair meaning, and not for or againstany party based upon any attribution to such party as the source of thelanguage in question. Headings used in this Agreement are for convenience ofreference only and shall not be used in construing this Agreement.

 

6.4                   Choice ofLaw. This Agreement shall be governed by the laws of the State ofCalifornia.

 

6.5                   Severability.If any term, covenant, condition or provision of this Agreement, or the applicationthereof to any person or circumstance, shall to any extent be held by a courtof competent jurisdiction to be invalid, void or unenforceable, the remainderof the terms, covenants, conditions or provisions of this Agreement, or theapplication thereof to any person or circumstance, shall remain in full forceand effect and shall in no way be affected, impaired or invalidated thereby.

 

6.6                   Waiver ofCovenants, Conditions or Remedies. The waiver by one party of theperformance of any covenant, condition or promise under this Agreement shallnot invalidate this Agreement nor shall it be considered a waiver by it of anyother covenant, condition or promise under this Agreement. The waiver by eitheror both parties of the time for performing any act under this Agreement shallnot constitute a waiver of the time for performing any other act or anidentical act required to be performed at a later time. The exercise of anyremedy provided in this Agreement shall not be a waiver of any consistentremedy provided by law, and the provision in this Agreement for any remedyshall not exclude other consistent remedies unless they are expressly excluded.

 

6.7                   Exhibits.   Allexhibits to which reference is made in this Agreement are deemed incorporatedin this Agreement.

 

6.8                   Amendment.This Agreement may be amended at any time by the written agreement of Buyer andSeller. All amendments, changes, revisions and discharges of this Agreement, inwhole or in part, and from lime to time, shall be binding upon the partiesdespite any lack of legal consideration, so long as the same shall be inwriting and executed by the parties hereto.

 

6.9                   Relationshipof Parties. The parties agree that their relationship is that of seller andbuyer, and that nothing contained herein shall constitute either party theagent or legal representative of the other for any purpose whatsoever, norshall this Agreement be deemed to create any form of business organizationbetween the parties hereto, nor is either party granted any right or authorityto assume or create any obligation or responsibility on behalf of the otherparty, nor shall either party be in any way liable for any debt of the other.

 

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6.10             No Third PartyBenefit.   This Agreement is intended to benefit only theparties hereto and no other person or entity has or shall acquire any rightsbereunder.

 

6.11             Time of theEssence.   Time shall be of the essence as to all datesand times of performance, whether contained herein or contained in any escrowinstructions to be executed pursuant to this Agreement, and all escrowinstructions 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, Buyer shall be entitled to assign Buyer’s rightsand delegate its obligations hereunder to a third party controlled by Buyer,but no such assignment shall release Buyer of any liability hereunder. Eachparty agrees to cooperate with the other party in competing an exchangequalifying for nonrecognition of gain under Internal Revenue Code §1031 and theapplicable provisions of the California Revenue and Taxation Code (“**Exchange**”), and each party reserves the right to convertthis transaction to an Exchange at any time 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 the transaction contemplated hereby shouldbe effected as an Exchange through a third party as a qualified IRC §1031intermediary, all obligations, representation, warranties and indemnities madeby Buyer shall run to Seller, and all obligations, representations, warrantiesand indemnities made by Seller shall ran to Buyer, despite the fact that anintermediary or other third party facilitating a party’s tax-deferred exchangewas substituted hereunder for that party. 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 litigation involving the parties to thisAgreement to enforce any provision of this Agreement, to enforce any remedyavailable upon default under this Agreement, or seeking a declaration of therights of cither party under this Agreement, the prevailing party shall beentitled to recover from the other such attorneys’ fees and costs as may bereasonably incurred, including the costs of reasonable investigation,preparation and professional or expert consultation incurred by reason of suchlitigation. All other attorneys’ fees and costs relating to this Agreement andthe transactions contemplated hereby shall be borne by the party incurring thesame.

 

6.16             Brokers.Pursuant to separate agreement, Seller shall pay Marcus & Millichap (“**Seller’s Broker**”), a brokerage commission for its servicesas broker in this transaction if, as and when the Closing occurs. Buyer andSeller each represent and warrant to the other that, except as stated in thepreceding sentence (a) they have not dealt with any brokers or finders inconnection

 

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with the purchase and saleof the Property, and (b) insofar as such party knows, no broker or other personis entitled to any commission or finder’s fee in connection with the purchaseand sale of the Property. Seller and Buyer each agree to indemnify and holdharmless the other against any loss, liability, damage, cost, claim or expenseincurred by reason of any brokerage fee, commission or finder’s fee which ispayable or alleged to be payable to any broker or finder because of anyagreement, act, omission or statement of the indemnifying party. The provisionsof this Section 6.16 shall not be limited in any way by any terms of thisAgreement.

 

6.17             Manner of Giving Notice. All notices and demands which either partyis required or desires to give to the other shall be given in writing bypersonal delivery, express courier service or by telecopy followed by next daydelivery of a hard copy to the address or telecopy number set forth below forthe respective party, provided that if any party gives notice of a change ofname, address or telecopy number, notices to that party shall thereafter begiven 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.: Steven Sanders                  | 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 Grccnman                       |
|                                   | 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 this Agreement shall survive the Closingand the consummation of the transactions contemplated by this Agreement or the terminationof this Agreement for any reason without the conveyance of the Property toBuyer.

 

SIGNATURES ON NEXT PAGE

 

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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 limited                               |
|---------|----------------------------------------------------------------------------------------|
|    | Partnership                                                                            |
|    |                                                                                   |
|    | By: Donahue  Schriber Realty Group, Inc., a Maryland  corporation, its general partner |
|    |                                                                                   |
|    | By:                                                                                    | /s/ [ILLEGIBLE] |
|    |                                                                                   |
|    | Name:                                                                                  | [ILLEGIBLE] |
|    |                                                                                   |
|    | 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/ G. Joseph Cosenza |
|    |                                                                                   |
|    | Name:                                                                                  | G. JOSEPH COSENZA |
|    |                                                                                   |
|    | Title:                                                                                 | 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 Agreement.

 
|   | STEWART  TITLE INSURANCE COMPANY |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             |
|   | Name:                            |   |   |
|   |                             |
|   | Title:                           |   |   |
|        |                                  |  |  |  |  |

 

18

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