Exhibit 10.472


 


AGREEMENT TO ADMIT PARTNER


 


 


Dated as of November 5, 2004


 


Between


 


C&S Southlake Capital Partners I, L.P.,


a Texas limited partnership,


the Partnership


 


Cooper & Stebbins, L.P., a Texas limited partnership,

CS Southlake, LLC, a Texas limited liability company,

collectively, the Existing Partners


 


and


 


Inland Real Estate Acquisitions, Inc.
an Illinois corporation,

as Admitting
Partner


 


 


With Respect to


 


 


a portion of

Southlake Town Square


 





















 


AGREEMENT
TO ADMIT PARTNER


 


This Agreement
To Admit Partner (“Agreement”) is made and entered into as of this 5th
day of November, 2004 (the “Effective Date”), by and between
INLAND REAL ESTATE ACQUISITIONS, INC., an Illinois corporation or its designee
or designees (“Admitting Partner”, or “Inland”), and COOPER &
STEBBINS, L.P., a Texas limited partnership (“C&S”), CS SOUTHLAKE,
LLC, a Texas limited liability company (“CS LLC”) (C&S and CSLLC are
collectively referred to herein as the “Existing Partners”), and C&S
SOUTHLAKE CAPITAL PARTNERS I, L.P., a Texas limited partnership (“Capital I”).


 


Introductory Provisions:


 


The following
provisions form the basis for and are a part of this Agreement:


 


A.            Capital
I will own certain real property described on Exhibit A (the “Property”)
on the Closing Date.


 


B.            C&S
and CSLLC are, or will be immediately prior to Closing, the sole partners in
Capital I.


 


C.            Capital
I and the Existing Partners desire to admit Inland as a partner of Capital I
and Inland desires to become a partner in Capital I on the terms and subject to
the conditions and other provisions set forth in this Agreement.


 


NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:


 


ARTICLE I

DEFINITIONS


 


The
capitalized terms used herein will have the following meanings.


 


“Accrued
Expenses” shall have the meaning set forth in Section 2.7 hereof.


 


“Admitting
Partner” shall have the meaning ascribed to it in the opening paragraph.


 


“Affiliate”
shall mean any Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with the
Person.


 


“Agreement”
shall mean this Agreement To Admit Partner, together with the exhibits attached hereto and the
Disclosure Schedule.


 


“Amended
and Restated Real Property Contract” shall have the meaning set forth in Section
2.6(b)(vi) hereof.


 


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“Amended
and Restated Partnership Agreement” shall mean the amended and restated
partnership agreement for Capital I substantially in the form attached herein
as Exhibit B, which will be entered into at Closing as provided herein.


 


“Approved
Title Matters” shall have the meaning set forth in Section 6.2(a)
hereof.


 


“Beneficial
Interests” shall mean one hundred percent (100%) of the general and limited
partnership interests in Capital I.


 


“Capital I”
shall have the meaning ascribed to it in the opening paragraph.


 


“Capital I Financial Statements” shall
have the meaning set forth in Section 3.1(h) hereof.


 


“Capital I’s
Knowledge” and “Existing Partners’ Knowledge” shall mean the current
actual knowledge of Brian R. Stebbins, Frank L. Bliss, Dave Laddusaw and
Patricia S. Pickard without any duty of inquiry or investigation.


 


“Capital I’s
Notice” shall have the meaning set forth in Section 6.2(b) hereof.


 


“Capital I
Property” shall mean the Capital I Real Property and the Capital I Personal
Property.


 


“Capital I
Personal Property” shall mean all fixtures, equipment, machinery,
furniture, carpet, drapes and other personal property, if any, owned by Capital
I, located on and used in connection with the Capital I Real Property, but
specifically excluding any items of personal property owned or leased by
Capital I’s property manager or tenants at the Capital I Real Property and
further excluding any items of personal property owned by third parties and
leased to Capital I.  All intangible
property, if any, owned by Capital I and pertaining to the Capital I Real
Property including, without limitation, transferable utility contracts,
transferable telephone exchange numbers, plans and specifications, engineering
plans and studies, floor plans, landscape plans, logos, designs, trade names,
trademarks, servicemarks, copyrights and other intellectual property, and
specifically the non-exclusive use of the names “Southlake Town Square” and “Town
Square” and any other name or names by which the Property is commonly known
(collectively, the “Town Square Trademarks”), provided that the grant of the
right to use the Town Square Trademarks shall be limited to purposes associated
with the Property.  The term “Capital I
Personal Property” as used hereunder does not, however, include the Excluded
Rights.


 


“Capital I
Real Property” shall mean (a) that certain real property legally described
on Exhibit A attached hereto, consisting of approximately 0.76 acres of
land, and approximately 67,937 square feet of net rentable square feet, and
located at 1400 Civic Place, Southlake, Texas and commonly known as “Building
3C” together with all of the following, if any: rights, privileges,
hereditaments, appurtenances, and easements related thereto, including all
rights, rights-of-way, roadways, roadbeds, reversions, strips, gores, and any
interests in any alleys, streets, or roads abutting or adjacent thereto,
together with all rights of Capital I in and to any other land or out parcels
contiguous to or adjoining such real property, (b) all improvements located
upon the Capital I Real Property, but expressly excluding any improvements
owned by any tenant or other third party, (c) all right, title and interest of
Capital I, if any, in and to all


 


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shrubs, trees, plants and other
landscaping located upon the Capital I Real Property, and (d) all right, title
and interest of Capital I, if any, in and to all casements, rights of way, and
other rights appurtenant to the Capital I Real Property.  The term “Capital I Real Property” as used
hereunder does not, however, include the Excluded Rights.


 


“Closing”
shall mean the closing of the transaction contemplated by this Agreement as
provided in Section 2.6 hereof.


 


“Closing Date” shall
mean the same date as the “Closing Date” under the Real Estate Contract,
subject to any extension of the Closing Date as provided for thereunder.


 


“Code” shall mean the
Internal Revenue Code of 1986, as amended.


 


“Contract” shall mean
any written agreement, license, sublicense, promissory note, evidence of
indebtedness, guaranty (directly or indirectly) of indebtedness, guarantees and
warranties, all construction, architectural, maintenance, operating and service
contracts, all equipment leases, or other contract or commitment relating to
the ownership, maintenance and/or operation of the Capital I Property.


 


“Contributed Capital”
shall have the meaning set forth in Section 2.3 hereof.


 


“C&S” shall have
the meaning ascribed to it in the opening paragraph.


 


“CSLLC” shall have
the meaning ascribed to it in the opening paragraph.


 


“Disclosure Schedule”
shall mean the disclosure schedule dated the date hereof furnished by Capital I
to Inland and containing all lists, descriptions exceptions, and other
information and materials as are required to be included therein pursuant to
this Agreement.


 


“Due Diligence
Termination Notice” shall have the meaning set forth in Section 2.5 (c)
hereof.


 


“Earnest Money” shall
have the meaning set forth in Section 2.4 (a)  hereof.


 


“Environmental Laws”
shall mean without limitation (a) the Resource Conservation and Recovery Act,
as amended by the Hazardous and Solid Waste Amendments of 1984, as now or
hereafter amended (“RCRA”) (42 U.S.C. § 6901 et  seq.), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, as now
or hereafter amended (“CERCLA”) (42 U.S.C. § 9601 et  seq.),
the Clean Water Act, as now or hereafter amended (“CWA”) (33 U.S.C. §
1251 et seq.), the Toxic Substances Control Act, as now or hereafter amended (“TSCA”)
(15 U.S.C. § 2601 et  seq.), the Clean Air Act, as now or
hereafter amended (“CAA”) (42 U.S.C. § 7401 et seq.), all regulations
promulgated under any of the foregoing, any local, state or foreign law,
statute, regulation or ordinance analogous to any of the foregoing, and any
other federal, slate, local, or foreign law (including any common law),
statute, regulation, or ordinance regulating, prohibiting, or otherwise
restricting the placement, discharge, release, threatened release, generation,
treatment, or disposal upon or into any environmental media of any Hazardous
Materials.


 


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“Excluded
Rights” shall mean any and all of interests of Capital I in and to
Brownstones at Town Square, L.P., or any property owned by such limited
partnership.


 


“Existing
Partners” shall mean, collectively, C&S and CSLLC.


 


“Governmental
Authority” shall mean any and all applicable courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city,
departmental or otherwise) whether now or hereafter in existence.


 


“Hazardous
Materials” shall mean any substance, product matter, material, waste,
solid, liquid, gas, or pollutant, the generation, storage, disposal, handling,
recycling, release (or threatened release), treatment, discharge, or emission
of which is regulated, prohibited, or limited under any Environmental Law and
shall also include, without limitation, (a) gasoline, diesel fuel, fuel oil,
motor oil, waste oil, and any other petroleum hydrocarbons, including any
additives or other by-products associated therewith, (b) asbestos and
asbestos-containing materials in any form, (c) polychlorinated biphenyls, (d)
any substance the presence of which on the Capital I Property (i) requires
reporting or remediation under any Environmental Law; (ii) causes or threatens
to cause a nuisance on the Capital I Property or poses or threatens to pose a
hazard to the health or safety of persons on the Capital I Property; or (iii)
which, if it emanated or migrated from the Capital I Property, could constitute
a trespass, nuisance or health or safety hazard to persons on adjacent
property, (e) radon, (f) urea formaldehyde foam insulation, and (g) underground
storage tanks, whether empty, filled or partially filled with any substance.


 


“Inland”
shall have the meaning ascribed to it in the opening paragraph.


 


“Inland
Title Objections” shall have the meaning set forth in Section 6.2(a)
hereof.


 


“Inspection
Period” shall have the meaning set forth in Section 2.5(c) hereof.


 


“IRS”
shall mean the United States Internal Revenue Service.


 


“Law”
shall mean all laws, statutes, ordinances, rules, decrees and regulations of
the United States of America or any state, commonwealth, city, county,
municipality or department thereof, including without limitation the Americans
with Disabilities Act.


 


“Leases”
shall mean all leases, subleases, licenses or other agreements for the use or
occupancy of all or any part of Capital I Real Property.


 


“Lien”
shall mean any mortgage, pledge, assessment, security interest, Lease, lien,
adverse claim, levy, charge, or other encumbrance of any kind, or any
conditional sale contract, title retention contract, or other contract to give
or to refrain from giving any of the foregoing other than Permitted Exceptions.


 


“Management
Agreement” shall have the meaning set forth in Section 2.11 hereof.


 


“Manager”
shall have the meaning set forth in Section 2.11 hereof.


 


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“Material
Adverse Effect” shall mean any effect that is materially adverse to the
validity or enforceability of this Agreement, the ability of either or both of
Capital I or Inland, as the case may be, to perform its obligations under this
Agreement or the business or condition of Capital I or the Capital I Property,
or with respect to the condition, operation or value of the Capital I Property
or the Leases and the cash flow emanating therefrom.


 


“Monetary
Liens” shall have the meaning set forth in Section 6.2(b) hereof.


 


“NNN
Charges” shall have the meaning set forth in Section 2.7 hereof.


 


“Parking
License” shall have the meaning set forth in Section 2.6(c)(xx)
hereof.


 


“Partnership”
shall mean C&S Southlake Capital Partners I, L.P., which upon admitting
Inland as a partner pursuant to the terms of this Agreement, shall amend and
restate its partnership agreement pursuant to the Amended and Restated Partnership
Agreement.


 


“Permits”
shall mean all permits, consents, licenses, certificates, approvals,
registrations, and authorizations which are required by any Law for operation
of the Capital I Property.


 


“Permitted
Exceptions” shall mean the Permitted Liens, together with (i) all of the
Approved Title Matters, and (ii) each and all of Inland’s Title Objections
other than Monetary Liens or those items Capital I has agreed to eliminate or
modify pursuant hereto but that Inland has elected to waive its objection with
respect thereto.


 


“Permitted
Liens” shall mean with respect to the Capital I Property any lien for real
property Taxes, assessments, and other governmental charges that are not due
and payable.


 


“Person”
shall mean any natural person, corporation, general partnership, limited
partnership, proprietorship, trust, union, association, court, tribunal,
agency, government department, commission, self-regulatory organization,
arbitrator, board, bureau, instrumentality, or other entity, enterprise, authority,
or business organization.


 


“Property
Information” shall have the meaning set forth in Section 2.5(a) hereof.


 


“Real
Property Contract” shall mean that certain Purchase Agreement dated as of
November 5, 2004 made by and between Southlake Venture East, L.P., a Texas
limited partnership, Southlake Venture West, L.P., a Texas limited partnership,
SL Venture West II, L.P., a Texas limited partnership, Southlake Central
Venture, a Texas general partnership, and SL Central Venture II, L.P., a Texas
limited partnership (collectively as the sellers thereunder, each of which is
an Affiliate of Capital I) and Inland (as the purchaser thereunder), with
respect to the purchase and sale of Southlake Town Square.


 


“Release”
shall mean releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, ejecting, escaping, leaching, disposing, seeping, infiltrating,
draining, or dumping of any Hazardous Material.  This term shall be interpreted to include both
the present and past tense, as appropriate.


 


“Settlement
Statement” shall have the meaning set forth in Section 2.6(c)(xi)
hereof.


 


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“Survey”
shall have the meaning set forth in Section 6.I(b) hereof.


 


“Survival
Period” shall have the meaning set forth in Section 3.1(k) hereof.


 


“Taxes”
shall mean all taxes, charges, fees, levies, guaranty fund assessments or other
similar assessments or liabilities, including without limitation income, gross
receipts, ad valorem, premium, excise, real property, personal property,
windfall profit, sales, use, transfer, licensing, withholding, employment,
payroll, and franchise taxes imposed by the United States of America or any
state, local, or foreign government, or any subdivision, agency, or other
similar Person of the United States or any such government; and such term shall
include any interest, fines, penalties, assessments, or additions to tax
resulting from, attributable to, or incurred in connection with any such tax or
any contest or dispute thereof.


 


“Tax Returns”
shall mean any report, return, or other information required by Law to be filed
by Capital I.


 


“Title
Approval Period” shall have the meaning set forth in Section 6.2(a)
hereof.


 


“Title
Commitment” shall have the meaning set forth in Section 6.1(a) hereof.


 


“Title
Information” shall mean those matters set forth in Section 3.1(I) of
the Disclosure Schedule.


 


Unless the
context of this Agreement otherwise requires, (a) words of any gender are
deemed to include each other gender; (b) words using the singular or plural
number also include the plural or singular number, respectively; (c) the terms “hereof,”
“herein,” “hereby,” “hereto,” and derivative or similar words refer to this
entire Agreement; (d) the terms “ARTICLE” or “Section” refer to the specified ARTICLE
or Section of this Agreement; (e) the term “party” means, on the one hand,
Inland and, on the other hand, Capital I; (f) the phrase “in the ordinary
course of business and consistent with past practice” refers to the business,
operations, affairs, and practice of Capital I which operations and practice
are consistent with the prudent operations and practices of Persons engaged in
the ownership and operation of real properties similar to the Properties; and
(g) all references to “dollars” or “$” refer to currency of the United States
of America.


 


ARTICLE II


ADMITTING OF PARTNER; PROPERTY VALUE; CAPITAL
CONTRIBUTION;


EARNEST MONEY; DUE DILIGENCE AND CLOSING


 


2.1           Admitting
of Partner.  Subject to the terms and
conditions, and in reliance upon the representations and warranties set forth
in this Agreement, Capital I agrees to admit Inland to the Partnership (less
the Excluded Rights) and Inland agrees to become a Partner in the Partnership
(less the Excluded Rights) at the Closing.


 


2.2           Capital I Property Value.
 Inland and the Existing Partners hereby
agree that the fair market value of the Capital I Property is Eighteen Million
Two Hundred Sixty Nine Thousand Nine Hundred Sixty Four and No/100 Dollars
($18,269,964.00) (the “Property Value”).


 


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2.3           Capital
Contribution.  Subject to the terms
and conditions, and in reliance upon the representations and warranties set
forth in this Agreement, Inland agrees to contribute capital of $17,356,465 to
Capital I as consideration for admission to the Partnership as a general
partner and a limited partner (the “Contributed Capital”) on the terms
and provisions provided for in the Amended and Restated Partnership Agreement.


 


2.4           Refundable
Earnest Money.


 


(a)           Deposit
and Investment.  Inland shall deposit
with Chicago Title Insurance Company (“Escrow Agent”), 171 N. Clark
Street, Chicago, Illinois, Attention: Nancy Castro, the sum of Two Hundred
Thousand and No/100 Dollars ($200,000.00) to be held by Escrow Agent in government
insured interest-bearing accounts at a national bank in Dallas County, Texas (together
with all interest thereon, the “Earnest Money”) simultaneously with the
execution of this Agreement.  Such
account shall have no penalty for early withdrawal.  The Escrow Agent shall be authorized, at
Inland’s option, to invest the Earnest Money in such manner as Inland may
direct; provided, however, that the Escrow Agent shall invest the Earnest Money
only in such manner as will allow the Escrow Agent to disburse the Earnest
Money upon seven (7) days notice.  Inland
may elect in its discretion to have $200,000 out of the “Earnest Money” held by
Escrow Agent pursuant to the Real Property Contract designated as the Earnest
Money hereunder by delivering written instructions to Escrow Agent (with a
contemporaneous copy to Capital I) regarding same.


 


(b)           Form;
Failure to Deposit.  The Earnest
Money shall be in the form of a certified or cashier’s check or the wire
transfer to Escrow Agent of immediately available U.S. federal funds.  If Inland fails to timely deposit any portion
of the Earnest Money within the time periods required, Capital I may terminate
this Agreement by written notice to Inland, and thereafter the parties hereto
shall have no further rights or obligations hereunder, except for rights and
obligations which, by their terms, survive the termination hereof.


 


2.5           Due
Diligence.


 


(a)           Due Diligence
Materials.  To the extent not already
delivered to Inland pursuant to the Real Property Contract, Capital I shall deliver
to Inland the information listed on Exhibit C attached hereto and made a
part hereof (the “Property Information”) within five business days
following the Effective Date.


 


(b)           Physical Due Diligence.  Commencing on the Effective Date and continuing
until the expiration of the Inspection Period (defined below), Inland shall
have reasonable access to the Capital I Property at all reasonable times during
normal business hours, upon appropriate notice to tenants as permitted or required
under the Leases, for the purpose of conducting reasonably necessary tests, including
surveys and architectural, engineering, geotechnical and environmental
inspections and tests, provided that (a) Inland must give Capital I one full
business days’ prior telephone or written notice of any such inspection or test,
and with respect to any intrusive inspection or test (i.e., core sampling) must


 


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obtain Capital I’s prior written consent (which consent may be given,
withheld or conditioned in Capital I’s sole discretion), and (b) prior to
performing any inspection or test, Inland must deliver a certificate of
insurance to Capital I evidencing that Inland and its contractors, agents and
representatives have in place reasonable amounts of commercial general
liability insurance and workers compensation insurance for its activities on
the Capital I Property in terms and amounts reasonably satisfactory to Capital
I covering any accident arising in connection with the presence of Inland, its
contractors, agents and representatives on the Capital I Property, which
insurance shall name Capital I as additional insureds thereunder.  Inland or Inland’s representatives may meet
with any tenant if and only if accompanied by a representative of Capital I;
provided, further, that Inland shall not discuss the transaction contemplated
by this Agreement with such tenants and Inland must contact Capital I at least
one full business day in advance by telephone to inform Capital I of Inland’s
intended meeting.  Inland or Inland’s
representatives may meet with any governmental authority for the sole purpose
of gathering information in connection with the transaction contemplated by
this Agreement; provided, however, Inland must contact Capital I at least one
full business days in advance by telephone to inform Capital I of Inland’s
intended meeting and to allow Capital I the opportunity to attend such meeting
if Capital I desires.  Inland or its
counsel is permitted to make written requests to the municipal authorities for
the purpose of verifying the compliance of the Capital I Property with
applicable zoning requirements and ordinances, compliance with building codes
and compliance with parking requirements, and to respond, make verbal comments
or inquiries related thereto, including but not limited to inquiries to
determine the appropriate officials to direct written inquiries to.


 


(c)           Due
Diligence/Termination Right.  Inland
shall have until 5:00 p.m., Dallas, Texas time on Friday, November 19, 2004
(the “Inspection Period”) in which to (a) examine, inspect, and
investigate the Property Information and the Capital I Property and, in Inland’s
sole and absolute judgment and discretion, determine whether the Capital I
Property is acceptable to Inland, (b) obtain all necessary internal approvals,
and (c) satisfy all other contingencies of Inland.  If, for any reason whatsoever, or no reason at
all, Inland, in its sole and absolute discretion, is not satisfied with any of
the foregoing at any time on or before the expiration of the Inspection Period
(hereinafter defined), then Inland may elect at its option, to terminate this
Agreement by delivering notice of termination to Capital I (the “Due
Diligence Termination Notice”) prior to the expiration of the Inspection
Period, in which event the Earnest Money shall be distributed pursuant to and
subject to Section 2.4(c) of the Real Property Contract (unless such termination
of this Agreement is made in connection with the acquisition by Inland of fee
title to the Capital I Property under the Real Property Contract), and thereafter
neither Capital I nor Inland shall have any further obligations or rights under
this Agreement except those that specifically survive a termination as provided
in this Agreement.


 


(d)           No Representation or
Warranty by Capital I.  Inland
acknowledges that, except as expressly set forth in this Agreement, Capital I
has not made and does


 


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not make any warranty or representation regarding the truth, accuracy
or completeness of the Property Information or the source(s) thereof.  Inland further acknowledges that some if not
all of the Property Information was prepared by third parties other than
Capital I.  Capital I expressly disclaims
any and all liability for representations or warranties, express or implied,
statements of fact and other matters contained in such information, or for
omissions from the Property Information, or in any other written or oral
communications transmitted or made available to Inland.  Inland shall rely solely upon the express
representations and warranties set forth herein and its own investigation with
respect to the Capital I Property, including, without limitation, the Capital I
Property’s physical, environmental or economic condition, compliance or lack of
compliance with any ordinance, order, permit or regulation or any other
attribute or matter relating thereto.  Capital
I has not undertaken any independent investigation as to the truth, accuracy or
completeness of the Property Information and is providing the Property
Information solely as an accommodation to Inland.


 


(e)           Inland’s Agreement
to Indemnify.  Inland hereby agrees
to indemnify, defend and hold Capital I and the Existing Partners harmless from
and against any and all liens, claims, causes of action, damages, liabilities
and expenses (including reasonable attorneys’ fees) arising out of (i) Inland’s
inspections or tests permitted under this Agreement or (ii) Inland’s failure to
comply with the provisions of Section 2.5(b); provided, however, the
indemnity shall not extend to protect the Partnerships or Capital I from any
pre-existing liabilities for matters merely discovered by Inland (i.e., latent
environmental contamination) so long as Inland’s actions do not aggravate any
preexisting liability of Capital I and the Existing Partners and then only to
the extent of such aggravation.  Inland’s
obligations under this Section 2.5(e) shall survive the termination of
this Agreement and shall survive the Closing for a period of one year.


 


2.6           Closing.


 


(a)           The Closing will take
place at the offices of Escrow Agent at 10:00 a.m., local time on the Closing
Date.


 


(b)           At the Closing, Inland will:


 


(i)                                     deposit
the Contributed Capital plus or minus prorations with Escrow Agent in cash by
wire transfer of immediately available funds;


 


(ii)                                  deliver
to Escrow Agent an Escrow Agreement (defined below);


 


(iii)                               deliver
to Escrow Agent Settlement Statement (defined below);


 


(iv)                              deliver
to Escrow Agent the Management Agreement (defined below);


 


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(v)                                 deliver
to Escrow Agent the Amended and Restated Partnership Agreement of the
Partnership;


 


(vi)                              deliver
to Escrow Agent either an amended and restated version of the Real Property
Contract or an amendment to the Real Property Contract, in form and substance
mutually acceptable to both Inland and Capital I in their sole discretion,
removing the Capital I Property from the Real Property Contract (the “Amended
and Restated Real Property Contract”);


 


(vii)                           deliver
to Escrow Agent Inland’s duly executed counterpart the Declaration of Trust of
The C&S Southlake Capital Protective Trust and the related Letter
Agreement, both of which are dated on or about the date hereof; and


 


(viii)                        deliver
to Escrow Agent all other documents reasonably determined by Inland, Capital I
and Title Company to be necessary to be delivered by Inland under the terms of
this Agreement.


 


(c)           At the Closing, Capital
I will:


 


(i)                                               deliver
to Escrow Agent (A) the Amended and Restated Partnership Agreement; (B) the
Amended and Restated Real Property Contract; and (C) the Special Warranty Deed
(in substantially the form attached hereto as Exhibit F), the Assignment
and Assumption of Leases (in substantially the form attached hereto as Exhibit
G) and the Bill of Sale, Assignment and Assumption of Contracts (in
substantially the form attached hereto as Exhibit H) each from SOUTHLAKE
VENTURE WEST, L.P., a Texas limited partnership, to a wholly owned subsidiary
of Capital I (which entity will be the holder of title to the Capital I
Property) as provided for in the Amended and Restated Partnership Agreement
(the “Subsidiary of Capital I”; the legal name of the Subsidiary of
Capital I is, as of the date hereof, anticipated to be “Town Square Ventures
II, L.P.”);


 


(ii)                                            deliver
to Escrow Agent an Escrow Agreement;


 


(iii)                                         deliver
to Escrow Agent certificates of the Existing Partners certifying that all of
the representations and warranties of the Existing Partners made hereunder are
true and correct in all material respects as of the Closing Date;


 


(iv)                                        deliver
to Escrow Agent a Certified Rent Roll;


 


(v)                                           deliver
to Escrow Agent a copy of the Certificate of Limited Partnership for Capital I
certified as of a date no earlier than five (5)


 


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business days prior to the Closing Date by
the Secretary of State (or equivalent official) of its state of organization;


 


(vi)                                        deliver
to Escrow Agent the Audit Letter attached hereto as Exhibit D;


 


(vii)                                     cause
a TLTA Owner’s Policy of Title Insurance to be issued by Title Company naming
the Subsidiary of Capital I as insured, in the amount of the Property Value,
Insuring that the Subsidiary of Capital I owns good and indefeasible fee simple
title to the Capital I Real Property providing for full extended coverage and
containing the Special Title Endorsements (the “Title Policy”) subject
only to the Permitted Encumbrances;


 


(viii)                                  deliver
to Escrow Agent a duly executed affidavit of the transferor of the Capital I
Property to the Subsidiary of Capital I certifying that such transferor and any
of its partners are not a “foreign person,” as defined in Section 1445 of the
Internal Revenue Code of 1986, as amended, and in any applicable state laws for
the state in which the Capital I Property is located;


 


(ix)                                          deliver
to Escrow Agent such conveyancing or transfer tax forms or returns, if any, as
are required to be delivered or signed by Capital I by applicable state and
local law in connection herewith, including any certifications required in
connection therewith;


 


(x)                                             deliver
to Escrow Agent the original of all Leases and Contracts in Capital I’s
possession;


 


(xi)                                          deliver
to Escrow Agent four (4) copies of a closing settlement statement between
Capital I and Inland, duly executed by Capital I, setting forth the prorations
and adjustments to the Contributed Capital in accordance with this Agreement;
it being agreed that such settlement shall be mutually approved by Capital I
and Inland at least 48 hours prior to Closing (the “Settlement Statement”);


 


(xii)                                       deliver
to Escrow Agent REA Estoppel letters in form and substance reasonably
satisfactory to Inland with respect to any reciprocal easement and operating
agreement;


 


(xiii)                                    deliver
to Escrow Agent all other documents reasonably determined by Inland, Capital I
and Title Company to be necessary to be delivered by Capital I under the terms
of this Agreement;


 


(xiv)                                   deliver
to Escrow Agent copies of notices terminating and canceling any and all
Contracts not accepted by Inland at Closing, including in particular any
management contracts and/or brokerage listing and leasing agreements;


 


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(xv)                                      cause
all records and files (or certified copies thereof) relating to the operation
and maintenance of the Capital I Property to be delivered to the possession of
Capital I;


 


(xvi)                                   cause,
to the extent in Capital I’s possession or control, plans and specifications,
engineering plans and studies, and other similar documents relating to the
Capital I Property to be delivered to the possession of Capital I.


 


(xvii)                                cause
all keys to the Capital I Property in Capital I’s possession, subject to any
rights of Capital I’s occupancy that survive the Closing, to be delivered to
the possession of Capital I;


 


(xviii)                             deliver
to Escrow Agent the Management Agreement;


 


(xix)                                     cause
the Excluded Rights to be transferred or conveyed out of ownership by Capital I
in such manner as Capital I or the Existing Partners so elect;


 


(xx)                                        deliver
to Escrow Agent an Irrevocable Parking, Management and Use Agreement with the
City of Southlake, Texas in substantially final form (but not executed)
reasonably acceptable to Inland and acceptable to the City of Southlake, Texas
in its sole discretion for the operation and management of those certain
parking facilities to be constructed and located on or adjacent to the Capital
I Real Property (the “Parking License”);


 


(xxi)                                     deliver
to Inland documentary evidence reasonably satisfactory to Inland that Capital I
and the Existing Partners are authorized to execute and deliver all documents
required to be delivered in connection herewith, including, but not limited to,
the Amended and Restated Partnership Agreement;


 


(xxii)                                  deliver
to Inland, to the extent issued by the applicable state, Certificates of Good
Standing with respect to Capital I and the Existing Partners dated no earlier
than five (5) business days prior to the Closing Date;


 


(xxiii)                               deliver
to Inland UCC lien, judgment and litigation searches with respect to Capital I
dated no earlier than five (5) business days prior to the Closing Date showing
no judgments, liens or litigation other than as set forth on the Disclosure
Schedule; and


 


(xxiv)                              deliver
to Escrow Agent the Existing Partner’s duly executed counterpart of the
Declaration of Trust of The C&S Southlake Capital Protective Trust and the
related Letter Agreement, both of which are dated on or about the date hereof.


 


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2.7           Adjustments as of
the Closing Date.  Accrued rental
income and all other accrued income relating to the Capital I Property, real
and personal property ad valorem taxes, insurance premiums (if and to the
extent that policies are continued for periods subsequent to the Closing Date),
utility charges, common area maintenance charges and operating charges pursuant
to any reciprocal easement agreements or similar agreements, and other
operating expenses of the Capital I Property, shall be prorated to the Closing
Date, based upon actual days involved. Except as set forth in Section 2.8
hereof, the Existing Partners shall be entitled to receive all cash in the
accounts of the Partnership on the Closing Date.  Existing Partners shall be responsible for all
real and personal property taxes payable by Capital I for any period prior to
and including the Closing Date.  Capital
I and Inland acknowledge that tenants have made estimated payments for such
tenants’ proportionate share of taxes, insurance, common area maintenance and
other charges (“NNN Charges”) that are reimbursable to the landlord
under such tenant leases.  Inland and
Manager (as defined in Section 2.11 hereof) shall make a final
reconciliation of 2004 NNN Charges on or before April 30, 2005.  The Existing Partners shall be entitled to any
amounts collected from tenants in 2005 and attributable to periods on or before
the Closing Date, and shall be liable for any amounts due to tenants and
attributable to periods on or before the Closing Date.  Inland shall be entitled to any amounts
collected from tenants in 2005 and attributable to periods after the Closing
Date, and shall be liable for any amounts due to tenants and attributable to
periods after the Closing Date.  All
accrued charges pursuant to Contracts and utility charges (whether or not service
is continued by Inland) for periods prior to and including the Closing Date
shall be determined as of the Closing Date and paid by the Existing Partners (“Accrued
Expenses”).  Any of such Accrued
Expenses for periods prior to and including the Closing Date which have not
been paid and are not reflected on the closing statement prepared by Capital I
and Inland as of the Closing Date shall be paid by Capital I prior to
delinquency (subject to Capital I’s right to contest same).  Inland shall make a good-faith attempt to
collect delinquent rents for Capital I’s benefit after the Closing and after
first applying any such rental payments so received to rents and late charges
and the costs of collection thereof in each case accruing after the Closing
Date, the remainder of such collections, if any, shall be remitted to Capital I
promptly upon receipt by Inland or Capital I after Closing (up to the amount of
such delinquent rents); provided, however, that nothing contained herein shall
be construed to require Inland to institute any suit or collection procedure to
collect such delinquent rents.  Inland
need not attempt to collect rents that are more than ninety days delinquent and
the foregoing obligation of Inland to remit any amounts in respect thereof to Capital
I shall also terminate ninety days after the Closing Date, except as to
recovery of 2004 NNN Charges, which shall terminate on December 31, 2005.  To the extent that the actual amount of all
such charges, expenses and income referred to in this section are unavailable
on the Closing Date, the foregoing prorations shall be based on estimates using
the most recently available statement for each such item to be prorated
(provided that, if the actual amount of real and personal property ad valorem
taxes and special assessments for the present tax year are not available, the
proration shall be based upon the taxes for the previous tax year) and, if
after the Closing Date the actual amount of any such closing proration that was
based on an estimate is determined to be more or less than the amount adjusted
for at Closing, the parties shall promptly (but no later than the date which is
the first anniversary of the Closing Date) adjust such proration.


 


2.8           Security Deposits.
 All security deposits and any prepayment
of rental or other sums attributable to any period beyond the Closing Date,
collected (and, except to the extent


 


13





















 


previously returned to tenants
whether presently held) by Capital I under the terms of any Leases shall be
retained by the Partnership at Closing and not delivered to the Existing
Partners.


 


2.9           Title and Survey
Costs.  The Existing Partners shall
pay and incur the costs for the Survey and the premium for the Owner’s Policy
(exclusive of endorsements), all transfer taxes, and their own attorneys’ fees.  Inland shall pay the premium for all
endorsements to the Title Policy and its own attorneys’ fees, provided that
Capital I shall pay the premium for any endorsements which the Existing Partners
elect, in their sole discretion, to provide in order to satisfy any of Inland’s
Title Objections pursuant to Section 6.2(b) hereof.  At Inland’s election, and at Inland’s sole
expense, if the Survey is acceptable to the title company for such purposes, the
standard exception pertaining to “discrepancies, conflicts, or shortages in
area or boundary lines, or any encroachments, or any overlapping of
improvements,” may be deleted except for “shortages in area”.


 


2.10         Mortgage Liens.  At Closing, the Existing Partners shall cause
Capital I to cause the Mortgage Liens to be released at or prior to Closing,
with Capital I having the right to apply the Contributed Capital or a portion
thereof for such purpose.


 


2.11         Management Agreement.
 Contemporaneously with Closing, (a)
Inland shall enter into a new sub-management agreement for the on-site property
management of the Capital I Property with Cooper & Stebbins, L.P. (the “Manager”)
in form reasonably acceptable to Inland and Manager (the “Management
Agreement”), on the following terms and conditions: (1) the term shall
expire not earlier than October 31, 2007, (2) Manager will provide customary
on-site management functions and staff, (3) Inland shall reimburse Manager for
all expenses incurred in providing such management functions, provided such
expenses are incurred in accordance with a budget approved by the Partnership,
(4) Inland will provide all accounting services to the Partnership and will
collect all management fee income on behalf of the Inland, and (5) Manager’s
duties shall be progressively transitioned over to Inland beginning on October
31, 2006.  The terms of this Section 2.13
shall survive the Closing.  Notwithstanding
the foregoing, Manager shall be required to agree to subordinate the sub-management
agreement to the loan documents of any lender and agree that such lender may
terminate the sub-management agreement in the event of a default under such
lender’s loan.


 


ARTICLE III


REPRESENTATIONS AND WARRANTIES


 


3.1           Representations and
Warranties from the Existing Partners.


 


3.1.1        Representations and
Warranties from the Existing Partners Regarding Capital I: The Existing
Partners, individually and collectively as set forth below, represent and
warrant to Inland as of the date of this Agreement and as of the Closing Date
that:


 


(a)           Organization
of Capital I.  The Existing Partners
represent and warrant that Capital I is duly organized and validly existing
under the laws of the State of Texas and has the requisite organizational power
and authority to carry out its business as presently conducted.  The Existing Partners represent and warrant
that the principal place of business of Capital I is in Southlake, Texas.


 


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(b)           Authority
of Existing Partners and Capital I. Each of the Existing Partners represents
and warrants that the execution and delivery of this Agreement by such Existing
Partners and Capital I and each other agreement, instrument, certificate and document
to be executed by such Existing Partners and Capital I hereunder and the performance
by such Existing Partners and Capital I of its obligations under this Agreement
have been duly and validly authorized by all necessary action on the part of such
Existing Partners and Capital I.  Each of
the Existing Partners and Capital I represents and warrants that this Agreement
constitutes a legal, valid, and binding obligation of such Existing Partners
and Capital I and is enforceable against such Existing Partners and Capital I
in accordance with its terms, except to the extent that (j) enforcement may be
limited by or subject to any bankruptcy, insolvency, reorganization, moratorium,
or similar Laws now or hereafter in effect relating to or limiting creditors’ rights
generally and (ii) the remedy of specific performance and injunctive and other forms
of equitable relief are subject to certain equitable defenses and to the
discretion of the court or other similar person or entity before which any
proceeding therefore may be brought.


 


(c)           Beneficial
Interests.


 


(i)            The
Existing Partners represent and warrant that the combined Beneficial Interests
of each of the Existing Partners will, immediately prior to the admission of
Inland as a partner in Capital I as of the Closing Date, constitute 100% of the
Beneficial Interests of Capital I and such Beneficial Interests are owned
legally and beneficially by the Existing Partners.


 


(ii)           The
Existing Partners represent and warrant that the respective Beneficial
Interests owned by the Existing Partners are free and clear of all Liens, and
the Beneficial Interests owned by the Existing Partners are not the subject of
any Contract (other than this Agreement) under which any such Lien might arise.
 Each of the Existing Partners represents
and warrants that there are no outstanding securities, rights, subscriptions,
warrants, options, or Contracts (except for this Agreement) that give any
Person the right to purchase or otherwise receive or be issued any interest in
that the Existing Partners’ Beneficial Interests or any rights to participate
in the equity or income of the Existing Partners (except for this Agreement).


 


(d)           Partnership
Agreement.  The Existing Partners
represent and warrant that attached in Section 3.1 (d) of the Disclosure
Schedule is an accurate copy of the Capital I partnership agreement, and no
amendments or modifications have been made to the Capital I partnership
agreement, except for those contemplated herein or attached as a part of the
Disclosure Schedule.


 


(e)           No
Conflicts or Violations.  Each of the
Existing Partners hereby represents and warrants that the execution and
delivery of this Agreement by each of the Existing Partners and Capital I does
not, and the performance by each of the Existing Partners and Capital I of such
Existing Partners’ and Capital I’s obligations, respectively, under this
Agreement and the consummation of the transactions contemplated hereby will


 


15





















 


not: (i) violate any term or provision of any Law or any writ,
judgment, decree, or injunction applicable to such Existing Partners and
Capital I, except such violations that do not have a Material Adverse Effect on
such Existing Partners and Capital I; (ii) conflict with or result in a
violation or breach of any of the provisions of the governing documents of such
Existing Partners and Capital I, except such conflicts, violations, or breaches
that do not have a Material Adverse Effect on such Existing Partners and
Capital I; or (iii) conflict with or result in a violation or breach of any
Contract to which such Existing Partners and Capital I are a party, except such
conflicts, violations, or breaches that do not have a Material Adverse Effect
on such Existing Partners and Capital I.


 


(f)            Taxes.  The Existing Partners represent and warrant
that, except as disclosed in Section 3.1(f) of the Disclosure Schedule,
all Federal, state and other applicable Tax Returns required to be filed by or
with respect to the Partnership have been filed and all Taxes that are due and
payable by the Partnership have been paid.  Except as shown on Section 3.1(f) of
the Disclosure Schedule, no deficiencies for Federal, state or other applicable
Taxes have been claimed, assessed or, to the Existing Partners’ Knowledge,
proposed against the Partnership by any Governmental Authority.  To the Existing Partners’ Knowledge, except as
set forth in Section 3.1(f) of the Disclosure Schedule, there are no
pending or threatened audits, investigations or claims for or relating to any
liability in respect of Federal, state or other applicable Taxes, and there are
no matters under discussion with any Governmental Authorities with respect to Federal,
state or other applicable Taxes that could result in an assessment of Federal,
state or other applicable Taxes against the Partnership.  Audits of Federal, state or other applicable
Tax Returns by the relevant taxing authorities have been completed for each period
shown on Section 3.1(f) of the Disclosure Schedule, and, except as shown
on Section 3.1 (f) of the Disclosure Schedule, the Existing Partners
have not been notified that any taxing authority intends to audit a Federal,
state or other applicable Tax Return for any other period for the Partnership.  Complete copies of all Federal income tax schedules
and reports relating to the operation of the Partnership and all reports
received by the Partnership from the IRS relating to examinations thereof have
been made available for Inland’s review.  From the date of its formation, the
Partnership has qualified to be treated as a partnership for federal income tax
purposes.  No taxing authority has taken
a position inconsistent with such treatment. Neither the Existing Partners nor
any other party has taken any action, or failed to take any action, that would cause
the Partnership to be treated as an association taxable as a corporation for
income tax purposes.


 


(g)           Compliance
With Law.  The Existing Partners
represent and warrant that except as shown on Section 3.1(g) of the Disclosure Schedule, the
Partnership is not in violation of any Law or any writ, judgment, decree,
injunction, or similar order applicable to such Partnership, which violation
has or may reasonably be expected to have a Material Adverse Effect.


 


(h)           Financial
Statements.  Section 3.1 (h)
of the Disclosure Schedule sets forth the Partnership’s balance sheets and
statements of income and partners’ capital accounts for the fiscal year ended
December 31, 2003 for the Partnership which includes all assets


 


16





















 


and liabilities of the Partnership, as of the date thereof (the “Capital
I Financial Statements”).  The
Capital I Financial Statements (including the notes thereto) have been prepared
in accordance with income tax based accounting and present fairly the financial
condition of the Partnership for such periods (including all liabilities or
obligations of any kind (whether accrued, absolute, fixed or contingent) of the
Partnership for such period and no other material liabilities have been
incurred for the period commencing January 1, 2004 and ending on the Closing
Date other than as set forth on the Disclosure Schedule and there has been no
change in the financial condition as reflected therein since the dates of such
Capital I Financial Statements that would have a Material Adverse Effect.


 


(i)            Intercompany
Liabilities.  The Existing Partners
represent and warrant that except as reflected in the Financial Statements, or
except as shown on Section 3.1(i) of the Disclosure Schedule, there are
no Liabilities between the Partnership or any Existing Partners or Affiliates
of Existing Partners, and all such intercompany Liabilities will be satisfied
in full on or prior to the Closing.  Neither
the Existing Partners nor any Affiliates of the Existing Partners provide or
causes to be provided to the Partnership any products, services, equipment,
facilities, or similar items other than property and asset management services.


 


(j)            Not
a Foreign Person.  Each of the
Existing Partners and Capital I represents and warrants that it is not a “foreign
person” but is a “United States person” as such terms are defined in the
Foreign Investment in Real Property Tax Act of 1980 and §§ 1445 and 7701 of the
Code; that is to say, each such Existing Partners represents that it is a
citizen or a resident of the United States, a domestic partnership, a domestic
corporation, or an estate or trust which is not a foreign estate or foreign
trust within the meaning of § 7701(a)(31) of the Code.


 


(k)           No
Condemnation.  The Existing Partners
represent and warrant that to the Existing Partners’ Knowledge, there is no
pending condemnation proceeding affecting the Capital I Property.


 


(l)            No
Litigation.  The Existing Partners
represent and warrant that except as shown on Section 3.1(l) to the
Disclosure Schedule there is no action, suit, proceeding, arbitration,
unsatisfied order or judgment, governmental investigation or claim pending or
threatened (and to the Existing Partners’ Knowledge there are no claims,
situations or facts or circumstances which could be reasonably believed to give
rise to any of the foregoing) against or affecting the Capital I Property, or
relating to or arising out of the ownership, operation, use or occupancy of the
Capital I Property, pending or being prosecuted before or by any Governmental
Authority or otherwise of which Existing Partners have received notice nor, to
Existing Partners’ Knowledge, is any such action, suit, proceeding,
arbitration, unsatisfied order or judgment, governmental investigation or claim
threatened or being asserted.


 


(m)          No
Other Contracts.  The Existing
Partners represent and warrant that except for the Permitted Exceptions and as
shown on Section 31(m) of the Disclosure Schedule, there are no
Contracts relating to the Capital I Property.


 


17





















 


(n)           No
Bankruptcy or Insolvency Proceedings.  The Existing Partners represent and warrant
that there are no attachments, executions, assignments for the benefit of
creditors, receiverships, conservatorship or voluntary or involuntary
proceedings in bankruptcy or pursuant to any other debtor relief laws filed by
such Existing Partners or Capital I, or pending against such Existing Partners
or Capital I.


 


(o)           Brokers.
 The Existing Partners represent and
warrant that all negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Existing Partners directly with
Inland, without the intervention of any Person on behalf of Existing Partners
in such manner as to give rise to any valid claim by any Person against Inland
for a finder’s fee, brokerage commission, or similar payment, except for
Holiday Fenoglio Fowler, L.P.


 


(p)           Consents.
 The Existing Partners represent and
warrant that no consent, license, approval, order, permit or authorization of
any Governmental Agency is required to be obtained or made and no consent of
any other third party, is required to be obtained by Existing Partners and
Capital I in connection with the execution, delivery and performance of this
Agreement and any of the transactions contemplated hereby.


 


(q)           Survival.
 The representations and warranties of
the Existing Partners set forth in this Section 3.1.1, the indemnity
obligations under Section 3.1.1(r) and the obligations of the Guarantor
under Section 3.1.1(s), shall survive the Closing until, and shall
terminate on, the date that is 90 days following the expiration of the
applicable statute of limitations period for Inland and its Affiliates in
connection with same.  As a condition
precedent to Inland’s obligation to contribute capital to the Partnership as
contemplated in this Agreement, the Existing Partners’ representations and
warranties contained herein must remain and be true and correct in all material
respects as of the Closing Date.


 


(r)            Indemnification.
 “Notwithstanding any provision in this
Agreement to the contrary, the Existing Partners hereby covenant and agree to
indemnify and hold harmless Inland and its Affiliates from and against any and
all (i) expenses (including reasonable attorneys’ fees), losses, damages,
liabilities, charges and claims of any kind or nature whatsoever (collectively “Indemnified Losses”)
(e.g., income tax deficiencies,
penalties, interest and additions to tax) of Inland and/or its Affiliates as a
result of reporting the transactions contemplated by this Agreement with
respect to the admission of Inland to the Partnership in the manner to be
reflected in the calendar 2004 income tax returns of the Partnership (and, for
the avoidance of doubt, this shall not include any Indemnified Losses from the
operation of the Partnership by Inland after the Effective Date), (ii)
Indemnified Losses of Inland and/or its Affiliates that may result from the
breach by any of the Existing Partners of any of the representations and
warranties under this Section 3.1.1 and (iii) Indemnified Losses of
Inland and/or its Affiliates as a result of liabilities of the Partnership
other than those solely and directly related to the Capital I Property.


 


(s)           By
its execution of a joinder to this Agreement, Peter C. Cooper, and individual
(the “Guarantor”), hereby guaranties for the benefit
of Inland and its


 


18





















 


Affiliates (i) the full, complete and timely payment of any
indemnification obligation of the Existing Partners under the provisions of
this 3.1.1 of this Agreement and (ii) the full and complete payment of any
Indemnified Losses that may occur to Inland and/or its Affiliates arising out
of a breach by the Existing Partners of their representations and warranties
under this Agreement.  This guaranty is a
direct and primary obligation of the Guarantor and is an unconditional guaranty
of payment and performance and not a guaranty of collection.  The obligations of the Guarantor under this Section
3.1.1(s) are absolute and unconditional, and are not subject to any
counterclaim, set-off, recoupment, deduction or defense based upon any claim
that the Guarantor may have against the Existing Partners and shall remain in
full force and effect without regard to, and shall not be released, discharged
or terminated or in any other way affected by, any circumstance or condition.


 


3.1.2        Representations and
Warranties of the Existing Partners with Respect to the Capital I Property.
 Each of the Existing Partners hereby
represents and warrants to Inland as of the date of this Agreement and as of
the Closing Date that:


 


(a)           The
Capital I Real Property consists of approximately 0.7600 acres of land, and
approximately 71,305 square feet of net rentable square feet, and located at
1400 Civic Place, Southlake, Texas and commonly known as Building 3C, and
Capital I will have good and indefeasible title to the Capital I Real Property,
as of the date of closing, subject to all easements, restrictions, reservations
and covenants now of record and further subject to all matters that a current,
accurate survey would show, together with the Permitted Encumbrances;


 


(b)           The
Capital I Real Property and the Capital I Personal Property, will on the
Closing Date, represent all of the assets of the Subsidiary of Capital I.


 


(c)           Section
3.1.1(c) of the Disclosure Schedule sets forth all of the existing warranties
applicable to the Capital I Property.


 


(d)           Neither
Capital I, nor the Existing Partners have been served with process or other written
notice of any litigation or proceeding pending or, to Capital I’s Knowledge or
the Existing Partners’ Knowledge, threatened against the Capital I Property,
including but not limited to condemnation or eminent domain.


 


(e)           All
income and expense statements delivered to Inland with respect to the Capital I
Property are true, correct and complete in all material respects.


 


(f)            Neither
Capital I nor the Existing Partners have received written notice of violations
at or by the Capital I Property of zoning, building, subdivision, fire, air pollution,
business occupancy or Environmental Requirements, rules or regulations relating
to the Capital I Property or of other governmental action affecting the Capital
I Property that have not been cured except as set forth in Section 3.1.1(f)
of the Disclosure Schedule.


 


19





















 


(g)           Neither
Capital I nor the Existing Partners have received written notice from any
federal, state, county or municipal authority as to the existence of any
Hazardous Materials at the Capital I Property.


 


(h)           The
rent roll attached hereto as Section 3.1.1(h) of the Disclosure Schedule
contains a complete list of all Leases affecting the Capital I Property and the
copies of such Leases provided to Inland are complete and correct in all
material respects.  Except as otherwise
disclosed to Inland in the Property Information, in any tenant estoppel
certificate, the rent roll attached to the Disclosure Schedule, the Leases are
in full force and effect and to Capital I’s Knowledge there is no monetary
default (other than with respect to the payment of basic rent not more than 20
days past due) nor any material non-monetary default under any of the Leases.


 


(i)            There
are no other Contracts other than the Contracts affecting the Capital I
Property or the operation thereof as set forth in Section 3.1(n) of the
Disclosure Schedule attached hereto, and the copies of such Contracts provided
to Inland are complete and correct and to Capital I’s knowledge, Capital I is
not in default thereunder.


 


(j)            The
Subsidiary of Capital I owns as of the Closing Date all of the landlords’
interest in the Leases and the property owners’ interest in the Contracts and
the Capital I Personal Property.  The
interest of the Subsidiary of Capital I in the Contracts, Leases, and the
Capital I Personal Property is free and clear of all encumbrances, and has not
been assigned to any other person, except for collateral assignments to lenders
which will be released at Closing.


 


(k)           The
representations and warranties of the Existing Partners set forth in this
Agreement shall survive the Closing for a period of one (1) year (the “Survival
Period”).  As a condition precedent
to Inland’s obligation to contribute capital to the Partnership as contemplated
in this Agreement, the Existing Partners’ representations and warranties
contained herein must remain and be true and correct in all material respects
as of the Closing Date.  Inland shall
have the right to bring an action against the Existing Partners on the breach
of a representation or warranty hereunder, but only upon the condition that
Inland first learns of the breach after Closing and gives written notice of
such breach to the Existing Partners before the end of the Survival Period and
files such action on or before the first day following the second anniversary
of the Closing Date.  The Existing
Partners shall have no liability after Closing for the breach of a representation
or warranty under this Section 3.1.2 of which Inland had knowledge as of
Closing.  Notwithstanding any other
provision of this Agreement, any agreement contemplated by this Agreement, or
any rights which Inland might otherwise have at law, equity, or by statute,
whether based on contract or some other claim, as of the Closing Date, Inland
agrees that any liability of the Existing Partners to Inland will be limited to
$600,000. The provisions of this Section 3.1.2(k) shall survive the
Closing.


 


3.2           Inland’s
Representations and Warranties.  Inland
hereby represents and warrants to Capital I as of the date hereof and as of the
Closing Date as follows:


 


20





















 


(a)           Organization.
Inland is a corporation duly organized, validly existing, and in good standing
under the Laws of the State of Illinois and has the requisite corporate power
and authority to enter into this Agreement and to perform its obligations under
this Agreement.


 


(b)           Authority.  The execution and delivery of this Agreement
by Inland and the performance by Inland of its obligations under this Agreement
have been duly and validly authorized by all requisite corporate action on the
part of Inland. This Agreement constitutes a legal, valid, and binding
obligation of Inland and is enforceable against Inland in accordance with its
terms, except to the extent that (i) enforcement may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium, or similar Laws now
or hereafter in effect relating to or limiting creditors, rights generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief are subject to certain equitable defenses and to the
discretion of the court or other similar person or entity before which any
proceeding therefor may be brought.


 


(c)           No
Conflicts or Violations. The execution and delivery of this Agreement by
Inland do not, and the performance by Inland of Inland’s obligations under this
Agreement will not:


 


(i)            violate
any term or provision of any applicable Law or any writ, judgment, decree, or
injunction applicable to Inland, except such violations that do not have a
Material Adverse Effect;


 


(ii)           conflict
with or result in a violation or breach of any of the provisions of the
articles or certificate of incorporation or bylaws of Inland, except such
conflicts, violations, or breaches that do not have a Material Adverse Effect;
or


 


(iii)          conflict
with or result in a violation or breach of any Contract to which Inland is a
party, except such conflicts, violations, or breaches that do not have a Material
Adverse Effect.


 


(d)           Litigation.  There is no action, suit, or proceeding
pending, or (to the knowledge of Inland) threatened, against Inland, at Law or
in equity, in, before, or by any person or entity that, if adversely
determined, would have a Material Adverse Effect.


 


(e)           Held
for Investment.  The Partner interest
will be held by Inland or its assignee for its own account for the purpose of
investment and not for the purpose or with the intent of a distribution or
other sale and disposition thereof.  Inland
shall not transfer or otherwise dispose of any of its partnership interest, or
any interest therein, in such manner as to violate any provisions of the
Securities Act of 1933, as amended, or of any securities Laws of any state or
other jurisdiction regulating the disposition thereof.  This Section 3.2(c) shall survive the
Closing.


 


(f)            Brokers.
 All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried out by
Inland directly with Capital I and its Affiliates, without the intervention of
any Person on behalf of Inland in such manner as to


 


21





















 


give rise to any valid claim by any Person against Capital I or its
Affiliates for a finder’s fee, brokerage commission, or similar payment, except
for Holliday Fenoglio Fowler, L.P., whose commission shall be paid by Capital I
pursuant to a separate written agreement.


 


(g)           No
Third-Party Financing.  Inland will
not rely on third-party equity to be raised or any third-party financing.  Capital I will not provide, and Inland will
not require, any documentation in the form of subordination, non-disturbance
and attornment agreements running to the benefit of any third-party lender.


 


3.3           Disclaimer; Release;
Indemnity.


 


(a)           Disclaimers
By Capital I and the Existing Partners.  Except as expressly set forth in this
Agreement, it is understood and agreed that Capital I, the Existing Partners
and their respective agents or employees have not at any time made and are not
now making, and they specifically disclaim, any warranties, representations or
guaranties of any kind or character, express or implied, with respect to the
Capital I Property, including, but not limited to, warranties, representations
or guaranties as to (a) matters of title, (b) environmental matters relating to
the Capital I Property or any portions thereof, including, without limitation,
the presence of Hazardous Materials in, on, under or in the vicinity of the
Capital I Property, (c) geological conditions, including, without limitation,
subsidence, subsurface conditions, water table, underground water reservoirs,
limitations regarding the withdrawal of water, and geologic faults and the
resulting damage of past and/or future faulting, (d) whether, and to the extent
to which the Capital I Property or any portions thereof are affected by any
stream (surface or underground), body of water, wetlands, flood prone area,
flood plain, floodway or special flood hazard, (e) drainage, (f) soil
conditions, including the existence of instability, past soil repairs, soil
additions or conditions of soil fill, or susceptibility to landslides, or the
sufficiency of any undershoring, (g) the presence of endangered species or any
environmentally sensitive or protected areas, (h) zoning or building
entitlements to which the Capital I Property or any portions thereof may be
subject, (i) the availability of any utilities to the Capital I Property or any
portions thereof including, without limitation, water, sewage, gas and
electric, (j) usages of adjoining property, (k) access to the Capital I
Property or any portions thereof, (l) the value, compliance with the plans and
specifications, size, location, age, use, design, quality, description,
suitability, structural integrity, operation, title to, or physical or
financial condition of the Capital I Property or any portion thereof, or any
income, expenses, charges, liens, encumbrances, rights or claims on or
affecting or pertaining to the Capital I Property or any parts thereof, (m) the
condition or use of the Capital I Property or compliance of the Capital I
Property with any or all past, present or future federal, state or local Laws,
(n) the existence or non-existence of underground storage tanks, surface
impoundments, or landfills, (o) any other matter affecting the stability and
integrity of the Capital I Property, (p) the potential for further development
of the Capital I Property, (q) the merchantability of the Capital I Property or
fitness of the Capital I Property for any particular purpose, (r) the truth,
accuracy or completeness of the Property Information, (s) tax consequences, or
(t) any other matter or thing with respect to the Capital I Property.


 


22





















 


(b)           “As
Is, Where Is”.  Subject to the terms
and provisions hereof and except as otherwise provided herein, Inland
acknowledges and agrees that upon Closing, Inland shall accept the property
held by the Partnership (including, without limitation, the Capital I Property
owned by the Subsidiary of Capital I) “AS IS, WHERE IS, WITH ALL FAULTS,” except to the extent expressly
provided otherwise in this Agreement and any document executed by Capital I and
delivered to Inland at Closing.  Except
as expressly set forth in this Agreement, Inland has not relied and will not
rely on, and neither Capital I nor the Existing Partners have made and are not
liable for or bound by, any express or implied warranties, guarantees,
statements, representations or information pertaining to the Capital I Property
or relating thereto (including specifically, without limitation, Property
Information packages distributed with respect to the Capital I Property) made
or furnished by Capital I, the Existing Partners, or any property manager, real
estate broker, agent or third party representing or purporting to represent
Capital I or the Existing Partners, to whomever made or given, directly or
indirectly, orally or in writing.  Inland
represents that it is a knowledgeable, experienced and sophisticated investor
of real estate and that, except as expressly set forth in this Agreement, it is
relying solely on its own expertise and that of Inland’s consultants and shall
make an independent verification of the accuracy of any documents and
information provided by Capital I and/or the Existing Partners.  Inland will conduct such inspections and
investigations of the Capital I Property as Inland deems necessary, including,
but not limited to, the physical and environmental conditions thereof, and
shall rely upon same.  By failing to
terminate this Agreement prior to the expiration of the Inspection Period,
Inland acknowledges that Capital I and the Existing Partners have afforded
Inland a full opportunity to conduct such investigations of the Capital I
Property as Inland deemed necessary to satisfy itself as to the condition of
the Capital I Property and the existence or non-existence or curative action to
be taken with respect to any Hazardous Materials on or discharged from the
Capital I Property, and will rely solely upon same and not upon any information
provided by or on behalf of Capital I, the Existing Partners or their agents or
employees with respect thereto, other than such representations, warranties and
covenants of Capital I or the Existing Partners as are expressly set forth in
this Agreement.  Upon Closing, Inland
shall assume the risk that adverse matters, including, but not limited to,
adverse physical or construction defects or adverse environmental, health or
safety conditions, may not have been revealed by Inland’s inspections and
investigations.  Inland hereby represents
and warrants to Capital I and the Existing Partners that: (a) Inland is
represented by legal counsel in connection with the transaction contemplated by
this Agreement; and (b) Inland is investing in the Partnership for business,
commercial, investment or other similar purpose and not for use as Inland’s
residence.  Inland waives any and all
rights or remedies it may have or be entitled to, deriving from disparity in
size or from any significant disparate bargaining position in relation to
Capital I or the Existing Partners.


 


(c)           Capital
I and Existing Partners Released from Liability.  Inland acknowledges that it will have the
opportunity to inspect the Capital I Property during the Inspection Period, and
during such period, observe the physical characteristics and existing
conditions and the opportunity to conduct such investigation and study on and
of the Capital I Property and adjacent areas as Inland deems necessary, and
except as otherwise provided herein Inland hereby FOREVER RELEASES AND
DISCHARGES


 


23





















 


Capital I and the Existing Partners from all responsibility and
liability, including without limitation, liabilities under any Environmental Laws,
regarding the condition, valuation, salability or utility of the Capital I
Property, or their suitability for any purpose whatsoever (including, but not
limited to, with respect to the presence in the soil, air, structures and
surface and subsurface waters, of Hazardous Materials or other materials or
substances that have been or may in the future be determined to be toxic,
hazardous, undesirable or subject to regulation and that may need to be
specially treated, handled and/or removed from the Capital I Property, current
or future federal, state and local laws, regulations or guidelines, and any
structural and geologic conditions, subsurface soil and water conditions and
solid and hazardous waste and Hazardous Materials on, under, adjacent to or
otherwise affecting the Capital I Property).  Inland further hereby WAIVES (and by Closing
this transaction will be deemed to have WAIVED) any and all objections and
complaints (including, but not limited to, federal, state and local statutory
and common law based actions, and any private right of action under any
federal, state or local laws, regulations or guidelines to which the Capital I
Property is or may be subject, including, but not limited to, any Environmental
Laws) concerning the physical characteristics and any existing conditions of
the Capital I Property.  Inland further
hereby assumes the risk of changes in applicable Laws relating to past, present
and future environmental conditions on the Capital I Property and the risk that
adverse physical characteristics and conditions, including, without limitation,
the presence of Hazardous Materials or other contaminants, may not have been
revealed by its investigation.


 


(d)           Survival.
 The terms and conditions of this Section
3.3 shall expressly survive the Closing and not merge with the provisions
of any Closing documents.  Inland
acknowledges and agrees that the disclaimers and other agreements set forth
herein are an integral part of this Agreement and that Capital I and the
Existing Partners would not have agreed to consummate this transaction for the
Contributed Capital without the disclaimers and other agreements set forth
above.


 


ARTICLE IV


CONDITIONS TO OBLIGATIONS OF INLAND


 


The obligations of Inland hereunder are subject to the fulfillment, at
or before the Closing, of each of the following conditions (all or any of which
may be waived in whole or in part by Inland):


 


4.1           Representations and
Warranties.  The representations and
warranties made by Capital I and/or the Existing Partners in this Agreement and
the disclosures of Capital I and/or the Existing Partners in the Disclosure
Schedule and all other schedules and exhibits attached hereto shall be true in
all material respects as of the date hereof and shall be true in all material respects
on and as of the Closing Date as though such representations, warranties and
disclosures were made on and as of the Closing Date.


 


4.2           Performance.  Capital I and the Existing Partners shall
have respectively performed and complied in all material respects with all
agreements, covenants, obligations, and conditions required by this Agreement
to be so performed or complied with by Capital I at or before the Closing Date.


 


24





















 


4.3           No Injunction.  There shall not be in effect on the Closing
Date any writ, judgment, injunction, decree, or similar order of any court or
Governmental Authority, or otherwise, restraining, enjoining, or otherwise preventing
consummation of any of the transactions contemplated by this Agreement.


 


4.4           No Proceeding or
Litigation.  There shall not be
instituted, pending, or (to the Knowledge of Inland or Capital I) threatened,
any action, suit, investigation, or other proceeding in, before, or by any
court or Governmental Authority to restrain, enjoin, or otherwise prevent consummation
of any of the transactions contemplated by this Agreement.


 


4.5           Capital I’s Closing
Deliveries.  Capital I (or the
Existing Partners, as applicable) shall have delivered to Inland (or the Escrow
Agent, as applicable) on or before the Closing all of the deliveries required
under this Agreement.


 


4.6           Tenant Estoppel
Certificates.  Capital I shall have
delivered tenant estoppel certificates substantially in the form of Exhibit
E hereto (or, if a tenant’s Lease specifies or contemplates another form of
tenant estoppel certificate, then such other specified or contemplated form)
executed by 75% of the retail tenants and 75% of the office tenants occupying
improvements located on the Capital I Property and the properties that are the
subject matter of the Real Property Contract, which estoppels must include
estoppels from 75% of the tenants (the “Major Tenants”) listed on Exhibit
G-l attached to the Real Property Contract, with the balance thereof
delivered within sixty (60) days of closing.  Capital I shall not be obligated to expend any
funds in connection with obtaining any such tenant estoppel certificates, and
the failure of Capital I to obtain any such tenant estoppel certificates shall
not be a breach or default hereunder.  If
the tenant estoppel certificates referred to in this Section 4.6 are not
timely delivered, then Inland’s sole remedies and recourses shall be limited to
either (a) waiving the requirement for the tenant estoppel certificate(s) in
question and proceeding to Closing without reduction of the Contributed Capital
or (b) terminating this Agreement by immediate notification to Capital I and
receiving the immediate return of all of the Earnest Money including, but not limited
to, any portion that may have been designated as the Breakup Fee under the Real
Property Contract (as such term is defined thereunder).


 


4.7           Title
Policy.  The title company shall be
prepared to issue the Owner’s Policy.


 


4.8           Closing of the Real
Property Contract.  The transactions
contemplated under the Real Property Contract shall have closed
contemporaneously with the closing of the transactions contemplated hereunder.


 


4.9           Ground Leases.  Simultaneously with the Closing, Inland and
SLTS Grand Avenue, L.P. shall have executed ground leases with respect to
certain parcels of land described under the Real Property Agreement upon terms
set forth in the Real Property Contract.


 


4.10         Parking License.  Inland shall have approved the Parking License
pursuant to the terms set forth in the Real Property Agreement.


 


In the event that any of the foregoing conditions precedent are not met
or fulfilled on the Closing Date and so long as Inland is not in default
hereunder, Inland may (a) terminate this Agreement and receive the immediate
return of all of the Earnest Money including, but not


 


25





















 


limited to, any portion that
may have been designated as the Breakup Fee, or (b) elect to close
notwithstanding the non-satisfaction of such condition, in which event Inland
shall be deemed to have waived any such condition.  In the event Inland elects to close,
notwithstanding the non-satisfaction of such condition, Inland shall be deemed
to have waived said condition, and there shall be no liability on the part of
Capital I or the Existing Partners therefor.


 


ARTICLE V 


CONDITIONS TO OBLIGATIONS OF CAPITAL I


 


The obligations of Capital I and the Existing Partners hereunder are
subject to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Capital I
and the Existing Partners):


 


5.1           Representations and
Warranties.  The representations and
warranties made by Inland in this Agreement shall be true in all material
respects as of the date hereof and shall be true in all material respects on
and as of the Closing Date as though such representations and warranties were
made on and as of the Closing Date.


 


5.2           Performance.  Inland shall have performed and complied in
all material respects with all agreements, covenants, obligations, and
conditions required by this Agreement to be so performed or complied with by
Inland at or before the Closing Date.


 


5.3           No Injunction.  There shall not be in effect on the Closing
Date any writ, judgment, injunction, decree, or similar order of any court or
Governmental Authority, or otherwise, restraining, enjoining, or otherwise preventing
consummation of any of the transactions contemplated by this Agreement.


 


5.4           No Proceeding or
Litigation.  There shall not be
instituted, pending, or (to the Knowledge of Inland or Capital I) threatened,
any action, suit, investigation, or other proceeding in, before, or by any
court or Governmental Authority to restrain, enjoin, or otherwise prevent consummation
of any of the transactions contemplated by this Agreement.


 


5.5           Closing of the Real
Property Contract.  The transactions
contemplated under the Real Property Contract shall have closed
contemporaneously with the closing of the transactions contemplated hereunder.


 


5.6           Inland’s Closing
Deliveries.  Inland shall have
delivered to Capital I (or to Escrow Agent, as applicable) on or before Closing
all of the deliveries required under this Agreement.


 


In the event that any of the foregoing conditions precedent are not met
or fulfilled on the Closing Date and so long as Capital I and the Existing
Partners are not in default hereunder, Capital I may (a) terminate this
Agreement and receive the immediate delivery of all of the Earnest Money
including, but not limited to, any portion that may have been designated as the
Breakup Fee, or (b) elect to close notwithstanding the non-satisfaction of such
condition, in which event Capital I shall be deemed to have waived any such
condition. In the event Capital I elects to close, notwithstanding the
non-satisfaction of such condition, Capital I shall be deemed to have waived
said condition, and there shall be no liability on the part of Inland therefor.


 


26





















 


ARTICLE VI 


TITLE AND SURVEY


 


6.1           Delivery of Title
Commitment and Survey.  Within five
(5) days of the Effective Date, Capital I shall deliver to Inland the following
items, to the extent not already delivered to Inland pursuant to the Real
Property Agreement:


 


(a)          Title
Commitment.  The Title Commitment (as
hereinafter defined), together with legible copies of any and all title
exception documents referenced therein.  The
“Title Commitment” shall mean a commitment or commitments for one or
more TLTA Owner’s Title Insurance Policy (Form B) for the Capital I Real
Property issued by the Chicago Title Insurance Company in the full amount of
the Property Value, covering title to the Capital I Real Property on or after
the date hereof, showing the Partnership as owner of the Capital I Real Property
in fee simple, and providing for full extended coverage over all general title
exceptions contained in such policies and containing the following special
endorsements to the extent available (collectively, the “Special Title Endorsements”),
owner’s comprehensive, access, survey (legal description equivalency), contiguity
(if applicable), encroachment (if applicable), non-imputation, and deletion of the
arbitration provision and creditors’ rights provision.  The Owner’s Policy described herein together
with the Special Endorsements is referred to herein as the Title Policy.


 


(b)          Survey.  An ALTA ACSM Title Survey of the Capital I
Real Property prepared in accordance with the Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys jointly established by the American Land Title
Association and the American Congress on Surveying and Mapping in 1999, that
meets the accuracy requirements of an Urban Survey, as defined therein, and
includes items 1, 3, 4, 6, 7 (a, b and c), 8-11 and 13-16 of Table A thereof
(the “Survey”).


 


6.2           Title and Survey
Objections.


 


(a)          In
the event (i) the Survey shows any easement, right-of-way, encroachment,
conflict, protrusion or other matter affecting the Capital I Real Property that
is unacceptable to Inland, or (ii) any exceptions appear in the Title
Commitment that are unacceptable to Inland, Inland shall notify Capital I in
writing of such facts (“Inland’s Title Objections”) not later than 5:00
p.m.  Central Time upon the date which is
the later of October 29, 2004 or five (5) business days after the date Inland
has received delivery of both the Survey and Title Commitment (the “Title
Approval Period”) but in no event later than the expiration of the
Inspection Period.  Upon the expiration
of the Title Approval Period, except for Inland’s Title Objections, Monetary
Liens (as hereafter defined), and any other matters arising subsequent to the
date of the Survey and Title Commitment, Inland shall be deemed to have
accepted the Survey, the Title Commitment and all matters shown or addressed
therein, including, without limitation, any easement, right of way,
encroachment, conflict, discrepancy, overlapping of improvements, protrusion,
lien, encumbrance, restriction, condition, covenant, exception or other matter
with respect thereto (collectively, the “Approved Title Matters”).


 


27





















 


(b)          Notwithstanding
anything to the contrary contained herein, except for any Monetary Liens and
any matters created by Capital I after the date of the Title Commitment,
Capital I shall have no obligation to take any steps or bring any action or
proceeding or otherwise to incur any effort or expense whatsoever to eliminate
or modify any of Inland’s Title Objections; provided, however, Capital I, at
its sole option, may attempt to eliminate or modify all or a portion of Inland’s
Title Objections to Inland’s reasonable satisfaction prior to the Closing Date.
 In the event Capital I is unable or
unwilling to attempt to eliminate or modify all of Inland’s Title Objections to
the reasonable satisfaction of Inland, Capital I shall provide written notice
thereof to Inland within five (5) business days of its receipt of Inland’s
Title Objections (“Capital I’s Notice”). Inland may thereafter elect to
close notwithstanding Inland’s Title Objections (in which case Capital I shall
have no liability to eliminate or modify, and Inland shall take the Capital I
Property subject to Inland’s Title Objections) or Inland may (as its sole and
exclusive remedy) terminate this Agreement by delivering notice thereof in
writing to Capital I, in which event neither party shall have any obligation
hereunder other than the Surviving Obligations and Inland shall be entitled to
return all of the Earnest Money, including any portion thereof that may have
been designated as the Breakup Fee.  Capital
I shall cause all mortgages, deeds of trust and monetary liens (including liens
for delinquent taxes, mechanics’ liens and judgment liens) affecting the
Capital I Property and all indebtedness secured thereby (the “Monetary Liens”)
to be satisfied, released and discharged of record on or prior to the Closing
Date.


 


ARTICLE VII


MISCELLANEOUS


 


7.1           Notices.  Any notice or other
communication given pursuant to this Agreement must be in writing and (a) delivered personally, (b) sent by
telefacsimile or other similar facsimile
transmission, (c) delivered by overnight express or (d) e-mail as follows:


 


(a)            If to Purchaser:


 


Inland Real Estate Acquisitions, Inc.


1700 Alma Road


Plano, Texas 75075


Attn: Matthew Tice


Telephone: (972) 442-6770


Facsimile: (972) 429-9017


E-Mail: tice@inlandgroup.com


 


The Inland
Real Estate Group, Inc


2901
Butterfield Road


Oak Brook, Illinois 60523


Attn: Dennis
K. Holland, Esq.


Telephone:
(630) 218-8000


Facsimile:
(630) 218-4900


E-Mail: dholland@inlandgroup.com


 


28





















 


(b)                                 If
to Capital I:


 


Cooper & Stebbins, L.P.


1256 Main Street, Suite 240


Southlake, Texas 76092


Attention: Frank S. Bliss


Telephone: (817) 329-8400


Facsimile: (817)  251-8717


E-Mail: fbliss@southlaketownsquare.com


 


with a copy to:


Winstead Sechrest & Minick P.C.


5400 Renaissance Tower


1201 Elm Street


Dallas, Texas 75270


Attention: John Nolan, Esq.


Telephone: (214) 745-5251


Facsimile: (214) 745-5390


E-mail: jnolan@winstead.com


 


All notices and other communications required or permitted under this
Agreement that are addressed as provided in this Section 7.1 will (A) if
delivered personally be deemed given when delivered or if by overnight express,
be deemed given the day after deposited with an overnight carrier; (B) if
delivered by telefacsimile or similar facsimile transmission, be deemed given
when electronically confirmed; and (C) if sent by e-mail when sent.  Any party from time to time may change its
address for the purpose of notices to that party by giving a similar notice
specifying a new address, but no such notice will be deemed to have been given
until it is actually received by the party sought to be charged with the
contents thereof.


 


7.2                                 Entire
Agreement.  Except for documents
executed by Capital I and Inland pursuant hereto, this Agreement supersedes all
prior discussions and agreements between the parties with respect to the
subject matter of this Agreement, and this Agreement contains the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof.


 


7.3                                 Expenses.  Except as otherwise expressly provided in
this Agreement, each of Capital I and Inland will pay
its own costs and expenses in connection with this Agreement and the transactions
contemplated hereby.


 


7.4                                 Public
Announcement.  Neither party hereto
shall make any public announcement or disclosure of any information related to
this Agreement to outside brokers or third parties, before or after the
Closing, without the prior written specific consent of the other party;
however, either party may disclose the terms and conditions of this Agreement
if required by Law or court order, and to its attorneys, accountants, employees
and existing or prospective financial partners provided same are advised by
such party of the confidential nature of such terms and conditions and agree to
maintain the confidentiality thereof (in each case, prior to disclosure).  The consent by either party to any disclosures
shall not be deemed to be a waiver on the part of such party of


 


29





















 


any prohibition against any future
disclosure.  Notwithstanding the
foregoing, Inland may make any and all SEC filings deemed appropriate by
Inland.


 


7.5                                 Further
Assurance.  Capital I and Inland
agree that, from time to time after the Closing, upon the reasonable request of
the other, they will cooperate and will cause their respective Affiliates to
cooperate with each other to effect the orderly transition of the business, operations,
and affairs of Capital I.  Without
limiting the generality of the foregoing, (a) Capital I will provide, and will
cause its respective Affiliates to provide, representatives of Inland reasonable
access to all books and records of Capital I and their Affiliates reasonably
requested by Inland in the preparation of any post-Closing financial
statements, reports, Tax Returns, or Tax filings of Capital I; (b) Inland will
provide, representatives of the Existing Partners reasonable access to all
pre-Closing books and records of Capital I reasonably requested by Capital I in
the preparation of any post-Closing financial statements, reports, Tax Returns,
or Tax filings of Capital I; and (c) each party hereto will execute such
documents and instruments as the other party hereto may reasonably request
containing terms and conditions mutually satisfactory to each party hereto to
further effectuate the terms hereof.


 


7.6                                 Waiver.
 Any term or condition of this Agreement
may be waived at any time by the party that is entitled to the benefit
thereof.  Such waiver must be in writing
and must be executed by an executive officer of such party.  A waiver on one occasion will not be deemed to
be a waiver of the same or any other breach or nonfulfillment on a future
occasion.  All remedies, either under
this Agreement, or by Law or otherwise afforded, will be cumulative and not
alternative.


 


7.7                                 Amendment.  This Agreement may be modified or amended
only by a writing duly executed by or on behalf of Capital I and Inland.


 


7.8                                 Counterparts.
 This Agreement may be executed
simultaneously in any number of counterparts, each of which will be deemed an
original, but all of which will constitute one and the same instrument.


 


7.9                                 No
Third Party Beneficiary.  Except as
otherwise set forth herein, the terms and provisions of this Agreement are
intended solely for the benefit of Capital I, the Existing Partners, Inland,
and their respective successors and permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any
other person or entity.


 


7.10                           Governing
Law.  This Agreement will be governed
by and construed and enforced in accordance with the Laws of the State of Texas
(without regard to the principles of conflicts of Law) applicable to a Contract
executed and performable in such state.


 


7.11                           Binding
Effect.  This Agreement is binding
upon and will inure to the benefit of the parties and their respective
successors and permitted assigns.


 


7.12                           Limited
Assignment.  Neither this Agreement
nor any right or obligation hereunder or part hereof may be assigned by any
party hereto without the prior written consent of the other party hereto (and
any attempt to do so will be void), except as otherwise specifically provided
herein.  Notwithstanding the foregoing,
Inland shall have the right to assign this Agreement on or before the fifth day
prior to the Closing Date to an Affiliate of Inland, any


 


30





















 


Affiliate of The Inland Real Estate Group, Inc., or any Affiliate of
Inland Western Retail Real Estate Trust, Inc.; provided, however, that Inland
shall remain liable for all obligations of Inland under this Agreement.  Inland may assign this Agreement and its
rights hereunder to any affiliate,


 


7.13                           Provisions.  If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under any present or future Law, and if
the rights or obligations under this Agreement of Capital I, the Existing
Partners and Inland will not be materially and adversely affected thereby, (a)
such provision will be fully severable; (b) this Agreement will be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom; and (d) in
lieu of such illegal, invalid, or unenforceable provision, there shall be added
automatically as part of this Agreement a legal, valid, and enforceable
provision as similar in terms to such illegal, invalid, or unenforceable
provision as may then be legal, valid and enforceable under applicable Law.


 


7.14                           Confidentiality.
 Affiliates of Capital I and Inland have
entered into the Confidentiality Agreement dated September 22, 2004, attached
hereto and incorporated herein, and such Confidentiality Agreements shall be
binding upon the parties herein.


 


7.15                           Condemnation.  If, prior to the Closing, action is initiated
to take any of the Capital I Property by eminent domain proceedings or by deed
in lieu thereof, Inland may either at or prior to Closing (a) terminate this
Agreement and receive a full refund of all of the Earnest Money, including any
amount designated as a Breakup Fee, or (b) consummate the Closing, in which
latter event all of Capital I’s assignable right, title and interest in and to
the award of the condemning authority shall be assigned to Inland at the
Closing and there shall be no reduction in the Contributed Capital.


 


7.16                           Casualty.  Except as otherwise provided in this
Agreement, Capital I assume all risks and liability for damage to or injury
occurring to the Capital I Property by fire, storm, accident, or any other
casualty or cause until the Closing has been consummated.  If the Capital I Property, or any part
thereof, suffers any damage in excess of $2,000,000.00 or in any amount that
would allow any of the Major Tenants to abate rent or terminate their lease
prior to the Closing from fire or other casualty which Capital I, at their sole
option, does not elect to repair, Inland may either at or prior to Closing (a)
terminate this Agreement and receive a full refund of the Earnest Money, or (b)
consummate the Closing, in which latter event all of Capital I’s right, title
and interest in and to the proceeds of any insurance covering such damage to
the extent the amount of such insurance does not exceed the Contributed
Capital, shall be assigned to Inland at the Closing and Inland shall receive a
credit for the deductible.  If the
Capital I Property, or any part thereof, suffers any damage equal to or less
than $2,000,000.00 prior to the Closing, Inland agrees that it will consummate
the Closing and accept the assignment of the proceeds of any insurance covering
such damage plus an amount equal to Capital I’s deductible under its insurance
policy and there shall be no reduction in the Contributed Capital.


 


7.17                           Maintenance
and Contracts.  From the Effective
Date of this Agreement until the Closing or earlier termination of this
Agreement:


 


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(a)                                   Capital
I shall cause the Subsidiary of Capital I to operate and maintain the Capital I
Property in the ordinary course of business consistent with the manner in which
it has heretofore been operated and maintained. 
Capital I shall maintain property and casualty insurance on the Capital I
Property in the same amounts and for the same coverage as it has heretofore
maintained for the Capital I Property.


 


(b)                                  Capital
I will cause the Subsidiary of Capital I to perform all of Capital I’s respective
material obligations under the Contracts.  Capital I will not, without the prior written
consent of Inland (which consent will not be unreasonably withheld or delayed),
modify, enter into, or renew any Contract.


 


7.18                           Leasing.
 From the Effective Date of this
Agreement through the expiration of the Inspection Period, Capital I will cause
the Subsidiary of Capital I to not, without the prior written consent of Inland
(which consent will not be unreasonably withheld or delayed), modify, enter
into, or renew any Leases.  Inland’s
failure to respond in writing within four (4) business days of Capital I’s
request for consent shall be deemed an approval of Capital I’s request,
provided that at the time of any request for approval, if there remain less
than four (4) business days prior to the expiration of the Inspection Period,
the Inspection Period shall be extended to give Inland at least four (4)
business days to respond.  Subsequent to
the expiration of the Inspection Period, Capital I shall not modify, enter
into, or renew any leases except upon the express written consent of Inland
which may be granted or withheld in Inland’s sole and absolute discretion.


 


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INTENTIONALLY BLANK]


 


SIGNATURE PAGES FOLLOW


 


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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of this 5th day of November, 2004, by the duly
authorized representatives of Capital I, the Existing Partners and Inland.


 


CAPITAL I:


 


	
  C&S SOUTHLAKE CAPITAL PARTNERS I, L.P.

  a Texas limited partnership,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  CS SOUTHLAKE, L.L.C.,

  a Texas limited liability company,

  General Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian R. Stebbins

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Brian R. Stebbins,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Managing Member

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date of Signature:

  	
  As of
  11.5.04

  	
   

  	
   

  	
   

  	
   

  
									



 


	
  C&S

  	
   

  	
   

  	
   

  



 


	
  COOPER & STEBBINS, L.P.,

  a Texas limited partnership,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  CS TOWN CENTRES, LLC,

  	
   

  	
   

  	
   

  
	
  a Texas limited liability company

  General Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Brian R. Stebbins

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Brian R. Stebbins,

  	
   

  	
   

  	
   

  
	
   

  	
  Managing Member

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date of Signature:

  	
  As of
  11.5.04

  	
   

  	
   

  	
   

  	
   

  
							



 


	
  CSLLC:

  	
   

  	
   

  	
   

  



 


	
  CS SOUTHLAKE, LLC

  a Texas limited liability company

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Brian R. Stebbins

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Brian R. Stebbins,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Managing Member

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date of Signature:

  	
  As of 11.5.04

  	
   

  	
   

  	
   

  	
   

  
									



 


1





















 


	
   

  	
   

  	
   

  	
  INLAND:

  
	
   

  	
   

  	
   

  	
  INLAND REAL ESTATE ACQUISITIONS,

  INC., an Illinois corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ G. Joseph Cosenza

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  G. Joseph Cosenza

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  President

  



 


Exhibit
A – Description of the Capital I Real Property


Exhibit
B – Form of Amended and Restated Partnership Agreement for Capital I


Exhibit
C – List of Property Information


Exhibit
D – Form of Audit Response Letter


Exhibit
E – Form of Tenant Estoppel Certificate


Exhibit
F – Form of Special Warranty Deed


Exhibit
G – Form of Assignment and Assumption of Leases


Exhibit
H – Form of Bill of Sale, Assignment and Assumption of Contracts


Disclosure
Schedule


 


2





















 


JOINDER OF SECTION 3.1.1 (s) GUARANTOR:


The following individual hereby joins in the execution of this
Agreement to Admit Partner for the sole purpose of evidencing such individual’s
agreement to be bound by the terms of Section 3.1.1(s) of this Agreement
for the time period stated in Section 3.1 and for no other purpose.


 


 


	
  /s/
  Peter C. Cooper

  	
   

  
	
  Peter
  C. Cooper, an individual

  	
   

  
	
   

  	
   

  
	
  Date
  of Signature:

  	
   

  	
   

  
				



 


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