Exhibit 10.437


 


REINSTATEMENT OF AND AMENDMENT TO PURCHASE AND


SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS


 


THIS
REINSTATEMENT OF AND AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this “Amendment”) is
entered into as of November 4, 2004 by and between Donahue Schriber Realty
Group, L.P., a Delaware limited partnership (“Seller”),
and Inland Real Estate Acquisitions, Inc., an Illinois corporation (“Buyer”).


 


RECITALS:


 


A.                                   Seller
and Buyer entered into that certain Purchase and Sale Agreement and Joint Escrow
Instructions dated as of October 11, 2004 (as previously amended in writing,
the “Agreement”; capitalized terms used but
not defined in this Amendment shall have the meanings given to them in the
Agreement) with respect to the property known as Placentia Village Center located
in Placentia, California. Buyer terminated the Agreement in accordance with its
terms on November 3, 2004.


 


B.                                     Seller
and Buyer now desire to reinstate the Agreement, to acknowledge certain matters
with respect to the Agreement, and to amend the Agreement, as set forth herein.


 


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


 


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


 


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


 


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


 


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


 


5.                                       Agreement
in Effect. The terms and provisions of this Amendment shall control over any
inconsistent terms and provisions of the Agreement. Except as amended hereby,
the parties acknowledge and agree that the Agreement is in full force and
effect in accordance with its terms. If required by Escrow Holder, Buyer and Seller
shall enter into a separate escrow agreement with

Escrow Holder to implement the post-Closing elements of this Amendment,
provided such escrow agreement is not in conflict with this Amendment. This
Amendment may be executed in counterparts, each of which shall be an original
and both of which, together, shall constitute one and the same instrument.


 


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


 


	
  SELLER:

  	
  Donahue Schriber Realty Group, L.P., a Delaware limited

  partnership

  
	
   

  	
   

  
	
   

  	
  By: Donahue Schriber Realty Group, Inc., a Maryland

  corporation, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick S. Donahue

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  PATRICK S.
  DONAHUE

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dirk Van Wyk

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Dirk Van Wyk

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
  BUYER:

  	
  Inland Real Estate Acquisitions, Inc., an Illinois corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Joseph Cosenza

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  G. JOSEPH
  COSENZA

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  PRESIDENT

  	
   

  
										



 


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PURCHASE AND SALE AGREEMENT


AND JOINT ESCROW INSTRUCTIONS


 


THIS PURCHASE
AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Agreement”)
is entered into as of October 11,2004 by and between Donahue Schriber Realty
Group, L.P., a Delaware limited partnership (“Seller”),
and Inland Real Estate Acquisitions, Inc., an Illinois corporation (“Buyer”).


 


RECITALS:


 


A.                                   Seller
is the owner of certain real property improved as a retail center known as Placentia
Village Center located in Placentia, California.


 


B.                                     Buyer
desires to purchase that property, and Seller desires to sell that property, on
the terms and conditions contained in this Agreement.


 


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


 


1.               PURCHASE
AND SALE


 


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


 


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


 


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


 


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


 


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


 


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


 


1





















 


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


 


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


 


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


 


1.3.1                        Within
two (2) business days after the “Effective Date” (as defined below), Buyer
shall deliver to Stewart Title Insurance Company (“Escrow
Holder” or the “Title Company”),
in immediately available funds, the sum of Five Hundred Thousand Dollars
($500,000) (said sum, together with any interest earned thereon while held by
Escrow Holder, is herein called the “Deposit”).    Escrow Holder shall deposit the Deposit
into an interest-bearing account satisfactory to Buyer pending disbursement in
accordance with the terms of this Agreement. Unless Buyer terminates this
Agreement by delivery of written notice of termination (the “Termination Notice”) to Seller and Escrow Holder on or
before October 27, 2004 (the “Decision Date”),
the Deposit shall be non-refundable after the Decision Date, except in the
event of Seller’s “Default” (as defined below) that occurs or continues after
the Decision Date and except as otherwise expressly herein provided, and shall
be applied to the Purchase Price at Closing. As used herein, Seller’s “Default”
shall not be deemed to have occurred unless Seller shall be in default
hereunder and shall not have cured such default within five (5) days after
written notice from Buyer.


 


1.3.2                        Not
later than 10:00 am Pacific time on the “Closing Date” (as defined below), Buyer
shall deposit into Escrow, by wire transfer of federal funds, the balance of
the Purchase Price, subject to adjustment by reason of any applicable
prorations and the allocation of closing costs described below.


 


2.               OPENING OF
ESCROW


 


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


 


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


 


2





















 


satisfaction of Buyer) of the “Deed” (as defined below) in the Official
Records of Orange County, California and the payment of the Purchase Price to
Seller.


 


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


 


3.               ACTIONS PENDING CLOSING


 


3.1                   Buyer’s
Review of Title.


 


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


 


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


 


3.1.3                        Seller
shall notify Buyer in writing within two (2) business days after Seller’s receipt
of Buyer’s notice of Disapproved Exceptions that: (a) Seller will remove such
Disapproved Exceptions from title as of or before Closing; or (b) Seller will
not remove any or certain specified Disapproved Exceptions from title. Seller’s
failure to address any Disapproved Exceptions in any notice, or failure to give
a notice as to any Disapproved Exceptions, shall constitute Seller’s statement
that it will not remove such Disapproved Exceptions from title.


 


3.1.4                        If
Seller does not provide Buyer with written notice that it shall remove all Disapproved
Exceptions from title, Buyer shall have the right to terminate this Agreement
by delivery of written notice of termination in accordance with Section 3.3 on
or before the Decision Date, as Buyer’s sole and exclusive remedy. Buyer’s
failure to provide such notice of termination on or before the Decision Date
shall constitute Buyer’s waiver of its disapproval of the Disapproved Exceptions.
In the case of Buyer’s waiver (or deemed waiver) of Disapproved Exceptions,
Seller shall have no obligation to remove or otherwise address such Disapproved
Exceptions from title, and such waived Disapproved Exceptions shall be deemed
approved. If Buyer elects to terminate this Agreement pursuant to this Section
3.1.4, the provisions of Section 3.3 shall apply. Except for the Disapproved
Exceptions Seller removes or covenants to remove, the exceptions to title shown
by the Title Report and Survey and any encumbrance arising from the acts of
Buyer are called the “Permitted Exceptions”
in this Agreement. In no event shall any mortgage or judgment liens be Permitted
Exceptions, and in no event shall any exceptions created by Seller after the
Effective Date that materially adversely affect title to the Property be
Permitted Exceptions, and Seller shall cause the same to be removed at or
before Closing. Should a supplemental Title Report be issued by the Title
Company after the date of the original Title Report disclosing additional title
exceptions that


 


3





















 


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


 


3.2                   Buyer’s
Review of the Property; Agreements. Seller has provided Buyer with copies
of (or make available to Buyer for review at the Project) the items reflected
on Schedule 3.1 attached hereto (collectively, the “Due
Diligence Documents”). Notwithstanding the foregoing or any other provision
hereof to the contrary, (i) Seller’s responsibility to provide Due Diligence
Documents shall be limited to those Due Diligence Documents in Seller’s (or its
property manager’s) possession (without limiting the foregoing, those items
that are marked “not in our possession” on Schedule 3.1 shall not be provided),
(ii) Seller shall not be required to generate reports or analyses not typically
prepared (or reflecting information not typically reflected) in Seller’s ordinary
course of business, and (iii) the Due Diligence Documents are provided as an
accommodation to Buyer and, except for any representations and warranties
expressly set forth in this Agreement, Seller expressly disclaims any and all
representations and warranties regarding the same. On or before the Decision
Date, Buyer shall have reviewed the foregoing and prepared, obtained, reviewed
(or shall have chosen not to have prepared, obtained or reviewed) and approved,
among other things, all other reports of investigations of the Property,
including, such soil, environmental, geological and engineering tests and
reports, and other inspections of the Property as Buyer shall deem necessary in
order to determine whether the Property is suitable for Buyer’s intended use,
as well as investigated (or chosen not to have investigated) all zoning
requirements, federal, state and local laws, ordinances, rules, regulations,
permits, licenses, approvals and orders applicable to the Property. Pursuant to
and subject to the requirements of Section 3.5 of this Agreement, Buyer may
enter onto the Property for the purpose of conducting its inspection (the “Inspection”) of the Property; provided, however, without
first obtaining Seller’s prior written consent, which consent will not be
unreasonably withheld, Buyer shall only conduct a visual inspection, with no
right to conduct any physical testing, boring, sampling or removal
(collectively “Physical Testing”) of any portion
of the Property. If Buyer wishes to conduct any Physical Testing of the
Property, Buyer shall submit a work plan to Seller prior to the Decision Date
for Seller’s prior written approval, which work plan Seller may modify, limit
or disapprove in its reasonable discretion. If, on the basis of the review and
the Inspection described in this Section 3.2, or if for any other reason or no
reason, Buyer determines that the Property is not suitable for Buyer’s intended
use, then Buyer may terminate this Agreement by delivering the Termination
Notice to Seller and Escrow Holder on or before the Decision Date. Buyer’s
failure to deliver the Termination Notice to Seller and Escrow Holder on or
before the Decision Date shall constitute Buyer’s approval of the
aforementioned items and of the condition of the Property.


 


3.3                   Buyer’s
Termination. If Buyer elects to terminate this Agreement in accordance with
Sections 3.1.4 or 3.2, Buyer shall deliver the Termination Notice to Seller and
Escrow Holder on or before the Decision Date. If Buyer elects to terminate this
Agreement in accordance with Sections 4.4 or 4.5, then on or before the dates
specified therein, Buyer shall deliver a Termination Notice to Seller and
Escrow Holder that Buyer elects to terminate this Agreement pursuant to said
Sections. Buyer’s failure to timely deliver such termination notice pursuant to
said Sections of this Agreement shall constitute Buyer’s waiver of Buyer’s
right to terminate this Agreement pursuant to said Sections. If Buyer timely
elects to terminate this Agreement pursuant to Sections 3.1.4, 3.2, 4.1.7,


 


4





















 


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


 


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


 


3.5                   Access to
Property.


 


3.5.1                        Subject to
the rights of existing tenants of the Property (“Tenants”),
whom Buyer hereby agrees not to interview or question without having provided
Seller and Seller’s Broker (as defined below) with at least 24 hours prior
written notice of its intention to do so during such interview, Seller hereby
grants to Buyer and Buyer’s representatives, agents, employees and contractors
(collectively, “Buyer’s Agents”) a nonexclusive
license to enter onto the Property solely for the purpose of conducting Buyer’s
Inspection. Any Inspection work shall be at the sole cost and expense of Buyer.
The license created under this Section 3.5.1 shall expire on termination of
this Agreement. At least forty-eight (48) hours prior to any entry and
Inspection, Buyer shall provide Seller with sufficient evidence to show that
Buyer and Buyer’s Agents, who are to enter upon the Property, are adequately
covered by policies of insurance issued by a carrier reasonably acceptable to
Seller insuring Buyer and Seller against any and all liability arising out of
Buyer’s or Buyer’s Agents’ entry upon and Inspection of the Property, including
without limitation any loss or damage to the Property, with coverage in the
amount of not less than $1,000,000 per occurrence.


 


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


 


3.5.3                        Buyer
shall, at its sole cost and expense, comply with all applicable federal, state and
local laws, statutes, rules, regulations, ordinances, or policies in conducting
the Inspection and the Physical Testing.


 


3.5.4                        Buyer hereby agrees to hold
harmless, protect, defend and indemnify, and hereby releases, Seller and its
trustees, officers, directors, employees, contractors, agents, subsidiaries and
affiliates, and its and their respective successors and assigns (collectively,
the “Indemnitees”) and the Property from and
against any and all claims, demands, causes of action, losses, liabilities,
liens, encumbrances, costs or expenses (including without limitation reasonable
attorneys’ fees and litigation costs) arising out of, connected with or
incidental to: (a) any injuries to persons (including death) or property (real
or personal), or (b) any mechanics’, workers’ or other liens on the Property, by
reason of or relating to the work or activities conducted on the Property by
Buyer or Buyer’s


 


5





















 


Agents. The provisions of this Section 3.5.4 shall survive any
termination of this Agreement and shall not be limited in any way by any other
terms of this Agreement.


 


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


 


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


 


4.               ADDITIONAL
AGREEMENTS OF THE PARTIES


 


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


 


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


 


4.1.2                        There are
no pending or, to Seller’s knowledge, threatened legal proceedings, administrative
actions, or pending governmental investigation of any kind or character
adversely affecting the Project or Seller’s interest therein.


 


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


 


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


 


4.1.5                        Seller is
not required to obtain any consents or approvals to consummate the transactions
contemplated in this Agreement.


 


4.1.6                        To Seller’s
knowledge, the copies of the Leases and Contracts delivered to Buyer (or made
available to Buyer) for its review are true and correct copies of the Leases
and Contracts and are all of the Leases and Contracts affecting the Property.
To Seller’s knowledge all of the Leases and Contracts are in full force and
effect and there are no defaults by any party thereto under the Leases and
Contracts. To Seller’s knowledge, except as may be set forth on the rent roll


 


6





















 


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


 


4.1.7                        As
used herein, “to Seller’s knowledge” and phrases
of similar import means the actual (not constructive and without attribution)
conscious knowledge, without undertaking, and without any duty to undertake,
any investigation or inquiry, of Deborah Hawthorne and Dirk Van Wyk, which
individuals are the employees of Seller (or its affiliates) with the operational/asset
disposition responsibility for the Project. It is expressly agreed and
understood that in no event shall Buyer be entitled to bring any action(s) for
damages or otherwise against such individuals. In the event Seller or Buyer
should become aware of any facts or circumstances prior to the Closing Date
that should render any of Seller’s representations and warranties that are
limited to Seller’s knowledge no longer accurate, the party first becoming so
aware shall promptly notify the other party in writing, and Buyer shall have
the right, as its sole and exclusive remedy, to terminate this Agreement by
written notice to Seller and Escrow Holder delivered within seven (7) days
after receipt of Seller’s notice or first becoming aware of such facts, in which
case this Agreement shall terminate in accordance with Section 3.3. This
Section 4.1.7 shall supersede any inconsistent provision of this Agreement.


 


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


 


4.2.1                        Buyer’s
Investigation and. Release. (a) Buyer acknowledges that, except as
explicitly set forth herein, there are no representations or warranties of any
kind whatsoever, express or implied, made by Seller in connection with this
Agreement, the purchase of the Property by Buyer, the Contracts, the Leases,
the physical condition of the Property or whether the Property complies with
applicable laws or is appropriate for Buyer’s intended use; (b) prior to the
Decision Date Buyer shall have (or shall have chosen not to have) fully
investigated the Property (including the Leases and Contracts) and all matters
pertaining thereto; (c) Buyer is not relying on any statement or representation
of Seller, its agents or its representatives nor on any information supplied by
Seller, its agents or its representatives; (d) Buyer, in entering into this
Agreement and in completing its purchase of the Property, is relying, and shall
rely, entirely on its own investigation of the Property based on its extensive
experience in and knowledge of real property in the areas where the Property is
located; (e) Buyer is aware (or has chosen not to be aware) of all zoning
regulations, other governmental requirements, legal, site and physical
conditions, and other matters affecting the use and condition of the Property;
(f) Buyer’s decision to purchase the Property on the terms and conditions
hereof has been, and at all times shall be, made solely and exclusively in
reliance on Buyer’s own review, inspection and investigation of the Property
(including the Leases and Contracts) and of materials, documents, information
and studies relating to the Property; (g) BUYER SHALL PURCHASE THE
PROPERTY IN ITS “AS IS” CONDITION AS OF THE DATE OF CLOSING. Without
limiting the foregoing, Buyer acknowledges that Buyer has accepted full
responsibility for assuring the Property complies at Closing with all
applicable laws, rules, regulations, orders and ordinances, and in the event
any such laws, rules, regulations, orders or


 


7





















 


ordinances impose any pre-Closing obligations upon Seller, Seller shall
have the right to (i) perform the same at Buyer’s expense and the cost thereof
shall be added to the Purchase Price at Closing, if Seller is obligated by law
to perform the same prior to Closing, and/or (ii) require Buyer to execute and
deliver at Closing any documentation requested by Seller or required by
governmental authorities confirming Buyer has accepted such responsibility and
indemnifying Seller against the same.


 


4.2.2                        Authority.  Buyer has the power and authority to own the
Property and to consummate the transactions contemplated by this Agreement.
This Agreement and all instruments, documents and agreements to be executed by
Buyer in connection herewith are or when delivered shall be duly authorized,
executed and delivered by Buyer and are valid, binding and enforceable obligations
of Buyer. Each individual executing this Agreement on behalf of Buyer
represents and warrants to Seller that he or she is duly authorized to do so.


 


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


 


4.3                   Reaffirmation.   The representations and warranties of Seller
and Buyer set forth in Sections 4.1 and 4.2 are true and correct as of the date
of this Agreement and shall be true and correct as of the Closing and shall be
a condition of Buyer’s obligation to Close this transaction (except if Buyer
shall have received written notice from Seller pursuant to Section 4.1.7 of any
facts or circumstances prior to the Closing Date that should render any of
Seller’s representations and warranties that are limited to Seller’s knowledge
no longer accurate, or if Buyer itself shall have become aware of any facts or
circumstances prior to the Closing Date that should render any of Seller’s
representations and warranties that are limited to Seller’s knowledge no longer
accurate, the foregoing condition to Closing shall be deemed waived after the
expiration of the seven-day period referenced in Section 4.1.7).   Subject to Section 4.1.7, the Closing shall
constitute each party’s reaffirmation of those representations and warranties
as of the Closing, and each party shall execute and deliver at Closing a
document (a “Reaffirmation Certificate”)
reaffirming such representations and warranties, which shall survive the
Closing.


 


4.4                   Condemnation.
If, prior to Closing, any portion of the Property shall be condemned or become
the subject of any pending or threatened condemnation action, Seller shall
promptly notify Buyer thereof. This Agreement shall remain in full force and
effect, regardless of such condemnation or threatened or pending action, and if
any condemnation award is received by Seller prior to Closing, the amount of
such award shall be applied as a credit against the Purchase Price. Any
condemnation awards received by Seller on or after Closing shall be promptly
delivered by Seller to Buyer. Notwithstanding the foregoing, in the event such
condemnation involves 5% or more of the Land or the Improvements or affects any
of the existing access points to the Property or permits a tenant to terminate
its Lease or abate or reduce its rent, Buyer shall be entitled to terminate this
Agreement by written notice thereof to Seller given within five (5) business
days after Buyer shall have been notified of such condemnation, whereupon the
Deposit (to the extent previously delivered to Escrow Holder) shall be returned
to Buyer. Buyer’s failure to timely deliver such notice to Seller within such
five (5) business day period shall constitute Buyer’s election to proceed to Closing.


 


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


 


4.6                   Tenant
Lease Amendments; Management of Property. Seller agrees to promptly provide
Buyer with a copy of all proposed amendments to existing Leases, and all
proposed new Leases, of any portion of the Property proposed to be executed
after the Effective Date and before the date (the “Stop Date”)
that is seven (7) days prior to the Decision Date for Buyer’s review, but in no
event shall Buyer have any right to approve the same, and Buyer’s failure to
terminate this Agreement on or before the Decision Date shall constitute Buyer’s
deemed approval of all such Lease amendments and new Leases. From and after the
Stop Date, Seller shall not execute any amendments to any existing Leases, or
any new Leases, without Buyer’s prior written consent. Upon the Closing, Buyer
shall reimburse Seller for, or assume Seller’s obligations with respect to, all
leasing commissions paid or payable by Seller and/or tenant improvement
obligations of Seller with respect to all Lease amendments and new Leases
approved (or deemed approved) by Buyer pursuant to this Section 4.6 (except
Seller shall be responsible for any leasing commissions payable with respect to
any Leases that are renewed or extended before the Closing Date). Subject to
damage or destruction, or other matters outside of Seller’s control, Seller
agrees to continue to manage the Property until Closing in the same manner it
is currently managing the Property (in no event shall Seller have any
obligation to make capital repairs, replacements or improvements, nor to cause
the Property to comply with applicable laws). Prior to Closing, and for a
reasonable period of time thereafter, Seller agrees to reasonably cooperate
with Buyer and Buyer’s accountants to facilitate Buyer’s evaluations and
required reports, including at least a one-year audit of the books and records
of the Property, which audit shall conclude with the execution by Seller of a
letter in the form attached hereto as Schedule 4.6 (Seller confirms that the
representations in such letter are, to Seller’s knowledge, correct as of the
date of execution of this Agreement, but Seller reserves the right to revise
such letter to reflect the state of Seller’s knowledge at the time Seller is
requested to execute such letter).


 


4.7                   Estoppel
Certificates. Seller agrees to promptly exert good faith efforts to obtain
estoppel certificates (“Estoppels”) and
subordination, non-disturbance and attornment agreements (“SNDAs”),
on Seller’s form or on such other reasonable forms as Buyer shall deliver to
Seller within five (5) days after the Effective Date, from the Tenants. Seller
shall not be in default hereunder by reason of the unavailability, or contents,
of any Estoppel or SNDA (but Seller shall act


 


9





















 


in good faith with respect to any defaults of Seller alleged by any
Tenant in any Estoppel or SNDA). Subject to the further terms of this Section
4.7, Buyer shall have the right to terminate this Agreement pursuant to Section
3.3 if three (3) business days prior to Closing Seller shall be unable to
obtain Estoppels approved by Buyer executed by (i) Office Max, Bank of America,
Marie Callender’s, Ross Dress for Less and Silk Pavillion (collectively, the “Majors”), plus (ii) other tenants (the “Minors”)
which, in the aggregate, occupy at least seventy five percent (75%) of the
remaining leased space at the Property not counting the space leased by the
Majors, plus, if applicable, any owner’s association or similar authority under
any active, recorded covenants, conditions and restrictions affecting the
Property (a “CC&R Estoppel”). Buyer shall
be deemed to have approved each Estoppel delivered to it by Seller unless Buyer
shall have delivered written notice to Seller objecting to such Estoppel within
four (4) days after Seller’s delivery of such Estoppel to Buyer. Buyer shall
have no right to object to, and shall be deemed to have approved, any Estoppel
executed on a form set forth in, or stipulated by, the applicable lease that
does not reflect a default by landlord or tenant and that does not contain any
information materially inconsistent with the information set forth in the
applicable lease to which it pertains. Buyer shall have no right to terminate
this Agreement by reason of the unavailability, or contents, of any SNDAs.
Seller agrees to execute and deliver to Buyer at Closing a “Seller Estoppel”
with respect to those Majors and Minors and any CC&R Estoppel as to which
Seller has been unable to obtain an executed Estoppel (or CC&R Estoppel),
but each Seller Estoppel shall be limited “to Seller’s knowledge” (as defined
in Section 4.1.7). Buyer shall further have the right to terminate this
Agreement and to obtain a return of its Deposit if any Tenant shall, on the
Closing Date, be delinquent, beyond any applicable grace period set forth in
its Lease, in paying its monthly rent due under its Lease.


 


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


 


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


 


10





















 


5.               CLOSING


 


5.1                   Deposits
Into Escrow.


 


5.1.1                        At
least one (1) business day prior to the Closing Date, Seller shall deposit into
Escrow:


 


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


 


(b)                                 An
affidavit or qualifying statement which satisfies the requirements of Section
1445 of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the “Non-Foreign Affidavit”), and a “Withholding
Exemption Certificate, Form 593”, pursuant to the California Revenue and
Taxation Code stating either the amount of withholding required from Seller’s
proceeds or that Seller is exempt from such withholding requirement (the “Certificate”).


 


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


 


(d)                                 An
original assignment and assumption agreement (the “Assignment
and Assumption Agreement”) duly executed by Seller assigning all of
Seller’s right, title and interest in and to the Leases and the Contracts. The
Assignment and Assumption Agreement shall be in the form of Exhibit “C”
attached hereto (at or before Closing, Seller shall terminate all Contracts as
to which Buyer shall have directed Seller in writing to terminate);


 


(e)                                  A
letter to each Tenant (the “Tenant Letters”)
advising the Tenant of the sale of the Property, the transfer of the Tenant’s
security deposit to Buyer and of the name and address of Buyer (or its property
manager); and


 


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


 


5.1.2                        On or before 10:00 a.m. Pacific
time or the Closing Date, Buyer shall deposit into Escrow:


 


(a)                                  Funds
in accordance with the provisions of Section 1.3.2;


 


(b)                                 Buyer’s
Reaffirmation Certificate;


 


(c)                                  An
original counterpart of the Assignment and Assumption Agreement duly executed
by Buyer; and


 


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(d)                                 the
Tenant Letters.


 


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


 


5.2                   Prorations.


 


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


 


5.2.2                        Real
estate taxes shall be prorated as of the Closing on the basis of the most recent
assessed valuation of and rates and multiplier applicable to the Property. If
prorations are not made on the basis of the current tax year or if supplemental
taxes are assessed after the Closing for the period prior to the Closing, the
parties shall make any necessary adjustment after Closing by cash payment upon
demand to the party entitled thereto so that Seller shall have borne all taxes
allocable to the period prior to the Closing (including all supplemental taxes
which are allocable to the period prior to Closing) and Buyer shall bear all
taxes allocable to the period after the Closing (including all supplemental
taxes which are allocable to the period after the Closing).


 


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


 


5.2.4                        Common
area and maintenance charges, property taxes, insurance and other operating
cost pass-throughs payable by Tenants which accrue as of the Closing Date, but
which are not then due and payable (collectively, the “Operating Expenses”), shall not be prorated, except as herein
provided. Buyer shall receive and retain any Operating Expenses paid by Tenants
on or after the Closing Date and Seller shall receive and retain any Operating
Expenses paid by Tenants prior to the Closing Date; provided, however, that any
monthly or periodic deposits or payments of estimated Operating Expenses with
respect to the month in which the Closing occurs received by Seller prior to
the Closing Date or by Buyer on or after the Closing Date shall be prorated as
of the Closing Date. Buyer and Seller shall prorate at Closing, actual
Operating Expenses collected by Seller from Tenants prior to Closing with
actual Operating Expenses paid by Seller with respect to such period, so that
if there are any rebates owing to Tenants for the period of Seller’s ownership,
Seller shall pay Buyer the amount of such rebates at Closing, and if the
Tenants owe the landlord any additional amounts for Operating Expenses with
respect to the period of Seller’s ownership,


 


12





















 


Buyer shall promptly pay Seller the amount so owed to the landlord upon
Buyer’s receipt of the same (and Buyer shall exert diligent good faith efforts
to collect the same but shall not required to terminate any Lease or evict any
Tenant in connection therewith). Any prorations under this Agreement based upon
monthly amounts shall be based upon a thirty (30) day month; any prorations
under this Agreement based upon annual amounts shall be based upon a 366 day
year.


 


5.3                   Payment
of Closing Costs.


 


5.3.1                        Closing
Costs Borne by Seller. Seller shall bear and Escrow Holder shall discharge
on Seller’s behalf out of the sums payable to Seller hereunder (a) one-half of
Escrow Holder’s fee, (b) the Orange County documentary transfer taxes, (c) all
costs and expenses of the Owner’s Policy (except Buyer shall pay all costs
attributable to any endorsements, any extended coverage and any deletion of the
survey exception from the policy), and (d) any additional charges payable in
accordance with common escrow practices in Orange County, California.


 


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


 


5.4                   Closing
of Escrow.


 


5.4.1                        Pursuant
to Section 6045 of the Internal Revenue and Taxation Code, Escrow Holder shall
be designated the “closing agent” hereunder and shall be solely responsible for
complying with the tax reform act of 1986 with regard to reporting all
settlement information to the Internal Revenue Service.


 


5.4.2                        Escrow
Holder shall hold the Closing on the Closing Date if: (i) it has received in a
timely manner all the funds and materials required to be delivered into Escrow
by Buyer and Seller; and (ii) it has received assurances satisfactory to it
that, effective as of the Closing, the Title Company will issue to Buyer, its
standard coverage CLTA title insurance policy in the amount of the Purchase
Price, insuring Buyer as the owner of the Property, subject only to the
Permitted Exceptions (the “Owner’s Policy”).


 


5.4.3                        To
Close the Escrow, Escrow Holder shall:


 


(a)                                  Cause
the Deed to be recorded and thereafter mailed to Buyer, and deliver the Owner’s
Policy, Bill of Sale, Assignment and Assumption Agreement (executed by Seller)
and Non-Foreign Affidavit and Certificate (and any additional documents
delivered pursuant to Section 5.1.1) to Buyer; and


 


(b)                                 Deliver
to Seller the Buyer’s Reaffirmation Certificate, the Assignment and Assumption
Agreement (executed by Buyer), and by wire transfer of federal funds, funds in
the amount of the Purchase Price, plus or less any net debit or credit to
Seller by reason of the prorations and allocations of closing costs provided
for in this Agreement.


 


13





















 


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


 


5.6                   LIQUIDATED
DAMAGES. BUYER AND SELLER AGREE THAT IN THE EVENT OF A MATERIAL DEFAULT OR BREACH HEREUNDER BY
BUYER (INCLUDING, WITHOUT LIMITATION, ANY DEFAULT OR BREACH BY BUYER WHICH
RESULTS IN THE FAILURE OF ESCROW TO CLOSE), THE DAMAGES TO SELLER WOULD BE
EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN, AND THAT THEREFORE THE
DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES TO SELLER, SUCH DAMAGES
INCLUDING COSTS OF NEGOTIATING AND DRAFTING OF THIS AGREEMENT, COSTS OF
COOPERATING IN SATISFYING CONDITIONS TO CLOSING, COSTS OF SEEKING ANOTHER BUYER
UPON BUYER’S DEFAULT, OPPORTUNITY COSTS IN, AND CARRYING COST ASSOCIATED WITH,
KEEPING THE PROPERTY OUT OF THE MARKETPLACE, AND OTHER COSTS INCURRED IN
CONNECTION HEREWITH. ACCORDINGLY, BUYER AND SELLER AGREE THAT, EXCEPT FOR ANY
DAMAGES, COSTS AND EXPENSES INCURRED
IN CONNECTION WITH OR RESULTING FROM BUYER’S DEFAULT, OR BREACH OF ITS
INDEMNITY OBLIGATIONS UNDER SECTIONS 3.5 AND 6.16 (WHICH DAMAGES, COSTS AND EXPENSES SHALL SURVIVE ANY CLOSING OR TERMINATION OF THIS AGREEMENT AND ARE NOT
LIMITED BY THIS SECTION 5.6), RECEIPT AND RETENTION OF THE DEPOSIT SHALL BE THE
SOLE DAMAGES OF SELLER IN THE EVENT
OF ANY BREACH OR DEFAULT BY BUYER HEREUNDER.


 


	
   

  	
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  Seller’s Initials

  	
   

  	
  Buyer’s Initials

  



 


5.7                   Seller’s
Breach. In the event of a material breach by Seller hereunder, Buyer’s remedies
shall be limited to (i) termination of this Agreement and the return to it of
the Deposit, or (ii) specific performance of this Agreement, except that after
Closing Seller shall remain liable for damages caused by Seller’s intentional
wrongful actions in breach of this Agreement and for any damages for any breach
of Seller’s representations and warranties that Buyer does not discover prior
to Closing (in order for Buyer to recover any damages for any such breach,
Buyer shall be required to allege and prove that at least one of the
individuals referenced in Section 4.1.7 had actual conscious knowledge of the
falsity of such representation and warranty when made, and Buyer shall be
required to file a lawsuit against Seller with respect thereto not later than
nine (9) months after the Closing Date). Except as expressly set forth in the
preceding sentence, Buyer expressly waives and releases any right to sue Seller
for damages.


 


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


 


6.               GENERAL
PROVISIONS


 


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


 


14





















 


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


 


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


 


6.3                   Legal Advice;
Neutral Interpretation; Headings. Each party has received independent legal
advice from its attorneys with respect to the advisability of executing this
Agreement and the meaning of the provisions hereof. The provisions of this
Agreement shall be construed as to their fair meaning, and not for or against
any party based upon any attribution to such party as the source of the
language in question. Headings used in this Agreement are for convenience of
reference only and shall not be used in construing this Agreement.


 


6.4                   Choice of
Law. This Agreement shall be governed by the laws of the State of
California.


 


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


 


6.6                   Waiver of
Covenants, Conditions or Remedies. The waiver by one party of the
performance of any covenant, condition or promise under this Agreement shall
not invalidate this Agreement nor shall it be considered a waiver by it of any
other covenant, condition or promise under this Agreement. The waiver by either
or both parties of the time for performing any act under this Agreement shall
not constitute a waiver of the time for performing any other act or an
identical act required to be performed at a later time. The exercise of any
remedy provided in this Agreement shall not be a waiver of any consistent
remedy provided by law, and the provision in this Agreement for any remedy
shall not exclude other consistent remedies unless they are expressly excluded.


 


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


 


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


 


6.9                   Relationship
of Parties. The parties agree that their relationship is that of seller and
buyer, and that nothing contained herein shall constitute either party the
agent or legal representative of the other for any purpose whatsoever, nor
shall this Agreement be deemed to create any form of business organization
between the parties hereto, nor is either party granted any right or authority
to assume or create any obligation or responsibility on behalf of the other
party, nor shall either party be in any way liable for any debt of the other.


 


15





















 


6.10             No Third Party
Benefit.   This Agreement is intended to benefit only the
parties hereto and no other person or entity has or shall acquire any rights
bereunder.


 


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


 


6.12             Further
Acts.   Each party agrees to perform
any further acts and to execute, acknowledge and deliver any documents, which
may be reasonably necessary to carry out the provisions of this Agreement.


 


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


 


6.14             Assignment.
Upon written notice to Seller, Buyer shall be entitled to assign Buyer’s rights
and delegate its obligations hereunder to a third party controlled by Buyer,
but no such assignment shall release Buyer of any liability hereunder. Each
party agrees to cooperate with the other party in competing an exchange
qualifying for nonrecognition of gain under Internal Revenue Code §1031 and the
applicable provisions of the California Revenue and Taxation Code (“Exchange”), and each party reserves the right to convert
this transaction to an Exchange at any time before the Closing Date. If either
party does elect to complete an Exchange, the other party shall execute all
escrow instructions, documents, agreements or instruments reasonably requested
by the first party to complete the Exchange; provided, however, that the other
party shall incur no additional liabilities, expenses or costs (other than its
attorneys fees in reviewing customary Exchange documentation) as a result of or
connected with such Exchange, and shall not be required to take title to any
other property. Notwithstanding that the transaction contemplated hereby should
be effected as an Exchange through a third party as a qualified IRC §1031
intermediary, all obligations, representation, warranties and indemnities made
by Buyer shall run to Seller, and all obligations, representations, warranties
and indemnities made by Seller shall ran to Buyer, despite the fact that an
intermediary or other third party facilitating a party’s tax-deferred exchange
was substituted hereunder for that party. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the
successors and assigns of the parties to this Agreement.


 


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


 


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


 


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with the purchase and sale
of the Property, and (b) insofar as such party knows, no broker or other person
is entitled to any commission or finder’s fee in connection with the purchase
and sale of the Property. Seller and Buyer each agree to indemnify and hold
harmless the other against any loss, liability, damage, cost, claim or expense
incurred by reason of any brokerage fee, commission or finder’s fee which is
payable or alleged to be payable to any broker or finder because of any
agreement, act, omission or statement of the indemnifying party. The provisions
of this Section 6.16 shall not be limited in any way by any terms of this
Agreement.


 


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


 


	
  To Buyer:

  	
  To Seller:

  
	
  Inland Real Estate
  Acquisitions, Inc.

  	
  Donahue Schriber Realty
  Group, L.P.

  
	
  2901 Butterfield Road

  	
  200 E. Baker Street, Suite
  100

  
	
  Oak Brook, IL 60523

  	
  Costa Mesa, CA 92626

  
	
  Attn.: Steven Sanders

  	
  Attn.: Dirk Van Wyk

  
	
  Telephone: 630-218-4948

  	
  Telephone: (714) 545-1400

  
	
  Fax: 630-218-4935

  	
  Fax: (714) 545-4222

  
	
   

  	
   

  
	
  With a copy to:

  	
  With a copy to:

  
	
   

  	
  David Grccnman

  
	
   

  	
  18800 Von Karman Avenue,
  Suite 100

  
	
   

  	
  Irvine, CA 92612

  
	
   

  	
  Telephone: (949) 224-0338

  
	
   

  	
  Fax: (949) 224-0339

  



 


6.18             Survival. The terms and provisions of this Agreement shall survive the Closing
and the consummation of the transactions contemplated by this Agreement or the termination
of this Agreement for any reason without the conveyance of the Property to
Buyer.


 


SIGNATURES ON NEXT PAGE


 


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


 


	
  SELLER:

  	
  Donahue
  Schriber Realty Group, L.P., a Delaware limited

  
	
   

  	
  Partnership

  
	
   

  	
   

  
	
   

  	
  By: Donahue
  Schriber Realty Group, Inc., a Maryland

  corporation, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  [ILLEGIBLE]

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Dirk Van Wyk

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Dirk Van Wyk

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
  BUYER:

  	
  Inland Real Estate
  Acquisitions, Inc., an Illinois corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ G. Joseph Cosenza

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  G. JOSEPH COSENZA

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  PRESIDENT

  
							



 


JOINDER OF ESCROW HOLDER


 


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


 


	
   

  	
  STEWART
  TITLE INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


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