Document:

Exhibit 10.6

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

U.S. RETAIL INCOME FUND VIII-D, LIMITED PARTNERSHIP

 

(“SELLER”)

 

AND

 

KRG DEVELOPMENT, LLC (“BUYER”)

 

FOR

 

FOUNTAIN OAKS SHOPPING CENTER, ATLANTA, GEORGIA

 

 

March 3, 2005

 

 

SCHEDULE OF EXHIBITS

 

	
  Exhibit
  “A”

  	
  Property
  Description

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “B”

  	
  List
  of Personal Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “C”

  	
  List
  of Existing Commission Agreements and Management Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “D”

  	
  Form of
  Escrow Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit “E”

  	
  List of Existing Environmental Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “F”

  	
  Rent
  Roll

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “G”

  	
  Exception
  Schedule

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “H”

  	
  List
  of Operating Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “I”

  	
  Form of
  Tenant Estoppel Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “J”

  	
  Property
  Tax Appeals

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  “K”

  	
  Unpaid
  Tenant Inducement Costs and Leasing Commissions re current tenants for which
  Seller is responsible

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit “L”

  	
  Due Diligence Materials
  Received by Purchaser

  	
   

  

 

ii

 

SCHEDULE OF CLOSING DOCUMENTS

 

	
  Schedule 1

  	
  Form of
  Limited Warranty Deed

  
	
   

  	
   

  
	
  Schedule 2

  	
  Form of
  Assignment and Assumption of Leases and Security Deposits and Leasing
  Commission Obligations arising after Closing

  
	
   

  	
   

  
	
  Schedule 2.4

  	
  Master Lease

  
	
   

  	
   

  
	
  Schedule 3

  	
  Form of Bill of Sale to Personal
  Property

  
	
   

  	
   

  
	
  Schedule 4

  	
  Form of Assignment and Assumption
  of Operating Agreements

  
	
   

  	
   

  
	
  Schedule 5

  	
  Form of
  General Assignment of Seller’s Interest in Intangible Property

  
	
   

  	
   

  
	
  Schedule 4.1(m)

  	
  Disclosure
  of Condemnation

  
	
   

  	
   

  
	
  Schedule 6

  	
  Form of Seller’s Affidavit (for
  Purchaser’s Title Insurance Purposes)

  
	
   

  	
   

  
	
  Schedule 7

  	
  Form of
  Seller’s Certificate (as to Seller’s Representations and Warranties)

  
	
   

  	
   

  
	
  Schedule 8

  	
  Form of
  Seller’s FIRPTA Affidavit

  
	
   

  	
   

  
	
  Schedule 9

  	
  Affidavit
  of Seller’s Residence

  
	
   

  	
   

  
	
  Schedule 10

  	
  Form of
  Purchaser’s Certificate (as to Purchaser’s Representations and Warranties)

  
	
   

  	
   

  
	
  Schedule 11

  	
  Form of
  Seller’s Estoppel (as to Leases)

  

 

iii

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE
AGREEMENT (the “Agreement”), made and entered into this 3rd day of March, 2005, by and between U.S.
RETAIL INCOME FUND VIII-D, LIMITED PARTNERSHIP, a Delaware limited partnership
(“Seller”), and KRG DEVELOPMENT, LLC, an Indiana limited liability
company (“Purchaser”).

 

W I  T  N  E  S
E  T  H:

 

WHEREAS, Seller desires to
sell certain improved real property commonly known as “Fountain Oaks Shopping
Center” located in Atlanta, Georgia (the “Shopping Center”) together with
certain related personal and intangible property, and Purchaser desires to
purchase such real, personal and intangible property; and

 

WHEREAS, the parties hereto
desire to provide for said sale and purchase on the terms and conditions set
forth in this Agreement;

 

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

 

ARTICLE 1.

DEFINITIONS

 

For purposes of this
Agreement, each of the following capitalized terms shall have the meaning
ascribed to such terms as set forth below:

 

“Additional Earnest Money”
shall mean the sum of One Hundred Seventy Five Thousand and No/100 Dollars
($175,000.00 U.S.).

 

“Ancillary Closing
Documents” shall mean, collectively, the Assignment and Assumption of
Leases, the Assignment and Assumption of Operating Agreements, the General
Assignment, and the Seller’s Certificate.

 

“Assignment and
Assumption of Leases” shall mean the form of assignment and assumption of
Leases and Security Deposits and obligations under the Commission Agreements to
be executed and delivered by Seller and Purchaser at the Closing in the form
attached hereto as SCHEDULE 2.

 

“Assignment and
Assumption of Operating Agreements” shall mean the form of assignment and
assumption of the Operating Agreements to be executed and delivered by Seller
and Purchaser at the Closing in the form attached hereto as SCHEDULE 4.

 

“Bill of Sale” shall
mean the form of bill of sale to the Personal Property to be executed and
delivered by Seller to Purchaser at the Closing in the form attached hereto as SCHEDULE 3.

 

1

 

“Broker” shall have
the meaning ascribed thereto in Section 10.1 hereof.

 

“Business Day” shall
mean any day other than a Saturday, Sunday or other day on which banking
institutions in the State of Georgia are authorized by law or executive action
to close.

 

“Closing” shall mean
the consummation of the purchase and sale of the Property pursuant to the terms
of this Agreement.

 

“Closing Date” shall
have the meaning ascribed thereto in Section 2.6 hereof.

 

“Commission Agreements”
shall have the meaning ascribed thereto in Section 4.1(f) hereof, and
such agreements are more particularly described on EXHIBIT “C” attached hereto and made a part hereof.

 

“Due Diligence Material”
shall have the meaning ascribed thereto in Section 3.7 hereof.

 

“Earnest Money” shall
mean the Initial Earnest Money, together with any Additional Earnest Money
actually paid by Purchaser to Escrow Agent hereunder, and together with all
interest which accrues thereon as provided in Section 2.3(c) hereof
and in the Escrow Agreement.

 

“Effective Date”
shall mean the last date upon which the following shall have occurred: (a) Purchaser
and Seller shall have delivered at least two (2) fully executed
counterparts of this Agreement to the other, (b) Purchaser, Seller and
Escrow Agent shall have executed and delivered at least one (1) fully
executed counterpart of the Escrow Agreement to each other party, and (c) Purchaser
shall have delivered the Initial Earnest Money (by federal wire transfer or
delivery of Purchaser’s check made payable to Escrow Agent) to Escrow Agent.

 

“Environmental Law”
shall mean any law, ordinance, rule, regulation, order, judgment, injunction or
decree relating to pollution or substances or materials which are considered to
be hazardous or toxic, including, without limitation, the Resource Conservation
and Recovery Act, the Comprehensive Environmental Response, Compensation and
Liability Act, the Hazardous Materials Transportation Act, the Clean Water Act,
the Toxic Substances Control Act, the Emergency Planning and Community Right to
Know Act, any state and local environmental law, all amendments and supplements
to any of the foregoing and all regulations and publications promulgated or
issued pursuant thereto.

 

“Escrow Agent” shall
mean the Title Company, at its office at Indianapolis, Indiana.

 

“Escrow Agreement”  shall mean that certain Escrow Agreement in
the form attached hereto as EXHIBIT “D”
entered into contemporaneously with the execution and delivery of this
Agreement by Seller, Purchaser and Escrow Agent with respect to the Earnest
Money.

 

“Existing Environmental
Reports” shall mean those certain reports, correspondence and related
materials, if any, more particularly described on EXHIBIT “E” attached hereto and made a part hereof.

 

2

 

“Existing Lender”  shall mean Metropolitan Life Insurance
Company.

 

“Existing Loan”  shall mean that certain loan from Existing
Lender, secured by a Deed to Secure Debt encumbering Fountain Oaks, that shall
be assumed by Purchaser or such other credit-worthy entity affiliated with
Purchaser as may be approved by Existing Lender.

 

“Existing Survey”
shall mean that certain survey with respect to the Land and the Improvements
prepared by Robert T. Armstrong, LS, Georgia Land Surveyor No. 1901 dated November 21,
2003 as Job Number 03-325.

 

“FIRPTA Affidavit”  shall mean the form of FIRPTA Affidavit to be
executed and delivered by Seller to Purchaser at Closing in the form attached
hereto as SCHEDULE 8.

 

“First Title Notice”
shall have the meaning ascribed thereto in Section 3.4 hereof.

 

“General Assignment”
shall have the meaning ascribed thereto in Section 5.1(g) hereof.

 

“Hazardous Substances”
shall mean any and all pollutants, contaminants, toxic or hazardous wastes or
any other substances that might pose a hazard to health or safety, the removal
of which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage or filtration of which is
or shall be restricted, prohibited or penalized under any Environmental Law
(including, without limitation, lead paint, asbestos, urea formaldehyde foam
insulation, petroleum and polychlorinated biphenyls).

 

“Improvements” shall
mean all buildings, structures and improvements now or on the Closing Date
situated on the Land, including without limitation, all parking areas and
facilities, improvements and fixtures located on the Land.

 

“Initial Earnest Money”
shall mean the sum of Two Hundred Ten Thousand and No/100 Dollars ($210,000.00
U.S.).

 

“Inspection Period”
shall mean the period commencing on February 10, 2005 and expiring at 5:00 P.M.
Eastern Standard Time on April 15, 2005.

 

“Intangible Property”
shall mean all intangible property, if any, owned by Seller and related to the
Land and Improvements, including without limitation, Seller’s rights and
interests, if any, in and to the following (to the extent assignable):  (i) the name “Fountain Oaks Shopping
Center”, (ii) all assignable plans and specifications and other
architectural and engineering drawings for the Land and Improvements; (iii) all
assignable warranties or guaranties given or made in respect of the
Improvements or Personal Property; (iv) all transferable consents,
authorizations, variances or waivers, licenses, permits and approvals from any
governmental or quasi-governmental agency, department, board, commission,
bureau or other entity or instrumentality solely in respect of the Land or
Improvements; and (v) all of Seller’s right, title and interest in and to
all assignable Operating Agreements that Purchaser agrees to assume (or is
deemed to have agreed to assume).

 

3

 

“Land” shall mean
that certain tract or parcel of real property located in Fulton County, Georgia
which is more particularly described on EXHIBIT
“A” attached hereto and made a part hereof, together with all
rights, privileges and easements appurtenant to said real property, and all right,
title and interest of Seller, if any, in and to any land lying in the bed of
any street, road, alley or right-of-way, open or closed, adjacent to or
abutting the Land.

 

“Lease” and “Leases”
shall mean all of the leases or occupancy agreements affecting of Property,
including: (i)  those in effect on the Effective Date which are more
particularly identified on EXHIBIT “F” attached
hereto, and; (ii) any amended or new leases entered into pursuant to Section 4.3(a) of
this Agreement, which as of the Closing affect all or any portion of the Land
or Improvements.

 

“Management Agreement”
shall have the meaning ascribed thereto in Section 4.1(f) hereof and
is more particularly described on EXHIBIT “C”
attached hereto and made a part hereof.

 

“Monetary Objection “
or “Monetary Objections” shall mean (a) any mortgage, deed to
secure debt, deed of trust or similar security instrument encumbering all or
any part of the Property (other than the security deed and other instruments
securing the Existing Loan, all of which shall be Permitted Exceptions), (b) any
mechanic’s, materialman’s or similar lien (unless resulting from any act or
omission of Purchaser or any of its agents, contractors, representatives or
employees), (c) the lien of ad valorem real or personal property taxes,
assessments and governmental charges affecting all or any portion of the
Property which are due and payable, and (d) any judgment of record against
Seller in the county or other applicable jurisdiction in which the Property is
located.

 

“Operating Agreements”
shall mean all those certain contracts and agreements more particularly
described on EXHIBIT ”H” attached
hereto and made a part hereof relating to the repair, maintenance or operation
of the Land, Improvements or Personal Property which will extend beyond the
Closing Date, including, without limitation, all equipment leases.

 

“Other Notices of Sale”
shall have the meaning ascribed thereto in Section 5.1(s) hereof.

 

“Permitted Exceptions”
shall mean, collectively, (a) liens for taxes, assessments and
governmental charges not yet due and payable or due and payable but not yet
delinquent, (b) the Leases, and (c) such other easements,
restrictions and encumbrances that do not constitute Monetary Objections and
which Purchaser has not objected to, in writing, prior to the expiration of the
Inspection Period.

 

“Personal Property”
shall mean all furniture (including common area furnishings and interior
landscaping items), carpeting, draperies, appliances, personal property
(excluding any computer software which either is licensed to Seller or Seller
deems proprietary), machinery, apparatus and equipment owned by Seller and
currently used exclusively in the operation, repair and maintenance of the Land
and Improvements and situated thereon, as generally described on EXHIBIT “B” attached hereto and made a part
hereof, and all books, records and files (excluding any appraisals, budgets,
strategic plans for the Property, internal analyses, information regarding

 

4

 

the marketing of the
Property for sale, submissions relating to Seller’s obtaining of corporate or
partnership authorization, attorney and accountant work product,
attorney-client privileged documents, or other information in the possession or
control of Seller or Seller’s property manager which Seller deems proprietary)
relating to the Land and Improvements. 
The Personal Property does not
include any property owned by tenants, contractors or licensees, and shall be
conveyed by Seller to Purchaser subject to depletions, replacements and
additions in the ordinary course of Seller’s business.

 

“Property”  shall have the meaning ascribed thereto in Section 2.1
hereof.

 

“Purchase Price”
shall be the amount specified in Section 2.4 hereof.

 

“Purchaser’s Certificate”
shall have the meaning ascribed thereto in Section 5.2(d) hereof.

 

“Rent Roll” shall
mean EXHIBIT “F” attached to this
Agreement and made a part hereof.

 

“Security Deposits”
shall mean any security deposits, rent or damage deposits, or similar amounts
(other than rent paid for the month in which the Closing occurs) which the
Tenants are required to deposit with Seller pursuant to the Leases (except to
the extent that a Tenant may agree in a Tenant Estoppel Certificate that a
security deposit was required under their lease but not deposited, in whole or
part.)

 

“Seller’s Affidavit”
shall mean the form of owner’s affidavit to be given by Seller at Closing to
the Title Company in the form attached hereto as SCHEDULE 6, provided that it is sufficient to cause the
Title Company to delete the standard exceptions to the final title policy
issued from the Title Commitment.

 

“Seller’s Certificate”
shall mean the form of certificate to be executed and delivered by Seller to
Purchaser at the Closing with respect to the truth and accuracy of Seller’s
warranties and representations contained in this Agreement (modified and
updated as the circumstances require), in the form attached hereto as SCHEDULE 7.

 

“Seller’s Estoppel”
shall mean the form of estoppel that may be executed and delivered by Seller at
Closing in substantially the form attached hereto as SCHEDULE 11, as contemplated in Section 6.1(d) hereof.

 

“Survey” and “Surveys”
shall have the meaning ascribed thereto in Section 3.4 hereof.

 

“Taxes” shall have
the meaning ascribed thereto in Section 5.4(a) hereof.

 

“Tenant Estoppel
Certificate” or “Tenant Estoppel Certificates” shall mean
certificates to be sought from the tenants under the Leases in substantially
the form attached hereto as EXHIBIT “I”;
provided, however, if any Lease provides for the form or content of an estoppel
certificate from the tenant thereunder, the Tenant Estoppel Certificate with
respect to such Lease may be in the form as called for therein.

 

5

 

“Tenant Inducement Costs”
shall mean any out-of-pocket payments required under a Lease to be paid by the
landlord thereunder to or for the benefit of the tenant thereunder which is in
the nature of a tenant inducement, including specifically, but without
limitation, tenant improvement costs, lease buyout payments, and moving,
design, refurbishment and club membership allowances and costs.  The term “Tenant Inducement Costs” shall not include loss of income resulting from
any free rental period, it being understood and agreed that Seller shall bear
the loss resulting from any free rental period until the Closing Date and that
Purchaser shall bear such loss from and after the Closing Date.

 

“Tenant Notices of Sale”
shall have the meaning ascribed thereto in Section 5.1(r) hereof.

 

“Title Company” shall
mean Chicago Title Insurance Company.

 

“Title Commitment”
shall have the meaning ascribed thereto in Section 3.4 hereof.

 

“Warranty Deed” shall
mean the forms of deeds attached hereto as SCHEDULE 1.

 

ARTICLE 2.

PURCHASE AND SALE

 

2.1.                            Agreement to Sell and
Purchase.  Subject to and in accordance with the terms
and provisions of this Agreement, Seller agrees to sell and Purchaser agrees to
purchase, the following property (collectively, the “Property”):

 

(a)                                  the Land;

 

(b)                                 the Improvements;

 

(c)                                  all of Seller’s right, title and interest in
and to the Leases, any guaranties of the Leases and the Security Deposits;

 

(d)                                 the Personal Property; and

 

(e)                                  the Intangible Property.

 

2.2.                            Permitted Exceptions.  The
Property shall be conveyed subject to the matters which are, or are deemed to
be, Permitted Exceptions.

 

2.3.                            Earnest Money.

 

(a)                                  Within three (3) business days after
Purchaser’s execution and delivery of this Agreement, Purchaser shall deliver
the Initial Earnest Money to Escrow Agent by federal wire transfer or by
Purchaser’s check, payable to Escrow Agent, which Initial Earnest Money shall
be held and released by Escrow Agent in accordance with the terms of the Escrow
Agreement.

 

(b)                                 Within three (3) business days after the
last day of the Inspection Period, Purchaser shall deposit the Additional
Earnest Money with Escrow Agent.  The
parties hereto

 

6

 

mutually acknowledge and
agree that time is of the essence in respect of Purchaser’s timely deposit of
the Additional Earnest Money with Escrow Agent and that if Purchaser fails to
deposit the Additional Earnest Money with Escrow Agent in the time period set
forth above, this Agreement shall terminate, and Escrow Agent shall return the
Initial Earnest Money to Purchaser, and neither party hereto shall have any
further rights or obligations hereunder, except those provisions of this
Agreement which by their express terms survive the termination of this Agreement.

 

(c)                                  The Earnest Money shall be applied to the
Purchase Price at the Closing and shall otherwise be held, refunded, or
disbursed in accordance with the terms of the Escrow Agreement and this
Agreement. All interest and other income from time to time earned on the
Initial Earnest Money and the Additional Earnest Money shall be earned for the
account of Purchaser, and shall be a part of the Earnest Money; and the Earnest
Money hereunder shall be comprised of the Initial Earnest Money, the Additional
Earnest Money and all such interest and other income.

 

2.4.                            Purchase Price. Subject to adjustment and credits as
otherwise specified in this Section 2.4 and elsewhere in this Agreement,
the purchase price (the “Purchase Price”) to be paid by Purchaser to
Seller for the Property shall be Twenty Five Million Seven Hundred Fifty
Thousand and No/100 Dollars ($25,750,000 U.S.). 
The Purchase Price shall be paid by Purchaser to Seller at the Closing
as follows:

 

(a)                                  The Earnest Money shall be paid by Escrow
Agent to Seller at Closing;

 

(b)                                 Purchaser shall assume the Existing Loan; and

 

(c)                                  An amount equal to the Purchase Price, less
the Earnest Money, shall be paid by Purchaser to Seller at the Closing by wire
transfer of immediately available federal funds to an account designated by
Seller, subject to prorations, adjustments and credits as otherwise specified
in this Agreement..

 

Seller represents that it is
in advanced negotiations with a tenant to take 6,325 square feet of space in
the Shopping Center at initial base rent of $12.00 per square foot with three
percent (3%) annual escalations for a term of 10 years.  In the event that a tenant has not begun
paying rent pursuant to a lease containing terms substantially similar to those
described herein on or before June 1, 2005, then Seller shall enter into a
master lease in the form attached hereto as Schedule 2.4
whereby Seller shall rent from Purchaser the 6,325 square feet of space on the
terms described therein (the “Master Lease”). 
The provisions of this paragraph shall survive Closing.

 

2.5.                            Independent Contract
Consideration. In
addition to, and not in lieu of the delivery to Escrow Agent of the Initial
Earnest Money, Purchaser shall deliver to Seller, concurrently with Purchaser’s
execution and delivery of this Agreement to Seller, Purchaser’s check, payable
to the order to Seller, in the amount of One Hundred and No/100 Dollars
($100.00).  Seller and Purchaser hereby
mutually acknowledge and agree that said sum represents adequate bargained for
consideration for Seller’s execution and delivery of this Agreement and
Purchaser’s right to inspect the Property pursuant to Article III.  Said sum is in

 

7

 

addition to and independent
of any other consideration or payment provided for in this Agreement and is
nonrefundable in all events.

 

2.6.                            Closing. The consummation of the sale by Seller and
purchase by Purchaser of the Property (the “Closing”) shall be conducted
by depositing the closing deliveries set forth in Article 5 hereof with
the Escrow Agent on or before the date which is the later to occur of (a) thirty
(30) days following the end of the Inspection Period, or (b) such date on
which the Existing Lender has consented to Purchaser’s assumption of the
Existing Loan, provided, however, that in the event that the Existing Lender
has not consented to Purchaser’s assumption of the Existing Loan within sixty
(60) days after the expiration of the Inspection Period, Seller may terminate
this Agreement by providing written notice to the Purchaser, and, so long as
Existing Lender’s failure or refusal to approve Purchaser’s assumption of the
Existing Loan does not result from Purchaser’s violation of the covenant set
forth in Section 4.5 hereof, Purchaser shall receive a return of the
Earnest Money.

 

ARTICLE 3.

PURCHASER’S INSPECTION AND REVIEW RIGHTS

 

3.1.                            Due Diligence Inspections.

 

(a)                                  From and after the Effective Date until the
Closing Date or earlier termination of this Agreement, Seller shall permit
Purchaser and its authorized representatives to inspect the Property to perform
due diligence, soil analysis and environmental investigations, to examine the
records of Seller with respect to the Property, and make copies thereof, at
such times during normal business hours as Purchaser or its representatives may
request.  All such inspections shall be
nondestructive in nature, and specifically shall not include any physically
intrusive testing.  All such inspections
shall be performed in such a manner to minimize any interference with the
business of the tenants under the Leases at the Property and, in each case, in
compliance with Seller’s rights and obligations as landlord under the
Leases.  All inspection fees, appraisal
fees, engineering fees and all other costs and expenses of any kind incurred by
Purchaser relating to the inspection of the Property shall be solely Purchaser’s
expense.  Seller reserves the right to
have a representative present at the time of making any such inspection.  Purchaser shall notify Seller not less than
one (1) Business Day in advance of making any such inspection.

 

(b)                                 If the Closing is not consummated hereunder,
Purchaser shall promptly (and as a condition to the refund of the Earnest
Money) deliver copies of all reports, surveys and other information furnished
to Purchaser by third parties in connection with such inspections to Seller;
provided, however, that delivery of such copies and information shall be
without warranty or representation whatsoever, express or implied, including,
without limitation, any warranty or representation as to ownership, accuracy,
adequacy or completeness thereof or otherwise. 
This Section 3.1(b) shall survive the termination of this
Agreement.

 

(c)                                  To the extent that Purchaser or any of its
representatives, agents or contractors damages or disturbs the Property or any
portion thereof, Purchaser shall return the same to

 

8

 

substantially the same
condition which existed immediately prior to such damage or disturbance.  Purchaser hereby agrees to and shall
indemnify, defend and hold harmless Seller from and against any and all
expense, loss or damage which Seller may incur (including, without limitation,
reasonable attorney’s fees actually incurred) as a result of any act or
omission of Purchaser or its representatives, agents or contractors, other than
any expense, loss or damage to the extent arising from any act or omission of
Seller during any such inspection and other than any expense, loss or damage
resulting from the discovery or release of any Hazardous Substances at the
Property (other than Hazardous Substances brought on to the Property by
Purchaser or its representatives, agents or contractors, or any release of
Hazardous Substances resulting from the negligence of Purchaser or its
representatives, agents or contractors). 
Said indemnification agreement shall survive the Closing and any earlier
termination of this Agreement. Purchaser shall maintain and shall ensure that
Purchaser’s consultants and contractors maintain commercial general liability
insurance in an amount not less than $1,000,000, combined single limit, and in
form and substance adequate to insure against all liability of Purchaser and
its consultants and contractors, respectively, and each of their respective
agents, employees and contractors, arising out of inspections and testing of
the Property or any part thereof made on Purchaser’s behalf.  Purchaser agrees to provide to Seller a
certificate of insurance with regard to each applicable liability insurance
policy prior to any entry upon the Property by Purchaser or its consultants or
contractors, as the case may be, pursuant to this Section 3.1.

 

3.2.                              Seller’s Deliveries to
Purchaser; Purchaser’s Access to Seller’s Property Records.

 

(a)                                  Purchaser acknowledges receipt of the
documents listed on Exhibit L, attached hereto and made a part
hereof and Purchaser further acknowledges that no additional items are required
to be delivered by Seller to Purchaser except for the following, or as
otherwise set forth elsewhere in this Agreement:

 

(i)                                     Copies of current Property tax bills and
assessor’s statements of current assessed value.

 

(ii)                                  Copies of Property operating statements for
the past 24 months.

 

(iii)                               Copies of utility bills for the Properties
(to the extent Seller is billed) for the past six (6) months.

 

(iii)                               2005 Operating Budget with respect to the
Properties.

 

(iv)                              Copies of all Leases, guarantees, any
amendments and letter agreements relating thereto existing as of the Effective
Date.

 

(v)                                 An aged tenant receivable report, if any,
regarding income from the tenants.

 

9

 

(vi)                              Most recent monthly tenant, tax and CAM
billing statements and year end operating expense reconciliations and general
ledger for the past 24 months.

 

(vii)                           All Operating Agreements currently in place
at the Properties.

 

(viii)                        A copy of Seller’s (or its affiliate’s)
current policies of title insurance with respect to the Land and Improvements,
including, if available, copies of all Schedule B-2 exception
documents.

 

(ix)                                A copy of the Existing Surveys.

 

(b)                             From the Effective Date until the Closing
Date or earlier termination of this Agreement, Seller shall allow Purchaser and
Purchaser’s representatives, on reasonable advance notice and during normal
business hours, to have access to Seller’s existing books, records and files
relating to the Property at Seller’s office at 3350 Riverwood Parkway, Suite 1500,
Atlanta, Georgia 30339, for the purpose of inspecting and (at Purchaser’s expense)
copying the same, including, without limitation, the materials listed below (to
the extent any or all of the same are in Seller’s possession), subject,
however, to the limitations of any confidentiality or nondisclosure agreement
to which Seller may be bound, and provided that Seller shall not be required to
deliver or make available to Purchaser any appraisals, strategic plans for the
Property, internal analyses, information regarding the marketing of the
Property for sale, submissions relating to Seller’s obtaining of corporate
authorization, attorney and accountant work product, or attorney-client
privileged documents.  Purchaser
acknowledges and agrees, however, that Seller makes no representation or
warranty of any nature whatsoever, express or implied, with respect to the
ownership (except with respect to the Leases), enforceability, accuracy (only
with respect to third party reports), adequacy or completeness (except with
respect to the Leases and Operating Agreements) or otherwise of any of such
records, evaluations, data, investigations, reports, cost estimates or other
materials.  If the Closing contemplated
hereunder fails to take place for any reason, Purchaser shall promptly (and as
a condition to the refund of the Earnest Money) return all copies of materials
copied from Seller’s books, records and files relating to the Property.  It is understood and agreed that Seller shall
have no obligation to obtain, commission or prepare any such books, records,
files, reports or studies not now in Seller’s possession.  Subject to the foregoing, Seller agrees to
make available to Purchaser for inspection and copying, without limitation, the
following books, records and files relating to the Property, all to the extent
the same are in Seller’s possession:

 

(i)                                     Tenant Information. 
Copies of the Leases, guarantees, any amendments, or letter agreements,
and any financial statements or other financial information of any tenants
under the Leases (and the Lease guarantors, if

 

10

 

any), written information
relative to the tenants’ payment histories, and tenant correspondence, to the
extent Seller has the same in its possession;

 

(ii)                                  Commission Agreements. 
Copies of the Commission Agreements;

 

(iii)                               Plans.  All available construction
plans and specifications in Seller’s possession relating to the development,
condition, repair and maintenance of the Property, the Improvements and the
Personal Property;

 

(iv)                              Reports.  Copies of all third party
analyses, compilations, data, studies, reports, or other information or
documents relating to the physical and/or environmental condition of the
Property and/or the Improvements, if any;

 

(v)                                 Permits; Licenses. 
Copies of any permits, licenses, or other similar documents in Seller’s
possession relating to the use, occupancy or operation of the Property; and

 

(vi)                              Operating Costs and Expenses.  All
available records of any operating costs and expenses for the Property in
Seller’s possession.

 

3.3.                            Condition of the Property.

 

(a)                                  Seller recommends that Purchaser employ one
or more independent engineering and/or environmental professionals to perform
engineering, environmental and physical assessments on Purchaser’s behalf in
respect of the Property and the condition thereof.  Purchaser and Seller mutually acknowledge and
agree that the Property is being sold in an “AS IS” condition and “WITH ALL
FAULTS,” known or unknown, contingent or existing.  Purchaser has the sole responsibility to
fully inspect the Property, to investigate all matters relevant thereto,
including, without limitation, the condition of the Property, and to reach its
own, independent evaluation of any risks (environmental or otherwise) or
rewards associated with the ownership, leasing, management and operation of the
Property.

 

(b)                                 To the fullest extent permitted by law,
Purchaser does hereby unconditionally waive and release Seller, and its
partners, beneficial owners, officers, directors, shareholders and employees
from any present or future claims and liabilities of any nature arising from or
relating to the presence or alleged presence of Hazardous Substances in, on,
at, from, under or about the Property or any adjacent property, including,
without limitation, any claims under or on account of any Environmental Law,
regardless of whether such Hazardous Substances are located in, on, at, from,
under or about the Property or any adjacent property prior to or after the date
hereof, unless such claims or liabilities arise from the negligent or
fraudulent activity of Seller, or activity of Seller in violation of any
Environmental Law.  In addition,
Purchaser does hereby covenant and agree to defend, indemnify, and hold
harmless Seller and its partners, beneficial owners, officers, directors,
shareholders and employees from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs or expenses of whatever kind or
nature, known or unknown, existing and future, including any action or
proceeding brought or threatened, or ordered by governmental authorities,
relating to any Hazardous Substances which may be placed or located on the
Property after the date of Closing, unless such claims or

 

11

 

liabilities arise from
Seller’s acts or omissions.   The terms
and provisions of this paragraph shall survive the Closing hereunder.

 

3.4.                            Title and Survey. 
Promptly upon execution of this Agreement, Purchaser may order at its
expense, from the Title Company a preliminary title commitment with respect to the
Property (the “Title Commitment”). 
Purchaser shall direct the Title Company to send a copy of the Title
Commitment to Seller.  Promptly upon
execution of this Agreement, Purchaser may arrange, also at its expense, for
the preparation of one or more updates of the Existing Survey (each and
together, the “Survey”). 
Purchaser likewise shall make copies of any such Survey available to
Seller prior to Closing.  Purchaser shall
have until the end of the Inspection Period to give written notice (the “First
Title Notice”) to Seller of such objections as Purchaser may have to any
exceptions to title disclosed in the Title Commitment or in any Survey or
otherwise in Purchaser’s examination of title. 
From time to time at any time after the First Title Notice and prior to
the Closing Date, Purchaser may give written notice of exceptions to title
first appearing of record after the effective date of any updated title
commitment or matters of survey which would not have been disclosed by an
accurate updated examination of title or preparation of an updated ALTA survey
prior to date of the initial Title Commitment or the initial Survey.  Seller shall have the right, but not the
obligation (except as to Monetary Objections), to attempt to remove, satisfy or
otherwise cure any exceptions to title to which the Purchaser so objects.  Within five (5) Business Days after
receipt of Purchaser’s First Title Notice, Seller shall give written notice to
Purchaser informing the Purchaser of Seller’s election with respect to such objections.  If Seller fails to give written notice of
election within such five (5) Business Day period, Seller shall be deemed
to have elected not to attempt to cure the objections (other than Monetary
Objections).  If Seller elects to attempt
to cure any objections, Seller shall be entitled to one or more reasonable
adjournments of the Closing of up to but not beyond the thirtieth (30th) day
following the initial date set for the Closing to attempt such cure, but,
except for Monetary Objections, Seller shall not be obligated to expend any
sums, commence any suits or take any other action to effect such cure.  Except as to Monetary Objections, if Seller
elects, or is deemed to have elected, not to cure any exceptions to title to
which Purchaser has objected or if, after electing to attempt to cure, Seller
determines that it is unwilling or unable to remove, satisfy or otherwise cure
any such exceptions, Purchaser’s sole remedy hereunder in such event shall be
either (i) to accept title to the Property subject to such exceptions as
if Purchaser had not objected thereto and without reduction of the Purchase
Price, (ii) if such exceptions are matters first appearing of record after
the date of this Agreement, and arise by, through or under Seller, to terminate
this Agreement, or (iii) to terminate this Agreement within three (3) Business
Days after receipt of written notice from Seller either of Seller’s election
not to attempt to cure any objection or of Seller’s determination, having
previously elected to attempt to cure, that Seller is unable or unwilling to do
so, or three (3) Business Days after Seller is deemed hereunder to have
elected not to attempt to cure such objections (and upon any such termination
under clause (ii) or (iii) above, Escrow Agent shall return the
Earnest Money to Purchaser). 
Notwithstanding the above, if such exceptions mentioned in clause (ii) above
were entered into by Seller after the Effective Date hereof and Purchaser
elects to proceed to Closing, Seller shall have the affirmative obligation to
cure such exceptions before Closing and Purchaser shall not take subject to
them.  Notwithstanding anything to the
contrary contained elsewhere in this Agreement, Seller shall be obligated to
cure or satisfy all Monetary Objections at or prior to Closing, and may use the
proceeds of the Purchase Price at Closing for such purpose.

 

12

 

3.5.                            Operating Agreements. 
Seller, without cost to Purchaser, shall terminate at Closing all
Operating Agreements to the extent any relates to the Property, except for
those Operating Agreements, if any, that Purchaser agrees, prior to Closing, to
assume.

 

3.6.                            Termination of Agreement. 
Purchaser shall have until the expiration of the Inspection Period to
determine, in Purchaser’s sole opinion and discretion, the suitability of the
Property for acquisition by Purchaser or Purchaser’s permitted assignee.  Purchaser shall have the right to terminate
this Agreement at any time on or before said time and date of expiration of the
Inspection Period by giving written notice to Seller of such election to
terminate.  If Purchaser so elects to
terminate this Agreement pursuant to this Section 3.6, Escrow Agent shall
pay the Initial Earnest Money to Purchaser, whereupon, except for those
provisions of this Agreement which by their express terms survive the
termination of this Agreement, no party hereto shall have any other or further
rights or obligations under this Agreement. 
Any termination of this Agreement shall constitute an automatic
termination of the Related Agreements (defined in Section 6.2(e) hereof).  If Purchaser fails to so terminate this
Agreement prior to the expiration of the Inspection Period, Purchaser shall
have no further right to terminate this Agreement pursuant to this Section 3.6.

 

3.7.                            Confidentiality.  All
information acquired by Purchaser or any of its designated representatives
(including by way of example, but not in limitation, the officers, directors,
shareholders and employees of Purchaser, and Purchaser’s engineers,
consultants, counsel and potential lenders, and the officers, directors,
shareholders and employees of each of them) with respect to the Property,
whether delivered by Seller or any of Seller’s representatives or obtained by
Purchaser as a result of its inspection and investigation of the Property,
examination of Seller’s books, records and files in respect of the Property, or
otherwise (collectively, the “Due Diligence Material”) shall be used
solely for the purpose of determining whether the Property is suitable for
Purchaser’s acquisition and ownership thereof and for no other purpose
whatsoever.  The terms and conditions
which are contained in this Agreement and all Due Diligence Material which is
not published as public knowledge or which is not generally available in the
public domain shall be kept in strict confidence by Purchaser and shall not be
disclosed to any individual or entity other than to those authorized
representatives of Purchaser who need to know the information for the purpose
of assisting Purchaser in evaluating the Property for Purchaser’s potential
acquisition thereof; provided however, that Purchaser shall have the right to
disclose any such information if required by applicable law or as may be
necessary in connection with any court action or proceeding with respect to
this Agreement.  Purchaser shall and
hereby agrees to indemnify and hold Seller harmless from and against any and
all loss, liability, cost, damage or expense that Seller may suffer or incur
(including, without limitation, reasonable attorneys’ fees actually incurred)
as a result of the unpermitted disclosure or use of any of the Due Diligence
Material to any individual or entity other than an appropriate representative
of Purchaser and/or the use of any Due Diligence Material for any purpose other
than as herein contemplated and permitted. 
If Purchaser elects to terminate this Agreement pursuant to any
provision hereof permitting such termination, or if the Closing contemplated
hereunder fails to occur for any reason, Purchaser will promptly return to
Seller all Due Diligence Material in the possession of Purchaser and any of its
representatives, and destroy all copies, notes or abstracts or extracts
thereof, as well as all copies of any analyses, compilations, studies or other
documents prepared by Purchaser or for its use (whether in written or
electronic form) containing

 

13

 

or reflecting any Due
Diligence Material.  In the event of a
breach or threatened breach by Purchaser or any of its representatives of this Section 3.7,
Seller shall be entitled, in addition to other available remedies, to an
injunction restraining Purchaser or its representatives from disclosing, in
whole or in part, any of the Due Diligence Material and any of the terms and
conditions of this Agreement.  Nothing
contained herein shall be construed as prohibiting or limiting Seller from
pursuing any other available remedy, in law or in equity, for such breach or
threatened breach.  The provisions of
this Section shall survive the termination of this Agreement, unless the
Closing occurs.  Notwithstanding the
foregoing, Seller acknowledges that Purchaser is a real estate investment trust
subject to regulation by the Securities and Exchange Commission (the “SEC”) and
hereby gives Purchase permission to file such disclosures as its attorneys or
auditors advise it to file with the SEC upon entering into the Agreement and
upon Closing, including a copy of the Agreement itself with the SEC.

 

ARTICLE 4.

REPRESENTATIONS, WARRANTIES AND OTHER AGREEMENTS

 

4.1.                            Representations and
Warranties of Seller.  Seller hereby makes the following
representations and warranties to Purchaser:

 

(a)                                  Organization, Authorization and Consents. 
Seller is a duly organized and validly existing limited partnership
under the laws of the State of Delaware. 
Seller has the right, power and authority to enter into this Agreement
and to convey the Property in accordance with the terms and conditions of this
Agreement, to engage in the transactions contemplated in this Agreement and to
perform and observe the terms and provisions hereof.

 

(b)                                 Action of Seller, Etc. Seller has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by Seller on or
prior to the Closing, this Agreement and such document shall constitute the
valid and binding obligation and agreement of Seller, enforceable against
Seller in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.

 

(c)                                  No Violations of Agreements. 
Neither the execution, delivery or performance of this Agreement by
Seller, nor compliance with the terms and provisions hereof, will result in any
breach of the terms, conditions or provisions of, or conflict with or
constitute a default under, or result in the creation of any lien, charge or
encumbrance upon the Property or any portion thereof pursuant to the terms of
any indenture, deed to secure debt, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which Seller is bound.

 

(d)                                 Litigation.  To Seller’s knowledge, Seller
has received no written notice that any investigation, action or proceeding is
pending or threatened, which (i) if determined adversely to Seller,
materially and adversely affects the use or value of the Property, or (ii) questions
the validity of this Agreement or any action taken or to be taken pursuant
hereto, or (iii) involves condemnation or eminent domain proceedings
involving the Property or any portion thereof.

 

14

 

(e)                                  Existing Leases. 
There are no leases, licenses, or other occupancy agreements affecting
any portion of the Property other than the Leases identified on Exhibit F.  There are no lease term letters or leases
delivered for execution to prospective tenants of the Property except for
prospective lease transactions that, although at one time actively pursued, are
not currently being pursued by Seller. 
The information contained in Exhibit F
is true and correct.  The copies of the
Leases furnished by the Seller to the Purchaser are true and complete
copies.  Other than items included in
Seller’s lease files which Seller has made available to Purchaser, Seller has
executed no side letters or other understandings concerning the Leases.  The Leases are in full force and effect,
without any material default by the Seller or, to Seller’s knowledge, by any
tenant thereunder.  Except as set forth
in Exhibit F All
tenants required to pay rent or additional rent as of the Effective Date have
paid such sums in full without set-off or counterclaim.  Seller has not given or received any notice
of default which remains uncured or unsatisfied with respect to any of the
Leases.  Seller has not granted to any
tenant under a Lease or any other person or entity an option, right of first
refusal, or right to purchase the Property or any part thereof or interest
therein which is not contained in a recorded document listed as a Permitted
Exception or in a Lease.  All Security
Deposits are set forth on Exhibit F.  There are no Tenant Inducement Costs other
than as set forth in Exhibit K.

 

(f)                                    Leasing Commissions.  To
Seller’s knowledge, (i) there are no lease brokerage agreements, leasing
commission agreements or other agreements providing for payments of any amounts
for leasing activities or procuring tenants with respect to the Property or any
portion or portions thereof other than as disclosed in EXHIBIT “C” attached hereto (the “Commission
Agreements”), and (ii) there are no agreements currently in effect
relating to the management and leasing of the Property other than as disclosed
on said EXHIBIT ”C” (the “Management
Agreement”); and that all leasing commissions, brokerage fees and
management fees accrued or due and payable under the Commission Agreements and
the Management Agreement, as of the date hereof and at the Closing have been or
shall be paid in full; and that Seller shall deliver termination notices with
regard to the Management Agreement at Closing (unless Purchaser elects to
assume such Management Agreement) at no cost to Purchaser.  Notwithstanding anything to the contrary
contained herein, Purchaser shall be responsible for the payment of all leasing
commissions payable for (A) any new leases entered into after the
Effective Date that have been approved (or deemed approved) by Purchaser, and (B) the
renewal, expansion or extension of any Leases existing as of the Effective Date
and exercised or effected after the Effective Date, and Purchaser shall pay to
the manager under the Management Agreement leasing commissions with respect to
leases entered into (or expansions, renewals or extensions effected) by
Purchaser within thirty (30) days after the Closing Date with the tenants or
prospective tenants listed in item IV of EXHIBIT ”C”
hereto and approved by Purchaser.

 

(g)                                 Taxes and Assessments. 
Except as may be set forth on EXHIBIT “J”
attached hereto and made a part hereof, Seller has not filed, and
has not retained anyone to file, notices of protests against, or to commence
action to review, real property tax assessments against the Property.  To Seller’s actual knowledge, there are no
performance, payment, maintenance, or other bonds outstanding or due to be
posted to any state or local government respecting the development or operation
of the Property or the roads or utilities serving the same.  To Seller’s actual knowledge, all
assessments, impact fees, or other similar state or local financial

 

15

 

obligations have been paid
in full and Seller is unaware of any other such obligations pending or
threatened with respect to the Property.

 

(h)                                 Environmental Matters. 
Except as may be set forth in the Existing Environmental Reports or as
otherwise disclosed on Exhibit E:
(i) Seller has not engaged in the generation, use, manufacture, treatment,
storage, or disposal of any Hazardous Substance on the Property in violation of
any Environmental Law, as hereinafter defined; (ii) Seller has not
received written notification that any governmental or quasi-governmental
authority that there are any violations of any Environmental Law with respect
to the Property, nor has Seller received any written notice that any
governmental or quasi-governmental authority is contemplating an investigation
of the Property, with respect to a violation or suspected violation of any
Environmental Law, (iii) and Seller has not received written notice that
any third party has engaged in the generation, use, manufacture, treatment,
storage, or disposal of any Hazardous Substance on the Property in violation of
any Environmental Law.

 

(i)                                     Compliance with Laws. 
There are no pending lawsuits against Seller with regard to the
construction, development, use, or operation of the Property.  To Seller’s actual knowledge, and except as
set forth on EXHIBIT “G”, there
are no actions, suits, or proceedings before any court or governmental
authority, affecting the Property or which may affect Seller’s ability to
perform its obligations under this Agreement, nor has Seller received an
express written threat of litigation with regard to the Property within the
last ninety (90) days.

 

(j)                                     Easements and Other Agreements.  To
Seller’s knowledge, Seller has not received any written notice of Seller’s
default in complying with the terms and provisions of any of the covenants, conditions,
restrictions or easements constituting a Permitted Exception.

 

(k)                                  Other Agreements.  To
Seller’s knowledge, except for the Leases, the Commission Agreements, the
Management Agreement and the Permitted Exceptions, there are no leases,
Operating Agreements, management agreements, brokerage agreements, leasing
agreements or other agreements or instruments in force or effect that grant to
any person or any entity any right, title, interest or benefit in and to all or
any part of the Property or any rights relating to the use, operation,
management, maintenance or repair of all or any part of the Property which will
survive the Closing or be binding upon Purchaser other than those which
Purchaser has agreed in writing to assume prior to the expiration of the
Inspection Period.  There are no material
defaults by Seller under the agreements referred to in this subsection (k)
and, to Seller’s knowledge, there are no material defaults by any other party
to such agreements.

 

(l)                                     Seller Not a Foreign Person. 
Seller is not a “foreign person” which would subject Purchaser to the
withholding tax provisions of Section 1445 of the Internal Revenue Code of
1986, as amended.

 

(m)                               Condemnation. 
Except as set forth in Schedule 4.1(m) Seller has received no
written notice of the commencement of any proceedings for taking by
condemnation or eminent domain of any part of the Property, nor does Seller
have any actual knowledge of threatened proceedings for taking by condemnation
or eminent domain of any part of the Property.

 

16

 

(n)                                 Employees.  Seller has no employees to
whom by virtue of such employment Purchaser will have any obligation after the
Closing.

 

(o)                                 Property Information.  All
contracts, guarantees, warranties, and all other books, records, contracts or
other like documentation delivered to Purchaser by Seller pursuant to this
Agreement or in connection with the execution hereof are accurate, true,
correct, and complete copies of Seller’s copies of those materials.

 

(p)                                 Mechanic’s Liens.  To
Seller’s knowledge, other than as set forth in the Title Commitments, there are
no mechanic’s liens or any matters or disputes as of the Closing Date which, if
such matters and disputes are not resolved on or before the Closing Date, could
ripen into mechanic’s liens relating to the Property.

 

(q)                                 Zoning.  The Property is properly zoned
for its present use and, to Seller’s knowledge, there presently exist no
violations of any applicable zoning ordinance, covenants, commitments,
conditions or restrictions.

 

(r)                                    Utilities and Access.  The
Property has adequate and permanent legal access to water and electrical
supply, storm, and sanitary sewage facilities, other required public utilities
(with respect to each of the aforementioned items, by means of either a direct
connection to the source of such utilities or through connections available on
publicly dedicated roadways directly abutting the Property), parking, and means
of access between the Property and public highways and roads over recognized
curb cuts for each Property’s current use.

 

Seller acknowledges that
Purchaser is relying on the representations and warranties made by Seller in
this Section 4.1.  The
representations and warranties made in this Agreement by Seller shall be
continuing and shall be deemed remade by Seller as of the Closing Date, with
the same force and effect as if made on, and as of, such date, subject to
Seller’s right to update such representations and warranties by written notice
to Purchaser and in Seller’s certificate to be delivered pursuant to Section 5.1(i) hereof.  All representations and warranties made in
this Agreement by Seller shall survive the Closing for a period of one (1) year,
and upon expiration thereof shall be of no further force or effect except to
the extent that with respect to any particular alleged breach, Purchaser gives
Seller written notice prior to the expiration of said one (1) year period
of such alleged breach with reasonable detail as to the nature of such breach
and files an action against Seller with respect thereto within ninety (90) days
after the giving of such notice.

 

Notwithstanding anything to
the contrary contained in this Section 4.1, in no event shall Seller’s
total liability for any breach or breaches of the representations or warranties
made in this Agreement exceed, in the aggregate, Seven Hundred and Fifty
Thousand and No/100 Dollars ($750,000 US). 
In no event shall Seller be liable for, nor shall Purchaser seek, any
consequential, indirect or punitive damages; and in no event shall any claim
for a breach of any representation or warranty of Seller be actionable or
payable if the breach in question results from or is based on a condition,
state of facts or other matter which was known to Purchaser prior to the Closing
or which was contained in the materials set forth on Exhibit L.

 

17

 

Except as otherwise
expressly provided in this Section 4.1 or this Agreement or in any
documents to be executed and delivered by Seller to Purchaser at the Closing,
Seller has not made, and Purchaser has not relied on, any information, promise,
representation or warranty, express or implied, regarding the Property, whether
made by Seller, on Seller’s behalf or otherwise, including, without limitation,
the physical condition of the Property, the financial condition of the tenants
under the Leases, title to or the boundaries of the Property, pest control
matters, soil conditions, the presence, existence or absence of hazardous
wastes, toxic substances or other environmental matters, compliance with
building, health, safety, land use and zoning laws, regulations and orders,
structural and other engineering characteristics, traffic patterns, market
data, economic conditions or projections, past or future economic performance
of the tenants or the Property, and any other information pertaining to the
Property or the market and physical environments in which the Property is
located.  Purchaser acknowledges (i) that
Purchaser has entered into this Agreement with the intention of making and
relying upon its own investigation or that of Purchaser’s own consultants and
representatives with respect to the physical, environmental, economic and legal
condition of the Property and (ii) that Purchaser is not relying upon any
statements, representations or warranties of any kind, other than those
specifically set forth in this Section 4.1 or elsewhere in this Agreement
or in any document to be executed and delivered by Seller to Purchaser at the
Closing, made (or purported to be made) by Seller or anyone acting or claiming
to act on Seller’s behalf.  Purchaser has
inspected or shall inspect the Property and is or shall be fully familiar with
the physical condition thereof and, subject to the terms and conditions of this
Agreement, shall purchase the Property in its “as is” condition, “with all
faults,” on the Closing Date.  The
provisions of the foregoing three (3) paragraphs of this Section shall
survive the Closing.

 

4.2.                            Knowledge Defined.  All
references in this Agreement to the “knowledge of Seller” or “to Seller’s
knowledge” or any words of similar import shall refer only to the actual
knowledge of Kip Marshall, Donna Cottle, Crystal Jones (the property manager)
and Krista Willson (the asset manager) who have been actively involved in the
management of Seller’s business in respect of the Property in the capacities of
representatives of BVT Management Services, Inc., an affiliate of
Seller.  The terms “knowledge of Seller”
or “to Seller’s knowledge” or any words of similar import shall not be
construed, by imputation or otherwise, to refer to the knowledge of Seller, or
any affiliate of Seller, or to any other partner, beneficial owner, officer,
agent, manager, representative or employee of Seller, or any of their
respective affiliates, or to impose on any of the individuals named above any
duty to investigate the matter to which such actual knowledge, or the absence
thereof, pertains.  There shall be no
personal liability on the part of the individuals named above arising out of
any representations or warranties made herein or otherwise.

 

4.3.                            Covenants and Agreements of
Seller.

 

(a)                                  Leasing Arrangements. 
During the pendency of this Agreement, Seller will not enter into any
lease affecting the Property, or modify or amend in any material respect, or
terminate, any of the existing Leases without Purchaser’s prior written consent
in each instance, which consent shall not be unreasonably withheld, delayed or
conditioned and which shall be deemed given unless denied by written notice to
Seller given within five (5) Business Days after Purchaser’s receipt of
Seller’s written request therefor, each of which requests shall be

 

18

 

accompanied by a copy of any
proposed modification or amendment of an existing Lease or of any new Lease
that Seller wishes to execute between the Effective Date and the Closing Date,
including, without limitation, a description of any Tenant Inducement Costs and
leasing commissions associated with any proposed renewal or expansion of an
existing Lease or with any such new Lease. 
If Purchaser fails to notify Seller in writing of its approval or
disapproval within said five (5) Business Day period, such failure by
Purchaser shall be deemed to be the approval of Purchaser.  At Closing, Purchaser shall reimburse Seller
for any Tenant Inducement Costs or leasing commissions actually incurred by
Seller pursuant to a renewal or expansion of any existing Lease or new Lease
approved (or deemed approved) by Purchaser hereunder after the Effective Date.

 

(b)                                 New Contracts. 
During the pendency of this Agreement, Seller will not enter into any
contract, or modify, amend, renew or extend any Operating Agreement, that will
be an obligation affecting the Property or any part thereof subsequent to the
Closing Date without Purchaser’s prior written consent in each instance.

 

(c)                                  Operation of Property. 
During the pendency of this Agreement, Seller shall continue to operate
the Property in a good and businesslike fashion consistent with Seller’s past
practices.

 

(d)                                 Insurance.  During the pendency of this
Agreement, Seller shall, at its expense, continue to maintain the insurance
policies covering the Improvements which are currently in force and effect.

 

(e)                                  Tenant Estoppel Certificates. 
Seller shall endeavor in good faith (but without obligation to incur any
cost or expense, except as set forth in the Leases) to obtain and deliver to
Purchaser prior to Closing a written Tenant Estoppel Certificate in the form attached
hereto as EXHIBIT “I” signed by
each tenant under each of the Leases; provided that delivery of such signed
Tenant Estoppel Certificates shall be a condition of Closing only to the extent
set forth in Section 6.1(d) hereof; and in no event shall the
inability or failure of Seller to obtain and deliver said Tenant Estoppel
Certificates (Seller having used its good faith efforts as set forth above) be
a default of Seller hereunder.

 

(f)                                    Right to Audit. Seller agrees that Purchaser’s accountants,
at Purchaser’s sole cost, shall have the right to perform an audit on Seller’s
previous two years’ financial statements with respect to each Property
(provided, however, only for those periods during which Seller has owned such
Property) and Seller agrees to issue appropriate management representation
letters in connection therewith.

 

4.4.                            Representations and
Warranties of Purchaser.

 

(a)                                  Organization, Authorization and Consents. 
Purchaser is a duly organized and validly existing limited liability
company under the laws of the State of Indiana. 
Purchaser has the right, power and authority to enter into this
Agreement and to purchase the Property in accordance with the terms and
conditions of this Agreement, to engage in the transactions  contemplated in this Agreement and to perform
and observe the terms and provisions hereof.

 

19

 

(b)                                 Action of Purchaser, Etc.  
Purchaser has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, and upon the execution and delivery
of any document to be delivered by Purchaser on or prior to the Closing, this
Agreement and such document shall constitute the valid and binding obligation
and agreement of Purchaser, enforceable against Purchaser in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors.

 

(c)                                  No Violations of Agreements. To Purchaser’s knowledge, neither the
execution, delivery or performance of this Agreement by Purchaser, nor
compliance with the terms and provisions hereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a default
under the terms of any indenture, deed to secure debt, mortgage, deed of trust,
note, evidence of indebtedness or any other agreement or instrument by which
Purchaser is bound.

 

(d)                                 Litigation.  To Purchaser’s knowledge,
Purchaser has received no written notice that any action or proceeding is
pending or threatened, which questions the validity of this Agreement or any
action taken or to be taken pursuant hereto.

 

The representations and
warranties made in this Agreement by Purchaser shall be continuing and shall be
deemed remade by Purchaser as of the Closing Date, with the same force and
effect as if made on, and as of, such date subject to Purchaser’s right to
update such representations and warranties by written notice to Seller and in
Purchaser’s certificate to be delivered pursuant to Section 5.2(d) hereof.  All representations and warranties made in
this Agreement by Purchaser shall survive the Closing for a period of one (1) year,
and upon expiration thereof shall be of no further force or effect except to
the extent that with respect to any particular alleged breach, Seller gives
Purchaser written notice prior to the expiration of said one (1) year
period of such alleged breach with reasonable detail as to the nature of such
breach and files an action against Seller with respect thereto within ninety
(90) days after the giving of such notice.

 

4.5                               Covenants of Purchaser

 

Purchaser shall in good
faith diligently seek to obtain an assumption of the Existing Loan.

 

ARTICLE 5.

CLOSING DELIVERIES, CLOSING COSTS AND PRORATIONS

 

5.1.                            Seller’s Closing Deliveries.  For
and in consideration of, and as a condition precedent to Purchaser’s delivery
to Seller of the Purchase Price, Seller shall obtain or execute and deliver to
Purchaser at Closing the following documents, all of which shall be duly
executed, acknowledged and notarized where required:

 

(a)                                  Warranty Deed.  A
limited warranty deed to the Land, in the form attached hereto as SCHEDULE 1 (the “Warranty Deed”),
subject only to the Permitted Exceptions, and executed,

 

20

 

acknowledged and sealed by
Seller.  The legal descriptions of the
Land set forth in said warranty deed shall be based upon and conform to the
applicable record title legal description contained in Seller’s vesting deed;

 

(b)                                 Quitclaim Deed.  If
requested by Purchaser, one or more quitclaim deeds to the Land and
Improvements (or any portion or portions thereof), in form and substance
reasonably satisfactory to Seller, and executed, acknowledged and sealed by
Seller;

 

(c)                                  Bill of Sale. Bills of sale for the Personal Property in
the form attached hereto as SCHEDULE 2
(the “Bill of Sale”), without warranty as to the title or condition of
the Personal Property;

 

(d)                                 Assignment and Assumption of Leases and
Security Deposits.  Two (2) counterparts of an assignment
and assumption of Leases and Security Deposits for each Property and, to the
extent required elsewhere in this Agreement, the obligations of Seller under
the Commission Agreements in the form attached hereto as SCHEDULE 3 (the “Assignment and
Assumption of Leases”), executed, acknowledged and sealed by Seller;

 

(e)                                  Updated Rent Roll.  An
update of the Rent Roll (with modifications as appropriate), certified by
Seller to be accurate in all material respects as of the date of Closing;

 

(f)                                    Assignment and Assumption of Operating
Agreements.  Two (2) counterparts of an assignment
and assumption of Operating Agreements for each Property in the form attached
hereto as SCHEDULE 4  (the “Assignment and Assumption of
Operating Agreements”), executed, acknowledged and sealed by Seller;

 

(g)                                 General Assignment.  An
assignment of the Intangible Property for each Property in the form attached
hereto as SCHEDULE 5 (the “General
Assignment”), executed, acknowledged and sealed by Seller;

 

(h)                                 Seller’s Affidavit. 
Owner’s affidavits substantially in the form attached hereto as SCHEDULE 6 (“Seller’s Affidavit”),
sufficient to cause the Title Company to delete the standard title exceptions
to the final title policy and stating that there are no known boundary disputes
with respect to the Properties, that there are no parties in possession of the
Property other than Seller and the tenants under the Leases, that there are no
brokers except as disclosed herein, that any improvements or repairs made by,
or for the account of, or at the instance of Seller to or with respect to the
Property within ninety (90) days prior to the Closing have been paid for in
full (or that adequate provision has been made therefor to the reasonable
satisfaction of the Title Company), and including such other matters as may be
reasonably requested by the Title Company;

 

(i)                                     Seller’s Certificate.  A
certificate in the form attached hereto as SCHEDULE 7
(“Seller’s Certificate”), evidencing the reaffirmation of the truth and
accuracy in all material respects of Seller’s representations, warranties, and
agreements set forth in Section 4.1 hereof, with such modifications
thereto as may be appropriate in light of any change in circumstance since the
Effective Date;

 

21

 

(j)                                     FIRPTA Certificate  A
FIRPTA Certificate in the form attached hereto as SCHEDULE 8;

 

(k)                                  INTENTIONALLY OMITTED;

 

(l)                                     Evidence of Authority  Such
documentation as may reasonably be required by the Title Company to establish
that this Agreement, the transactions contemplated herein, and the execution
and delivery of the documents required hereunder, are duly authorized, executed
and delivered;

 

(m)                               Settlement Statement 
Settlement statements for each Property setting forth the amounts paid
by or on behalf of and/or credited to each of Purchaser and Seller pursuant to
this Agreement;

 

(n)                                 Surveys and Plans.  Such
surveys, site plans, plans and specifications, and other matters relating to
the Property as are in the possession of Seller to the extent not theretofore
delivered to Purchaser;

 

(o)                                 Certificates of Occupancy.  To
the extent the same are in Seller’s possession, original or photocopies of
certificates of occupancy for all space within the Improvements located on the
Property;

 

(p)                                 Leases.  To the extent the same are in
Seller’s possession, original executed Leases and the contents of all lease
files, including original tenant correspondence, guarantees, and similar
documents;

 

(q)                                 Tenant Estoppel Certificates.  All
originally executed Tenant Estoppel Certificates as may be in Seller’s
possession;

 

(r)                                    Notices of Sale to Tenants. 
Seller will join with Purchaser in executing a notice, in form and
content reasonably satisfactory to Seller and Purchaser (the “Tenant Notices
of Sale”), which Purchaser shall send to each tenant under the Leases
informing such tenant of the sale of the Property and of the assignment to and
assumption by Purchaser of Seller’s interest in the Leases and the Security
Deposits and directing that all rent and other sums payable for periods after
the Closing under such Lease shall be paid as set forth in said notices;

 

(s)                                  Notices of Sale to Service Contractors and
Leasing Agents.  Seller will join with Purchaser in executing
notices, in form and content reasonably satisfactory to Seller and Purchaser
(the “Other Notices of Sale”), which Purchaser shall send to each
service provider and leasing agent under the Operating Contracts and Commission
Agreements (as the case may be) assumed by Purchaser at Closing informing such
service provider or leasing agent (as the case may be) of the sale of the
Property and of the assignment to and assumption by Purchaser of Seller’s
obligations under the Operating Agreements and Commission Agreements arising
after the Closing Date and directing that all future statements or invoices for
services under such Operating Agreements and/or Commission Agreements for
periods after the Closing be directed to Seller or Purchaser as set forth in
said notices;

 

22

(t)                                    Keys
and Records.  All of the keys to any
door or lock on the Property and the original tenant files and other
non-confidential books and records (excluding any appraisals, budgets,
strategic plans for the Property, internal analyses, information regarding the
marketing of the Property for sale, submissions relating to Seller’s obtaining
of corporate authorization, attorney and accountant work product,
attorney-client privileged documents, or other information in the possession or
control of Seller or Seller’s property manager which Seller deems proprietary)
relating to the Property in Seller’s possession; and

 

(u)                                 Assumption
Documents.  Seller shall execute and
deliver any and all documents required by Existing Lender in order for
Purchaser to assume the Existing Loan and fully release Seller from any
obligation under the Existing Loan arising at Closing.

 

(v)                                 Other
Documents.  Such other documents as
shall be reasonably requested by the Title Company or Purchaser to effectuate
the purposes and intent of this Agreement.

 

5.2.                            Purchaser’s
Closing Deliveries. Purchaser shall obtain or execute and deliver to
Seller at Closing the following documents, all of which shall be duly executed,
acknowledged and notarized where required:

 

(a)                                  Assignment
and Assumption of Leases.  Two (2) counterparts
of the Assignment and Assumption of Leases for each Property, executed,
acknowledged and sealed by Purchaser;

 

(b)                                 Assignment
and Assumption of Operating Agreements. 
Two (2) counterparts of the Assignment and Assumption of Operating
Agreements for each Property, executed, acknowledged and sealed by Purchaser;

 

(c)                                  General
Assignment.  Two (2) counterparts
of the General Assignment for each Property, executed, acknowledged and sealed
by Purchaser;

 

(d)                                 Purchaser’s
Certificate.  A certificate in the
form attached hereto as SCHEDULE 10
(“Purchaser’s Certificate”), evidencing the reaffirmation of the truth
and accuracy in all material respects of Purchaser’s representations,
warranties and agreements contained in Section 4.4 hereof, with such
modifications thereto as may be appropriate in light of any change in
circumstances since the Effective Date;

 

(e)                                  Notice
of Sale to Tenants.  The Tenant
Notices of Sale, executed by Purchaser, as contemplated in Section 5.1(r)
hereof;

 

(f)                                    Notices
of Sale to Service Contractors and Leasing Agents.  The Other Notices of Sale to Service
Contractors and Leasing Agents, as contemplated in Section 5.1(s) hereof;

 

(g)                                 Settlement
Statement  Settlement statements for
each Property setting forth the amounts paid by or on behalf of and/or credited
to each of Purchaser and Seller pursuant to this Agreement;

 

(h)                                 Evidence
of Authority.  A copy of resolutions
of the Board of Directors of the Purchaser, certified by the Secretary or
Assistant Secretary of Purchaser to be in force and

 

23

 

unmodified as of the date
and time of Closing, authorizing the purchase contemplated herein, the
execution and delivery of the documents required hereunder, and designating the
signatures of the persons who are to execute and deliver all such documents on
behalf of Purchaser or if Purchaser is not a corporation, such documentation as
Seller may reasonably require to establish that this Agreement, the transaction
contemplated herein, and the execution and delivery of the documents required
hereunder, are duly authorized, executed and delivered; and

 

(i)                                     Assumption
Documents.  Purchaser shall execute
and deliver any and all documents required by Existing Lender in order for
Purchaser to assume the Existing Loan and fully release Seller from any
obligation under the Existing Loan arising at Closing.

 

(j)                                     Other
Documents.  Such other documents as
shall be reasonably requested by Seller’s counsel to effectuate the purposes
and intent of this Agreement.

 

5.3.                            Closing
Costs. Seller shall pay the cost of the transfer taxes imposed by the
State of Georgia upon the conveyance of the Property pursuant hereto, the
attorneys’ fees of Seller, and all other costs and expenses incurred by Seller
in closing and consummating the purchase and sale of the Property pursuant
hereto.  Purchaser shall pay all costs
payable to the Existing Lender related to the assumption of the Existing Loan,
including without limitation Existing Lender’s advisor and legal counsel fees,
the cost of any owner’s and/or lender’s title insurance premium and title
examination fees, the cost of the Survey, all ministerial recording fees on all
instruments to be recorded in connection with this transaction (not including deed
taxes), the attorneys’ fees of Purchaser, and all other costs and expenses
incurred by Purchaser in the performance of Purchaser’s due diligence
inspection of the Property and in closing and consummating the purchase and
sale of the Property pursuant hereto.

 

5.4.                            Prorations
and Credits.   The items in this Section 5.4
shall be prorated between Seller and Purchaser or credited, as specified
herein.   All matters involving
prorations or adjustment to be made in connection with the Closing and not
specifically provided for in some other provision of this Agreement shall be
prorated as of midnight of the day immediately preceding the Closing Date.

 

(a)                                  Taxes.  All general real estate taxes imposed by any
governmental authority (“Taxes”) for the year in which the Closing
occurs shall be prorated between Seller and Purchaser as of the Closing.  If the Closing occurs prior to the receipt by
Seller of the bill for Taxes for the calendar year or other applicable tax
period in which the Closing occurs, Taxes shall be prorated for such calendar
year or other applicable tax period based upon the prior year’s tax bill.

 

(b)                                 Reproration
of Taxes.  After receipt of final
bill for Taxes, Purchaser shall prepare and present to Seller a calculation of
the reproration of such Taxes, based upon the actual amount of such Taxes
charged to or received by the parties for the year or other applicable fiscal
period.  The parties shall make the
appropriate adjusting payment between them within thirty (30) days after
presentment to Seller of Purchaser’s calculation and appropriate back-up
information.  Purchaser shall provide
Seller with appropriate backup materials related to the calculation.   The

 

24

 

provisions of this Section 5.4(b) shall
survive the Closing for a period of one (1) year after the Closing Date.

 

(c)                                  Rents,
Income and Other Expenses.  Rents and
any other amounts actually received from tenants shall be prorated as of the
Closing Date and be adjusted against the Purchase Price on the basis of a schedule which
shall be prepared by Seller and delivered to Purchaser for Purchaser’s review
and approval prior to Closing. Purchaser shall receive at Closing a credit for
Purchaser’s pro rata share of the rents, additional rent, common area
maintenance charges, tenant reimbursements and escalations, and all other
payments received for the month of Closing and for all other rents and other
amounts that apply to periods from and after the Closing, but which are
received by Seller prior to Closing. 
Purchaser agrees to pay to Seller, upon receipt and net of any
collection costs incurred by Purchaser, any rents or other payments by tenants
under their respective Leases that apply to periods prior to Closing but are
received by Purchaser after Closing; provided, however, that any delinquent
rents or other payments by tenants shall be applied first to any current
amounts owing by such tenants, then to delinquent rents in the order in which
such rents are most recently past due, with the balance, if any, paid over to
Seller to the extent of delinquencies existing at the time of Closing to which
Seller is entitled; it being understood and agreed that Purchaser shall not be
legally responsible to Seller for the collection of any rents or other charges
payable with respect to the Leases or any portion thereof, which are delinquent
or past due as of the Closing Date; but Purchaser agrees that Purchaser shall
send monthly notices for a period of three (3) consecutive months in an
effort to collect any rents and charges not collected as of the Closing
Date.  Any reimbursements payable by any
tenant under the terms of any tenant lease affecting the Property as of the
Closing Date, which reimbursements pertain to such tenant’s pro rata share of
increased operating expenses or common area maintenance costs incurred with
respect to the Property at any time prior to the Closing, shall be prorated
upon Purchaser’s actual receipt of any such reimbursements, on the basis of the
number of days of Seller and Purchaser’s respective ownership of the Property
during the period in respect of which such reimbursements are payable; and
Purchaser agrees to pay to Seller Seller’s pro rata portion of such
reimbursements within thirty (30) days after Purchaser’s receipt thereof.  Conversely, if any tenant under any such
Lease shall become entitled at any time after Closing to a refund of tenant
reimbursements actually paid by such tenant prior to Closing, then, Seller
shall, within thirty (30) days following Purchaser’s demand therefor, pay to
Purchaser any amount equal to Seller’s pro rata share of such reimbursement
refund obligations, said proration to be calculated on the same basis as
hereinabove set forth.  Seller hereby
retains its right to pursue any tenant under the Leases for sums due Seller for
periods attributable to Seller’s ownership of the Property; provided, however,
that Seller (i) shall be required to notify Purchaser in writing of its
intention to commence or pursue such legal proceedings; (ii) shall only be
permitted to commence or pursue any legal proceedings after the date which is
three (3) months after Closing, except that Seller shall be entitled to
continue to pursue any legal proceedings commenced prior to Closing; and (iii) shall
not be permitted to commence or pursue any legal proceedings against any tenant
seeking eviction of such tenant or the termination of the applicable
Lease.  The provisions of this Section 5.4(c) shall
survive the Closing.

 

(d)                                 Percentage
Rents.  Percentage rents, if any, collected
by Purchaser from any tenant under such tenant’s Lease for the percentage rent
accounting period in which the Closing

 

25

 

occurs shall be prorated
between Seller and Purchaser as of the Closing Date, as, if, and when received
by Purchaser, such that Seller’s pro rata share shall be an amount equal to the
total percentage rentals paid for such percentage rent accounting period under
the applicable Lease multiplied by a fraction, the numerator of which shall be
the number of days in such accounting period prior to Closing and the
denominator of which shall be the total number of days in such accounting
period; provided, however, that such proration shall be made only at such time
as such tenant is current or, after application of a portion of such payment,
will be current in the payment of all rental and other charges under such
tenant’s Lease that accrue and become due and payable from and after the
Closing.  The provisions of this Section 5.4(d) shall
survive the Closing.

 

(e)                                  Tenant
Inducement Costs.  Set forth on EXHIBIT “K” attached hereto and made a part
hereof is a list of tenants at the Property with respect to which Tenant
Inducement Costs and/or leasing commissions have not been paid in full as of
the Effective Date.  Seller shall pay all
such Tenant Inducement Costs and leasing commissions set forth in EXHIBIT “K” as and when the same are due
and payable.  If said amounts have not
been paid in full on or before Closing, Purchaser shall receive a credit
against the Purchase Price in the aggregate amount of all such Tenant
Inducement Costs and leasing commissions remaining unpaid at Closing, and
Purchaser shall assume the obligation to pay amounts payable after Closing up
to the amount of such credit received at Closing.  Except as may be specifically provided to the
contrary elsewhere in this Agreement, Purchaser shall be responsible for the
payment of all Tenant Inducement Costs and leasing commissions which become due
and payable (whether before or after Closing) (i) as a result of any
renewals or extensions or expansions of existing Leases approved or deemed
approved by Purchaser in accordance with Section 4.3(a) hereof
between the Effective Date and the Closing Date and under any new Leases, approved
or deemed approved by Purchaser in accordance with said Section 4.3(a),
and (ii) all Tenant Inducement Costs and leasing commissions that first
become due and payable after Closing. 
The provisions of this Section 5.4(e) shall survive the
Closing.

 

(f)                                    Security
Deposits.  Purchaser shall receive at
Closing a credit for all Security Deposits required to be held by Seller under
the Leases (except to the extent that a Tenant has certified in a Tenant
Estoppel Certificate that it has not deposited, in whole or part, its security
deposit with Seller) together with a detailed inventory of such Security
Deposits certified by Seller in the updated Rent Roll to be delivered by Seller
at Closing.

 

(g)                                 Operating
Expenses.  Personal property taxes,
installment payments of special assessment liens, vault charges, sewer charges,
utility charges, and normally prorated operating expenses actually paid or
payable as of the Closing Date shall be prorated as of the Closing Date and
adjusted against the Purchase Price, provided that within ninety (90) days
after the Closing, Purchaser and Seller will make a further adjustment for such
taxes, charges and expenses which may have accrued or been incurred prior to
the Closing Date, but not collected or paid at that date.  In addition, within ninety (90) days after
the close of the fiscal year(s) used in calculating the pass-through to tenants
of operating expenses and/or common area maintenance costs under the Leases
(where such fiscal year(s) include(s) the Closing Date), Seller and Purchaser
shall, upon the request of either, re-prorate on a fair and equitable basis in
order to adjust for the effect of any credits or payments due to or from
tenants for periods prior to the Closing Date. 
All

 

26

 

prorations shall be made
based on the number of calendar days in such year or month, as the case may
be.  The provisions of this Section 5.4(g) shall
survive the Closing.

 

ARTICLE 6.

CONDITIONS
TO CLOSING

 

6.1.                            Conditions
Precedent to Purchaser’s Obligations. 
The obligations of Purchaser hereunder to consummate the transaction
contemplated hereunder shall in all respects be conditioned upon the
satisfaction of each of the following conditions prior to or simultaneously
with the Closing, any of which may be waived by Purchaser in its sole
discretion by written notice to Seller at or prior to the Closing Date:

 

(a)                                  Seller
shall have delivered to Purchaser all of the items required to be delivered to
Purchaser pursuant to the terms of this Agreement, including, but not limited
to Section 5.1 hereof;

 

(b)                                 Existing
Lender shall have approved Purchaser’s assumption of the Existing Loan;

 

(c)                                  Seller
shall have performed, in all material respects, all covenants, agreements and
undertakings of Seller contained in this Agreement;

 

(d)                                 All
representations and warranties of Seller as set forth in this Agreement shall
be true and correct in all material respects as of the date of this Agreement
and as of Closing, provided that solely for purposes of this subparagraph such
warranties and representations shall be deemed to be given without being
limited to Seller’s knowledge and without modification (by update or otherwise,
as provided in Section 5.1(i) hereof); and

 

(d)                                 Tenant
Estoppel Certificates shall have been delivered to Purchaser from: Kroger (the “Anchor
Tenant”), in the form that said tenant is obligated to deliver pursuant to its
lease; and (z) tenants occupying not less than eighty-five percent (85%) of the
remaining occupied, aggregate net rentable square footage of all of the
Improvements located on the Property. 
Each Tenant Estoppel Certificate shall: (i) be substantially in the
form attached hereto as EXHIBIT “I”
(or if the applicable Lease provides for a particular form of estoppel
certificate to be given by the tenant thereunder, the Tenant Estoppel
Certificate with respect to such Lease may be in the form as called for
therein), (ii) be dated within sixty (60) days prior to the Closing Date, (iii) confirm
the material terms of the applicable Lease, and (iv) confirm the absence
of any material defaults under the applicable Lease as of the date
thereof.  The delivery of said Tenant
Estoppel Certificates shall be a condition of Closing, and the failure or
inability of Seller to obtain and deliver said Tenant Estoppel Certificates,
Seller having used its good faith efforts to obtain the same, shall not
constitute a default by Seller under this Agreement.  Notwithstanding anything to the contrary
contained herein, if Seller has been unable to obtain and deliver to Purchaser
by Closing the applicable percentage of Tenant Estoppel Certificates for the
tenants described in subclause (z) above and meeting the requirements set forth
above, then, at the option of Seller, that portion of this condition to Closing
may be satisfied by Seller’s execution and delivery to Purchaser at Closing, on
behalf of any one or more tenants which have failed to provide the

 

27

 

required Tenant Estoppel
Certificate an estoppel certificate substantially in the form attached hereto
as SCHEDULE 11 (“Seller’s
Estoppel”); and provided that Seller’s liability under any such Seller’s
Estoppel so executed and delivered by Seller to Purchaser at Closing shall
cease and terminate upon the receipt by Purchaser after Closing of a duly
executed Tenant Estoppel Certificate from the tenant under the applicable Lease
covered in such Seller’s Estoppel. 
Notwithstanding Seller’s right to substitute the Seller’s Estoppel for
some percentage of tenants in the small shops, the Seller’s Estoppel may not be
used as a substitution for the Tenant Estoppel Certificate from the Anchor
Tenant.

 

In the event any of the
conditions in this Section 6.1 have not been satisfied (or otherwise
waived in writing by Purchaser) prior to or on the Closing Date (as same may be
extended or postponed as provided in this Agreement), Purchaser shall have the
right to, at its option: (x) terminate this Agreement by written notice to
Seller given prior to the Closing, whereupon (i) Escrow Agent shall return
the Earnest Money to Purchaser; and (ii) except for those provisions of
this Agreement which by their express terms survive the termination of this
Agreement, no party hereto shall have any other or further rights or obligations
under this Agreement; or (y) extend the Closing Date for a period of thirty
(30) days to permit Seller to make further good faith efforts to satisfy such
condition.  In the event that the Closing
Date is so extended and, at the end of such period, the unsatisfied condition
has still not been satisfied, Purchaser shall have the right to terminate this
Agreement by written notice to Seller given prior to Closing, whereupon (i) Escrow
Agent shall return the Earnest Money to Purchaser; and (ii) except for those
provisions of this Agreement which by their express terms survive the
termination of this Agreement, no party hereto shall have any other or further
or rights or obligations under this Agreement.

 

6.2.                            Conditions
Precedent to Seller’s Obligations. 
The obligations of Seller hereunder to consummate the transaction
contemplated hereunder shall in all respects be conditioned upon the
satisfaction of each of the following conditions prior to or simultaneously
with the Closing, any of which may be waived by Seller in its sole discretion
by written notice to Purchaser at or prior to the Closing Date:

 

(a)                                  Purchaser
shall have paid and Seller shall have received the Purchase Price, as adjusted
pursuant to the terms and conditions of this Agreement, which Purchase Price
shall be payable in the amount and in the manner provided for in this
Agreement;

 

(b)                                 Purchaser
shall have delivered to Seller all of the items required to be delivered to
Seller pursuant to the terms of this Agreement, including, but not limited to Section 5.2
hereof;

 

(c)                                  Purchaser
shall have performed, in all material respects, all covenants, agreements and
undertakings of Purchaser contained in this Agreement; and

 

(d)                                 All
representations and warranties of Purchaser as set forth in this Agreement
shall be true and correct in all material respects as of the date of this
Agreement and as of Closing, provided that solely for purposes of this
subparagraph such warranties and representations shall be deemed to be given
without being limited to Purchaser’s knowledge and without modification (by
update or otherwise, as provided in Section 5.2(d)  hereof).

 

28

 

(e)                                  Seller
shall not have any obligation to sell any one Property to Purchaser unless
Purchaser prior to or on the Closing Date closes on the acquisition of Indian
River Square Shopping Center in Vero Beach, Florida and Plaza Volente Shopping
Center in Austin, Texas.  In the event
that Closing does not occur as a result of Purchaser’s failure or refusal to
adhere to the requirements of this subsection, this Agreement and the Related
Agreements shall terminate and Escrow Agent shall pay the Earnest Money to the
Seller.

 

(f)                                    Existing
Lender’s approval of Purchaser’s assumption of the Existing Loan, including a
full release of Seller from any obligation or liability of Seller under the
Existing Loan arising after Closing.

 

ARTICLE 
7.

CASUALTY
AND CONDEMNATION

 

7.1.                            Casualty.  Risk of loss up to and including the Closing
Date shall be borne by Seller.  In the
event of any immaterial damage or destruction to the Property or any portion
thereof, Seller and Purchaser shall proceed to close under this Agreement, and
Purchaser will receive (and Seller will assign to Purchaser at the Closing
Seller’s rights under insurance policies to receive) any insurance proceeds
(including any rent loss insurance applicable to any period on and after the
Closing Date) due Seller as a result of such damage or destruction and assume
responsibility for such repair, and Purchaser shall receive a credit at Closing
for any deductible, uninsured or coinsured amount under said insurance
policies.  For purposes of this
Agreement, the term “immaterial damage or destruction” shall mean such
instances of damage or destruction:  (i) which
can be repaired or restored at a cost of One Hundred Thousand and No/100
Dollars ($100,000.00) or less; (ii) which can be restored and repaired
within sixty (60) days from the date of such damage or destruction; and (iii) in
which Seller’s rights under its rent loss insurance policy covering the
Property are sufficient to replace lost rent for a period of eighteen (18)
months and are assignable to Purchaser and will continue pending restoration
and repair of the damage or destruction.

 

In the event of any material
damage or destruction to the Property or any portion thereof, Purchaser may, at
its option, by notice to Seller given within the earlier of twenty (20) days
after Purchaser is notified by Seller of such damage or destruction, or the
Closing Date, but in no event less than ten (10) days after Purchaser is
notified by Seller of such damage or destruction (and if necessary the Closing
Date shall be extended to give Purchaser the full 10-day period to make
such election): (i) terminate this Agreement, whereupon Escrow Agent shall
immediately return the Earnest Money to Purchaser, or (ii) proceed to
close under this Agreement, receive (and Seller will assign to Purchaser at the
Closing Seller’s rights under insurance policies to receive) any insurance proceeds
(including any rent loss insurance applicable to the period on or after the
Closing Date) due Seller as a result of such damage or destruction (less any
amounts reasonably expended for restoration or collection of proceeds) and
assume responsibility for such repair, and Purchaser shall receive a credit at
Closing for any deductible amount under said insurance policies.  If Purchaser fails to deliver to Seller
notice of its election within the period set forth above, Purchaser will
conclusively be deemed to have elected to proceed with the Closing as provided
in clause (ii) of the preceding sentence. 
If Purchaser elects clause (ii) above,

 

29

 

Seller will cooperate
with Purchaser after the Closing to assist Purchaser in obtaining the insurance
proceeds from Seller’s insurers.  For
purposes of this Agreement “material damage or destruction” shall mean
all instances of damage or destruction that are not immaterial, as defined
herein.

 

7.2.                            Condemnation.  If, prior to the Closing, all or any part of
the Property is subjected to a bona fide threat of condemnation by a body
having the power of eminent domain or is taken by eminent domain or
condemnation (or sale in lieu thereof), or if Seller has received written
notice that any condemnation action or proceeding with respect to the Property
is contemplated by a body having the power of eminent domain, Seller shall give
Purchaser immediate written notice of such threatened or contemplated
condemnation or of such taking or sale, and Purchaser may by written notice to
Seller given within thirty (30) days after the receipt of such notice from
Seller, elect to cancel this Agreement. 
Purchaser waives any right to terminate as a result of disclosures set
forth in Schedule 4.1(m), if any. 
If Purchaser chooses to cancel this Agreement in accordance with this Section 7.2,
then the Earnest Money shall be returned immediately to Purchaser by Escrow
Agent and the rights, duties, obligations, and liabilities of the parties hereunder
shall immediately terminate and be of no further force and effect, except for
those provisions of this Agreement which by their express terms survive the
termination of this Agreement.  If
Purchaser does not elect to cancel this Agreement in accordance herewith, this
Agreement shall remain in full force and effect and the sale of the Property
contemplated by this Agreement, less any interest taken by eminent domain or
condemnation, or sale in lieu thereof, shall be effected with no further
adjustment and without reduction of the Purchase Price, and at the Closing,
Seller shall assign, transfer, and set over to Purchaser all of the right,
title, and interest of Seller in and to any awards applicable to the Property
that have been or that may thereafter be made for such taking.  At such time as all or a part of the Property
is subjected to a bona fide threat of condemnation and Purchaser shall not have
elected to terminate this Agreement as provided in this Section 7.2, and
provided that the Inspection Period has expired and Purchaser has delivered the
Additional Earnest Money to Escrow Agent, (i) Purchaser shall thereafter
be permitted to participate in the proceedings as if Purchaser were a party to
the action, and (ii) Seller shall not settle or agree to any award or
payment pursuant to condemnation, eminent domain, or sale in lieu thereof
without obtaining Purchaser’s prior written consent thereto in each case.

 

ARTICLE 
8.

DEFAULT
AND REMEDIES

 

8.1.                            Purchaser’s
Default.  If Purchaser fails to
consummate this transaction for any reason other
than Seller’s intentional and willful default, failure of a
condition to Purchaser’s obligation to close, or the exercise by Purchaser of
an express right of termination granted herein, Seller shall be entitled, as
its sole remedy hereunder, to terminate this Agreement and to receive and
retain the Earnest Money as full liquidated damages for such default of
Purchaser, the parties hereto acknowledging that it is impossible to estimate
more precisely the damages which might be suffered by Seller upon Purchaser’s
default, and that said Earnest Money is a reasonable estimate of Seller’s
probable loss in the event of default by Purchaser.  Seller’s

 

30

 

retention of said Earnest
Money is intended not as a penalty, but as full liquidated damages.  The right to retain the Earnest Money as full
liquidated damages is Seller’s sole and exclusive remedy in the event of
default hereunder by Purchaser, and Seller hereby waives and releases any right
to (and hereby covenants that it shall not) sue the Purchaser:  (a) for specific performance of this
Agreement, or (b) to recover actual damages in excess of the Earnest
Money.  The foregoing liquidated damages
provision shall not apply to or
limit Purchaser’s liability for Purchaser’s obligations under Sections 3.1(b),
3.1(c), 3.7 and 10.1 of this Agreement. 
Purchaser hereby waives and releases any right to (and hereby covenants
that it shall not) sue Seller or seek or claim a refund of said Earnest Money
(or any part thereof) on the grounds it is unreasonable in amount and exceeds
Seller’s actual damages or that its retention by Seller constitutes a penalty
and not agreed upon and reasonable liquidated damages.

 

8.2.                            Seller’s
Default.  If Seller fails to
perform any of its obligations under this Agreement for any reason other than
Purchaser’s default or the permitted termination of this Agreement by Seller or
Purchaser as expressly provided herein, Purchaser shall be entitled, as its
sole remedy, and at its option: (a) to receive the return of the Earnest
Money from Escrow Agent, and reimbursement from Seller for Purchaser’s
reasonable third party due diligence costs which return and reimbursement shall
operate to terminate this Agreement and release Seller from any and all
liability hereunder, (b) to enforce specific performance of Seller’s
obligation to execute and deliver the documents required to convey the Property
to Purchaser in accordance with this Agreement, or (c) in the event that
Seller’s default is such that the remedy of specific performance is rendered
impossible, or such that the value of the Property is adversely affected, then
Seller shall be obligated to reimburse Purchaser for Purchaser’s reasonable
third party due diligence costs which return and reimbursement shall operate to
terminate this Agreement and release Seller from any and all liability
hereunder.  Purchaser expressly waives
its rights to seek damages in the event of Seller’s default hereunder (except
for the reimbursement described above). 
Purchaser shall be deemed to have elected to terminate this Agreement
and to receive a return of the Earnest Money and reimbursement of third-party
due diligence costs from Escrow Agent if Purchaser fails to file suit for specific
performance against Seller in a court having jurisdiction in the county and
state in which the Property is located, on or before sixty (60) days following
the date upon which Purchaser delivered written notice to Seller stating that
Seller was in default of this Agreement.

 

ARTICLE 9.

ASSIGNMENT

 

9.1.                            Assignment.  Subject to the next following sentence, this
Agreement and all rights and obligations hereunder shall not be assignable by
any party without the written consent of the other.  Notwithstanding the foregoing to the
contrary, this Agreement and Purchaser’s rights hereunder may be transferred
and assigned to any entity owned directly or indirectly, in whole or part, by
Kite Realty Group, L.P.  Any assignee or
transferee under any such assignment or transfer by Purchaser as to which
Seller’s written consent has been given or as to which Seller’s consent is not
required hereunder shall expressly assume all of Purchaser’s duties,
liabilities and obligations under this Agreement by written instrument delivered
to Seller as a condition to the effectiveness of such assignment or
transfer.  No assignment or transfer
shall

 

31

 

relieve the original
Purchaser of any duties or obligations hereunder, and the written assignment
and assumption instrument shall expressly so provide.  Subject to the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, successors and permitted assigns.  This Agreement is not intended and shall not
be construed to create any rights in or to be enforceable in any part by any
other persons.

 

ARTICLE 10.

BROKERAGE
COMMISSIONS

 

10.1.                     Broker.  Upon the Closing, and only in the event the
Closing occurs, Seller shall pay a brokerage commission to NewBridge Retail
Advisors (“Broker”) pursuant to a separate agreement.  Broker acknowledges and agrees that it shall
look solely to Seller for the payment of its commission, and Broker hereby
waives and releases any present or future claims against Purchaser for the
payment of such commission.  In addition,
Broker (upon receipt of its brokerage commission) agrees to execute and deliver
to Seller and Purchaser at the Closing a release and waiver of any claim Broker
may have against Purchaser or the Property. 
Broker shall and does hereby indemnify and hold Purchaser and Seller
harmless from and against any and all liability, loss, cost, damage, and
expense, including reasonable attorneys’ fees actually incurred and costs of
litigation, Purchaser or Seller shall ever suffer or incur because of any claim
by any agent, salesman, or broker, whether or not meritorious, for any fee,
commission or other compensation with regard to this Agreement or the sale and
purchase of the Property contemplated hereby, and arising out of any acts or
agreements of Broker.  Seller shall and
does hereby indemnify and hold Purchaser harmless from and against any and all
liability, loss, cost, damage, and expense, including reasonable attorneys’
fees actually incurred and costs of litigation, Purchaser shall ever suffer or
incur because of any claim by any agent, salesman, or broker, whether or not
meritorious, for any fee, commission or other compensation with regard to this
Agreement or the sale and purchase of the Property contemplated hereby, and
arising out of any acts or agreements of Seller, including any claim asserted
by Broker.  Likewise, Purchaser shall and
does hereby indemnify and hold Seller free and harmless from and against any
and all liability, loss, cost, damage, and expense, including reasonable
attorneys’ fees actually incurred and costs of litigation, Seller shall ever
suffer or incur because of any claim by any agent, salesman, or broker, whether
or not meritorious, for any fee, commission or other compensation with respect
to this Agreement or the sale and purchase of the Property contemplated hereby
and arising out of the acts or agreements of Purchaser.  This Section 10.1 shall survive the
Closing or any earlier termination of this Agreement.

 

ARTICLE 11.

MISCELLANEOUS

 

11.1.                     Notices.  Wherever any notice or other communication is
required or permitted hereunder, such notice or other communication shall be in
writing and shall be delivered by overnight courier, hand, facsimile
transmission, or sent by U.S. registered or certified mail,

 

32

 

return receipt requested,
postage prepaid, to the addresses or facsimile numbers set out below or at such
other addresses as are specified by written notice delivered in accordance
herewith:

 

	
  PURCHASER:

  	
   

  	
  KRG Development, LLC

  
	
   

  	
   

  	
  30 S. Meridian Street

  
	
   

  	
   

  	
  Suite 1100

  
	
   

  	
   

  	
  Indianapolis, Indiana
  46204

  
	
   

  	
   

  	
  Attention: Daniel R.
  Sink

  
	
   

  	
   

  	
  Facsimile: (317) 577-5605

  
	
   

  	
   

  	
   

  
	
  SELLER:

  	
   

  	
  BVT Institutional
  Investments, Inc.

  
	
   

  	
   

  	
  3350 Riverwood Parkway

  
	
   

  	
   

  	
  Suite 1500

  
	
   

  	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
   

  	
  Attention: Brad Garner

  
	
   

  	
   

  	
  Facsimile: (770) 618-3567

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  McGuireWoods LLP

  
	
   

  	
   

  	
  1170 Peachtree Street,
  N.E.

  
	
   

  	
   

  	
  Suite 2100

  
	
   

  	
   

  	
  Atlanta, Georgia 30309

  
	
   

  	
   

  	
  Attn: Stephen D.
  Peterson

  
	
   

  	
   

  	
  Facsimile: (404) 443-5764

  

 

Any notice or other
communication (i) mailed as hereinabove provided shall be deemed
effectively given or received on the third (3rd) business day following the
postmark date of such notice or other communication, (ii) sent by
overnight courier or by hand shall be deemed effectively given or received upon
receipt, and (iii) sent by facsimile transmission shall be deemed
effectively given or received on the first Business Day after the day of
transmission of such notice and confirmation of such transmission.

 

11.2                        Possession.  Full and exclusive possession of the
Property, subject only to the Permitted Exceptions and the rights of the
tenants under the Leases, shall be delivered by Seller to Purchaser on the
Closing Date.

 

11.3                        Time
Periods.  If the time period by
which any right, option, or election provided under this Agreement must be
exercised, or by which any act required hereunder must be performed, or by
which the Closing must be held, expires on a Saturday, Sunday, or holiday, then
such time period shall be automatically extended through the close of business
on the next regularly scheduled Business Day.

 

11.4                        [INTENTIONALLY
DELETED]

 

11.5                        Discharge
of Obligations.  The acceptance
by Purchaser of the documents listed in Section 5.1 hereunder shall be
deemed to constitute the full performance and discharge of each and every
warranty and representation made by Seller and Purchaser herein and every
agreement and obligation on the part of Seller and Purchaser to be performed
pursuant to the terms of this

 

33

 

Agreement, except those
warranties, representations, covenants and agreements which are specifically
provided in this Agreement to survive Closing. 

 

11.6                        Severability.  This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. 
If any provision of this Agreement, or the application thereof to any
person or circumstance, shall, for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby but
rather shall be enforced to the greatest extent permitted by law.

 

11.7                        Construction.  This Agreement shall not be construed more
strictly against one party than against the other merely by virtue of the fact
that this Agreement may have been prepared by counsel for one of the parties,
it being mutually acknowledged and agreed that Seller and Purchaser and their
respective counsel have contributed substantially and materially to the
preparation and negotiation of this Agreement. 
Accordingly, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any exhibits or amendments hereto.

 

11.8                        Sale
Notification Letters.   Promptly
following the Closing, Purchaser shall deliver the Tenant Notices of Sale to
each of the respective tenants under the Leases and the Other Notices of Sale
to each service provider and leasing agent, the obligations under whose
respective Operating Agreements and Commission Agreements Purchaser has assumed
at Closing.  The provisions of this Section shall
survive the Closing.

 

11.9                        Access
to Records Following Closing. 
Purchaser agrees that for a period of two (2) years following the
Closing, Seller shall have the right during regular business hours, on five (5) days’
written notice to Purchaser, to examine and review at Purchaser’s office (or,
at Purchaser’s election, at the Property), the books and records relating to
the ownership and operation of the Property which were delivered by Seller to
Purchaser at the Closing.  Likewise,
Seller agrees that for a period of two (2) years following the Closing,
Purchaser shall have the right during regular business hours, on five (5) days’
written notice to Seller, to examine and review at Seller’s office, all books,
records and files, if any, retained by Seller relating to the ownership and
operation of the Property by Seller prior to the Closing.  The provisions of this Section shall
survive the Closing.

 

11.10                 Survival.  The provisions of this Article 11 and
the provisions of Sections 3.1(b), 3.1(c), 3.3, 3.7, 4.1, 4.2, 4.4, 5.1, 5.2,
5.4, 6.1(d) and 10.1 shall survive the Closing to the extent (and subject
to any specific limitations) provided in this Agreement and any earlier
termination of this Agreement and shall not be merged into the execution and
delivery of the Warranty Deed.

 

11.11                 General
Provisions.  No failure of either
party to exercise any power given hereunder or to insist upon strict compliance
with any obligation specified herein, and no custom or practice at variance
with the terms hereof, shall constitute a waiver of either party’s right to
demand exact compliance with the terms hereof. 
This Agreement contains the entire agreement of the parties hereto, and
no representations, inducements, promises, or agreements, oral or otherwise,
between the parties not embodied herein shall be of any force or effect.  Any

 

34

 

amendment to this
Agreement shall not be binding upon Seller or Purchaser unless such amendment is
in writing and executed by both Seller and Purchaser.  Subject to the provisions of Section 9.1
hereof, the provisions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, legal representatives,
successors, and permitted assigns.  Time
is of the essence in this Agreement.  The
headings inserted at the beginning of each paragraph are for convenience only,
and do not add to or subtract from the meaning of the contents of each
paragraph.  This Agreement shall be
construed and interpreted under the laws of the State of Georgia.  Except as otherwise provided herein, all
rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law.  All personal pronouns used in this Agreement,
whether used in the masculine, feminine, or neuter gender shall include all
genders, and all references herein to the singular shall include the plural and
vice versa.

 

11.12                 Attorney’s
Fees.  If Purchaser or Seller
brings an action at law or equity against the other in order to enforce the
provisions of this Agreement or as a result of an alleged default under this
Agreement, the prevailing party in such action shall be entitled to recover
court costs and reasonable attorney’s fees actually incurred from the
non-prevailing party.

 

11.13                 Counterparts.  This Agreement may be executed in one or more
counterparts, each of which when taken together shall constitute one and the
same original.  To facilitate the execution
and delivery of this Agreement, the parties may execute and exchange
counterparts of the signature pages by facsimile, and the signature page of
either party to any counterpart may be appended to any other counterpart.

 

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

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  U.S. RETAIL INCOME FUND
  VIII-D, LIMITED

  PARTNERSHIP, a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: BVT Institutional
  Investments, Inc., a Georgia

  corporation, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Brad R. Garner

  
	
   

  	
  Name:

  	
   BRAD R. GARNER

  
	
   

  	
  Title:

  	
       VICE
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
                                                                                                         ,

  
	
   

  	
  KRG DEVELOPMENT, LLC,
  an Indiana limited

  liability company

  
					

 

35

 

	
   

  	
  By:

  	
   /s/ John A. Kite

  
	
   

  	
  Name:

  	
    JOHN A.
  KITE

  
	
   

  	
  Title:

  	
      PRESIDENT
  AND CEO

  
					

 

 

IN WITNESS WHEREOF, the
undersigned Broker has joined in the execution and delivery hereof solely for
the purpose of evidencing their rights and obligations under the provisions of Section 10.1
hereof.

 

	
   

  	
  BROKER:

  
	
   

  	
   

  
	
   

  	
  NEWBRIDGE RETAIL
  ADVISORS

  
	
  Date of Execution:

  	
   

  
	
   

  	
  By:

  	
   /s/ William V.
  Barron

  
	
   

  	
  Name:

  	
  WILLIAM V. BARRON

  
	
  March
  3, 2005

  	
  Title:

  	
       MANAGING
  PARTNER/PRESIDENT

  
	
   

  	
   

  
	
   

  	
                     :

  
					

 

36

 

EXHIBIT “A”

 

DESCRIPTION
OF LAND

 

1

 

EXHIBIT “B”

 

LIST
OF PERSONAL PROPERTY

 

None

 

1

 

EXHIBIT “C-1”

 

LIST
OF COMMISSION AGREEMENTS

AND
EXISTING MANAGEMENT AGREEMENT

 

I.                                         Commission
Agreements Entered Into By Seller During Its Ownership of Property:

 

Property Management and
Leasing Agreement dated December 29, 2003 by and between U.S. Retail
Income Fund VIII-D, Limited Partnership, and BVT Management Services, Inc.

 

Exclusive Subleasing
Agreement dated July 30, 2004 by and between BVT Management Services, Inc.
and The Shopping Center Group, LLC.

 

II.                                     Commission
Agreements Not Entered Into By Seller, But Affecting the Property:

 

None

 

III.                                 Management
Agreement:

 

Property Management and
Leasing Agreement dated December 29, 2003 by and between U.S. Retail
Income Fund VIII-D, Limited Partnership, and BVT Management Services, Inc.

 

IV.                                 List
of Tenants and Prospective Tenants for Which Commissions Will be Payable By
Purchaser Post-Closing if a Lease (or Expansion, Renewal or Extension) is
Entered Into Within 90 Days After Closing Date:

 

None

 

1

 

EXHIBIT “D”

 

FORM OF
ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT
(the “Agreement”), made and entered into this
      day of                     ,
2004, by and among KRG Development, LLC (hereinafter referred to as “Purchaser”),
U.S. Retail Income Fund VIII-E, Limited Partnership (hereinafter referred to as
“Seller”), and CHICAGO TITLE INSURANCE COMPANY (hereinafter referred to
as “Escrow Agent”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, Purchaser and
Seller have entered into that certain Purchase and Sale Agreement fully
executed March      , 2005 (hereinafter referred
to as the “Contract”); and

 

WHEREAS, Section 2.3(a) of
said Contract provides for Purchaser’s payment to Escrow Agent, within three (3) days
after Purchaser’s execution and delivery of the Contract to Seller, of Two
Hundred Ten Thousand and No/100 Dollars ($210,000.00) as Initial Earnest Money
(as defined in the Contract) to be held and applied by said Escrow Agent in
accordance with this Agreement; and

 

WHEREAS, Section 2.3(b) of
the Contract provides for Purchaser’s payment to Escrow Agent, no later than
three (3) days after the expiration of the “Inspection Period” (as defined
in the Contract) of the additional sum of One Hundred Seventy Five Thousand and
No/100 Dollars ($175,000.00) as the Additional Earnest Money (as defined in the
Contract); and

 

WHEREAS, the parties
hereto desire to set forth the terms and conditions of Escrow Agent’s holding,
investment and disbursement of the Escrow Funds (as hereinafter defined).

 

NOW, THEREFORE, for and
in consideration of the agreements set forth in the Contract and the mutual
covenants set forth herein, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.                                       Escrow
Agent does hereby acknowledge receipt of a check or wire transfer, payable to
the order of Escrow Agent, in the amount of Two Hundred Ten Thousand and No/100
Dollars ($210,000.00) as the Initial Earnest Money (as defined in the
Contract).  Said Initial Earnest Money,
together with any Additional Earnest Money actually deposited by Purchaser with
Escrow Agent pursuant to the terms of the Contract, all interest and other
income earned on the Initial Earnest Money, any Additional Earnest Money and
interest thereon being herein referred to as the “Escrow Funds”.  Escrow Agent hereby agrees to hold,
administer, and disburse the Escrow Funds pursuant to this Agreement and the
Contract.  Escrow Agent shall invest the
Escrow Funds in an interest-bearing account. 
All interest or other income shall be earned for the account of
Purchaser and shall be held, invested and disbursed as a part of the Escrow
Funds hereunder.  Purchaser’s Federal
Identification Number for purposes of this Agreement is 35-2020998.  Escrow Agent’s fee, if any, for services
rendered hereunder shall be paid one-half (1/2) by Purchaser and one-half (1/2)
by Seller.

 

2

 

2.                                       At
such time as Escrow Agent receives written notice from either Purchaser or
Seller, or both, setting forth the identity of the party to whom such Escrow
Funds (or portions thereof) are to be disbursed and further setting forth the
specific section or paragraph of the Contract pursuant to which the
disbursement of such Escrow Funds (or portions thereof) is being requested,
Escrow Agent shall disburse such Escrow Funds pursuant to such notice; provided,
however, that if such notice is given by either Purchaser or Seller but
not both, Escrow Agent shall (i) promptly notify the other party (either
Purchaser or Seller, as the case may be) that Escrow Agent has received a
request for disbursement, and (ii) withhold disbursement of such Escrow
Funds for a period of ten (10) days after receipt of such notice of
disbursement and if Escrow Agent receives written notice from either Purchaser
or Seller within said ten (10) day period which notice countermands the
earlier notice of disbursement, then Escrow Agent shall withhold such
disbursement until both Purchaser and Seller can agree upon a disbursement of
such Escrow Funds.  Purchaser and Seller
hereby agree to send to the other, pursuant to Paragraph 6 below, a
duplicate copy of any written notice sent to Escrow Agent and requesting any
such disbursement or countermanding a request for disbursement.

 

3.                                       In
performing any of its duties hereunder, Escrow Agent shall not incur any
liability to anyone for any damages, losses, or expenses, except for willful
default, gross negligence, fraud or breach of trust, and it shall accordingly
not incur any such liability with respect to (i) any action taken or
omitted in good faith upon advice of its legal counsel given with respect to
any questions relating to the duties and responsibilities of Escrow Agent under
this Agreement, or (ii) any action taken or omitted in reliance upon any
instrument, including any written notice or instruction provided for in this
Agreement, not only as to its due execution and the validity and effectiveness
of its provisions but also as to the truth and accuracy of any information
contained therein, which Escrow Agent shall in good faith believe to be
genuine, to have been signed or presented by a proper person or persons, and to
conform with the provisions of this Agreement.

 

4.                                       Notwithstanding
the provisions of Paragraph 2 above, in the event of a dispute between
Purchaser and Seller sufficient in the sole discretion of Escrow Agent to
justify its doing so or in the event that Escrow Agent has not disbursed the
Escrow Funds on or before the date which is six (6) months from the date
hereof, Escrow Agent shall be entitled to tender the Escrow Funds into the
registry or custody of any court of competent jurisdiction, together with such
legal pleadings as it may deem appropriate, and thereupon be discharged from
all further duties and liabilities under this Agreement.  Any such legal action may be brought in such
court as Escrow Agent shall determine to have jurisdiction thereof.

 

5.                                       Purchaser
and Seller hereby agree to indemnify and hold Escrow Agent harmless against any
and all losses, claims, damages, liabilities, and expenses, including, without
limitation, reasonable costs of investigation and legal counsel fees, which may
be imposed upon Escrow Agent or incurred by Escrow Agent in connection with the
performance of its duties hereunder, including, without limitation, any
litigation arising from this Agreement or involving the subject matter hereof.

 

6.                                       Wherever
any notice or other communication is required or permitted hereunder, such
notice or other communication shall be in writing and shall be delivered by
overnight

 

3

 

courier, hand delivery,
or sent by U.S. registered or certified mail, return receipt requested, postage
prepaid, to the addresses set out below or at such other addresses as are
specified by written notice delivered in accordance herewith:

 

	
  PURCHASER:

  	
   

  	
  KRG Development, LLC

  
	
   

  	
   

  	
  30 S. Meridian Street

  
	
   

  	
   

  	
  Suite 1100

  
	
   

  	
   

  	
  Indianapolis, Indiana
  46204

  
	
   

  	
   

  	
  Attention: Daniel R.
  Sink

  
	
   

  	
   

  	
  Facsimile: (317) 577-5605

  
	
   

  	
   

  	
   

  
	
  SELLER:

  	
   

  	
  BVT Institutional
  Investments, Inc.

  
	
   

  	
   

  	
  3350 Riverwood Parkway

  
	
   

  	
   

  	
  Suite 1500

  
	
   

  	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
   

  	
  Attention: Brad Garner

  
	
   

  	
   

  	
  Facsimile: (770) 618-3567

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  McGuireWoods LLP

  
	
   

  	
   

  	
  1170 Peachtree Street,
  N.E.

  
	
   

  	
   

  	
  Suite 2100

  
	
   

  	
   

  	
  Atlanta, Georgia 30309

  
	
   

  	
   

  	
  Attn: Stephen D.
  Peterson

  
	
   

  	
   

  	
  Facsimile: (404) 443-5764

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW AGENT:

  	
   

  	
  Chicago Title Insurance
  Company

  
	
   

  	
   

  	
  101 W. Ohio Street, Suite 1100

  
	
   

  	
   

  	
  Indianapolis, Indiana
  46204

  
	
   

  	
   

  	
  Attention: Alan Kolb

  
	
   

  	
   

  	
  Facsimile: (317) 684-3843

  
				

 

Any notice or other
communication (i) mailed as hereinabove provided shall be deemed
effectively given or received on the third (3rd) business day following the
postmark date of such notice or other communication, (ii) sent by
overnight courier or by hand shall be deemed effectively given or received upon
receipt, and (iii) sent by facsimile transmission shall be deemed
effectively given or received on the first business day after the day of
transmission of such notice and confirmation of such transmission.

 

7.                                       This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors, and assigns. 
Any and all rights granted to any of the parties hereto may be exercised
by their agents or personal representatives.

 

8.                                       Time
is of the essence of this Agreement.

 

4

 

9.                                       If
proceedings shall be instituted before any court of competent jurisdiction for
the resolution of any dispute arising under this Agreement between any parties
hereto, then upon final resolution of such dispute, the prevailing party in
such dispute shall be promptly paid by the nonprevailing party therein all of
such prevailing party’s attorneys’ fees and expenses, court costs and costs of
appeal actually incurred in connection with such proceeding.

 

10.                                 This
Agreement is governed by and is to be construed under the laws of the State of
Georgia and may be executed in several counterparts, each of which shall be
deemed an original, and all such counterparts together shall constitute one and
the same instrument.

 

[Signatures
begin on next page]

 

5

 

IN WITNESS WHEREOF, the
parties hereto have signed and sealed this Agreement as of the day, month and
year first above written.

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  U.S. RETAIL INCOME FUND
  VIII-D, LIMITED

  PARTNERSHIP, a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By:  BVT Institutional Investments, Inc., a
  Georgia

  corporation, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

 

[SIGNATURES
CONTINUED ON FOLLOWING PAGE]

 

6

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  KRG DEVELOPMENT, LLC,
  an Indiana limited

  liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

[SIGNATURES
CONTINUED ON FOLLOWING PAGE]

 

7

 

	
   

  	
  ESCROW
  AGENT:

  
	
   

  	
   

  
	
   

  	
  CHICAGO TITLE INSURANCE
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  (CORPORATE SEAL)

  	
   

  
						

 

8

 

EXHIBIT “E”

 

LIST
OF EXISTING ENVIRONMENTAL REPORTS

 

Phase I Environmental
Site Assessment Report by National Assessment Corporation dated October 29,
2003.

 

1

EXHIBIT “F”

 

RENT ROLL

 

1

 

EXHIBIT “G”

 

EXCEPTION
SCHEDULE

 

None.

 

1

 

EXHIBIT “H”

 

LIST OF
OPERATING AGREEMENTS

 

Services Agreement
between BVT Management, Inc. and ArborGuard, Inc. dated June 22,
2004, for tree service.

 

Monitoring Services
Agreement between BVT Management, Inc., successor to Long Island
Associates, and AFA Southeast Inc. dated August 2, 1999.

 

Services Agreement
between BVT Management, Inc. and Litter Control Sweeping Service dated June 1,
2004, for parking lot maintenance.

 

Security Guard Agreement
between BVT Management, Inc., successor to Long Island Associates, and
Norred & Associates, Inc. dated November 2, 2001.

 

Elevator Agreement between
BVT Management, Inc., successor to Fletcher Bright, and Otis Elevator
dated November 18, 1997.

 

Services Agreement
between BVT Management, Inc. and TruGreen Landcare dated September 29,
2004, for landscaping service.

 

1

 

EXHIBIT “I”

 

FORM OF
TENANT ESTOPPEL CERTIFICATE

 

[TO BE PROVIDED BY
PURCHASER]

 

1

 

EXHIBIT “A”

 

1.                                      Description
of Subleases and/or Assignments of Tenant’s Interest (if none, then state none)

 

 

2.                                      Amounts
of the Security Deposit Which Have Been Applied by Landlord (if none, then
state none)

 

2

 

EXHIBIT “J”

 

PROPERTY
TAX APPEALS

 

None.

 

1

 

EXHIBIT “K”

 

TENANT
INDUCEMENT COSTS AND LEASING COMMISSIONS

RE
CURRENT TENANTS FOR WHICH SELLER IS RESPONSIBLE

 

	
  Cuts, Inc.
  (potential renewal commission)

  	
   

  	
  $1,620

  	
   

  
	
  Nancy
  G’s (2nd half leasing commission)

  	
   

  	
  $9,000 (due upon tenant
  opening)

  	
   

  
	
  Consignment
  Shop (potential renewal commission)

  	
   

  	
  $6,039

  	
   

  
	
  Sola
  Salon (proposed new tenant) leasing commission

  	
   

  	
  $59,019

  	
   

  
	
  Sola
  Salon (tenant inducement costs)

  	
   

  	
  $56,925

  	
   

  

 

1

 

SCHEDULE 1

 

FORM OF
LIMITED WARRANTY DEED

 

After Recording Return
to:

 

 

LIMITED
WARRANTY DEED

 

STATE OF GEORGIA

COUNTY OF FULTON

 

THIS INDENTURE, made this
         day of                  ,
2005, between U.S. RETAIL INCOME FUND VIII-D, as party of the first part
(hereinafter “GRANTOR”), and KRG DEVELOPMENT, LLC, an Indiana limited liability
company, as party of the second part (hereinafter “GRANTEE”).

 

WITNESSETH: That the said
GRANTOR, for and in consideration of the sum of TEN AND NO/100THS DOLLARS
($10.00) and other good and valuable consideration, in hand paid at and before
the sealing and delivery of these presents, the receipt whereof is hereby
acknowledged, has granted, bargained, sold and conveyed and by these presents
does grant, bargain, sell and convey unto the said GRANTEE, its successors and
assigns, all that tract or parcel of land described as follows:

 

See Exhibit “A” attached
hereto and by this reference made a part hereof.

 

The above-described
property is conveyed subject to those matters set forth on Exhibit “B” attached
hereto and by this reference made a part hereof.

 

TO HAVE AND TO HOLD the
said bargained premises, together with all and singular the rights, members and
appurtenances thereof, to the only proper use, benefit and behoof of the said
GRANTEE, its successors and assigns, forever, IN FEE SIMPLE.

 

And the said GRANTOR, for
itself, its successors and assigns, will warrant and forever defend the right
and title to the above described property unto the said GRANTEE, its successors
and assigns, against the lawful claims of all persons claiming by, through or
under the

 

 

undersigned.

 

 

IN WITNESS WHEREOF, the
said GRANTOR, by and through its duly appointed officers, has hereunto set its
hand and affixed its seal the day and year first above written.

 

	
   

  	
  “GRANTOR”

  
	
   

  	
   

  
	
  Signed, sealed and
  delivered

  	
  U.S. RETAIL INCOME FUND
  VIII-D., a

  
	
  in the presence of:

  	
  Delaware limited
  partnership

  
	
   

  	
   

  
	
   

  	
   

  	
  By: BVT Institutional
  Investments, Inc., a

  
	
  Unofficial Witness

  	
  Georgia corporation,
  general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  	
   

  
	
  Notary Public

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  My Commission Expires: 

  	
   

  	
   

  	
   

  
								

 

 

EXHIBIT “A”

 

LEGAL
DESCRIPTION

 

 

EXHIBIT “B”

 

PERMITTED
EXCEPTIONS

 

 

SCHEDULE 2

 

FORM OF
ASSIGNMENT AND ASSUMPTION OF LEASES

AND
SECURITY DEPOSITS AND LEASING

COMMISSION
OBLIGATIONS ARISING AFTER CLOSING 

 

ASSIGNMENT
AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS

 

THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS (“Assignment”) is made and entered into as of the         
day of                 ,
200   , by and between U.S. Retail Income Fund       ,
Limited Partnership, a Delaware limited partnership (“Assignor”),
and KRG Development, LLC, an Indiana limited liability company (“Assignee”).

 

W I T N E
S S E T H:

 

WHEREAS, contemporaneously with
the execution hereof, Assignor has conveyed to Assignee certain real property
commonly known as “                          
Shopping Center” located in                ,
                  
County,                  ,
and more particularly described on Exhibit “A”
attached hereto (the “Property”) ; and

 

WHEREAS, in connection with said
conveyance, Assignor desires to transfer and assign to Assignee all of Assignor’s
right, title and interest in and to
certain leases affecting the Property, together with the security deposits and
future leasing commission obligations associated therewith, and, subject to the
terms and conditions hereof, Assignee desires to assume Assignor’s obligations
in respect of said leases, security deposits and leasing commission
obligations;

 

NOW, THEREFORE, for and in
consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid to
Assignor by Assignee, Assignee’s purchase of the Property and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged by Assignor and Assignee, Assignor and Assignee hereby
covenant and agree as follows:

 

1.                                       Assignor
hereby unconditionally and absolutely assigns, transfers, sets over and conveys
to Assignee, without warranty or representation of any kind, express or
implied, except as set forth below and except for any warranty or
representation contained in that certain Purchase and Sale Agreement dated                    
     , 2005, between Assignor and Assignee (the “Contract”), applicable to the property assigned herein, all
of Assignor’s right, title and interest in, to and under (a) those certain
leases set forth on Exhibit “B”
attached hereto and by this reference made a part hereof affecting or relating
to the Property or the improvements thereon (the “Leases”), (b) those certain tenant deposits presently held by
Assignor and enumerated on Exhibit “B”
attached hereto (the “Security Deposits”),
and (c) those certain leasing commission agreements more particularly
described on Exhibit “C” attached hereto and
made a part hereof (the “Commission Agreements”),
subject to the matters more particularly described on Exhibit “D”
attached hereto and made a part hereof.

 

 

2.                                       Assignee,
by acceptance hereof, hereby assumes and agrees to perform all of Assignor’s
duties and obligations under the Leases arising from and after the date hereof,
including, without limitation, Assignor’s obligations to pay leasing
commissions due and payable in respect of any renewal or expansion of any of
the existing Leases, or any new lease with a tenant under any of the Leases,
after the date hereof pursuant to the Commission Agreements, provided that any
renewal or expansion of any of the Existing Leases, or any new lease with a
tenant under any of the Leases  that was
entered into after the Effective Date of the Contract (as defined therein) and
prior to the date hereof was approved (or deemed approved) by Purchaser as
required in the Contract.

 

3.                                       All
representations and warranties of Assignor made in the Contract in respect of
the Leases, the Security Deposits and Commission Agreements, as recertified to
Assignee pursuant to that certain Seller’s Certificate as to Representations of
even date herewith from Assignor to Assignee, shall survive for a period of one
(1) year from the date hereof, and upon the expiration thereof shall be of
no further force or effect except to the extent that with respect to any
particular alleged breach, Assignee shall give Assignor written notice prior to
the expiration of said one (1) year period of such alleged breach with
reasonable detail as to the nature of such breach and files an action against
Assignor with respect thereto within ninety (90) days after the giving of such
notice. Notwithstanding anything to the contrary contained in the Contract or
this Assignment, in no event shall Assignor’s total liability for any such
breach or breaches exceed, in the aggregate, Seven Hundred Fifty Thousand and
No/100 Dollars ($750,000). In no event shall Assignor be liable for, nor shall
Assignee seek, any consequential, indirect or punitive damages; and in no event
whatsoever shall any claim for a breach of any representation or warranty of
Assignor be actionable or payable if the breach in question results from or is
based on a condition, state of facts or other matter which was actually known
to Assignee prior to the date hereof.

 

4.                                       This
Assignment shall inure to the benefit of and be binding upon Assignor and
Assignee, their respective legal representatives, successors and assigns.  This Assignment may be executed in
counterparts, each of which shall be deemed an original and all of such
counterparts together shall constitute one and the same Assignment.

 

 

IN WITNESS WHEREOF, the duly
authorized representatives of Assignor and Assignee have caused this Assignment
to be properly executed under seal as of this day and year first above written.

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  U.S. RETAIL INCOME FUND
          , LIMITED

  PARTNERSHIP, a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: BVT Institutional
  Investments, Inc., a Georgia

  corporation, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (CORPORATE
  SEAL)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  KRG CAPITAL, LLC, an
  Indiana limited liability

  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

EXHIBIT A

 

Legal
Description

 

4

 

EXHIBIT B

 

List of
Leases and Security Deposits

 

5

 

EXHIBIT C

 

Lease
Commission Agreements

 

6

 

EXHIBIT D

 

Permitted
Exceptions

 

7

 

SCHEDULE 2.3

 

MASTER
LEASE

 

MASTER LEASE AGREEMENT

 

THIS MASTER
LEASE AGREEMENT (the “Lease Agreement”) is made this      
of                            ,
200    , by and between U.S. Retail Income Fund VIII-D
whose address is 3350 Riverwood Parkway, Suite 1500, Atlanta, Georgia
30339 (“Tenant”), and KRG Development, LLC whose address is 30 S. Meridian
Street, Suite 1100, Indianapolis, Indiana 46204 (“Landlord”).

 

W I T N E S S E T
H:

 

WHEREAS, pursuant to that
certain Purchase and Sale Agreement dated March      ,
2005 (the “Contract”), Tenant agreed to sell to Landlord, at and for a purchase
price to be calculated at Closing, certain real property and improvements
thereon located in Atlanta, Georgia, commonly known as Fountain Oaks Shopping
Center, and more particularly described in Exhibit “A” hereto (the “Shopping
Center”); and

 

WHEREAS, the Contract
allows Tenant to enter into a  Master
Lease for 6,325 square feet of the Shopping Center in the event that a tenant
has not begun paying rent for that space on or before June 1, 2005 as more
particularly set forth in the Contract; and

 

WHEREAS, a tenant has not
begun paying rent for the subject space as set forth in the Contract on or
before June 1, 2005;

 

NOW, THEREFORE, in
consideration of the premises, the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of all of which are hereby acknowledged, it is agreed as follows:

 

ARTICLE I.

LEASED PREMISES

 

1.                                       Landlord
leases to Tenant, and Tenant leases from Landlord, the property described below
(the “Leased Premises”), which is part of the Shopping Center.

 

2.                                       The
Leased Premises contain approximately Six Thousand Three Hundred Twenty Five
(6,325) square feet of net leaseable space in the Shopping Center, said Leased
Premises being the area cross-hatched on the Site Plan attached hereto as Exhibit
“B” and made a part hereof.

 

8

 

ARTICLE II.

TERMS AND
CONDITIONS OF LEASE

 

Tenant shall have and
hold the Leased Premises upon the terms and conditions set forth below:

 

1.                                       TERM
OF LEASE.  The term of this Lease
Agreement shall be for Ten (10) years from                                                   .  However, at Tenant’s election, Tenant may
amend this Master Lease to release herefrom any rentable area included within a
new lease executed during the term hereof so long as: (i) the Leased
Premises have been leased to bona fide lessees other than Tenant (the “Third
Party Lessees”) (ii) such Third Party Lessees have begun paying full Base
Rent (as hereinafter defined) without any credits, concessions, allowances or
periods of free rent (the “Third Party Lease Commencement”); and (iii) the
Base Rent is equal to or exceeds $12.00 per square foot with three percent (3%)
increases annually. It is understood and agreed by the parties hereto that no
potential lessee shall become a Third Party Lessee until Landlord has approved
such lessee, such consent not to be unreasonably withheld, conditioned or
delayed (the “Approved Lessees”).  For
purposes hereof, “Base Rent” shall be the fixed minimum annual rent provided in
leases with Third Party Lessees, exclusive of contributions for real estate
taxes (see Paragraph 10 below), insurance (see Paragraph 11 below) common area
maintenance (see Paragraph 8 below), and any percentage rent.  If a portion of the Leased Premises is
removed as aforesaid, this Lease Agreement shall remain in full force and
effect for the remainder of the Leased Premises.  In the event that all of the space leased
hereunder becomes subject to new leases with Approved Lessees, this Lease
Agreement shall automatically terminate. 
At any time after the thirty sixth (36th) month of the lease
term, Tenant may terminate this lease by paying to Landlord an amount equal to
the present value of the aggregate rent for the remaining term of this Lease
Agreement assuming a discount rate of three percent (3%).

 

2.                                       RENTAL.  The original amount of Base Rent to be paid
by Tenant to Landlord shall be Twelve and 00/100 Dollars ($12.00) per square
foot of Leased Premises, increasing by three percent (3%) non-cumulative on
each anniversary of this Lease Agreement. 
Rent for any partial month during the term of this Lease Agreement shall
be prorated on a daily basis.  Payments
due from Tenant to Landlord under this section shall be due and payable in
advance on the 1st (1st) day of each month.

 

3.                                       BROKERAGE
COMMISSIONS AND TENANT IMPROVEMENTS. 
During the term of this Lease Agreement, Tenant agrees to (i) pay
brokerage commissions arising out of or in connection with the leasing of any
of the Leased Premises to Third Party Lessees and (ii) complete and/or pay
for all tenant improvements (or tenant improvement allowances) required under
Approved Leases.

 

4.                                       OCCUPANCY
AND USE.  It is expressly agreed that
Tenant is not obligated either (a) to physically occupy the Leased
Premises or (b) to commence or conduct any business within the Leased
Premises.  The Leased Premises may be
used only for retail purposes which are allowed by the zoning classification
applicable to the Shopping Center and which have been approved in writing by
Landlord for permitted subleases as provided above.  In no event

 

9

 

shall the Leased Premises
be used for any unlawful purpose or for any purpose which violates an exclusive
use right given to any other tenants of the Shopping Center, including, but not
limited to, Kroger.  Tenant shall not
commit any waste upon the Leased Premises or any nuisance or other act which
may disturb any other tenants of the Shopping Center.  Tenant shall, at its sole cost and expense,
comply with all laws, ordinances and regulations of all federal, state, county,
municipal and other governmental authorities, now or hereafter in force,
pertaining to Tenant or its use of the Leased Premises and shall indemnify
Landlord against any damage or expense resulting from non-compliance.  Further, Tenant shall not cause to occur any
violation of any federal, state or local law, ordinance or regulation, now or
hereafter in force, relating to environmental conditions on, under or about the
Leased Premises or the use, generation, release, storage or disposal of any
hazardous substance (as such term may be defined in any such law, ordinance or
regulation) on, under or about the Leased Premises and shall indemnify Landlord
against any damage or expense resulting from any such violation.  Nothing contained in the preceding sentence
shall be deemed a consent on the part of Landlord to the use, generation,
release, storage or disposal of any such hazardous substance on the Leased
Premises, which shall be prohibited without Landlord’s prior written consent,
in its sole and absolute discretion.

 

5.                                       COMMON
AREAS, DRIVEWAYS, SERVICE DRIVES AND PARKING.  Tenant shall have a non-exclusive right to
the use of the common areas, driveways, service drives and public parking areas
in the Shopping Center, in common with other tenants of the Shopping Center,
their agents, employees, customers and invitees.

 

6.                                       REPAIRS
AND MAINTENANCE.

 

(a)                                  Landlord
agrees that during the term of this Lease Agreement, it will, at its own
expense, keep and maintain the roof, foundation and exterior walls of the
Shopping Center buildings in good condition and repair; provided, however, that
Landlord shall not be responsible for or required to make repairs necessitated
by any damage thereto caused by the negligence, misuse of the Leased Premises,
or willful or wrongful acts of Tenant, its agents, employees, customers or
invitees, any damage thereto caused by operation of Tenant’s business other
than ordinary wear and tear, or any damage to plate or window glass.  It is hereby understood and agreed that
Landlord shall not in any event be obligated to make any repairs pursuant to
this subparagraph until notice of the necessity therefor has been given in
writing to Landlord by Tenant and Landlord shall have a reasonable time after
such written notice to make such repairs. 
Tenant shall promptly report in writing to Landlord any defective
condition known to it that Landlord is required to repair.  Landlord shall have the right to enter the
Leased Premises at any time to make repairs required of Landlord under this
Lease Agreement, or to make repairs to Landlord’s adjoining property, if any.

 

(b)                                 Tenant
shall throughout the term of this Lease Agreement, at its own expense, maintain
the Leased Premises in good order and repair, including the plate and window
glass, the heating, ventilating and air conditioning system, and the plumbing
and electrical facilities.  Tenant agrees
to return said Leased Premises to Landlord at the expiration, or prior
termination, of this Lease Agreement in as good condition and repair as when
first received, ordinary wear and tear and damage by fire or other casualty
beyond the control of Tenant alone excepted.

 

10

 

(c)                                  Regardless
of any obligation otherwise imposed upon Landlord, Tenant shall pay for the
cost of any uninsurable repairs or damage resulting from the negligence or the
unlawful or willful acts of Tenant, its agents, employees, representatives or
visitors.

 

(d)                                 Landlord
shall not be liable to Tenant for failure to make any repairs required by
Landlord, or damages as a consequence thereof, unless written notice of
necessity therefor has been given by Tenant to Landlord, specifying in
reasonable detail the repairs required, and Landlord shall not have made such
repairs within a reasonable time after receipt of such notice, due allowance
being made for delays beyond the control of Landlord.

 

(e)                                  Notwithstanding
anything to the contrary contained in this Paragraph 6, any repair and
maintenance obligations of Landlord or Tenant shall be subject to the
provisions of Paragraphs 14 and 15 below, which shall govern and control the
same.

 

7.                                       COMMON
USE AND AREAS.  All facilities
furnished in the Shopping Center and designated for the general use, in common,
of occupants of the Shopping Center, including Tenant hereunder, its agents,
employees, customers and invitees, including but not limited to the common
areas, parking areas, streets, roadways, sidewalks, canopies, loading
platforms, malls, shelters, ramps, landscaped areas, and other facilities
whether of a similar or dissimilar nature (herein called “Common Areas”) shall
at all times be subject to the exclusive control and management of Landlord,
and Landlord shall have the right from time to time to change the area, level,
location and arrangement of the Common Areas, to restrict parking by tenants
and their employees to employee parking areas, and to make all rules and
regulations and do such things from time to time as in Landlord’s sole
discretion may be necessary regarding such facilities, subject to the
requirements of any approved subleases.

 

8.                                       PARKING,
COMMON AREAS AND SERVICE AREAS. 
Landlord will operate and maintain the Common Areas referred to
above.  In addition to any other rental
or charges to Tenant elsewhere set forth as additional rental, Tenant agrees to
pay to Landlord its pro rata share of the expenses, of whatsoever kind or
nature, for operating, maintaining, managing and repairing the Common Areas
referred to above.  The pro rata share of
such Common Areas expenses which are required to be paid by Tenant shall be the
percentage of such Common Areas expenses which is equal to the total square
footage leased by Tenant as compared with and in relation to the total
leaseable square footage of all buildings in the Shopping Center, whether
leased or not leased.  Tenant shall pay
such amount not later than thirty (30) days after presentation of a statement
therefor by Landlord to Tenant.  Tenant
shall be entitled to a credit against the amount due under this Paragraph 8 for
the amount of similar payments made to Landlord by any Third Party Lessees of
the Leased Premises.

 

9.                                       CARE
OF LEASED PREMISES.  Tenant shall at
all times keep the Leased Premises and the adjoining areas (subject to its
reasonable control) in a clean and neat condition.  Tenant shall not make any alterations,
additions or improvements to the Leased Premises without Landlord’s prior
written consent, in its sole and absolute discretion, subject to the
requirements of any approved subleases.

 

11

 

10.                                 REAL
ESTATE AND OTHER TAXES.  In addition
to any other rental or charges to Tenant elsewhere set forth as additional
rental, Tenant agrees to pay to Landlord its pro rata share of all ad valorem
or other real estate taxes and assessments upon the Shopping Center regardless
of the governmental jurisdiction, authority or authorities levying the
same.  The pro rata share of such taxes
which is required to be paid by Tenant shall be that percentage of such taxes
which is equal to the total square footage leased by Tenant as compared with
and in relation to the total leaseable square footage of all buildings in the
Shopping Center (or the smaller tax parcel of which the Leased Premises is a
part), whether leased or not leased. 
Tenant shall pay such amount not later than thirty (30) days after
presentation of a statement therefor by Landlord to Tenant.

 

11.                                 INSURANCE
PREMIUMS.  Tenant shall pay to
Landlord that portion of premiums for fire and extended coverage, business
interruption, rental loss, liability and all other insurance deemed
commercially reasonable and carried by Landlord with respect to the Shopping
Center and Common Areas equal to the product obtained by multiplying said
premium by the same fraction used under Paragraph 8 above.  Within thirty (30) days after Landlord notifies
Tenant of the amount due under this Paragraph and certifies the correctness of
same, Tenant shall pay such amount as additional rent.  Tenant shall be entitled to a credit against
the amount due under this Paragraph 11 for the amount of similar payments made
to Landlord by any Third Party Lessees of the Leased Premises.  The amount of fire and extended coverage
insurance carried by Landlord will be at Landlord’s discretion, but will not be
unreasonably excessive in relation to replacement cost.

 

12.                                 INDEMNIFICATION
AND LIABILITY INSURANCE.  Tenant
shall indemnify and hold Landlord harmless from and against any and all claims,
actions, damages, liability and expense in connection with loss of life,
personal injury and/or damage to property arising from or out of any occurrence
in, upon or at the Leased Premises, or the occupancy or use by Tenant of the
Leased Premises or any part thereof, or occasioned wholly or in part by any
negligent act or omission of Tenant, its agents, contractors, employees,
servants, lessees or concessionaires. 
Landlord shall indemnify and hold Tenant harmless from and against any
and all claims, actions, damages, liability and expense in connection with loss
of life, personal injury and/or damage to property arising from or out of any
occurrence in, upon or at the Common Areas, or occasioned wholly or in part by
any negligent act or omission of Landlord, its agents, contractors, employees,
servants, lessees or concessionaires.  In
case Landlord shall be made a party to any litigation commenced by or against
Tenant, then Tenant shall protect and hold Landlord harmless and pay all costs
and attorney’s fees incurred by Landlord in connection with such litigation and
any appeals thereof.  For this purpose,
but without limiting Tenant’s indemnification obligations, Tenant shall provide
and keep in force, for the protection of the general public and Landlord,
liability insurance against claims for bodily injuries or death upon or near
the Leased Premises, sidewalks, streets and service and parking areas adjacent
thereto, with limits of not less than $1,000,000.00 for bodily injuries to or
death of any one person and with limits of not less than $2,000,000.00 for
bodily injuries to or death of any number of persons arising out of one
accident, and property damage with limits of not less than $500,000.00.  Tenant shall name Landlord as an additional
insured.  Tenant shall furnish Landlord
at all times with satisfactory evidence of such coverage.  All notices of termination shall be provided
to Landlord at least thirty (30) days prior to such termination.

 

12

 

13.                                 UTILITIES
AND SERVICES.  Tenant shall procure
for its own account and shall pay the cost of all water, sewer, gas, electric
power and fuel and other utilities consumed or used in or at said Leased
Premises, including appropriate deposits as required.  Tenant’s responsibility for the payment of
said utilities shall begin upon the commencement of this Lease Agreement.  Tenant shall also pay to Landlord any and all
water connection charges for the Leased Premises if Landlord is required to pay
the same to any governing authority.

 

14.                                 WAIVER
OF SUBROGATION.  Landlord and Tenant
hereby waive and release each other of and from any and all rights of recovery,
claim, action or cause of action against each other, their agents, officers,
directors, partners and employees, for any loss or damage that may occur to the
Leased Premises or any other improvements in the Shopping Center, or personal
property, including building contents, within the Leased Premises and/or the
Shopping Center, by reason of fire or the elements of nature or other events
normally covered by extended all risk property damage insurance coverage,
regardless of cause or origin INCLUDING, WITHOUT LIMITATION, NEGLIGENCE OF LANDLORD
OR TENANT AND THEIR AGENTS, OFFICERS, DIRECTORS, MEMBERS, PARTNERS AND
EMPLOYEES.  Landlord and Tenant shall
immediately give written notice of the terms of the mutual waivers contained in
this Paragraph 14 to each of their respective insurance companies which have
issued policies of insurance covering all risk property damage, and shall have
the insurance policies properly endorsed to reflect the insurance company’s
acknowledgment of such waiver and the absence of any subrogation rights.  Each party shall provide to the other,
annually within ten (10) days after request therefor, evidence that its
all risk property damage insurance policies have been so endorsed.

 

15.                                 FIRE
OR CASUALTY.  If the Leased Premises
shall be damaged to the extent of more than fifty percent (50%) of the
reasonable value of the improvements above foundation and floor by fire or
other casualty, Landlord or Tenant may either:

 

(a)                                  terminate
the term of this Lease Agreement, effective as of the date of such fire or
casualty, by written notice given to the other party within thirty (30) days
after such date, in which event all obligations of Tenant hereunder shall
terminate as of the date of such fire or casualty; or

 

(b)                                 if
the Lease Agreement is not terminated as set forth in paragraph (a) above,
to repair, restore or rehabilitate the Leased Premises at Landlord’s expense,
in which event the term hereof shall not terminate, but all rents herein
reserved shall be abated on a per diem basis until the Leased Premises are
restored to the same condition as existed prior to such fire or casualty.

 

16.                                 EMINENT
DOMAIN.  In the event that all or any
part of the Leased Premises or any part of the common area shall be taken by
any public authority under the power of eminent domain or like power, this
Lease Agreement shall terminate as of the date possession shall be required to
be delivered to the appropriate authority. 
Landlord shall be entitled to all such awards of damages as may be
allowed, subject to the requirements of any approved subleases.

 

13

 

17.                                 ASSIGNMENT
AND SUBLETTING.  Without Landlord’s
prior written consent, or except as specifically set forth herein, in its sole
and absolute discretion, Tenant may not assign this Lease Agreement.  Tenant may sublet any part of the Leased
Premises subject to Landlord’s prior, written approval, such approval not to be
unreasonably withheld so long as such sub-tenant’s proposed use does not
conflict with any existing or prohibited uses at the Shopping Center, and so
long as such subtenant satisfies the Leasing Standards. Landlord hereby agrees
that (y) Landlord shall enter into a commercially reasonable non-disturbance
and attornment agreement with the subtenant at the time such sublease is entered
into, and (z) the term of such a sublease may extend beyond the term of this
Lease (provided that, at the end of the term of this Lease, the sublease will
convert to a direct lease between Landlord and the subtenant, so long as the
sublease is otherwise an Approved Lease).

 

18.                                 LEASE
MODIFICATION.  Landlord agrees that
if Tenant, or Tenant’s agent, obtains a Third Party Lessee for any or all of
the Leased Premises, and Landlord and the Third Party Lessee enter into a lease
for such space, Landlord and Tenant shall execute and deliver an amendment to
this Lease Agreement whereby such space leased to the Third Party Lessee shall
be deleted from the Leased Premises under this Lease Agreement.  In such event, that is, upon Third Party
Lease Commencement (as defined in Paragraph 1 above), Tenant shall have no
further duties or obligations under this Lease Agreement with respect to such
space leased to a Third Party Lessee.

 

19.                                 TRANSFER
OF LANDLORD’S INTEREST.  In the event
of the sale, assignment or transfer by Landlord of its interest in the Shopping
Center to a successor in interest who assumes this Lease, Landlord shall
thereupon be released and discharged from all of its covenants and obligations
hereunder, except such obligations as shall have accrued prior to any such
sale, assignment or transfer.

 

20.                                 LIENS.  Nothing contained in this Lease shall be
construed as a consent on the part of Landlord to subject the estate of
Landlord to liability under the Mechanic’s Lien Law of the State of Georgia, it
being expressly understood that Landlord’s estate shall not be subject to such
liability for improvements made by Tenant. 
Tenant shall strictly comply with the Mechanic’s Lien Law of the State
of Georgia.  In the event that a claim of
lien is filed against the Leased Premises and/or the Shopping Center in
connection with any work performed by or on behalf of Tenant, Tenant shall
satisfy such claim, or shall transfer the same to security, within thirty (30)
days from the date of filing.  In the
event that Tenant fails to satisfy or transfer such claim within said thirty
(30) day period, Landlord may do so and thereafter charge Tenant, as additional
rent, all costs incurred by Landlord in connection with satisfaction or
transfer of such claim, including attorneys’ fees.  Further, Tenant agrees to indemnify, defend
and save Landlord harmless from and against any damage or loss incurred by
Landlord as a result of any such claim of lien.

 

21.                                 DEFAULT.  As used in this Lease Agreement, the term “event
of default” shall mean any of the following:

 

14

(a)                                  Tenant’s failure to make payment of any
rental installment or any other amounts payable by Tenant to Landlord hereunder
within ten (10) days after Tenant’s receipt of written notice that the
same is past due;

 

(b)                                 Tenant’s failure, within thirty (30) days
after receipt of demand from Landlord, to fulfill any other obligation imposed
on Tenant by this Lease;

 

(c)                                  Tenant makes an assignment for the benefit of
creditors, files a voluntary petition in bankruptcy under any chapter of the
Federal Bankruptcy Act, or is the subject of an involuntary petition in
bankruptcy filed against it and not dismissed within thirty (30) days; or

 

(d)                                 A receiver is appointed for Tenant or Tenant’s
leasehold interest hereunder or property used in connection therewith shall be
taken on execution.

 

22.                                 REMEDIES.  Upon the happening of an “event
of default”, Landlord at its option may:

 

(a)                                  terminate this Lease Agreement; or

 

(b)                                 terminate Tenant’s right to possession of the
Leased Premises without terminating the term of this Lease Agreement.

 

Upon termination of this
Lease Agreement for any reason, or upon termination of the Tenant’s right of
possession as provided above, Tenant shall promptly surrender possession to
Landlord and vacate the Leased Premises and Landlord may re-enter the Leased
Premises and expel the Tenant or anyone claiming under the Tenant (subject to
non-disturbance agreements described above) and remove the property of any of
them without notice, formal claim or process, Landlord being absolved of any
liability or claim for damages in doing anything reasonably necessary or
appropriate in connection therewith.  If
Landlord elects to terminate the term of this Lease Agreement or Tenant’s right
of possession, Landlord may, at its option, lease or sublet all or any part of
the Leased Premises on such terms and conditions as Landlord may elect and
collect from Tenant any balance remaining due on the rent or other obligations
payable by Tenant under this Lease Agreement and such amounts shall be credited
against any amounts owing by Tenant hereunder. 
It is expressly understood and agreed that the provisions of this
Paragraph shall not be construed to limit or impair any other right, claim or
remedy to which Landlord may be entitled at law or in equity in case of Tenant
default.

 

23.                                 ENTRY OF LANDLORD. 
Landlord may at all reasonable times enter the Leased Premises:

 

(a)                                  to inspect or protect the Leased Premises;

 

(b)                                 to effect compliance with any law, order or
regulation of any lawful authority;

 

(c)                                  to make or supervise repairs, alterations or
additions;

 

15

 

(d)                                 to exhibit the Leased Premises to prospective
tenants, purchasers or other persons; and

 

(e)                                  to alter or otherwise prepare the Leased
Premises for re-occupancy at any time after Tenant has vacated the Leased
Premises.

 

No authorized entry by
Landlord shall constitute an eviction of Tenant or a deprivation of Tenant’s
rights, alter the obligations of Tenant or create any right in Tenant adverse
to Landlord’s interest hereunder.

 

24.                                 LANDLORD’S WARRANTIES. 
Landlord warrants to Tenant that it has the right to lease the Leased
Premises on the terms and conditions of this Lease Agreement, that the Leased
Premises are presently free of any zoning or other restrictions prohibiting use
or occupancy thereof for shopping center uses and that Tenant may peaceably and
quietly hold and enjoy the Leased Premises for the term of this Lease Agreement
as long as it shall faithfully perform its obligations hereunder, except as otherwise
provided for by the terms of this Lease Agreement.

 

25.                                 NOTICES AND REPORTS.  Any
notice, report, statement, approval, consent, designation, demand or request to
be given, and any option or election to be exercised, by a party under the
provisions of this Lease Agreement shall be effective only when made in writing
and delivered in person or by certified or registered mail to the other party
at the applicable address set forth above. 
However, either party may designate a different address by giving the
other party written notice of the change. 
Rentals payable to Landlord shall be paid by Tenant at the same address
prescribed for delivery of written notice.

 

26.                                 CONSTRUCTION OF LEASE.  This
Lease Agreement shall be construed according to the laws of the State of
Georgia.  References to Tenant, whenever
consistent with the contents of this Lease, shall include the plural, neuter,
feminine and masculine.  In the absence
of specific provisions to the contrary, the party upon whom an obligation is
imposed by this Lease shall perform the obligation at its own expense.  Paragraph headings relating to the contents
of particular paragraphs are inserted only for the purpose of convenience and
are not to be construed as parts of the particular paragraphs to which they
refer.  Any separate or attached sketch,
drawing, plan, specification, rider or schedule shall be deemed an
original part of this Lease Agreement only if initialed by the parties and
bearing the same date as this Lease Agreement. 
This Lease Agreement and the Contract contain all of the understandings
between the parties and may not be added to or modified except by one or more
written instruments signed by the party or parties to be charged with the
obligations set forth therein.  The
failure of Landlord to insist upon strict performance of any of the covenants
or conditions of this Lease Agreement, or to exercise any option herein
conferred in any one or more instances, shall not be construed as a waiver or
relinquishment of any such covenants, conditions or options, but the same shall
be and remain in full force and effect.

 

27.                                 NON-RECORDATION.  It
is expressly agreed and understood that filing of record, by or through the act
or effort of Tenant or its successors, legal representatives or assigns, in any
manner whatsoever as an exhibit or attachment to any other instrument so filed
or

 

16

 

otherwise, of this Lease
Agreement in the public records without the prior written consent of Landlord
shall be deemed a default by Tenant under the terms and conditions of this
Lease Agreement.  Either party hereto,
upon the request of and at the expense of the other party, shall execute a
short form of this Lease Agreement adequate for recordation.

 

28.                                 DEFAULT BY LANDLORD. 
Tenant shall not have the right to terminate this Lease Agreement
because of Landlord’s default unless Tenant has given notice to Landlord and to
any mortgage holder of whom Tenant has been given notice, specifying the nature
of default by Landlord, and Landlord or such mortgagee shall not have cured the
default within thirty (30) days after such notice.

 

29.                                 BINDING EFFECT OF LEASE.  All
rights and liabilities given to or imposed upon either of the parties by this
Lease Agreement shall benefit and bind their respective successors, heirs and
assigns, to the extent this Lease Agreement may be assignable as provided
above.

 

30.                                 PARTIAL INVALIDITY.  If
any term, covenant, condition or provision of this Lease Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby.

 

31.                                 RIGHTS CUMULATIVE.  All
rights, powers and privileges conferred hereunder upon the parties hereto shall
be cumulative and not restricted to those given by law.

 

32.                                 SUBORDINATION AND ATTORNMENT.

 

(a)                                  Tenant hereby subordinates its rights
hereunder to the lien of any mortgage or mortgages, or the lien resulting from
any other method of financing or refinancing, now or hereafter in force against
the land and buildings of which the Leased Premises are a part, and to all
advances made or hereafter to be made upon the security thereof.  This subparagraph shall be self-operative and
no further instrument of subordination shall be required by any mortgagee, but
Tenant agrees upon request of Landlord, from time to time, to execute promptly
any and all documents evidencing such subordination.

 

(b)                                 In the event that any proceedings are brought
for the foreclosure of, or in the event of exercise of the power of sale under,
any mortgage made by Landlord covering the Leased Premises or in the event that
a deed is given in lieu of foreclosure of any such mortgage, Tenant shall attorn
to the purchaser, or grantee in lieu of foreclosure, upon any such foreclosure
or sale and recognize such purchaser, or grantee in lieu of foreclosure, as the
Landlord under this Lease Agreement.

 

33.                                 NO PARTNERSHIP. 
Landlord does not, in any way or for any purpose, become a partner of
Tenant in the conduct of its business, or otherwise, or a joint venturer or a
member of a joint enterprise with Tenant, nor does anything in this Lease
Agreement confer any interest in Landlord in the conduct of Tenant’s business.

 

17

 

34.                                 LIABILITY OF LANDLORD. 
Tenant shall look solely to the estate and property of Landlord in the
land and buildings comprising the Shopping Center and the proceeds thereof for
the collection of any judgment, or in connection with any other judicial
process, requiring the payment of money by Landlord in the event of any default
or breach by Landlord with respect to any of the terms, covenants and
conditions of this Lease Agreement to be observed and performed by Landlord and
no other property or estate of Landlord shall be subject to levy, execution or
other enforcement procedures for the satisfaction of Tenant’s remedies and
rights under this Lease Agreement.

 

This Lease Agreement and the
Contract contain all of the agreements and understandings between the parties
hereto with respect to the subject matter hereof and may not be modified orally
or in any manner other than by an agreement in writing, signed by the parties
hereto or their respective successors in interest.

 

35.                                 DEFINED TERMS.  Any
capitalized terms that are not otherwise defined herein shall be deemed to have
the meaning given them in the Contract.

 

[THIS
SPACE INTENTIONALLY LEFT BLANK]

 

 

[SIGNATURES
BEGIN ON FOLLOWING PAGE]

 

18

 

IN WITNESS WHEREOF, Landlord
and Tenant have each caused these presents to be appropriately executed.

 

	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KRG DEVELOPMENT, LLC, an
  Indiana limited

  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
						

 

 

[THIS
SPACE INTENTIONALLY LEFT BLANK]

 

 

[SIGNATURES
CONTINUED ON FOLLOWING PAGE]

 

19

 

	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S. RETAIL INCOME FUND
  VIII-D, LIMITED

  PARTNERSHIP, a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  BVT Institutional Investments, Inc., a
  Georgia

  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
						

 

20

 

SCHEDULE 3

 

FORM OF BILL OF SALE TO PERSONAL PROPERTY

 

BILL OF SALE

 

THIS BILL OF SALE (“Bill of Sale”) is made and entered into as
of the          day of                         ,
200   , by U.S. Retail Income Fund      ,
Limited Partnership, a Delaware limited partnership (“Seller”), for
the benefit of KRG Development, LLC, an Indiana limited liability company (“Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, contemporaneously with the execution
hereof, Seller has conveyed to Purchaser certain improved real property
commonly known as “                                     
Shopping Center” located in                           ,
                          
County,                        
and more particularly described on Exhibit
“A” attached hereto (the “Property”);
and

 

WHEREAS, in connection with said conveyance, Seller
desires to transfer and convey to Purchaser all of Seller’s right, title and
interest in and to certain tangible personal property, inventory and fixtures
located in and used exclusively in connection with the ownership, maintenance
or operation of the Property and the Improvements thereon;

 

NOW,
THEREFORE, for and in
consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid to
Seller by Purchaser, the premises and other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged by
Seller and Purchaser, it is hereby agreed as follows:

 

1.                                       All capitalized terms not defined herein
shall have the meanings ascribed to such terms as set forth in that certain
Purchase and Sale Agreement dated as of                           ,
2005, between Seller and Purchaser (the “Sales
Contract”).

 

2.                                       Seller hereby unconditionally and absolutely
transfers, conveys and sets over to Purchaser, without warranty or
representation of any kind, express or implied, all right, title and interest
of Seller in any and all furniture (including common area furnishings and
interior landscaping items), carpeting, draperies, appliances, personal
property (excluding any computer software which either is licensed to Seller or
Seller deems proprietary), machinery, apparatus and equipment owned by Seller
and currently used exclusively in the operation, repair and maintenance of the
Land and Improvements and situated thereon, including, without limitation, all
of Seller’s right, title and interest in and to those items of tangible
personal property set forth on Exhibit “B”
attached hereto and all books, records and files (excluding any appraisals,
budgets, strategic plans for the Property, internal analyses, information
regarding the marketing of the Property for sale, submissions relating to
Seller’s obtaining of corporate authorization, attorney and accountant work
product, attorney-client privileged documents, or other information in the
possession or control of Seller or Seller’s property manager which Seller deems

 

1

 

proprietary) relating to the
Land and Improvements (the “Personal Property”).  The Personal Property does not include any property owned by tenants,
contractors or licensees.

 

3.                                       The Personal Property is hereby transferred
and conveyed subject to those certain matters more particularly described on Exhibit “C” attached hereto and made a
part hereof.

 

4.                                       This Bill of Sale shall inure to the benefit
of Purchaser, and be binding upon Seller, and their respective legal
representatives, transfers, successors and assigns.

 

IN WITNESS WHEREOF, Seller
has caused this Bill of Sale to be executed under seal as of this day and year
first above written.

 

	
   

  	
   

  	
  U.S. RETAIL INCOME FUND
       , LIMITED

  PARTNERSHIP, a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  BVT Institutional Investments, Inc., a
  Georgia

  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

2

 

Exhibit “A”

 

Legal Description

 

 

3

 

Exhibit “B”

 

List of Personal Property

 

 

4

 

Exhibit “C”

 

Permitted Encumbrances

 

 

5

 

SCHEDULE 4

 

FORM OF ASSIGNMENT AND ASSUMPTION OF OPERATING
AGREEMENTS

 

ASSIGNMENT AND ASSUMPTION OF CONTRACTS

 

THIS ASSIGNMENT AND
ASSUMPTION OF CONTRACTS (“Assignment”)
is made and entered into as of the          
day of                        ,
200    , by and between U.S.
RETAIL INCOME FUND        , LIMITED
PARTNERSHIP, a Delaware limited partnership (“Assignor”)
and KRG DEVELOPMENT, LLC, an Indiana limited liability company (“Assignee”).

 

W I T N E S S E T H:

 

WHEREAS, contemporaneously with the execution hereof,
Assignor has conveyed to Assignee certain real property commonly known as “                                    
Shopping Center” in                            ,
                       
County,                            ,
and more particularly described on Exhibit
“A” attached hereto (the “Property”); and

 

WHEREAS, in connection with said conveyance, Assignor
desires to transfer and assign to Assignee, to the extent assignable, all of
Assignor’s right, title and interest in and to certain service contracts
related to the Property, and to the extent assignable, all guaranties and
warranties given in connection with the operation, construction, improvement,
alteration or repair of the Property; and Assignee desires to assume Assignor’s
obligations under said service contracts;

 

NOW,
THEREFORE, for and in
consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid to
Assignor by Assignee, the Premises and other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged by Assignor
and Assignee, Assignor and Assignee hereby covenant and agree as follows:

 

1.                                       Assignor hereby unconditionally and
absolutely assigns, transfers, sets over and conveys to Assignee, to the extent
assignable, and without warranty or representation of any kind, express or
implied, except as set forth below and except for any warranty or
representation contained in that certain Purchase and Sale Agreement dated                            
     , 2005, between Assignor and Assignee, (the “Contract”) applicable to the property
assigned herein, all of Assignor’s right, title and interest in, to and under
those certain contracts set forth on Exhibit “B”
attached hereto and by this reference made a part hereof (the “Service Contracts”), subject to the
matters set forth on Exhibit “C”
attached hereto and by this reference made a part hereof.

 

2.                                       Assignee, by acceptance hereof, hereby
assumes and agrees to perform all of Assignor’s duties and obligations under
the Service Contracts arising from and after the date hereof.

 

1

 

3.                                       All representations and warranties of
Assignor made in the Contract in respect of the Service Contracts, as
recertified to Assignee pursuant to that certain Seller’s Certificate as to
Representations of even date herewith from Assignor to Assignee, shall survive
for a period of one (1) year from the date hereof, and upon the expiration
thereof shall be of no further force or effect except to the extent that with
respect to any particular alleged breach, Assignee shall give Assignor written
notice prior to the expiration of said one (1) year period of such alleged
breach with reasonable detail as to the nature of such breach and files an
action against Assignor with respect thereto within ninety (90) days after the
giving of such notice. Notwithstanding anything to the contrary contained in
the Contract or this Assignment, in no event shall Assignor’s total liability
for any such breach or breaches exceed, in the aggregate, Seven Hundred Fifty
Thousand and No/100 Dollars ($750,000). In no event shall Assignor be liable
for, nor shall Assignee seek, any consequential, indirect or punitive damages;
and in no event whatsoever shall any claim for a breach of any representation
or warranty of Assignor be actionable or payable if the breach in question
results from or is based on a condition, state of facts or other matter which
was actually known to Assignee prior to the date hereof.

 

4                                          This Assignment shall inure to the benefit
and be binding upon Assignor and Assignee and their respective legal
representatives, successors and assigns.

 

IN WITNESS WHEREOF, the duly
authorized representatives of Assignor and Assignee have caused this Assignment
to be properly executed under seal as of this day and year first above written.

 

	
   

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S.
  RETAIL INCOME FUND          , LIMITED

  PARTNERSHIP, a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  BVT Institutional Investments, Inc., a
  Georgia

  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

2

 

	
   

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KRG
  DEVELOPMENT, LLC, an
  Indiana

  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

3

 

Exhibit A

 

Legal Description

 

4

 

Exhibit B

 

Assigned Contracts

 

None

 

5

 

Exhibit C

 

Permitted Exceptions

 

 

6

 

SCHEDULE 4.1(M)

 

DISCLOSURE OF CONDEMNATION

 

 

 

SCHEDULE 5

 

FORM OF GENERAL ASSIGNMENT OF

SELLER’S INTEREST IN INTANGIBLE PROPERTY

 

GENERAL ASSIGNMENT

 

THIS GENERAL ASSIGNMENT (“Assignment”) is made and entered into as
of the            day of                     ,
2005 by U.S. Retail Income Fund      , Limited
Partnership a Delaware limited partnership (“Assignor”) to KRG Development,
LLC, an Indiana limited liability company (“Assignee”).

 

W I T N E S S E T H:

 

WHEREAS, contemporaneously with the execution
hereof, Assignor has conveyed to Assignee certain real property commonly known
as “                                    
Shopping Center” located in                         ,
                       
County,                           ,
and more particularly described on Exhibit “A”
attached hereto and made a part hereof (the “Property”);
and

 

WHEREAS, in connection with said conveyance,
Assignor desires to transfer and assign to Assignee all of Assignor’s right,
title and interest (if any) in
and to all assignable trade names, entitlements and other intangible property
used and owned by Assignor (if any) in connection with the Property, subject to
the matters set forth on Exhibit “B”
attached hereto and made a part hereof;

 

NOW,
THEREFORE, for and in
consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid to
Assignor by Assignee, the premises and other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged by
Assignor and Assignee, Assignor and Assignee hereby covenant and agree as
follows:

 

1.                                       Assignor hereby unconditionally and
absolutely assigns, transfers, sets over and conveys to Assignee, to the extent
assignable, and without warranty or representation of any kind, express or
implied, except as set forth below and except for any warranty or
representation contained in that certain Purchase and Sale Agreement dated as
of                           
    , 2005, between Assignor and Assignee (the “Contract”) applicable to the property
assigned herein, all of Assignor’s right, title and interest (if any) in and to
all intangible property, if any, owned by Assignor related to the real property
and improvements constituting the Property (excluding any computer software
which either is licensed to Assignor or Assignor deems proprietary), including,
without limitation, Assignor’s rights and interests in and to the following (i) the
name “                                        
Shopping Center”, (ii) all assignable plans and specifications and other
architectural and engineering drawings for the Land and Improvements (as
defined in the Contract); (iii) all assignable warranties or guaranties
given or made in respect of the Improvements or Personal Property (as defined
in the Contract); and (iv) all transferable consents, authorizations,
variances or waivers, licenses, permits and approvals from any

 

 

governmental or
quasi-governmental agency, department, board, commission, bureau or other
entity or instrumentality solely in respect of the Land or Improvements.

 

2.                                       All representations and warranties of
Assignor made in the Contract in respect of the Intangible Property (as defined
in the Contract), as recertified to Assignee pursuant to that certain Seller’s
Certificate as to Representations of even date herewith from Assignor to Assignee,
shall survive for a period of one (1) year from the date hereof, and upon
the expiration thereof shall be of no further force or effect except to the
extent that with respect to any particular alleged breach, Assignee shall give
Assignor written notice prior to the expiration of said one (1) year
period of such alleged breach with reasonable detail as to the nature of such
breach and files an action against Assignor with respect thereto within ninety
(90) days after the giving of such notice. Notwithstanding anything to the
contrary contained in the Contract or this Assignment, in no event shall
Assignor’s total liability for any such breach or breaches exceed, in the
aggregate, Seven Hundred Fifty Thousand and No/100 Dollars ($750,000). In no
event shall Assignor be liable for, nor shall Assignee seek, any consequential,
indirect or punitive damages; and in no event whatsoever shall any claim for a
breach of any representation or warranty of Assignor be actionable or payable
if the breach in question results from or is based on a condition, state of
facts or other matter which was actually known to Assignee prior to the date
hereof.

 

3.                                       This Assignment shall inure to the benefit
and be binding upon Assignor and Assignee and their respective legal representatives,
successors and assigns.

 

IN WITNESS
WHEREOF, the duly
authorized representative of Assignor has caused this Assignment to be properly
executed under seal as of this day and year first above written.

 

	
   

  	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S.
  RETAIL INCOME FUND       , LIMITED

  PARTNERSHIP, a
  Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:  BVT Institutional Investments, Inc., a
  Georgia

  corporation, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

2

 

Exhibit “A”

 

Legal Description

 

 

3

 

Exhibit “B”

 

Permitted Exceptions

 

 

4

 

SCHEDULE 6

 

FORM OF SELLER’S AFFIDAVIT

(FOR PURCHASER’S TITLE INSURANCE PURPOSES)

 

SELLER’S AFFIDAVIT

 

STATE OF GEORGIA

 

COUNTY OF COBB

 

Personally appeared before
me, the undersigned deponent who being duly sworn, deposes and says on oath the
following to the best of his knowledge and belief:

 

1.                                       That the undersigned is the general partner
of U.S. Retail Income Fund       , Limited
Partnership, a Delaware limited partnership (hereinafter referred to as “Owner”) and as such general partner of the
Owner, the undersigned has knowledge of the facts sworn to in this Affidavit.

 

2.                                       That Owner is the owner of certain real
property located in                                      
County,                                      ,
being described on EXHIBIT A,
attached hereto and made a part hereof (hereinafter referred to as the “Property”), subject to those matters set
forth on EXHIBIT B, attached
hereto and made a part hereof.

 

3.                                       That Owner is in possession of the Property,
and to the best knowledge and belief of the undersigned, no other parties have
any claim to possession of the Property, except as set forth on EXHIBIT B hereto.

 

4.                                       That the undersigned is not aware of and has
received no notice of any pending suits, proceedings, judgments, bankruptcies,
liens or executions against the Owner which affect title to the Property except
for any matters set forth on EXHIBIT B-1
hereto.

 

5.                                       That except as may be set forth on EXHIBIT B hereto, there are no unpaid
or unsatisfied security deeds, mortgages, claims of lien, special assessments
for sewer or streets, or ad valorem taxes which constitute a lien against the
Property or any part thereof.

 

6.                                       That, except as may be set forth on EXHIBIT C attached hereto and made a
part hereof, no improvements or repairs have been made upon the Property at the
instance of Owner within the ninety-five (95) days immediately preceding the
date hereof for which the cost has not been paid; and, except as may be set
forth on EXHIBIT C hereto,
there are no outstanding bills for labor or materials used in making
improvements or repairs on the Property at the instance of Owner or for
services of architects, surveyors, or engineers incurred in connection
therewith at the instance of Owner.

 

5

 

7.                                       That Owner is not a foreign person, a foreign
corporation, foreign partnership, foreign trust or foreign estate, as those
terms are defined in the Internal Revenue Code. 
The federal employer identification number of the Owner is                                      
and Owner’s address is 3350 Riverwood Parkway, Suite 1500, Atlanta,
Georgia 30339.  This statement is made by
the undersigned in compliance with Section 1445 of the Internal Revenue
Code to exempt any transferee of the Property from withholding the tax required
upon a foreign transferor’s disposition of a U.S. real property interest

 

8.                                       That, except for NewBridge Retail Advisors
(hereinafter referred to as “Broker”)
engaged by Owner in connection with the sale of the Property to KRG
Development, LLC, an Indiana limited liability company (hereinafter referred to
as “Purchaser”) and those certain
leasing agents (hereinafter referred to as the “Leasing Agents”) set forth on EXHIBIT D attached hereto and made a part hereof in
connection with certain brokers’ commission agreements, Owner has not engaged
any “broker’s” services (as defined in O.C.G.A. § 44-14-601)
with regard to the purchase, sale, management, lease, option or other
conveyance of any interest in the Property; as to Broker, the Closing Statement
executed in connection with the sale of the Property to Purchaser reflects
payment in full satisfaction of all 
amounts owed to Broker with respect to the Property; as to the Leasing
Agents, all amounts owed to the Leasing Agents through the date hereof have
been paid in full as of the date hereof; and as of the date hereof, Owner has not
received any notice of lien from Broker, any of the Leasing Agents or any other
real estate broker, salesman, agent or similar person relating to the Property.

 

9.                                       That to Owner’s knowledge there are no
boundary disputes affecting the Property.

 

10.                                 That this Affidavit is made to induce Chicago
Title Insurance Company to insure title to the Property, without exception
other than as set forth on EXHIBIT B
hereto, relying on information in this document.

 

	
  Sworn to and subscribed
  before me,

  	
   

  	
  BVT Institutional
  Investments, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  this
               day
  of
                        ,
  200   .

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (NOTARIAL
  SEAL)

  	
   

  	
   

  	
   

  
								

 

2

 

EXHIBIT
A

 

Legal
Description

 

 

3

EXHIBIT B

 

Existing
Encumbrances

 

 

4

 

EXHIBIT B-1

 

List
of any Pending Actions regarding Tenant Matters

 

 

5

 

EXHIBIT C

 

List
of any Contractors, Materialmen or Suppliers Not Yet Paid in Full

 

 

6

 

EXHIBIT D

 

Leasing
Commission Agreements

 

 

7

 

SCHEDULE 7

 

FORM OF SELLER’S CERTIFICATE

(AS TO SELLER’S REPRESENTATIONS AND WARRANTIES)

 

SELLER’S CERTIFICATE AS TO REPRESENTATIONS

 

THIS SELLER’S
CERTIFICATE AS TO REPRESENTATIONS (this “Certificate”) is
given and made by U.S. Retail Income Fund VIII-D, Limited Partnership a
Delaware limited partnership (collectively “Seller”),
this        day of                    ,
200   , for the benefit of KRG Development, LLC, an Indiana
limited liability company (“Purchaser”).

 

Pursuant to the provisions
of that certain Purchase and Sale Agreement, dated as of                     
      , 2005, between Seller and KRG Development,
LLC (the “Contract”), which has
since been assigned to Purchaser, for the purchase and sale of certain real
property commonly known as Fountain Oaks Shopping Center (the “Property”), Seller certifies that except
as may be set forth to the contrary in EXHIBIT ”B”
attached hereto and made a part hereof, all of the representations and
warranties of Seller contained in the Contract remain true and correct in all
material respects as of the date hereof; and

 

The representations and
warranties contained herein shall survive for a period of one (1) year
after the date hereof, and upon the expiration thereof shall be of no further
force or effect except to the extent that with respect to any particular
alleged breach, Purchaser shall give Seller written notice prior to the
expiration of said one (1) year period of such alleged breach with
reasonable detail as to the nature of such breach and files an action against
Seller with respect thereto within ninety (90) days after the giving of such
notice. Notwithstanding anything to the contrary contained in the Contract or
this Certificate, in no event shall Seller’s total liability for any such
breach or breaches exceed, in the aggregate, Seven Hundred Fifty Thousand and
No/100 Dollars ($750,000). In no event shall Seller be liable for, nor shall
Purchaser seek, any consequential, indirect or punitive damages; and in no
event whatsoever shall any claim for a breach of any representation or warranty
of Seller be actionable or payable if the breach in question results from or is
based on a condition, state of facts or other matter which was actually known
to Purchaser prior to the date hereof.

 

[signatures begin on next page]

 

8

 

IN WITNESS WHEREOF, Seller
has caused this Certificate to be executed by its duly authorized
representative as of the day and year first above written.

 

	
   

  	
  U.S.
  RETAIL INCOME FUND VIII-D,

  LIMITED PARTNERSHIP, a
  Delaware limited

  partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: BVT Institutional
  Investments, Inc., a Georgia

  corporation, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

9

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

 

10

 

EXHIBIT “B”

 

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

 

11

 

SCHEDULE 8

 

FORM OF SELLER’S FIRPTA AFFIDAVIT

 

 

CERTIFICATION OF NON-FOREIGN STATUS

 

Section 1445 of the
Internal Revenue Code provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person.  To
inform the transferee that withholding of tax is not required upon the
disposition of a U.S. real property interest by U.S. Retail Income Fund         ,
Limited Partnership, a Delaware limited partnership (the “Seller”), the Seller
hereby certifies as follows:

 

1.                                       The Seller is not a foreign corporation,
foreign partnership, foreign trust, or foreign estate (as those terms are
defined in the Internal Revenue Code and Income Tax Regulations);

 

2.                                       The Seller’s U.S. employer
identification number is                              ;
and

 

3.                                       The Seller’s office address is 3350 Riverwood
Parkway, Suite 1500, Atlanta, Georgia 30339.

 

The undersigned understands
that this Certification may be disclosed to the Internal Revenue Service by
transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.

 

This Certificate is made
with the knowledge that KRG Development, LLC, an Indiana limited liability
company, will rely upon this Certificate in purchasing that certain real
property from Seller more particularly described on Exhibit A attached hereto.

 

Under penalties of perjury I
declare that I have examined this Certification and to the best of my knowledge
and belief, it is true, correct and complete, and I further declare that I have
authority to sign this document on behalf of the Seller.

 

	
  Date:
                          ,
  200   

  	
  U.S. Retail Income Fund
       , Limited Partnership, a Delaware limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By: BVT Institutional
  Investments, Inc., a Georgia corporation, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

1

 

THIS CERTIFICATION MUST BE
RETAINED UNTIL THE END OF THE FIFTH TAXABLE YEAR FOLLOWING THE TAXABLE YEAR IN
WHICH THE TRANSFER TAKES PLACE.

 

2

 

SCHEDULE 9

 

FORM OF SELLER’S GEORGIA WITHHOLDING TAX AFFIDAVIT]

 

AFFIDAVIT OF SELLER’S RESIDENCE

 

	
  Seller’s Name

  	
   

  	
  Seller’s Identification
  Number (SSN or FEI)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  U.S. Retail Income Fund
  VIII-D

  	
   

  	
  N/A

  	
   

  
	
  Limited Partnership

  	
   

  	
  Spouse Identification
  Number (if jointly owned)

  	
   

  
	
  3350 Riverwood Parkway

  	
   

  	
   

  	
   

  
	
  Suite 1500

  	
   

  	
   

  	
   

  
	
  Atlanta, Georgia 30339

  	
   

  	
   

  	
   

  

 

INSTRUCTIONS

 

This form is provided to be
executed by the seller and furnished to the buyer to establish Georgia
residency, such that withholding from the proceeds of the sale of property are
not subject to the withholding laws of this state.  (See O.C.G.A. 48-7-128.)

 

Sellers are not subject to
withholding from the proceeds of sale if either they reside in Georgia , or
they are deemed to be a Georgia resident by virtue of the fact that they have
filed Georgia tax returns in the preceding two years, do business or own
property in Georgia, intend to file a Georgia Tax return for the current year,
and if a corporation or limited partnership, are registered to do business in
this State.

 

Buyer is not required to
withhold if this affidavit (or one in substantially the same form ) is
submitted to the Department in lieu of a withholding tax return.

 

The seller is to execute this
affidavit by placing an initial in the blanket preceding statements which
apply.

 

Seller is exempt from
withholding on the sale of property because:

 

o                                    Seller is a resident of Georgia.

 

Seller is not a resident of
Georgia, but is deemed a resident for purposes of withholding by virtue of the
following:

 

ý  Seller
is a nonresident who has filed Georgia tax returns for the preceding two
year; and

 

o  Seller
is an established business in Georgia and will continue substantially the same
business in Georgia after  the sale OR
the seller has real property in the State at the time of closing of equal or
greater value than the withholding tax liability as measured by the 100%
property tax assessment of such remaining property; and

 

o  Seller
will report the sale on a Georgia Income Tax return for the current year and
file by its due date; and

 

o  If
Seller is a corporation or limited partnership, seller is registered to do
business in Georgia.

 

1

 

Under penalty a perjury, I
swear that the above information is, to the best of my knowledge and belief,
true, correct, and complete.

 

	
  U.S. RETAIL INCOME FUND
  VIII-D, LIMITED PARTNERSHIP

  	
   

  
	
  a Delaware limited
  partnership

  	
   

  
	
   

  	
   

  
	
  By: BVT Institutional
  Investments, Inc., a Georgia corporation, its general partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sworn to and subscribed
  before me this

  	
   

  
	
       
  day of
                 ,
  200   .

  	
   

  
	
   

  	
   

  
	
  Notary Public

  	
   

  
	
   

  	
   

  
	
  My commission
  expires:                     

  	
   

  
	
   

  	
   

  
	
  (NOTARIAL SEAL)

  	
   

  
						

 

2

 

SCHEDULE 10

 

FORM OF PURCHASER’S CERTIFICATE

(AS TO PURCHASER’S REPRESENTATIONS AND WARRANTIES)

 

PURCHASER’S CERTIFICATE AS TO REPRESENTATIONS

 

THIS
PURCHASER’S CERTIFICATE AS TO REPRESENTATIONS (this “Certificate”)
is given and made by KRG Capital, LLC, an Indiana limited liability company (“Purchaser”), this      
day of                        ,
200   , for the benefit of U.S. Retail Income Fund VIII-D,
Limited Partnership a Delaware limited partnership (“Seller”).

 

Pursuant to the provisions
of that certain Purchase and Sale Agreement, dated as of                        ,
2005, between Seller and Purchaser (the “Contract”),
for the purchase and sale of certain real property commonly known as Fountain
Oaks Shopping Center (the “Property”),
Purchaser certifies that except as may be set forth to the contrary in EXHIBIT ”B” attached hereto and made a
part hereof, all of the representations and warranties of Purchaser contained
in the Contract remain true and correct in all material respects as of the date
hereof; and

 

The representations and
warranties contained herein shall survive for a period of one (1) year
after the date hereof, and upon the expiration thereof shall be of no further
force or effect except to the extent that with respect to any particular
alleged breach, Seller shall give Purchaser written notice prior to the
expiration of said one (1) year period of such alleged breach with reasonable
detail as to the nature of such breach and files an action against Purchaser
with respect thereto within ninety (90) days after the giving of such notice.

 

IN WITNESS WHEREOF,
Purchaser has caused this Certificate to be executed by its duly authorized
representative as of the day and year first above written.

 

	
   

  	
  “PURCHASER”

  
	
   

  	
   

  
	
   

  	
  KRG DEVELOPMENT, LLC, an
  Indiana limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  (CORPORATE
  SEAL)

  
						

 

1

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

 

2

 

EXHIBIT “B”

 

EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES

 

 

3

 

SCHEDULE 11

 

FORM OF SELLER’S ESTOPPEL

AS TO TENANTS)

 

LANDLORD ESTOPPEL CERTIFCATE

 

              ,
200    

 

KRG Development, LLC

30 S. Meridian, Suite 1100

Indianapolis, Indiana  46204

 

	
  RE:

  	
   

  	
  Lease:

  	
   

  	
  Lease
  dated
                         between
                               ,

  as original or successor landlord (“Landlord”), and

                                                (“Tenant”),

  as the same may have been amended by
                                    

  (the “Lease”)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Premises:

  	
                                                             

  	
   

  	
   

  	
   

  
	
  Commencement
  Date:

  	
   

  	
                                  

  
	
  Expiration
  Date:

  	
   

  	
                                  

  
	
  Current
  Monthly Base Rent:

  	
   

  	
  $                              

  
	
  Current
  Monthly Additional Rent:

  	
   

  	
  $                              

  
	
  Security
  Deposit:

  	
   

  	
  $                              

  
	
  Monthly
  Base Rent Paid Through:

  	
   

  	
                       ,
  200   

  
	
  Monthly
  Additional Rent Paid Through:

  	
   

  	
                       ,
  200   

  

 

Ladies and Gentlemen:

 

We are the Landlord under
the lease described above, and this certificate is given pursuant to Section 6.1(d) of
that certain Purchase and Sale Agreement (the “Agreement”) dated                                ,
200    , between Landlord, as Seller, and you, as
Purchaser, with respect to                            .  We give you this certificate to permit you,
your successors or assigns and any mortgagee to rely on it as conclusive
evidence of the matters stated below, in completing the purchase by you or your
assignee, and a possible loan secured by,                                 ,
which includes the Premises.  We certify
to you and your successors and assigns and your mortgagee as follows:

 

1.                                       Except as may be set forth on Exhibit ”A”
hereto, Tenant is in sole possession of and is occupying the Premises.  Except as may be set forth on Exhibit ”A”
hereto, Tenant has not subleased all or any part of the Premises or assigned
the Lease, or otherwise transferred its interest in the Lease or the Premises.

 

1

 

2.                                       The Lease is currently in effect and
constitutes the entire agreement between Landlord and Tenant.  The Lease has not been amended, modified, or
changed, whether in writing or orally, except as may be stated in the Lease.

 

3.                                       To Landlord’s knowledge, the Commencement
Date and Expiration Date of the term of the Lease are correctly stated
above.  Tenant has no options or rights
and has not exercised any options or rights to renew, extend, amend, modify, or
change the term of the Lease, except as may be stated in the Lease.

 

4.                                       The current monthly Base Rent under the Lease
and the current monthly Additional Rent under the Lease are correctly stated
above. Monthly Base Rent and monthly Additional Rent have been paid through the
respective dates stated above.  No rent
has been prepaid for more than one month. 
Tenant has not been given any free rent, partial rent, rebates, rent
abatements, or rent concessions of any kind, except as may be stated in the
Lease.

 

5.                                       Tenant has deposited the Security Deposit
stated above with Landlord, and except as may be set forth on Exhibit ”B”
hereto none of the Security Deposit has been applied by Landlord to the payment
of rent or any other amounts due under the Lease.

 

6.                                       To Landlord’s knowledge, any construction,
build-out, improvements, alterations, or additions to the Premises required
under the Lease have been fully completed in accordance with the plans and
specifications described in the Lease.

 

7.                                       To Landlord’s knowledge, Landlord has fully
performed all of its obligations under the Lease and is not in default under
any term of the Lease.  In addition, to
Landlord’s knowledge, no circumstances exist under which Landlord may be deemed
in default merely upon service of notice or passage of time.

 

8.                                       Tenant has not currently asserted to Landlord
and, to Landlord’s knowledge, Tenant has no defenses, set-offs, or
counterclaims to the payment of rent and all other amounts due from Tenant to
Landlord under the Lease.

 

9.                                       Tenant has not been granted and has not
exercised any options or rights of expansion, purchase, or first refusal
concerning the Lease or the Premises, except as may be stated in the Lease.

 

10.                                 To Landlord’s knowledge, Tenant has not filed
and is not the subject of any filing for bankruptcy or reorganization under
federal bankruptcy laws.

 

All references herein to the
“knowledge of Seller” or “to Seller’s knowledge” shall have the same meaning
and shall be subject to the same qualifications as set forth in Section 4.2
of the Agreement.

 

This certificate shall
terminate and be of no further force and effect, and Seller shall have no
further liability hereunder, upon the receipt by you or your successors and
assigns of a duly executed Tenant Estoppel Certificate from the Tenant under
the Lease with respect to the matters herein contained, all as set forth in Section 6.1(d) of
the Agreement.

 

 

Sincerely,

 

U.S. Retail Income Fund           ,
Limited Partnership

a Delaware limited
partnership

 

By:  BVT Institutional Investments, Inc., a
Georgia corporation, its general partner

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  

 

 

EXHIBIT “A”

 

1.                                      Description of Subleases
and/or Assignments of Tenant’s Interest (if none, then state none)

 

 

 

2.                                       Amounts of the Security Deposit Which Have
Been Applied by Landlord (if none, then state none)Exhibit 10.01

 

MACROMEDIA, INC.

FY 2005 EXECUTIVE INCENTIVE PLAN

 

1

 

MACROMEDIA, INC. FY 2005 EXECUTIVE INCENTIVE
PLAN

 

1.                                      Purpose of the Plan

 

The purpose of the FY 2005
Executive Incentive Plan (the “Plan”) is to provide financial incentives for
certain of the Company’s Executives to meet and exceed the Company’s annual
financial goals. 

 

2.                                      Eligibility and
Participation 

 

As approved by the Board of
Directors Compensation Committee (the “Committee”), the Plan is designed for
Executives whose responsibilities significantly influence Company results.
Participants shall be those Executives selected by the Chief Executive Officer
and Chief Financial Officer or the Committee. Participation in the Plan is on a
Fiscal Year basis and in the sole discretion of the Company. Thus, an Executive
who is selected for participation in the Plan is in no way guaranteed to be
selected for participation in any subsequent incentive plan or arrangement that
the Company may adopt for any future Fiscal Year. 

 

3.                                      Administration of the Plan

 

3.1
As approved by the Committee, the Plan will be administered by the Chief
Executive Officer and Chief Financial Officer, including but not limited to,
the power to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations necessary or
advisable in the administration of the Plan, and such determination shall be
final and binding upon all persons having an interest in the Plan.

 

3.2
Subject to the provisions of the Plan, the Chief Executive Officer and Chief
Financial Officer shall have the authority to determine each Participant’s
Target Award, the date when any performance goals are measured, and the date
when Awards (if any) will be paid. Notwithstanding any provision of the Plan,
for any Participant who is also a Section 16 officer of the Company, the
Committee shall make all determinations for the Award for each such Section 16
officer in consultation with the Chief Executive Officer and Chief Financial
Officer in the Committee’s discretion.

 

4.                                      Determination of Awards

 

4.1
Establishment of Target Award.  Each
Participant is eligible to receive a Quarterly Award for the first three fiscal
quarters of the 2005 Fiscal Year and an Annual Award at the end of the 2005
Fiscal Year. Each Participant’s maximum Annual Award (including any Quarterly
Awards) is equal to two times the Participant’s Target Award.  The maximum Quarterly Award payable to a
Participant is equal to one-eighth (1/8) of the Participant’s Target Award.

 

4.2 Award Funding. Awards will be paid from an
incentive compensation pool (the “Award Pool”). The Award Pool shall be
determined by the Committee after the end of the 2005 Fiscal Year.  The
Award Pool will be equal to the sum of the Participants’ Target Awards for such
Fiscal Year multiplied by the Award Pool Funding Percentage. The Award Pool
Funding Percentage is determined based on the FY2005 Executive Incentive Plan
Funding Matrix (the “Matrix” attached hereto as Appendix A) by measuring the
Company’s performance for the 2005 Fiscal Year against the Revenue Growth and
Operating Margin goals established for FY2005. 
The Revenue Growth and Operating Margin percentages will be rounded to
the nearest whole number, and the matching intersection on the Matrix will
establish the Award Pool Funding Percentage.

 

4.3
Determination of Award Amounts.

 

a)                                      Quarterly Awards.  At the end of 
Q1, Q2 and Q3 for Fiscal Year 2005, each executive’s direct manager will
assess his/her achievement against quarterly objectives, recommend the amount
of Quarterly Award (if any) to be paid to the Participant and review the
recommendation with the

 

2

 

Chief
Executive Officer and Chief Financial Officer. 
The Chief Executive Officer and Chief Financial Officer will review and
approve all of the proposed Quarterly Awards (if any) payable to Participants.

 

b)                                     Annual Awards.  On or prior to the date six weeks following
the end of the 2005 Fiscal Year, the Chief Executive Officer and Chief
Financial Officer will review all of the proposed Annual Awards (if any)
payable to each Participant based on his/her Target Award, individual
achievement of objectives, overall performance rating for the Fiscal Year and
based on the total Award Pool available to pay incentives. The following matrix
will be used to determine the amount of Annual Award to be paid to each
Participant in this plan:

 

	
  Rating

  	
   

  	
  Performance

  	
   

  	
  Percent of Funded

  Incentive Earned

  
	
  A

  	
   

  	
  Results far exceed
  expectations and requirements; results are exceptional

  	
   

  	
  125% to 200%

  
	
  B

  	
   

  	
  Results meet or exceed
  expectations and requirements; objectives and responsibilities are
  accomplished within the established standards and the required time frame

  	
   

  	
  75% to 150%

  
	
  C

  	
   

  	
  Results are not meeting
  normal expectations and requirements; objectives and responsibilities are not
  completed within the required time frame

  	
   

  	
  0% to less than 100%

  

 

The
amount of any Quarterly Award(s) paid to any Participant during the 2005 Fiscal
Year will be deducted from (i) such Participant’s Annual Award and (ii) the
total amount of Quarterly Awards paid to all Participants will be deducted from
the Award Pool available to pay all Participant incentives at the end of FY
2005.

 

4.4
Reduction of Award.  The Chief Executive
Officer and the Chief Financial Officer in their sole discretion, may eliminate
any Participant’s Award, or reduce it below that which otherwise would be
payable in accordance with the Plan for any reason.

 

5.                                      Payment of Awards 

 

5.1
Date of Payment. Payment of Awards (if any) will be made in cash, on or about
the date eight weeks following the end of the 2005 Fiscal Year.  In order to be eligible to receive
incentives, the Executive must sign and return a copy of this plan to Human
Resources.

 

5.2
Requirement of Employment. Unless otherwise specifically determined by the
Committee, a Participant will be entitled to payment of an Award only if the
Participant is employed on the date of payment of any Quarterly Award or Annual
Award (except to the limited extent provided in the following sentence). If any
Participant resigns from his or her employment prior to such date of payment,
such Participant will not earn or be paid his or her Target Award, in whole or
in part. If, after the completion of the 2005 Fiscal Year, a Participant incurs
a Termination of Employment due to death or permanent disability as defined the
Company’s 401(k) Plan, the Participant shall be entitled to the payment of any
Award for such Fiscal Year otherwise payable to the Participant. In the event
an Award is payable to a Participant subsequent to the Participant’s death,
such payment shall be made to the Participant’s estate.

 

5.3   Prorated Award.  Awards will be prorated in the following
instances:

 

3

 

a)                                      New Hires, New Participants:  With respect to a Participant who begins
employment during the 2005 Fiscal Year, any Award to such Participant will be
prorated based on the number of calendar days such Participant was employed by
the Company during such during 2005 Fiscal Year.

 

b)                                     Reduced Work Schedules:  For any Participant working a reduced work
schedule, including by reason of an unpaid leave of absence, with the Company’s
approval for any period during the 2005 Fiscal Year, such Participant’s Award
will be prorated based on the number of days worked by such Participant during
the 2005 Fiscal Year as determined by the Chief Executive Officer and Chief
Financial Officer.

 

c)                                      Job Eliminations/Reductions in Force.  In the event that, in the determination of
the Chief Executive Officer and Chief Financial Officer, a Participant’s
employment is terminated during the 2005 Fiscal Year as a result of a job
elimination or a reduction in force, such Participant’s Target Award will be
prorated based on the number of calendar such Participant was employed by the
Company during such during 2005 Fiscal Year.

 

5.4
Deductions from Awards. The Company shall withhold all applicable income and
other taxes from any Award payment to any Participant, including any federal,
FICA, state and local taxes. Participants are not eligible for any form of draw
or incentive advances. Each Award shall be payable solely from the general
assets of the Company. Each Participant’s right to payment of an Award (if any)
shall be solely as an unsecured general creditor of the Company. 

 

6.                                      Employment Rights 

 

Each Executive and any
Participant confirms that his or her employment with the Company is “at will”.
Nothing in the Plan shall confer upon any Executive or Participant the right to
continue in the employ of the Company or its Affiliated Companies or shall
interfere with or restrict in any way the rights of the Company to discharge or
change the terms of employment of any Executive or Participant at any time for
any reason whatsoever, with or without cause. 

 

7.                                      Effect on Other Plans 

 

Participation in this Plan
shall not affect any other equity or other compensation or incentive plan in
effect for the Company or any Affiliated Company, and the Plan shall not
preclude the Company’s Board of Directors from establishing any other forms of
incentive compensation for Executives. 

 

8.                                      Revenue Recognition

 

Revenue
Recognition:  all license agreements of
any kind entered into by the Company must be structured to allow for standard
revenue recognition in accordance with generally accepted accounting principles
and Company policies. No side letters or side agreements from any employee (in
any form, including e-mail messages) are allowed. Each Executive has the obligation
to comply with the Company’s revenue recognition policies. An executive’s
incentive payment may be reduced or disallowed in the Company’s discretion in
the event any Executive fails to comply with the Company’s revenue recognition
policies.

 

9.                                      Amendment, Suspension or
Termination of the Plan 

 

This Plan contains all terms
and conditions for the FY 2005 Executive Incentive Plan and supersedes any
prior written or verbal agreements regarding FY 2005 cash incentives for the
2005 Fiscal Year and the FY2005 Executive Incentive Plan. This Plan may be
amended, modified or terminated at any time by the Company’s

 

4

 

Board of Directors or the
Committee. Notification to each Executive of any change to this Plan will be
made in writing or by electronic mail. 

 

10.                               Effective Date 

 

The Macromedia, Inc. FY
2005 Executive Incentive Plan is effective April 1, 2004.

 

11.                               Definitions 

 

“Affiliated Company” means
any company controlling, controlled by, or under common control with the
Company.

 

“Award” means an award paid
quarterly (“Quarterly Award” for Q1, Q2 and Q3) or paid annually (“Annual Award”)
pursuant to the provisions of the Plan.

 

“Committee” means the
Compensation Committee of the Company’s Board of Directors.

 

“Company” means Macromedia, Inc.,
a Delaware corporation.

 

 “Executive” means an employee of the Company
at the level of Vice President or above employed by the Company or any
Affiliated Company as determined by the Committee.

 

“Operating Margin” means operating
profit (meaning pro forma operating profit excluding amortization of intangible
assets and developed technology or any one-time write-offs) divided by Revenue
Growth where operating profit is the sum of Revenue Growth minus the sum of (A) the
direct cost of producing such revenue and (B) the indirect operating
expense for the Company as based upon the internal calculation of such expenses
as reported by the Company in its Annual Report on Form 10-K for its
2005 Fiscal Year as filed with the Securities and Exchange Commission.

 

“Participant” means an
Executive who has been selected by the Committee for participation in the Plan
for such Fiscal Year.

 

“Revenue” means revenue
received for goods and services sold by the Company adjusted for revenue deferrals
and changes in inventory as publicly reported by the Company in its Annual
Report on Form 10-K for its 2005 Fiscal Year as filed with the
Securities and Exchange Commission.

 

“Revenue Growth” means the
percent by which the Company’s Fiscal Year 2005 Revenue exceeds the Company’s
revenue as reported by the Company in its Annual Report on Form 10-K
for its 2004 Fiscal Year.

 

“Target Award” means a
Participant’s annual target incentive compensation.

 

“Termination of Employment”
means the date as determined by the Company when the employee-employer
relationship between the Participant and the Company and its Affiliated
Companies is terminated for any reason, including, but not limited to, a
termination by resignation, discharge, death, permanent disability, retirement,
or the disaffiliation of an Affiliated Company, but excluding any such
termination where there is a simultaneous reemployment by either the Company or
one of its Affiliated Companies.

 

5

 

12.                               Acceptance

 

I acknowledge
receipt of and agree to the terms and conditions of the FY 2005 Executive
Incentive Plan including FY2005 Executive Incentive Plan.  My Target Award for FY 2005 is:  $XXXXXX.

 

 

	
  Participant:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  
	
  Macromedia Representative:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Elizabeth A. Nelson

  	
  Date

  
	
  Executive Vice President, Chief Financial
  Officer

  and Secretary

  	
   

  

 

6

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