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Exhibit 10.210
THOMAS DOBYNS, INC.
A PROFESSIONAL CORPORATION
ATTORNEY AT LAW
653 SOUTH "B" STREET, SUITE 100
TUSTIN, CALIFORNIA 92780-7753
(714) 838-5588
FAX (714) 838-1632
Gary Pechter, Counsel June 10, 2004
INLAND REAL ESTATE
ACQUISITIONS, INC.
2901 Butterfield Road via fedex and fax to
Oak Brook, IL 60523 630/218-4900
Re: Purchase of Fullerton Metrocenter,
Fullerton, CA.
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Dear Gary:
This will confirm the mutual understanding and agreement of Seller and Buyer in
the captioned transaction that the Purchase and Sale Agreement and Joint Escrow
Instructions dated May 18, 2004 (the "Purchase Agreement") is amended as
follows:
1. At the request of Buyer, the Review Period set forth in Section 2.3 of
the Purchase Agreement is extended such that the Review Period shall expire at
5:00 PM on JUNE 18, 2004.
2. Section 1.3 of the Purchase Agreement is amended to provide that if
Buyer has not elected to terminate the Purchase Agreement at expiration of the
Review Period, Buyer shall deposit the $1,000,000.00 Deposit into Escrow not
later than 5:00 PM CDT on JUNE 18, 2004.
3. Section 7.1 of the Purchase Agreement is amended to provide that the
Close of Escrow shall occur on JUNE 30, 2004.
I represent that I am authorized by the Seller to enter into this amendment to
the Purchase Agreement on behalf of Seller and you are entitled to rely on this
authorization.
Please confirm the foregoing is acceptable to Buyer by executing and returning
(by fax and mail) a copy of this letter.
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Gary Pechter
Sr. Vice President and
Sr. Counsel
INLAND REAL ESTATE GROUP
June 10, 2004
Page Two
Thank again for your help.
Best regards, THE UNDERSIGNED CONFIRMS THAT HE IS
AUTHORIZED TO EXECUTE THIS LETTER AMENDMENT
/s/ Thomas Dobyns ON BEHALF OF BUYER WHEREBY TO BIND BUYER TO
THE TERMS AND CONDITIONS HEREOF. SELLER IS
THOMAS DOBYNS ENTITLED TO RELY ON THIS AUTHORIZATION
TD-o
xc: client, HBJ /s/ Gary Pechter
---------------------------------------------
Gary Pechter, Senior Vice President
and Senior Counsel
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FULLERTON METROCENTER
SECOND AMENDMENT TO PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS
This Second Amendment to Purchase and Sale Agreement and Joint Escrow
Instructions (the "SECOND AMENDMENT") is entered into as of June 30, 2004, by
and between ANATON ASSOCIATES, a California limited partnership, as SELLER, and
INLAND REAL ESTATE ACQUISITIONS, INC., an Illinois corporation, as BUYER, based
on the following:
R E C I T A L S:
A. Seller and Buyer executed a Purchase and Sale and Joint Escrow
Instructions dated as of May 18, 2004 (the "Purchase Agreement") whereby Seller
agreed to sell and Buyer agreed to purchase certain property known as FULLERTON
METROCENTER (the "PROPERTY"), as more particularly described therein.
B. The Purchase Agreement was amended by letter amendment dated as of June
10, 2004 (the "First Amendment").
C. The parties desire to further modify, amend and supplement the Purchase
Agreement and for that purpose enter into this Second Amendment.
IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN SET FORTH AND OTHER VALUABLE
CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, SELLER AND BUYER AGREE:
1. CLOSE OF ESCROW. Buyer and Seller agree that Close of Escrow shall occur
as soon as practicable on or before June 30, 2004.
2. BENNIGANS LEASE. The parties acknowledge that the lease dated November
10, 1986 (the "BENNIGANS LEASE") between Seller and Steak and Ale of California,
Inc. dba Bennigans (herein "BENNIGANS") has been unilaterally terminated by
Bennigans without the consent of Seller. The premises covered by the Bennigans
Lease is known as Pad K, having a street address of 1401 S. Harbor Blvd.,
Fullerton, CA. (the "BENNIGANS PREMISES"). As a result of Bennigans' Lease
termination, the rental income to be earned from the Bennigans Lease cannot be
reasonably expected to continue after Buyer has acquired the Property from
Seller. Buyer agrees to purchase the Property from Seller notwithstanding the
termination of the Bennigans Lease and Seller agrees to do the following with
respect to the Bennigans Lease:
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(a) Commencing on the date of Close of Escrow, Seller shall pay Buyer
an amount equal to the total of the following:
(i) the monthly rent in the amount of $11,090.00;
(ii) the monthly estimated common area maintenance expenses
("CAM") in the amount of $967.00;
(iii) an estimated amount for real estate taxes in the current
amount of $1,677.00 based on an annual amount of $20,121.00 [which is
subject to increase based on the sale of the Property to Buyer]; and
(iv) Seller shall pay a pro rata share of Buyer's fire and
extended coverage insurance for the Bennigans Premises based upon a fraction,
the numerator of which shall be 7,180 sq.ft. and the denominator of which shall
be the square footage of all premises on the Property for which Buyer (as new
Landlord) provides fire and extended coverage; but in no event shall Seller be
required to pay any portion of earthquake coverage for the Bennigans Premises.
General commercial liability insurance costs for the common areas are included
as part of CAM and not paid separately by Seller.
Other than the foregoing, Seller shall have no other obligations or liability to
Buyer under the Bennigans Lease.
(b) Seller's obligations under Section 2(a), above, shall cease,
terminate and be of no further force or effect on the earlier of the following
on occur: (i) Seller has made twenty-four (24) months of payments pursuant to
Section 2(a); or (ii) the date that a Qualified Tenant (defined below) for the
Bennigans Premises has opened for business and commenced payment of rent. Upon
commencement and termination of Seller's obligations under Section 2(a), all
monetary obligations for a partial month shall be pro-rated based on the number
of days in the partial month.
(c) For as long as Seller is obligated to make payments pursuant to
Section 2(a), above, Seller shall have a continuing right to locate a
replacement tenant for the Bennigans Premises. Buyer shall accept a replacement
tenant for the Bennigans premises if all of the following conditions are
satisfied:
(i) The prospective tenant (whether individually or as the
majority beneficial owner of a corporation, limited liability company or other
legal entity) has a minimum of ten (10) years experience in the restaurant
business, including ownership of at least one (1) other restaurant location
which restaurant has been operating profitably for at least the past two (2)
calendar years.
(ii) The prospective tenant has a minimum net worth of
$1,000,000.00 and cash liquidity of at least $100,000.00. The net worth of the
prospective tenant may be determined by including personal assets of a corporate
or other legal entity provided a personal guaranty is given by the individual
whose personal assets are used to satisfy the net worth and liquidity
requirements.
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(iii) The prospective tenant has no history of a bankruptcy
filing (voluntary or involuntary) nor litigation involving issues or allegations
of failure to pay debts during the previous seven (7) years.
(iv) The lease with the prospective tenant shall be for a minimum
term of five (5) years at a rental rate not less than the rental rate in effect
for the balance of the Bennigans Lease (exclusive of options), i.e., expiring
March, 2008. For any period beyond March 2008, the rent shall be increased at an
annual rate of not less than the cost of living (using the Index and
calculations set forth in Seller's standard lease form) but in no event greater
than 12.5% every five (5) years.
(v) Seller shall be solely responsible for all brokerage
commissions, tenant concessions such as "free rent" periods, and any tenant
improvement allowance which Seller negotiates with the prospective tenant.
(vi) The balance of the lease terms with the prospective tenant
shall include standard and customary language found in Seller's standard lease
form, including provisions for payment of real estate taxes, insurance and
common area maintenance expenses.
Any prospective tenant satisfying the foregoing criteria (herein a "QUALIFIED
TENANT") shall be deemed acceptable to Buyer and Buyer shall enter into a lease
with such prospective tenant upon presentation of a tenant and a lease which
substantially satisfy the foregoing conditions.
Buyer shall have the right to decline to accept any tenant presented by Seller
which satisfies the foregoing conditions by giving Seller written notice thereof
("BUYER'S DECLINE NOTICE") within five (5) business days after Buyer has
tendered to Seller all of the information reasonably necessary for Buyer to
determine whether the prospective tenant satisfies conditions in Section
2(c)(i)-(vi), above. In the event Buyer gives Seller a Buyer's Decline Notice,
Seller's obligations under Section 2(a) shall terminate and be of DO further
force or effect, commencing on the first day of the calendar month following
receipt of Buyer's Decline Notice.
(d) In the event Seller elects, in Seller's sole discretion, to
commence legal action against Bennigans for breach of the Bennigans Lease (or
any other remedy raised thereto), Seller shall be solely responsible for all
costs and expenses (including attorneys fees) in initiating and prosecuting such
legal action and shall be entitled to retain all settlement and judgment amounts
which Seller may obtain against Bennigans and Buyer shall have no right, title
or interest in any part thereof.
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3. H & R BLOCK LEASE. H&R Block Tax Services, Inc. ("BLOCK") leases space
N-5 and commonly known as 1577 S. Harbor Blvd., Fullerton, CA. 92832 (the "BLOCK
PREMISES") under a written lease with Seller dated as of August 4, 1999 (the
"BLOCK LEASE"). The Lease Term expires on September 30, 2004 ("LEASE EXPIRATION
DATE"), and the option to renew the Lease Term provided in the Block Lease has
expired unexercised. If Block elects to extend the Block Lease, with the consent
of Buyer as determined by Buyer in Buyer's sole discretion, Seller agrees as
follows:
(a) In the event Buyer agrees to allow Block to extend the Lease Term
but such extension includes provisions for Block to reduce its total floor area
(such that the Block Premises is divided into multiple premises), Seller shall
pay up to a maximum of $40,000.00 (the "BLOCK TI ALLOWANCE") for costs related
to demising the Block Premises into multiple premises provided that Seller shall
have the exclusive right to select the contractor to perform the Block Premises
demising work. Seller shall also pay for Seller's attorney to prepare a lease
amendment reasonably acceptable to Buyer memorializing the terns and conditions
of the extension of the term of the Block Lease. Seller shall also supervise the
progress of such demising work to its completion. Seller shall cause Seller's
contractor to prepare a written estimate of the total cost of the Block Premises
demising work for Buyer's prior approval which will not be unreasonably withheld
or delayed. If Buyer disapproves Seller's contractor's estimate for the demising
work, Buyer may hire a different contractor to perform the demising work but in
such event Seller shall only be required to pay Buyer the Block TI Allowance and
Seller shall have no further obligation or liability with respect to the Block
Lease.
(b) Buyer shall be solely responsible for all costs related to the
reduction in floor area of the Block Premises which exceed the Block TI
Allowance.
(c) If Block elects not to extend the Lease Term beyond the Lease
Expiration Date, or if Buyer elects not to allow for a Lease Term extension for
whatever reasons Buyer deems appropriate in Buyer's sole election, then in lieu
of the Block TI Allowance, Seller shall pay to Buyer a one-time fee of
$40,000.000 which shall be payable within ten (10) days after Seller's receipt
of a written notice from Buyer that the Block Lease will not be extended beyond
the lease Expiration Date.
(d) Other than the foregoing, Seller shall have no further obligations
or liability to Buyer with inspect to the Block Lease.
4. WILD OATS MARKETS/HENRY'S LEASE. With respect to the lease between
Seller and Wild Oats, referenced in Sections 10.1 through 10.5 of the Purchase
Agreement:
(a) Seller has given Wild Oats, and Wild Oats has acknowledge receipt
of, a Delivery Notice [as defined an Section 2.1(c) of Exhibit C to the Wild
Oats lease] whereby Seller shall deliver the Wild Oats Premises to Wild Oats on
July 16, 2004. In the event the liquidated damages provisions set forth in
Section 2.1(c) of Exhibit C to the Lease shall be applicable for any reason,
Seller agrees that Seller shall be solely responsible for the payment of all
such liquidated damages and Seller shall indemnify and hold Buyer harmless from
and against any and all liability for such liquidated damages.
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(b) The Wild Oats premises have been measured by the project
architects pursuant to Section 2.4 of the Wild Oats lease. The project
architects have certified the Wild Oats premises to be a total square footage of
28,165 sq.ft. (the "CERTIFIED SQUARE FOOTAGE"). Although this area exceeds the
area of 28,092 sq.ft., set forth in Section 1.8 of the Wild Oats lease, the
parties agree that there shall be no adjustment in the Purchase Price or other
monetary consideration due to the larger area. In consideration of the
foregoing, Buyer Agrees to accept Base Rent from Wild Oats based upon 28,092
sq.ft. if Wild Oats refuses to pay a greater amount based on square footage
exceeding 28,092 sq.ft
(c) Wild Oats shall be allowed to use space in the Shopping Center as
a temporary employment office, subject to the following conditions:
(i) Wild Oats shall use the space formerly occupied by Strouds
and located at 1361 South Harbor Blvd. (the "TEMPORARY SPACE").
(ii) Wild Oats may use the Temporary Space for the period of July
15, 2004, through August 15, 2004, at no cost to Wild Oats, except that Wild
Oats shall pay for the following: (1) utilities used in the Temporary Space, (2)
commercial general liability insurance coverage for the Temporary Space
consistent with Wild Oats' insurance requirements pursuant to Section 12.1 (a)
of the Wild Oats lease, (3) Wild Oats shall not make any changes, alterations or
modifications to the Temporary Space, and (4) Wild Oats' occupancy of the
Temporary Space shall be in compliance with all laws, codes, statutes,
regulations and permits applicable thereto.
5. TANG DBA BIG ISLAND BBO LEASE.
(a) In addition to the Security Deposit of $2,616.00 paid by Big
Island BBQ under its Lease, Seller collected advance Minimum Rent of $2,616.00
and advance Adjustments in the sum of $415.00 for a total of $3,031.00. Because
the right to receipt of the advance payments will accrue entirely to the benefit
of Buyer, Buyer will receive a credit at Close of Escrow in the sum of
$3,031.00. However, this credit shall NOT be in addition to the overall credit
for July rents provided in Section 12, below.
(b) The Security Deposit shall be subject to the customery provisions
governing transfer of tenants security deposits at Close of Escrow.
(c) As a result of Big Island BBQ commencing payment of Minimum Rent
effective as of July 1, 2004, this tenant shall no longer be subject to the
provisions of Section 10.8 of the Purchase Agreement. However, the Unaccrued
Rent Amount set forth in Section 10.8 shall not be reduced as a result of the
deletion of Big Island BBQ Section 10.8.
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6. CONDITIONS OF TITLE SATISFIED. Buyer acknowledges and agrees that all of
Buyer's conditions regarding title matters and Permitted Exceptions, as provided
in Section 2.1 and its subsections, have been approved by Buyer and all such
conditions are deemed satisfied.
7. DUE DILIGENCE DOCUMENTS. Buyer acknowledges and agrees that all of
Buyer's conditions regarding Due Diligence Documents, as provided in Section 2.2
and its subsections, have been approved by Buyer and all such conditions are
deemed satisfied.
8. ESTOPPEL CERTIFICATES. Buyer acknowledges and agrees that Seller has
provided all of the Tenant Estoppel Certificates (defined in Section 3.1.3)
required by the Purchase Agreement and that Seller is not required to provide a
Seller Lease Estoppel Certificate (as provided in Section 3.1.6 of the Purchase
Agreement) for any tenant of the Property.
9. LEASEHOLD ESTOPPEL CERTIFICATES. Buyer acknowledges that Seller has
provided all of the Leasehold Estoppel Certificates provided for in Section 3.2
of the Purchase and the Leasehold Estoppel Certificates are acceptable to Buyer.
Seller acknowledges that Seller is still required to provide Buyer with Seller
Lease Estoppel Certificates for each tenant who fails to return a Tenant
Estoppel Certificate.
10. TENANT IMPROVEMENT ALLOWANCES. Regarding the TI Allowances appearing in
Section 10.6 of the Purchase Agreement, there is no change in the total of
$115,000.00 and that aim shall be retained by Escrow and paid pursuant to a
Joint Escrow Order at such time that Seller designates each TI Allowance payment
to be made.
11. ESCROWED FUNDS FOR WILD OATS CONSTRUCTION. Section 10.2 is modified to
provide that in lien of escrowing funds with Builders Control Service, Co., the
following shall be applicable:
(a) Seller represents that approximately $400,000.00 is still to be
paid for the cost of the Wild Oats build-out of its Premises. Seller
acknowledged and agrees that the sum of $400,000.00 shall be retained by Escrow
and disbursed in accordance Section 11(b), below.
(b) Seller and Buyer shall sign a Joint Escrow Order which provides
that upon Escrow's receipt of an invoice from HOFMANN-FINN CONSTRUCTION, which
has been approved by Howard B. Jones, on behalf of ANATON ASSOCIATES, Escrow
shall disburse payment to Hofmann-Finn for the amount of such invoice without
further notice or demand. Buyer shall have no rights of approval or consent with
respect to payment of invoices from this hold-back fund and this funds is being
established only to assure that the funds are available for payment for
completion of the Wild Oats build-out.
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12. TENANT RENTS FOR JULY 2004. Supplementing Section 7.5.1.1, at Close of
Escrow Buyer shall be credited with the collectible rents (included estimated
common area maintenance assessments) which accrue for the month of July 2004.
Based upon the certified rent roll for the month of July, 2004, the parties
agree that this is a total of $407,162.71. As a result of the foregoing credit,
Seller shall be entitled to receive, negotiate and retain all tenant rent
payments received for the month of July 2004 even if such tenant payments are
received by Buyer's agent or property manager and regardless of when such tenant
payments are ultimately paid or received. If necessary, Buyer shall instruct
Buyer's agent and/or property manager to turn over all such tenant payments to
Seller promptly when received, without offset or deduction of any kind.
13. DELINQUENT TENANT RENTS AND OTHER AMOUNTS OWED SELLER. Seller shall be
exclusively entitled to all rents, common area charges and other monetary
obligations which have accrued and are due Seller, but are unpaid, as of the
Close of Escrow. After Close of Escrow Seller may pursue collection of all
delinquent amounts owed Seller by whatever legal means available to Seller,
provided, however, that Seller shall not be allowed to (i) terminate any
tenant's lease nor {ii) commence any action for the eviction of any tenant from
its premises.
14. RECONCILIATION OF CAM RECEIPTS AND DISBURSEMENTS. Supplementing Section
7.5.1.1(C) of the Purchase Agreement.
(a) Based upon a 7-page interim CAM reconciliation prepared by the
Property Manager, Buyer shall receive a credit at Close of Escrow in the sum of
$41,995.00 (the "CAM ADJUSTMENT").
(b) The parties agree that if the calculation of the CAM Adjustment is
determined to be incorrect in a material amount after Close of Escrow, an
adjustment shall be made. For purposes hereof, a "material amount" shall be an
amount which is in excess of five (5.0%) of the CAM Adjustment.
(c) Invoices for CAM expenses received after Close of Escrow shall be
paid by Buyer ("ACCRUED CAM BILLS"). Buyer shall pay the Accrued CAM Bills upon
presentment and shall indemnify and hold Seller harmless, from all claims,
liability, judgments, damages, attorney's fees and costs arising out of or
related to the failure or refusal by Buyer to pay in full the Accrued CAM Bills.
15. RECONCILIATION OF RESERVES. Supplementing Section 7.5.l.3, represents
the Reserves balance is approximately $93,694.00 which amount will be credited
to Buyer as of Close of Escrow. Seller advises Buyer that the following repairs
are scheduled to be performed in June 2004: (i) approximately $22,500.00 for
Petromat surfacing of parking area; (ii) approximately $35,000.00 for parking
lot repairs; and (iii) approximately $40,000.00 for parking lot slurry seal and
restriping. Of the foregoing total of approximately $97.500.00, approximately
28% is chargeable to Reserves, or the approximate sum of $27,300.00. The total
cost of approximately $97,500.00 will be paid by Buyer upon receipt of invoices
and Reserves will be charged with its pro rate thereof.
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16. JULY RENT FOR RESTATED GROUND LEASE. Rent accruing under the Restated
Ground Lease for the month of July 2004 in the sum of $34,584.00 shall be paid
by Seller and Seller shall receive a credit at Close of Escrow for the amount
thereof (subject to proration, if necessary).
17. DESIGNATION OF MANAGING PARTNER. Seller hereby designates Howard B.
Jones (individually and/or as trustee of his revocable trust dated 12/02/1982)
as the Managing Partner for all purposes of this transaction and Howard B. Jones
shall have the authority and power to execute all additional and related
contracts, agreements, escrow instructions, assignments, title documents
(including all amendments, revisions, modifications thereof) and any and all
other related and pertinent documents arising out of or related to this
transaction, on behalf of Seller and his signature alone shall have the same
force and effect to irrevocably bind Seller as if all the partners of Seller had
duly executed and acknowledged each such document.
18. ENTIRE AGREEMENT. This is the entire agreement between the parties with
respect to the subject matter of this Amendment. All previous discussions,
premises, inducements, statements, negotiations and representations are
expressly contained herein or have been superseded hereby. There are no
contemporaneous agreements between the parties regarding the subject matter of
this Amendment.
19. BINDING ON ASSIGNS. The terms, covenants, conditions and provisions of
this Amendment shall be binding upon and inure to the benefit of the lawful
assigns and transferees of the parties.
20. REMAINING TERMS AND CONDITIONS. Except as expressly amended hereby, all
tersm, covenants, conditions and provisions of the Purchase Agreement remain in
full force and effect.
21. COUNTERPARTS AND FACSIMILE SIGNATURES. This agreement may be executed
in any number of counterparts, each of which shall be effective only upon
delivery and thereafter shall be deemed an original, and all of which shall be
taken to be one and the same instrument, for the same effect as if all parties
hereto had signed the same signature page. Any signature page of this agreement
may be detached from any counterpart of this agreement without impairing the
legal effect of any signatures thereon and may be attached to another
counterpart of this agreement identical in form hereto but having attached to it
one or more additional signature pages.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have executed this Second Amendment as
evidenced by the authorized signatures below.
ASSIGNOR
ANATON ASSOCIATES,
A California limited partnership
By: /s/ Howard B. Jones Dated: 6/30/2004
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Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: /s/ David M. Whitney Dated: 6/30/2004
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David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: /s/ Janet N. Whitney Dated: 6/30/2004
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Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: /s/ John W. Phelps Dated: 6/30/2004
-------------------------- --------------
John W. Phelps II, General Partner
By: /s/ James S. Phelps Dated: 6/30/2004
-------------------------- --------------
James S. Phelps, General Partner
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IN WITNESS WHEREOF, the foregoing Second Amendment has been executed as
evidenced by this authorized signature(s) below.
BUYER
INLAND REAL ESTAE ACQUISITIONS, INC.
By: /s/ [ILLEGIBLE]
-------------------------------
Its: SR V.P.
---------------------------
Dated: 6/30/04
----------------------
INLAND WESTERN FULLERTON METROCENTER, L.L.C.
A Delaware limited liability company
By: Inland Western Retail Real Estate Trust, Inc.
A Maryland corporation, its sole member
By: /s/ [ILLEGIBLE]
---------------------------
Its: [ILLEGIBLE]
--------------------------
Dated: 6/30/04
------------------
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FULLERTON METROCENTER
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Joint Escrow Instructions (the
"AGREEMENT") is dated, for reference purposes only, MAY 18, 2004 (the "EFFECTIVE
DATE"), and is executed on the dates set opposite the signatures below, by and
between ANATON ASSOCIATES, a California limited partnership (the "SELLER"), and
INLAND REAL ESTATE ACQUISITIONS, INC., an Illinois corporation (the "BUYER").
RECITALS:
A. Seller owns the interests described below in, and operates and manages,
certain real property and improvements located at the southwest corner of
Orangethorpe Avenue and Harbor Blvd. in the City of Fullerton (the "CITY"),
County of Orange, State of California, which is commonly known as FULLERTON
METROCENTER (the "PROPERTY"). A site plan depicting the Property is attached
hereto as Exhibit A-l.
B. Seller has a leasehold interest in a portion of the Property, as granted
by that certain Amended and Restated Ground Lease dated as of December 1, 2003
(the "RESTATED GROUND LEASE"), between FULLERTON METRO CENTER, LLC, a Delaware
limited liability company, as Landlord (the "GROUND LEASE LANDLORD") and Seller,
as Tenant, covering certain portions of the Property commonly known as the
"Corner Parcel", "Parcel 2" and "Parcel 3". The general locations of these three
Parcels are shown on attached Exhibit A-2.
1. The respective legal descriptions of the Corner Parcel, Parcel 2
and Parcel 3 are set forth on Exhibit B-l attached hereto.
2. The Restated Ground Lease has not been modified or amended and is
in full force and effect.
3. The Restated Ground Lease is memorialized by that certain Amended
and Restated Memorandum of Lease (the "GROUND LEASE MEMORANDUM"), dated as of
December 1, 2003, and recorded January 8, 2004, as Instrument No. 2204000015508,
in the Official Records of Orange County.
C. Seller has an additional leasehold interest in a portion of the
Property, as granted by that certain written Sublease (the "WARDS/TARGET
SUBLEASE") dated as of September 12, 1986, between the former Montgomery Ward &
Co., Incorporated (herein "WARDS"), as Sub-Landlord, and Seller, as Sub-Tenant,
covering certain portions of the Property commonly known as Sublease Parcel 'B',
Sublease Parcel 'C', Sublease Parcel 'D', Sublease Parcel 'E', Sublease Parcel
'F' and Sublease Parcel 'G' (collectively the "SUBLEASE PARCELS"). The general
locations of the Sublease Parcels are shown on attached Exhibit A-2.
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1. The respective legal descriptions of each of the Sublease Parcels B
through G are set forth on Exhibit B-2 attached hereto.
2. The Wards/Target Sublease has been modified by a "First Amendment
to Sublease" dated April 9, 1987, and by that certain "Fourth Amendment to Lease
and Second Amendment to Sublease" dated as of December 21, 2001 (collectively
the "WARDS/TARGET SUBLEASE AMENDMENTS"). By virtue of the Fourth Amendment to
Lease and Second Amendment to Sublease, Target Corporation (herein "TARGET")
assumed the position of Wards as Sub-Landlord under the Wards-Target Sublease.
[See Section 4.2.14].
3. The Wards/Target Sublease has been further modified and
memorialized by the following: (i) a Memorandum of Sublease dated as of
September 12, 1986, and recorded May 15, 1987, as Instrument No. 87-274838, in
the Official Records of Orange County; (ii) a First Amendment to Memorandum of
Sublease dated as of April 9, 1987, and recorded November 17, 1987, as
Instrument No. 87-646472, Official Records of Orange County; (iii) a
Supplemental Agreement Pertaining to Sublease and Memorandum of Sublease dated
as of November 17, 1987, and recorded February 24, 1988, as Instrument No.
88-080160, Official Records of Orange County; and (iv) the incorrectly entitled
"First [should read "Second"] Amendment to Memorandum of Sublease" dated as of
September 21, 2001, and recorded February 11, 2002, as Instrument No.
20020120386, Official Records of Orange County (all of the foregoing being
collectively the "WARDS/TARGET RECORDED DOCUMENTS").
4. The John Wilson Phelps Trust (defined in "D" below) has entered
into that certain "Restated Non-Disturbance, Indemnity and Attornment Agreement
Between Phelps Trust and Anaton Associates" dated as of March 16, 2004, with
Seller, a Short Form Memorandum of which dated March 16, 2004, was recorded
April 07, 2004, as Instrument No. 2004000290281, Official Records of Orange
County, California (herein collectively the "RESTATED NONDISTURBANCE
AGREEMENT").
D. Wards entered into a written lease with the "Trust created by the Last
Will and Testament of John Wilson Phelps, deceased, and the Decree of
Distribution entered into in the matter of his estate, a certified copy of which
Decree is recorded in Book 2296, Page 452, Official Records of Orange County,
California" (collectively herein "THEJOHN WILSON PHELPS TRUST"), dated May 1,
1964, and recorded October 16, 1964, as Instrument No. 14867, Book 7262, Page
621, Official Records of Orange County, California (the "WARDS/TARGET/PHELPS
LEASE"), covering certain premises commonly referred to as 1331 S. Harbor Blvd.,
Fullerton, CA. 92832, plus other parcels, as more particularly described
therein.
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1. The Wards/Target/Phelps Lease was subsequently amended by written
Addendum to Lease dated January 15, 1965, recorded February 5, 1965, as
Instrument No. 5049 in Book 7405, Page 530, Official Records of Orange County,
California; amended again by written Addendum to Lease datged August 25, 1965,
recorded September 10, 1965, as Instrument No. 7394, in Book 7661, page 701,
Official Records of Orange County, California, then re-recorded November 8,
1965, as Instrument No. 6463, in Book 7733, page 71, Official Records of Orange
County, California; amended again by written Addendum dated September 30, 1966,
recorded November 28, 1966, as Instrument No. 14503, in Book 8113, Page 155,
Official Records of Orange County, California; amended again by the unrecorded
Fourth Amendment to Lease and Second Amendment to Sublease dated December 21,
2001 (whereby Target assumed all rights, privileges, duties, obligations and
liabilities as lessee under the Wards/Target/Phelps Trust Lease, as more fully
set forth thereat (collectively the "WARDS/TARGET/PHELPS LEASE AMENDMENTS").
2. Seller has no right, title or interest in the Wards/Target/Phelps
Lease and Buyer is not acquiring any right, title or interest in the
Wards/Target/Phelps Lease, except as is set forth in the Wards/Target Sublease.
E. Seller's interest in the Property includes all structures, buildings,
improvements, compressors, electrical, plumbing, heating, ventilating and air
conditioning machinery and property of every kind, character and description
appurtenant to the Property (the "IMPROVEMENTS") (the Land and Improvements are
collectively referred to herein as the "REAL PROPERTY"). The Improvements
include approximately 242,080 square feet of leaseable area (excluding the
Target premises).
F. Seller's interest in the Property includes all of Seller's right, title
and interest in and to all leases, rental agreements and tenancies affecting the
Property (see "TENANT LEASES" defined in Section 4.2.15) and all security
deposits and other deposits held or received by Seller in connection with the
Tenant Leases. The Tenant Leases are listed on attached Exhibit G.
G. Seller's interest in the Property also includes all of Seller's right,
title and interest in and to all licenses, permits and approvals, if any, issued
by any federal, state or municipal authority relating to the use, maintenance or
operation of the Property and in favor of the Property (the "OPERATING
PERMITS").
H. Seller's interest in the Property also includes all of Seller's right,
title and interest in and to all Service Contracts (as defined in Section
2.2.1.4 below), all personal property used in connection with the operation of
the Property, as set forth in Section 4.2.13, and all other tangible and
intangible rights relating to the Property.
All the foregoing is subject to the right, title and interest of tenants in
their fixtures and personal property as provided by their respective leases.
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I. In addition to the Restated Ground Lease and the Wards/Target Sublease,
the Property is encumbered by that certain "Declaration and Agreement
Establishing Covenants, Conditions, Restrictions and Grant of Easements" dated
September 12, 1986, and recorded May 15, 1987, as Instrument No. 87-274841,
Official Records of Orange County; and that "First Amendment to Declaration and
Agreement Establishing Covenants, Conditions, Restrictions and Grants of
Easements" dated as of April 9, 1987, and recorded November 17, 1987, as
Instrument No, 87-646471, Official Records of Orange County; and that "Second
Amendment to Declaration and Agreement Establishing Covenants, Conditions,
Restrictions and Grants of Easements" dated as of December 21, 2001, and
recorded February 11, 2002, as Instrument No. 20020120384, Official Records of
Orange County (herein collectively referred to as the "CC&Rs").
J. Buyer desires to purchase the Property from Seller and Seller is willing
to sell the Property to Buyer in accordance with the terms and conditions set
forth in this Agreement.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS CONTAINED
HEREIN, SELLER AND BUYER AGREE AS FOLLOWS:
ARTICLE 1. AGREEMENT OF PURCHASE AND SALE; PURCHASE PRICE
1.1 AGREEMENT OF PURCHASE AND SALE. In accordance with and subject to the
terms and conditions of this Agreement, Seller agrees to sell the Property to
Buyer and Buyer agrees to purchase and accept the Property from Seller on such
terms and conditions.
1.2 PURCHASE PRICE. The Purchase Price (the "PURCHASE PRICE") for the
Property shall be FIFTY-ONE MILLION, TWO HUNDRED SEVENTY-FIVE THOUSAND AND
NO/100 DOLLARS ($51,275,000.00).
1.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by Buyer,
all cash, at Close of Escrow. Within three (3) business days after expiration of
the Review Period (defined in Section 2.3 below), if Buyer has not elected to
terminate this Agreement, Buyer shall deposit the sum of ONE MILLION DOLLARS
($1,000,000.00) (the "DEPOSIT") with Escrow Holder, by wire transferred funds at
Buyer's sole cost and expense. The Deposit shall be applied to the Purchase
Price and subject to Section 8.2 (liquidated damages). The balance of the
Purchase Price shall be deposited with Escrow Holder in sufficient time to allow
for timely Close of Escrow as provided in Section 7.1
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ARTICLE 2. CONDITION OF TITLE
2.1 TITLE MATTERS. Buyer agrees to accept the Assignment subject only to
those matter approved by Buyer pursuant to Section 2.2 below (collectively, the
"PERMITTED EXCEPTIONS").
2.1.1 TITLE REVIEW. Buyer shall have until expiration of the Review
Period to do the following: (i) obtain an ALTA survey of the Property, (ii)
review and approve any supplement (the "SUPPLEMENT") to the preliminary title
report ("PTR") furnished to Buyer by Seller, showing any survey exceptions;
(iii) review the Supplement and PTR, any documents included as exceptions in the
PTR, and any other matters related to Seller's title to the Property, and (iv)
deliver notice ("BUYER'S TITLE NOTICE") to Seller, of Buyer's disapproval of any
title or survey exceptions or other title matters of which Buyer disapproves, in
Buyer's sole discretion. Buyer shall be deemed to have approved of any title or
survey exceptions which Buyer fails to specify in Buyer's Title Notice.
2.1.2 BUYER DISAPPROVED TITLE EXCEPTIONS. Except as provided in
Section 2.1.3, with respect to such title or survey exceptions as Buyer may
disapprove, Seller shall have the option, in Seller's sole discretion, as
evidenced by Seller's written notice to Buyer given within three (3) business
days after receipt of Buyer's Title Notice, either: (i) to give Buyer written
notice within three (3) business days after receipt of Buyer's Title Notice that
Seller elects to cause such objectionable title or survey exception to be
removed of record or to cause the Title Company to insure Buyer against any loss
arising from such objectionable title or survey exception, in either case in
such a manner as approved by Buyer in Buyer's sole discretion; or (ii) to
terminate this Agreement by delivering written notice thereof to Buyer. Seller
shall give Buyer written notice of Seller's election not to cause the removal of
or provide insurance for any objectionable title or survey exception, as
provided above, which notice shall be deemed Seller's election to terminate this
Agreement ("SELLER'S TERMINATION NOTICE").
2.1.3 SELLER ELECTION TO TERMINATE; BUYER WAIVER. If Seller elects to
terminate this Agreement rather than remove or provide insurance with respect to
a disapproved title or survey exception, Buyer may waive its disapproval by
delivering written notice (the "TITLE WAIVER NOTICE") thereof to Seller within
three (3) business days after receipt of Seller's Termination Notice. Buyer's
failure to deliver such Title Waiver Notice within the three (3) business day
period shall be deemed to be Buyer's agreement to terminate the Agreement.
2.1.4 PERMITTED EXCEPTIONS. Those title and survey exceptions approved
or deemed approved by Buyer shall be referred to herein as "PERMITTED
EXCEPTIONS". Seller shall not cause any new matter to encumber the Property
after the Close of Escrow. Notwithstanding anything to the contrary herein,
Seller shall cause all monetary exceptions and liens to be removed of record and
to be eliminated as exceptions to the Title Policy on or prior to Close of
Escrow. If prior to Close of Escrow, there are any liens,
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assessments or encumbrances that Seller is obligated to pay and discharge, as
provided above, Seller shall deposit with Escrow Holder sufficient monies (or,
if Seller does not make such deposit, Escrow Holder is authorized to to use all
or any portion of the Purchase Price), acceptable to and required by Escrow
Holder to insure the obtaining and recording of such satisfactions and the
issuance of the Title Policy (defined in Section 7.7.3 below), either, at
Buyer's election (in Buyer's sole discretion), free of any such liens,
assessments and encumbrances, or with insurance (approved by Buyer in Buyer's
sole discretion) against any loss or damage that Buyer may suffer as a result
thereof, including but not limited to the enforcement of same.
2.1.5 REMOVAL OF INTENTIONAL LIENS. Notwithstanding anything herein to
the contrary, Seller shall remove all liens and encumbrances which Seller
intentionally causes to be a title exception from and after the date of this
agreement.
2.1.6 COVENANT TO CONVEY. At the Close of Escrow, Seller shall convey
to Buyer the leasehold interests under the Restated Ground Lease and under the
Wards/Target Sublease subject only to the Permitted Exceptions.
2.2 DUE DILIGENCE DOCUMENTS
2.2.1 All documents described in Section 2.2.1, 2.2.2 and 2.2.3 are
deemed "DUE DILIGENCE DOCUMENTS". Seller shall provide Buyer with the following
Due Diligence Documents within three (3) business days after mutual execution of
the Letter of Intent dated as of REVISED - March 23, 2004 (the "LETTER OF
INTENT"):
2.2.1.1 (a) A current preliminary title report or commitment
(the "PTR")for the fee simple interest in the Real Property and subleasehold
estate under the Wards/Target Sublease from First American Title Company (the
"TITLE COMPANY") , together with copies of all underlying documents of record
referred to therein; and (b) a copy of the most current survey (the "SURVEY") in
Seller's possession.
2.2.1.2 (a) Copies of all Tenant Leases and any amendments,
modifications and letter agreements, and all exhibits and attachments thereto,
currently in effect for the Property, (b) the most current rent roll (the "RENT
ROLL"), including all expiration dates, prepaid rents, delinquencies, defaults,
options, deposits (and whether refundable or nonrefundable) and any special
concessions, and (c) summary of tenant gross sales reports prepared by the
Property Manager, including sales tax filings and other pertinent information,
for the past 24 months.
2.2.1.3 Copies of the 2003-2004 property tax assessments and
bills.
2.2.1.4 A list and copies of all management, maintenance and
repair, service and supply contracts and other written agreements (the "SERVICE
CONTRACTS").
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2.2.1.5 Copies of the Restated Ground Lease and the Wards/Target
Sublease (including Wards/Target Sublease Amendments) and all documents related
thereto not otherwise delivered as part of Section 2.2.1.1.
2.2.1.6 Copies of all monthly and annual income and expense
statements for the year 2004 (year-to-date) and 2003 and utility and sewer bills
for the years 2003 and 2004 (year-to date) and a schedule of capital
improvements made over the past 36 months, including a copy of the 2003 annual
CAM reconciliation and 2004 operating budget for the Property.
2.2.1.7 Names, telephone numbers and addresses of architects,
consultants and contractors who worked on the Property, to the extent available
to Seller.
2.2.1.8 Environmental report dated March 15, 2004 prepared by
West Coast Environmental and Engineering and supplement letter dated March 19,
2004 (the "ENVIRONMENTAL REPORT") and property condition report dated March 18,
2004, prepared by EMG of Hunt Valley, Maryland (the "PROPERTY CONDITION
REPORT").
2.2.1.9 Copies of all fire, extended risk, liability and other
insurance policies and schedule of the premiums for the Property.
2.2.2 To the extent such records and documents exist and are in the
possession of Seller or Seller's Property Manager, Seller shall provide Buyer
with any and all additional books, records and files relating to the Property at
the request of Buyer. Seller's Property Manager is: Williams Real Estate
Management, Inc. (the "PROPERTY MANAGER"), 125 East Baker Street, Suite 208,
Costa Mesa, CA. ph. 714/427-5977, fax 714/427-5922
Buyer or its agents shall have the right to make copies of such books and
records, and to conduct such review as Buyer deems prudent. In the event this
Agreement is terminated by Buyer or Seller as provided herein, Buyer shall
forthwith return to Seller all documents delivered to Buyer by Seller and Buyer
shall not retain any copies thereof and this covenant shall survive the
termination of this Agreement.
2.2.3 Seller reserves the right to deliver to Buyer additional
documents prior to Close of Escrow.
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2.3 BUYER'S REVIEW PERIOD. Buyer shall have until 5:00 PM on JUNE 11, 2004
(the "REVIEW PERIOD"), in which to review and approve or disapprove, in Buyer's
sole and absolute discretion, all Due Diligence Documents and all other
conditions of the Property, and to conduct any investigations including without
limitation any Uniform Commercial Code searches for financing statements for
Orange County and the California Secretary of State and fixture filings. If
Buyer approves of the Due Diligence Documents, the Property and Buyer's
investigations, Buyer shall so notify Seller prior to expiration of the Review
Period (the "BUYER APPROVAL NOTICE"). If Buyer fails to deliver the Buyer
Approval Notice to Seller prior to the expiration of the Review Period, such
failure shall constitute Buyer's disapproval, this Agreement shall terminate and
neither party shall have any further obligation hereunder, except for covenants
that survive the termination of this Agreement.
2.3.1 Notwithstanding anything to the contrary contained in this
Agreement, at any time prior to Buyer's delivery of the Buyer Approval Notice,
Buyer may elect to terminate this Agreement for any reason or for no reason.
ARTICLE 3. ESTOPPEL CERTIFICATES, SUBORDINATIOIN, NON-DISTURBANCE AND ATTORNMENT
AGREEMENTS; WAIVER OF RIGHT OF FIRST OFFER.
3.1 TENANT ESTOPPEL CERTIFICATES. Not later than ten (10) calendar days
prior to the expiration of the Review Period, Seller shall deliver to Buyer
estoppel certificates addressed to Buyer and duly executed by Wild Oats-Henry's
Marketplace, PetsMart and Sportmart and at least eighty percent (80%) of the
remaining tenants of the Property, not including Seller Lease Estoppels. The
eighty percent (80%) of remaining tenants shall be determined based on total
rentable square feet rather than number of tenants and must include the
following tenants: First Bank and Trust, Orange County's Credit Union,
Bennigans, Pop's Unfinished Furniture, Wherehouse Entertainment, China Buffet
and Party America. Except as provided below, the estoppel certificate shall be
in the form of attached Exhibit F. Seller shall keep Buyer apprised as to
Seller's progress in causing such Tenant Estoppel Certificates to be executed
and delivered. From and after Buyer's delivery of Buyer Approval Notice, at
Buyer's request, Buyer may communicate directly with any tenants of the Property
with respect to any Tenant Estoppel Certificate or the status of the tenant's
lease with Seller in general. Seller shall provide a Seller Lease Estoppel [See
Section 3.1.6 below] for all Tenant Leases for which no Tenant Estoppel
Certificate is returned prior to Close of Escrow. An equivalent estoppel shall
also be provided by each guarantor of each Tenant Lease but such guarantor
estoppel shall not be a condition to Close of Escrow.
3.1.1 With respect to those Tenant Leases which specify a form of
estoppel certificate, Buyer shall accept the form which is substantially in the
form provided in such Tenant Lease, in lieu of the form which is attached
Exhibit F.
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3.1.2 With respect to tenants Wild Oats Markets, Inc. dba Henry's
Marketplace, Sylvan Learning Center and Orange County Credit Union, none of
which have commenced occupancy of their premises as of the date of this
Agreement, a form of estoppel from such tenants which includes the following
minimum information shall be deemed acceptable to Buyer: (i) tenant
certification that the Lease is in full force and effect and that Landlord
(Seller) is not in default beyond any cure period under any of the lease terms
or conditions; (ii) the commencement date of the lease (if established or
known); (iii) the rental commencement date (if established or known); and (iv) a
statement of all prepaid rents and security deposit, if any; and (v) a statement
of any tenant improvement allowance or other payment owed to such tenant but not
yet paid by Seller under the terms of such tenant's Lease.
3.1.3 Each of the foregoing forms of estoppel to be provided are
collectively referred to herein as the "TENANT ESTOPPEL CERTIFICATES".
3.1.4 Buyer shall have five (5) business days after receipt of each
Tenant Estoppel Certificate in which to reasonably disapprove the contents of a
Tenant Estoppel Certificate (the "ESTOPPEL DISAPPROVAL PERIOD"). Buyer shall
provide Seller with written notice of Buyer's reasons for disapproval (the
"BUYER ESTOPPEL DISAPPROVAL NOTICE") prior to expiration of the Estoppel
Disapproval Period. In the event Buyer has not given a Buyer Estoppel
Disapproval Notice as to a specific Tenant Estoppel Certificate within the
Estoppel Disapproval Period, then it shall be conclusively deemed that Buyer has
accepted and approved such Tenant Estoppel Certificate and this condition shall
be deemed waived or satisfied as to each such Tenant Estoppel Certificate for
which Buyer did not deliver a Buyer Estoppel Disapproval Notice.
3.1.5 In the event Buyer delivers a Buyer Estoppel Disapproval Notice
as to any Tenant Estoppel Certificate, then Seller shall use commercially
reasonable efforts to provide a corrected, acceptable Tenant Estoppel
Certificate, including curing any default described in a Tenant Estoppel
Certificate, provided such claimed default is a proper landlord obligation for
which Seller is contractually bound under the Tenant Lease. Seller shall have
the right, at Seller's sole option, to delay the Closing Date for an additional
period of time, not to exceed fourteen (14) calendar days, to allow Seller to
provide such corrected, acceptable Tenant Estoppel Certificate (the "ESTOPPEL
CURE PERIOD"). If Seller is unable to satisfy any Buyer Estoppel Disapproval
Notice, then Buyer shall have the right, at Buyer's sole option, to waive the
Buyer Estoppel Disapproval Notice and Close Escrow, in which event Seller shall
have no further obligation or liability with respect to any Buyer Estoppel
Disapproval Notice waived by Buyer.
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3.1.6 Seller shall provide Buyer with an estoppel certificate
substantially in the form of Exhibit F (the "SELLER LEASE ESTOPPEL CERTIFICATE")
on behalf of any Tenant Lease for which a Tenant Estoppel Certificate is not
returned duly executed by the tenant. In the event an inadequate number of
Tenant Estoppel Certificates are returned, as required by Section 3.1, 3.1.1 and
3.1.2, Buyer shall have the right to waive receipt of any unreturned Tenant
Estoppel Certificates and proceed to Close Escrow but in such event Seller shall
have no further obligation or liability with respect to any Tenant Estoppel
Certificate which is unreturned as of Close of Escrow, except as are contained
in Seller Lease Estoppel Certificates.
3.1.7 In the event Seller is unable to satisfy the Tenant Estoppel
Certificate conditions set forth above, then Seller shall give Buyer written
notice thereof (the "SELLER ESTOPPEL FAILURE NOTICE") and, within five (5)
business days after receipt of the Seller Estoppel Failure Notice, Buyer shall
either (i) elect to waive Seller's obligation to obtain any additional or
corrected Tenant Estoppel Certificates and proceed to Close Escrow (in which
event Seller shall have no further obligation or liability to Buyer to obtain or
provide additional or corrected Tenant Estoppel Certificates); or (ii) elect to
terminate this Agreement, in which event the Agreement shall be deemed
terminated, and neither party shall have any further obligation or liability to
the other arising out of the Agreement, except for covenants and conditions
which survive the termination of this Agreement.
3.2 LEASEHOLD ESTOPPEL CERTIFICATES. Not later than ten (10) calendar days
prior to the Closing Date, Seller shall deliver to Buyer estoppel certificates
in form of Exhibits E-l through E-3, addressed to Buyer and its assignees and
Buyer's lender, duly executed by the Restated Ground Lease landlord (with
respect to the Restated Ground Lease), and by the lessor of the
Wards/Target/Phelps Lease and by Target (with respect to the Wards/Target
Sublease) (collectively the "LEASEHOLD ESTOPPEL CERTIFICATES").
3.3 CC&R'S ESTOPPEL CERTIFICATE. Prior to Close of Escrow, Seller shall
provide Buyer with an estoppel certificate in the form of attached Exhibit H
whereby Seller shall warrant and represent that the CC&R's are in full force and
effect and have not been modified, amended or changed, except as set forth in
RECITALS I (the "CC&R's ESTOPPEL"). Seller shall make a reasonable attempt to
obtain the equivalent of a CC&R's Estoppel from TARGET CORPORATION but the
failure or inability to do so shall not be a condition to Closing. The Tenant
Estoppel Certificates, Seller Estoppel Certificates, Leasehold Estoppel
Certificates and the CC&R's Estoppel are sometimes collectively referred to
herein as the "ESTOPPEL CERTIFICATES".
3.4 WAIVER OF RIGHT OF FIRST OFFER BY LANDLORD OF RESTATED GROUND LEASE.
Seller shall deliver to Buyer a written election by FULLERTON METRO CENTER, LLC,
stating that FULLERTON METRO CENTER, LLC, elects not to exercise the Right of
First Offer contained in Section 15.4 of the Restated Ground Lease.
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ARTICLE 4. WARRANTIES
4.1 BUYER WARRANTIES AND REPRESENTATIONS. Buyer warrants and represents for
the benefit of Seller that the following facts are true and correct as of the
execution of this Agreement and shall be true and correct as of the Closing
Date:
4.1.1 ORGANIZATION. Buyer is a corporation duly organized and validly
existing under the laws of the State of Illinois and in good standing under the
laws of the State of Illinois.
4.1.2 AUTHORITY. The execution and delivery of this Agreement has been
duly authorized and approved by all requisite action of Buyer and the
consummation of the transactions contemplated hereby will be duly authorized and
approved by all requisite action of Buyer, and no other authorizations or
approvals, whether of governmental bodies or otherwise, will be necessary in
order to enable Buyer to enter into or comply with the terms, conditions and
provisions of this Agreement.
4.1.3 BINDING EFFECT OF DOCUMENTS. This Agreement and the other
documents to be executed by Buyer hereunder, upon execution and delivery thereof
by Buyer, will have been duly entered into by Buyer, and will constitute legal,
valid and binding obligations of Buyer. Neither this Agreement nor anything
provided to be done under this Agreement violates or shall violate any contract,
document, understanding, agreement or instrument to which Buyer is a party or by
which it is bound.
4.2 SELLER WARRANTIES AND REPRESENTATIONS. Seller warrants and represents
for the benefit of Buyer that the following facts are true and correct as of the
execution of this Agreement and shall be true and correct as of the Closing
Date. For purposes of the following warranties and representations, the term "to
the best of Seller's knowledge after reasonable inquiry" shall mean facts and
information within the actual knowledge of Howard B. Jones III, John W. Phelps
and James S. Phelps, and limited to inquiry of the current Property Manager and
review of the books and records of the Property, but without the necessity of
any further or additional inquiry of any person or entity.
4.2.1 ORGANIZATION. Seller is a California limited partnership duly
organized, validly existing and in good standing under the laws of the State of
California with full power to enter into this Agreement, and Seller is duly
qualified to transact business in the State of California.
4.2.2 AUTHORITY. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
and approved by all requisite action of Seller, and no other authorizations or
approvals, whether of governmental bodies or otherwise, are necessary in order
to enable Seller to enter into
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or to comply with the terms, conditions and provisions of this Agreement. The
persons executing this Agreement on behalf of Seller have the legal power, right
and actual authority to bind Seller to the terms and conditions of this
Agreement.
4.2.3 BINDING EFFECT OF DOCUMENTS. This Agreement and the other
documents to be executed by Seller hereunder, upon execution and delivery
thereof by Seller, will have been duly entered into by Seller, and will
constitute legal, valid and binding obligations of Seller.
4.2.4 PENDING LITIGATION. To the best of Seller's knowledge after
reasonable inquiry, there are no pending lawsuits of any nature affecting the
Property and there is no threatened litigation affecting the Property, including
without limitation, Seller's title to or use of the Property or any part
thereof.
4.2.5 CONDEMNATION PROCEEDINGS. To the best of Seller's knowledge
after reasonable inquiry, there are no condemnation proceedings, eminent domain
proceedings or similar actions or proceedings now pending against the Property
and no such proceedings or actions have been threatened against the Property.
4.2.6 EMPLOYMENT CONTRACTS. There are no employees presently employed
by Seller in connection with its operation of the Property under any ground
lease, sublease or other empowering document. This warranty does not apply to
independent contractor, vendor or other third-party agreements outside the scope
of the employer-employee relationship.
4.2.7 NO FEE TITLE TO PROPERTY. Seller does not own fee title to the
Real Property and Seller's right to own, manage and operate the Property is
governed solely by the Restated Ground Lease, Wards/Target Sublease, CC&R's and
documents related thereto or arising therefrom. Neither Seller nor any of its
Affiliates own any other interest in the Property, except for John W. Phelps and
James S. Phelps, who are partners of Fullerheim Partners, Ltd. as well as
members of Fullerton Metro Center, LLC, as well as trustees of the John Wilson
Phelps Trust.
4.2.8 CONFLICT WITH EXISTING AGREEMENTS AND LAWS. Neither the
execution of this Agreement nor the consummation by Seller of the transactions
contemplated hereby will: (i) conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under or result in a
termination of any contract, document, understanding, agreement or instrument to
which Seller is a party or by which Seller or the Property is bound; (ii)
violate any restriction to which Seller or the Property is subject; (iii) to the
best of Seller's knowledge after reasonable inquiry, constitute a violation of
any code, resolution, law, statute, regulation, ordinance, judgment, rule,
decree or order applicable to Seller or the Property; or (iv) result in the
creation of any lien, charge or encumbrance
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upon the Property or any part thereof. Seller has not received any notice of any
violation of any laws applicable to the Property and, to the best of Seller's
knowledge after reasonable inquiry, the Property is not in violation of any
applicable laws.
4.2.9 ACCESS; PERMITS. To the best of Seller's knowledge after
reasonable inquiry, there are no facts or conditions that could result in the
termination of the existing access from the Property to any existing highways,
streets or roads, or in the termination or expiration of any conditional use
permits, sign permits or similar governmental permits or approvals necessary for
the management and/or lawful operation of the Property as now operated.
4.2.10 AGREEMENTS OF SALE; OPTIONS, LEASES. Except as disclosed by the
PTR and the Due Diligence Documents, there are no outstanding liens or rights of
third parties to acquire any interest in the Property or any portions thereof,
nor are there any outstanding agreements of sale, options, contracts or other
obligations for the sale, exchange or transfer of the Property or any portion
thereof or otherwise relating to the Property.
4.2.11 BANKRUPTCY. To the best of Seller's knowledge after reasonable
inquiry, there are no attachments, executions, assignments for the benefit of
creditors, receiverships or voluntary or involuntary proceedings in bankruptcy
or pursuant to any other debtor relief laws filed by Seller or pending or
threatened against Seller or the Property.
4.2.12 FOREIGN PERSON. Seller is not a foreign person and is a "United
States Person" as defined in Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended.
4.2.13 PERSONAL PROPERTY. The following personal property is included
with the Property and shall be governed by a bill of sale: (i) one golf cart,
(ii) one pressure washer, (iii) various holiday decorations, and (iv)
miscellaneous tools, equipment and portable garages. All personal property is
sold in its as-is condition and no part of the Purchase Price shall be allocated
to personal property because of its nominal value. Seller shall provide Buyer a
Bill of Sale in the form of Exhibit I for the Personal Property.
4.2.14 THE TARGET PARCEL. The parcel occupied by Target, as shown
generally on attached Exhibit A-2, is not included as part of the sale. Target
only participates in the Property by way of common area maintenance expenses as
provided in the CC&Rs and pursuant to the Wards/Target Sublease.
4.2.15 TENANT LEASES. There are no Tenant Leases other than those
described on Exhibit G (the "TENANT LEASES") attached hereto and such Tenant
Leases are in full force and effect and have not been amended except as shown on
Exhibit G. To the best of Seller's knowledge after reasonable inquiry, there is
no material default under any of the Tenant Leases on the part of Seller (as the
landlord thereunder) and there are no
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defaults on the part of any of the tenants (unless otherwise set forth on a
Tenant Estoppel Certificate). Except as set forth on Exhibit G, no tenant has
vacated all or any portion of its premises, and Seller knows of no fact or event
that, with the giving of notice and/or passage of time, would render it in
material default as landlord thereunder or would render any tenant in material
default thereunder. There are no prepayments of rent under the Tenant Leases,
except in the ordinary course of business, other than Security Deposits for the
account of tenants and as stated in the Rent Roll. The outstanding amount of
Security Deposits under the Tenant Leases is set forth on Exhibit G. Seller has
not received any non-cash security deposits or other security deposits except as
described on the Rent Roll. Except as set forth on Exhibit G and Article 10, all
work to be performed by Landlord under the Tenant Leases has been completed and
there are no amounts payable under any of the Leases that have not been paid.
4.2.16 RESTATED GROUND LEASE. The Restated Ground Lease is in full
force and effect and has not been modified or amended in any respect. There is
no material default under the Restated Ground Lease on the part of Seller (as
the tenant thereunder) and there are no defaults under the Restated Ground Lease
on the part of the Landlord of Restated Ground Lease Landlord (as the landlord
thereunder).
4.2.17 WARDS/TARGET SUBLEASE. The Wards/Target Sublease is in full
force and effect and except for the Wards/Target Sublease Amendments, has not
been modified or amended in any respect. Except for the Wards/Target Sublease,
Wards/Target Sublease Amendments and Wards/Target Recorded Documents, there are
no other agreements, oral or written, between Wards or Target and Seller
relating to the Property which would have an adverse effect on Buyer's right,
title or interest in the Property. There is no default under the Wards/Target
Sublease on the part of Seller (as the Sub-Tenant thereunder) and there is no
default under the Wards/Target Sublease on the part of Target (as the Sub-
Landlord thereunder).
4.2.18 CC&R'S. The CC&R's are in full force and effect and have not
been modified or amended in any respect. There is no default under the CC&R's on
the part of the Seller or any other party thereto.
4.2.19 SERVICE CONTRACTS. No notice of default has been received from
any of the parties to the Service Contracts and no event has occurred that, with
notice or lapse of time, or both, would constitute a material default thereunder
and each of such agreements is in full force and effect. All service contracts
are cancellable on thirty (30) days' notice except for the fire sprinkler alarm
contract with ADT.
4.2.20 OCCUPANCY AGREEMENTS. Seller has not entered into any leases,
licenses or other agreements permitting, nor has Seller entered into any course
of conduct that would permit, any person or entity to occupy or possess any
portion of the Property other than as permitted under the Leases.
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4.2.21 IMPROVEMENTS. Except for the Tenant Leases, Seller has made no
commitment to any tenant, governmental or quasi-governmental entity or other
person or entity with any respect to the Property or imposes on Seller or the
successors or assigns of Seller any obligation to pay or contribute property or
money or to construct, install or maintain any improvements on or off the
Property.
4.2.22 DUE DILIGENCE DOCUMENTS TRUE AND CORRECT. All documents, the
Leases, Service Contracts and any other agreements, matters and things submitted
to Buyer by Seller for Buyer's approval pursuant to Section 2.2.1 above are
true, correct and complete copies thereof as of the date of submission thereof
and, as to any subsequent amendments or additions, approved in writing by Buyer
as of Closing.
4.2.23 CONDITION OF PROPERTY. To the best of Seller's actual knowledge
after reasonable inquiry; (i) Seller has not received any notices of uncured
violations of building codes, environmental laws; (ii) there are no special
assessments levied against the Property which are not reflected on the real
estate tax bill; (iii) interior and exterior structures are in a good state of
repair, free of leaks, structural problems and mold, and (iv) no Tenant Lease
provides for an option or right of first refusal to purchase the Property.
4.2.24 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties by Seller and Buyer shall survive the Close of Escrow for twelve
(12) months, after which period neither party shall have any further liability
to the other resulting therefrom.
ARTICLE 5. CONDITION OF PROPERTY; HAZARDOUS MATERIALS
5.1 AS-IS CONDITION. Except to the extent otherwise expressly and
specifically stated in this Agreement, Buyer is acquiring the Property "as-is"
with all faults and defects. Buyer does hereby expressly agree and acknowledge
that except as expressly and specifically set forth in Section 4.2 hereof, in
consideration of Seller entering into this Agreement, neither Seller nor any of
its partners, officers, employees, brokers, agents or representatives makes any
warranty or representation, express or implied, or arising by operation of law,
or otherwise, with regard to the Property or any portion thereof, including but
in no way limited to any warranty of quantity, quality, condition, habitability,
merchantability, suitability or fitness for any particular use, or compliance
with law, or environmental or hazardous condition, of any of the Property.
Except as expressly and specifically set forth in this Agreement, Seller
specifically disclaims and Buyer accepts such disclaimer of any warranty,
guarantee or representation, oral or written, past or present, express or
implied, by Seller or anyone purporting to act on behalf of Seller (and Seller's
broker) concerning the Property. Except as provided in this Agreement, Buyer
acknowledges that it is purchasing the Property based solely upon Buyer's own
independent investigations and findings regarding the physical condition of the
Property. Without limiting the foregoing, except as provided in this Agreement,
Buyer acknowledges that Seller has made no agreement to and has no obligation to
alter, repair, improve or remediate any of the Property or Improvements.
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5.2 RELEASE OF SELLER. Without limiting any other provisions of this
Agreement including Paragraph 4.2 above, and except as to Seller's covenants,
warranties, indemnities and representations expressly and specifically set forth
in this Agreement, Buyer, on its behalf and on behalf of its Affiliates (as
defined in Section 5.4 below), does hereby forever release, discharge and
covenant not to sue Seller and its partners, employees, brokers, agents,
contractors and managers or Affiliates (as defined in Section 5.3 below) (herein
collectively "RELEASED PARTY(IES)"), from and as to any and all claims,
liabilities, obligations, costs and expenses (collectively "CLAIMS") whether
known or unknown, liquidated or contingent, arising from or related to (i) any
defects, errors or omissions in the design or construction or maintenance of any
of the Improvements (excluding however, the improvements to the premises to be
occupied by Henry's Marketplace and Sylvan Learning Centers), whether the same
are a result of negligence (gross, active or passive) or claimed willful
misconduct or otherwise, or (ii) the condition (including environmental
conditions) of the Property or any portion thereof, whether the same is a result
of any act of Seller or any Released Party, or anyone acting upon any of their
behalf, or any tenant or occupant of any portion of the Property, now or in the
past. The release, discharge and covenant not to sue set forth herein
specifically includes without limitation any Claims under "Environmental Laws"
or "Environmental Risk" (defined below) or the Americans With Disabilities Act
of 1990, 42 U.S.C. Sec. 12101 ET SEQ.
5.2.1 "ENVIRONMENTAL LAWS" means all laws (federal, state, local or
foreign) relating to pollution or the environment or relating to public health,
welfare or safety including without limitation, the Solid Waste Disposal Act, as
amended by the Resource Conversion and Recovery Act, 42 U.S.C. Sec. 1901 ET
SEQ., the Comprehensive Environmental Response, Compensation Liability Act of
1980, 42 U.S.C. Sec. 9601 ET SEQ., the Emergency Planning and Community Right to
Know Act, 42 U.S.C. Sec. 11001 ET SEQ., the Clean Air Act, 42 U.S.C. Sec. 7401
ET SEQ., the Clean Water Act, 33 U.S.C. Sec. 1251 ET SEQ., the Toxic Substances
Control Act, 15 U.S.C. Sec. 2601 et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. Sec. 1801 ET SEQ., the Occupational Safety and Health Act, 29
U.S.C. Sec. 652 ET SEQ., the Federal Insecticide, Fungicide and Rodenticide Act,
7 U.S.C. Sec. 136 ET SEQ., and Safe Drinking Water Act, 42 U.S.C. Sec. 300f ET
SEQ., as any of the same may be amended from time to time, any state or local
law dealing with environmental or hazardous materials/substances matters, any
common law, and any regulations, orders, rules, procedures, guidelines and the
like promulgated in connection therewith, regardless of whether the same are in
existence on the date of this Agreement.
5.2.2 "ENVIRONMENTAL RISK" means any obligation or risk of liability
under Environmental Laws including without limitation (a) the presence, release
or discharge or asbestos; (b) the presence, release or discharge or any
"hazardous substance", "hazardous waste", "hazardous materials", "pollutants",
or "contaminants" (as defined by any Environmental Laws), including
asbestos-containing materials and (c) the presence, release or discharge of any
petroleum substance or petroleum product, or fraction thereof.
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5.2.3 IT IS SPECIFICALLY INTENDED BY SELLER AND BUYER THAT EXCEPT AS
TO THE EXPRESS WARRANTIES OF SELLER SPECIFICALLY SET FORTH IN THIS AGREEMENT AND
SELLER'S OBLIGATIONS UNDER THIS AGREEMENT, THE RELEASE AND DISCHARGE CONTAINED
HEREIN BE WITHOUT LIMIT, IRRESPECTIVE OF THE CAUSE OR CAUSES OF ANY SUCH CLAIMS
(INCLUDING WITHOUT LIMITATION PRE-EXISTING CONDITIONS, STRICT LIABILITY OR THE
NEGLIGENCE OF ANY RELEASED PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, ACTIVE OR PASSIVE. BUYER ACKNOWLEDGES THAT IT IS ITS INTENT THAT
THIS RELEASE AND DISCHARGE BE A GENERAL RELEASE AS TO THE MATTERS SET FORTH OR
REFERRED TO IN SECTIONS 5.1 AND 5.2 HEREOF AND THAT BUYER WAIVES ITS RIGHTS
UNDER ANY STATE STATUTE OR CODE, INCLUDING THE PROVISIONS OF CALIFORNIA CIVIL
CODE SECTION 1542 WHICH PROVIDES:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
5.3 An "AFFILIATE" of Seller includes any corporation, partnership, limited
liability company, trust, estate or any entity in which Seller or any of its
partners, brokers, agents, employees or contractors, now have, or may hereafter
have, title or interest, direct or indirect, beneficial or otherwise; provided,
however, that the term "Affiliate" does not include any person, trustee, trust,
limited liability company or other entity having a fee interest in the Real
Property in their capacity(ies) as past or current fee owner and/or as landlord
or lessor under any lease, ground lease or sublease.
5.4 An "AFFILIATE" of Buyer is defined as any corporation, partnership,
limited liability company, trust, estate or any entity controlled, directly or
indirectly, by Buyer or any officer, director, or shareholder thereof, now, in
the past or in the future, including any entity that acquires any right, title
or interest in and to the Property.
ARTICLE 6: ADDITIONAL AGREEMENT OF BUYER AND SELLER
6.1 RIGHT OF ENTRY. Buyer and its representatives, employees, contractors,
agents and designees shall have the right to enter upon the Property, at Buyer's
sole cost and expense, during normal business hours, without interfering with
the conduct of any business by any tenant or occupant of the Property, in order
to inspect and investigate the Property. Without Seller's prior consent, Buyer
shall not discuss this transaction or any aspect of the sale of the Property
with any tenant, subtenant, vendor or other occupant of the Property and then
only when accompanied by the Property Manager. Prior to conducting any soils or
engineering testing or any other invasive testing, Buyer shall obtain the
approval and consent of Seller, which consent will not be unreasonably withheld,
conditioned or delayed.
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Seller shall have the right to require Buyer to provide Seller with a binder or
certificate of commercial liability insurance naming Seller as additional
insured and with such coverages and risks as Seller may reasonably designate.
6.2 OPERATIONS PENDING CLOSING. From execution of this Agreement through
the Close of Escrow:
6.2.1 MANAGEMENT AND OPERATION OF PROPERTY. Seller shall manage,
operate and maintain the Property in substantially the same manner as it has
operated, managed and maintained the Property prior to execution of this
Agreement, other than ordinary wear and tear and except that Seller shall not be
required to make any extraordinary repairs or replacements of existing defects
or conditions unless there is an actual, defined threat to person or property
and such defect or condition is known to Seller (provided Seller provides
written notice to Buyer of the need for such repairs or replacements). Seller
shall use reasonable efforts to keep available the services of Seller's present
suppliers and contractors and to preserve for Buyer the goodwill enjoyed by
Seller in its operation of the Property.
6.2.2 SERVICE CONTRACTS. Seller shall not enter into any renewal,
extension, modification or replacement of any existing Service Contracts
(defined in Paragraph 2.2.1.4 above) or enter into any new employment,
maintenance, service, supply or other agreement relating to the Property without
the express written consent of Buyer which will not be unreasonably withheld or
delayed.
6.2.3 NEW LEASES. From and after mutual execution and delivery of this
Agreement, Seller will not, without the prior written consent of Buyer, which
will not be unreasonably withheld, delayed or conditioned: (i) enter into any
new leases for space, (ii) modify, amend, terminate, renew, extend or waive any
rights under any existing tenant lease, (iii) apply any rental security deposits
against sums payable under any Lease, (iv) grant any concession, rebate,
allowance or free rent to any tenant of the Property for any period, or (v)
accept the surrender of or terminate any tenant lease. Notwithstanding the
foregoing, prior to expiration of the Review Period, Seller shall have the right
to send default notices (including any statutory three day notice) to tenants on
the Property without Buyer's consent, provided a copy of each such notice is
concurrently supplied to Buyer. However, Seller will not initiate, without the
prior written consent of Buyer, any legal action against any tenant Property who
is in default under its lease. Buyer's consent will not be unreasonably
withheld, delayed or conditioned.
6.2.4 INSURANCE POLICIES. Seller shall keep in full force and effect
all fire, casualty, liability and extended coverage and other insurance policies
which are currently in effect for the Property.
6.2.5 PERFORMANCE OF EXISTING OBLIGATIONS. Seller shall perform its
obligations when due pursuant to the Restated Ground Lease, Wards/Target
Sublease, CC&R's, Service Contracts and all Tenant Leases on the Property.
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6.2.6 ACCESS TO PROPERTY BOOKS AND RECORDS. Seller shall, upon request
of Buyer, make all books and records relating to the ownership, operation and
management of the Property available to Buyer and its representatives as the
offices of the Property Manager (see Paragraph 2.2.2 above), during normal
business hours, and shall permit Buyer's representatives to examine, copy and
audit the same, at Buyer's sole cost and expense. Seller shall cooperate with
Buyer's representatives, shall allow such persons to make extracts from the
aforesaid books and records and shall respond fully and candidly to inquiries
made by such representatives.
6.2.7 NEW AGREEMENTS AND OBLIGATIONS. From and after delivery of the
Buyer Approval Notice, Seller shall not enter into or record any easement,
right-of-way, covenant, condition, restriction, license, permit, agreement,
mortgage, deed of trust, lien or other instrument against the Property or any
portion thereof, without the prior consent of Buyer in its sole and absolute
discretion.
6.2.8 REPRESENTATIONS AND WARRANTIES. Neither Buyer nor Seller will
cause any action to be taken which would cause any of the representations or
warranties made by such party in this Agreement to be false as of the Closing
Date. Each party shall promptly notify the other party in writing of the
occurrence of any event or condition which occurs prior to the Closing Date
which causes a change in the facts relating to the truth of any of the
representations or warranties made in Article 4 of this Agreement. In addition
Seller shall notify Buyer of any event or condition which occurs prior to the
Closing Date which would cause the gross income from the Property, as of the
Closing Date, to be less than the gross income reflected on the most recent rent
roll provided by Seller to Buyer.
6.2.9 INDEMNITY. Seller agrees to defend, indemnify and hold harmless
Buyer and Buyer's successors and assigns, from and against any and all claims,
losses, costs, expenses, obligations, damages and liabilities which Buyer may
hereafter be liable for, suffer, incur or pay for in connection with any breach
or violation of any of Seller's representations and warranties contained herein
or resulting from or arising with respect to the Property through the date prior
to the date on which the Close of Escrow occurs (except for matters arising from
or with respect to the Buyer's inspections, which shall be Buyer's sole
responsibility).
6.2.10 COMPLETION OF PARKING LOT AND SIDEWALK REPAIRS. In the event
any part of the parking lot or sidewalks require repairs, Buyer will complete
such repairs after Close of Escrow using funds in the Reserves [see Section
7.5.1.3 below].
6.2.11 CANCELLATION OF SERVICE CONTRACTS. Seller shall have the
obligation to cancel any Service Contract which Buyer does not elect to assume
as of the Close of Escrow, at Seller's sole cost and expense.
6.3 SELLER RIGHTS AFTER CLOSING. Seller shall have the right, after Close
of Escrow, to commence or continue legal proceedings against any tenant to
collect damages resulting from such tenant's defaults of its obligations under
its lease which accrued prior to the Closing Date, provided, however, that such
proceedings shall only seek monetary damages.
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ARTICLE 7: CLOSING
7.1 ESCROW. Escrow for purchase of the Property shall be consummated by
means of an escrow (the "ESCROW") which shall be opened at First American Title
Company (the "ESCROW HOLDER") located at 30 North LaSalle Street, Suite 310,
Chicago, IL 60602; Escrow Officer: PAULA PODVIN; Phone 312/917-7258; fax
630-799-8716, within TWO (2) business days after mutual execution of the
Agreement (the "OPENING OF ESCROW"). The parties shall close the Escrow within
ten (10) calendar days after expiration of the Review Period (the "CLOSING
DATE"). If Escrow does not close on the Closing Date, it may close on any date
thereafter provided neither Buyer or Seller has given Escrow cancellation
instructions prior to Close of Escrow. Although the parties have agreed to and
are bound by said Closing Date, the term "Close of Escrow," as used herein,
shall mean that date when the Memorandum of Assignment and Assumption of
Restated Ground Lease, Exhibit C-2, and Memorandum of Assignment and Assumption
of Wards/Target Sublease, Exhibit D-2, have been recorded in the Official
Records of Orange County. Notwithstanding any of the foregoing to the contrary,
Seller shall have the right to have all title and title insurance matters
relating to the Property handled by the office of First American Title Company
located at 2 First American Way, Santa Ana, CA, 92707, Title Officer: DAVID
NEAL, Title Order #NCS-67299-SAl; phone 714/800-4966; fax 714/800-4751.
7.2 ESCROW INSTRUCTIONS; OPENING OF ESCROW. This Agreement shall be
deposited in Escrow and, together with any instructions and general provisions
consistent with the terms and provisions of this Agreement which Escrow Holder
may reasonably request, shall constitute the escrow instructions to Escrow
Holder from Buyer and Seller. Buyer and Seller agree to promptly execute any
such escrow instructions requested by Escrow Holder which are consistent with
this Agreement and do not modify any material obligations of Buyer or Seller
hereunder, provided that in the event of any conflict or inconsistency between
the terms and conditions of such general instructions and the terms and
conditions of this Agreement, the terms and conditions of this Agreement shall
control.
7.3 BUYER'S OBLIGATIONS. On or before the Closing Date, Buyer shall deliver
to Escrow Holder:
7.3.1 The entire Purchase Price, by wire transferred, immediately
available funds, at the sole cost of Buyer.
7.3.2 The Assignment, Assumption and Consent (Restated Ground Lease),
Exhibit C-l, and Memorandum of Assignment and Assumption of Restated Ground
Lease, Exhibit C-2, Assignment and Assumption of Wards/Target Sublease, Exhibit
D-l, and Memorandum of Assignment and Assumption of Wards/Target Sublease,
Exhibit D-2, duly executed by Buyer and signatures duly acknowledged for
documents to be recorded.
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7.3.3 Buyer's assumption of all Tenant Leases, in the form of
Exhibit K.
7.3.4 All costs and fees required to be paid by Buyer pursuant to
Sections 7.5 and 7.6 below; and
7.3.5 All other documents and instruments as may be reasonably
requested by the Escrow Holder in order to consummate this transaction.
7.4 SELLER'S OBLIGATIONS. On or before the Closing Date, Seller shall
deliver to Escrow Holder:
7.4.1 The Assignment, Assumption and Consent (Restated Ground Lease),
Exhibit C-l, and Memorandum of Assignment and Assumption of Restated Ground
Lease, Exhibit C-2, Assignment and Assumption of Wards/Target Sublease, Exhibit
D-l, and Memorandum of Assignment and Assumption of Wards/Target Sublease,
Exhibit D-2, duly executed by Seller and signatures duly acknowledged for
documents to be recorded.
7.4.2 An assignment of all the Tenant Leases, certificates of
occupancy, insurance certificates and zoning letters (if any).
7.4.3 The Bill of Sale in the form of Exhibit I, executed by Seller.
7.4.4 The rent roll for the Property certified by Seller as of the
Closing Date.
7.4.5 Originals of the Leases and those Service Contracts approved by
Buyer.
7.4.6 The following items, to the extent in Seller's possession (which
need not be delivered at the Close of Escrow, but may, instead, be delivered to
the Property's management office); (i) all keys for all entrance door and spaces
which may be locked (whether occupied or not) in the Improvements, but only to
the extent in the possession of Seller; (ii) all original books, records, tenant
files, operating reports, warranties, operating manuals, plans and
specifications and other materials reasonably necessary to the continuity of
operation of the Property (but no checking or banking statements, tax statements
or other financial information personal to Seller); (iii) the originals (or
copies where originals are not available) of the licenses and permits, to the
extent in the possession of Seller; and (iv) certificates of insurance from the
tenants, to the extent in the possession of Seller.
7.4.7 A Non-Foreign Affidavit executed by Seller in the standard form
used by Escrow Holder, together with a California RE 590 form.
7.4.8 The Estoppel Certificates.
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7.4.9 Written notice executed by Seller and addressed to each of the
tenants of the Property in the form of attached Exhibit J.
7.4.10 A certificate indicating that the representations and
warranties set forth in Article 4 are true and correct on the Closing Date, or,
if there have been changes, describing the changes.
7.4.11 Such other documents and instruments as may be reasonably
required by the Escrow Holder in order to consummate this transaction and issue
the Title Policy to Buyer.
7.5 PRORATIONS AND ADJUSTMENTS. Seller shall be responsible for and pay all
accrued expenses with respect to the Property accruing up to 11:59 PM on the day
prior to the Close of Escrow (the "ADJUSTMENT DATE") and shall be entitled to
receive and retain all revenue from the Property accruing up to such time, even
if determined at some time after the Close of Escrow.
7.5.1 PRORATIONS AT CLOSING. On the Close of Escrow, the following
adjustments and apportionments shall be made in cash as of the Close of Escrow:
7.5.1.1 Collectible rents for the month in which the Close of
Escrow occurs (the "CLOSING MONTH"). If past due rents are owing by tenants of
the Property for months prior to the Closing Month and/or the Closing Month (the
"RENT ARREARAGES"), Buyer shall invoice such tenants for such sums and Seller
shall be entitled to any funds received from such tenants by Buyer after the
Closing Date which are in excess of amounts then owing to Buyer from such
tenants for months including or after the Closing Month. In determining the
amounts required to be paid to Seller pursuant to the immediately preceding
sentence, Buyer shall not be permitted to accept any rentals or amounts owing to
Buyer under tenant leases in advance of the due dates therefor. During the
period after the Closing Date, Seller shall immediately deliver to Buyer any and
all rents received by Seller to the extent such rents related to any period from
and after the Closing Date. Except for the billing of Rent Arrearages, if any,
as provided above, Buyer shall have no other obligations in connection with the
collection of any Rent Arrearages, including without limitation any obligation
to commence or threaten litigation with respect to such Rent Arrearages. In the
event any tenant of the Property owes any sum for percentage rent pursuant to
the provisions of such tenant's lease, Buyer shall be entitled to all such
percentage rent which accrues in the calendar year 2004 and which has not been
paid as of the Close of Escrow.
7.5.1.1 (A) Buyer shall compute and bill all tenants for all
"additional rent" and other amounts required to be paid under each tenant's
lease, including without limitation, common area maintenance expenses, real
estate taxes, insurance costs and operating expense pass-throughs (collectively,
the "ADDITIONAL RENTS") as the same become due after the Close of Escrow under
the terms of each tenant's lease. Except for the computing and billing of the
Additional Rents, if any, Buyer shall have no other obligations in connection
with the collection of Additional Rent.
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7.5.1.1(B) Seller and Buyer acknowledge that the tenants of
the Property pay estimated monthly payments for Additional Rent and that the
actual amount owed by each tenant for Additional Rent is determined annually by
way of a so-called "CAM Reconciliation", The CAM Reconciliation for the calendar
year 2004 will not be prepared until 2005 and the parties wish to waive any
accounting or adjustment which may result from the overpayment or underpayment
of Additional Rent by each tenant of the Property due to the estimated payments
paid by tenants during the calendar year 2004. Therefore, regardless of whether
tenants of the Property have a credit or debit resulting from the 2004 CAM
Reconciliation, Seller shall not be entitled to any portion of tenant balances
due for 2004 Additional Rent and Buyer shall not be entitled to a reimbursement
from Seller for any tenant credit balances of 2004 Additional Rent, regardless
of what amounts may be reflected on the 2004 CAM Reconciliation.
7.5.1.1(C) At the Closing, Seller shall provide an interim
statement of all CAM payments received by Seller under the Tenant Leases through
the date of Close of Escrow and a statement of all CAM expenses paid by Seller
through the date of Close of Escrow. In the event Seller's receipt of CAM
payments shall exceed the amount Seller has paid for CAM expenses, the amount of
such excess shall be credited to Buyer as of the Close of Escrow.
7.5.1.1(D) Accrued rent under the Restated Ground Lease.
7.5.1.2 Real estate taxes. If the real estate tax rate and
assessments on the several tax parcels on the Property have not been set for the
fiscal year in which the Closing Date occurs, then the proration of such taxes
shall be based upon the rate and assessments for the preceding tax year and such
proration shall be adjusted in cash between Seller and Buyer upon presentation
of written evidence that the actual taxes paid for the year in which the Closing
Date occurs, differ from the amounts used in the calculation at the Closing
Date.
7.5.1.3 Landlord has collected advance sums from certain tenants
of the Property which are earmarked by Landlord and such tenants as "reserves"
(the "RESERVES") for the payment of (i) roof replacement (but not roof
maintenance or repairs); (ii) parking lot resurfacing and restriping; and (iii)
painting of exterior walls of buildings and common areas of the Property (the
"CAPITAL CAM COSTS"). The actual amount of such Reserves shall be provided by
Seller and shall be transferred to Buyer as a credit to Buyer's account and a
debit to Seller's account at Close of Escrow. Buyer acknowledges that the
Reserves have been earmarked solely for payment of Capital CAM Costs and for no
other purpose.
7.5.1.4 Any and all installments currently due or assessments or
bonds encumbering the Property, as shown on the title commitment approved by
Buyer pursuant to Section 2.2.1.1.
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7.5.1.5 Charges under Service Contracts affecting the Property on
the Close of Escrow and utility charges and deposits relating to the Property,
including without limitation, electricity, gas, water and sewage charges, if
any.
7.5.2 SECURITY DEPOSITS. At the Close of Escrow, Seller shall credit
the Buyer's account by an amount equal to all security deposits (and all
interest thereon which is payable to the tenant pursuant to the terms of such
Tenant's Lease), which are payable to the tenants under the Tenant Leases in
effect on the Closing Date pursuant to the terms of such lease or applicable
law. Upon making such credit, Buyer will be deemed to have received all such
security deposits and interest thereon, if any, and shall be fully responsible
for the same as if a cash amount equal to such security deposits and interest
thereon were actually delivered to Buyer. Seller shall have no residual
liability to Buyer in the event any security deposit fully disclosed by the
terms of a Tenant's Lease is not properly credited to Buyer's account as of the
Close of Escrow.
7.5.3 SURVIVAL AFTER CLOSING. The provisions of this Section 7.5 shall
survive the Close of Escrow.
7.6 CLOSING COSTS. (A) Seller shall pay:
7.6.1 The premium for a standard CLTA Owner's form of Title Policy.
7.6.2 Documentary transfer taxes, document preparation charges
and acknowledgement and recording costs incurred or charged by Escrow Holder,
the Title Company or the county recorder.
7.6.3 One-half (1/2) of Escrow Holder's escrow fee, not to exceed
$500.00.
7.6.4 The cost of any Seller's other obligations under this
Agreement.
(B) Buyer shall pay:
7.6.5 Any additional premium for an ALTA form of Title Policy,
together with the cost of any ALTA survey.
7.6.6 One-half (1/2) of Escrow Holder's escrow fee, not to exceed
$500.00.
7.6.7 The cost of Buyer's other obligations under this Agreement.
7.7 ADDITIONAL CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE THE PROPERTY.
Buyer's obligation to purchase the Property from Seller pursuant to this
Agreement is subject to and conditioned upon the fulfillment of each and all of
the following conditions precedent, unless waived in writing by Buyer, in
Buyer's sole and absolute discretion. If any of the
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following conditions is not satisfied, Buyer may terminate this Agreement by
written notice to Seller prior to Close of Escrow, in which case the Deposit
shall be returned to Buyer (less one-half of any charges by the Escrow Holder)
and neither party shall have any further obligation or liability to the other
arising out of this Agreement (except that Buyer shall return copies of all
documents in the possession of Buyer relating to the Property):
7.7.1 Buyer shall not have terminated this Agreement pursuant to the
terms of this Agreement.
7.7.2 Each and all of the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
on the Closing Date and Seller shall have delivered the items described in
Section 7.4 hereof on or prior to the Closing Date; and
7.7.3 The Title Company shall be unconditionally obligated and
committed to issue to Buyer an ALTA Owner's Extended Coverage Policy, Form
1970B, without regional exceptions (together with all endorsements requested by
Buyer prior to the expiration of the Review Period) with liability in the full
amount of the Purchase Price, insuring title to the Property and the
Improvements as vested in Buyer (or Buyer's designated assignee), or nominee,
subject only to the Permitted Exceptions (the "TITLE POLICY").
7.7.4 Seller has performed all of Seller's obligations under this
Agreement.
7.7.5 Buyer shall have received the executed Estoppel Certificates in
accordance with Article 3 of this Agreement.
7.7.6 Buyer shall have received any approvals or documentation
required by the landlord of the Restated Ground Lease.
7.8 ADDITIONAL CONDITIONS TO SELLER'S OBLIGATION TO CONVEY THE PROPERTY.
Seller's obligation to convey the Restated Ground Lease and Wards/Target
Sublease to Buyer pursuant to this Agreement is subject to and conditioned upon
the fulfillment of each and all of the following conditions precedent, unless
waived in writing by Seller:
7.8.1 Buyer shall not have terminated this Agreement pursuant to
the terms of this Agreement.
7.8.2 Each and all of the representations and warranties of Buyer
contained in this Agreement shall be true and correct in all material respects
on the Closing Date; and
7.8.3 Buyer has performed all of Buyer's material obligations
under this Agreement.
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ARTICLE 8: REMEDIES
8.1 REMEDIES. If Seller defaults under this Agreement, then Buyer may, at
Buyer's option, bring an action to terminate the Escrow or seek equitable relief
by way of specific performance and the filing/recording of a lis pendens against
the Property. Except as provided in Section 8.3, Buyer shall not have the right
to seek monetary damages against Seller in the event Seller shall fail or refuse
to Close Escrow, unless such failure or refusal was willful and intentional. If
Buyer defaults under this Agreement, Seller's sole and exclusive remedy shall be
liquidated damages in accordance with Section 8.2 below.
8.2 LIQUIDATED DAMAGES. BUYER AND SELLER ACKNOWLEDGE AND AGREE THAT: (i) IT
WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO DETERMINE SELLER'S ACTUAL DAMAGES
IN THE EVENT OF BUYER'S DEFAULT UNDER THIS AGREEMENT, AND (ii) TAKING INTO
ACCOUNT ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, IN THE
EVENT THE CLOSE OF ESCROW DOES NOT OCCUR DUE TO BUYER'S DEFAULT UNDER THIS
AGREEMENT, SELLER'S SOLE AND EXCLUSIVE REMEDY SHALL BE TO TERMINATE THIS
AGREEMENT AND RECOVER THE SUM OF $1,000,000.00 FROM BUYER AS AND FOR LIQUIDATED
DAMAGES. BUYER SHALL HAVE NO OTHER OR FURTHER OBLIGATION OR LIABILITY UNDER THIS
AGREEMENT TO SELLER ON ACCOUNT OF SUCH DEFAULT OR BREACH. SELLER HEREBY WAIVES
THE BENEFIT OF CALIFORNIA CIVIL CODE SECTION 3389. THE PAYMENT OF SUCH AMOUNT AS
LIQUIDATED DAMAGES IS NOT EXTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING
OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671,
1676 AND 1677. SELLER AND BUYER EACH CONFIRM THEIR AGREEMENT TO THE FOREGOING BY
INITIALING IN THE SPACE PROVIDED BELOW.
/s/ [ILLEGIBLE] /s/ SS
- -------------- -------------
Seller Initial Buyer Initial
8.3 BUYER MONETARY DAMAGES. Notwithstanding anything in Section 8.1 to the
contrary, Buyer shall retain all rights and remedies at law and equity,
including without limitation the recovery of monetary damages and consequential
damages, arising out of any breach by Seller of any warranty or representation
set forth herein or arising from any Seller obligations under Article 10 hereof.
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ARTICLE 9: DAMAGE TO PROPERTY; EMINENT DOMAIN
9.1 ELECTION TO TERMINATE. If on or before the Close of Escrow either: (i)
all or any part of the Property is damaged or destroyed by fire or the elements
or by any other cause, and the cost to repair such damage is Fifty Thousand
Dollars ($50,000.00) or more, as reasonably determined in good faith by the
parties, or the damage results in the loss of any material parking or building
area or the right of any tenant to terminate its lease or abate rent, or (ii)
all or any part of the Property is taken or threatened to be taken by
condemnation or other power of eminent domain, Buyer may, by written notice
given to Seller and Escrow Holder, within ten (10) days after Buyer and Seller
have determined the cost to repair such damage in accordance with this Section
9.1 (and the Close of Escrow shall be extended if necessary to allow Buyer said
10-day period) elect, in Buyer's sole and absolute discretion, to terminate this
Agreement or proceed with the Close of Escrow in accordance with the terms and
conditions set forth in Section 9.2 below. If Buyer fails to deliver written
notice to Seller and Escrow Holder of its election to proceed with the
transaction within the foregoing 10-day period, then Seller shall provide Buyer
with one day prior written notice of Seller's termination of this Agreement and
if Buyer fails to respond within such one day period, this Agreement shall
terminate and be of no further force or effect. If Buyer elects to terminate
this Agreement, or Seller terminates this Agreement as provided in the preceding
sentence, the Deposit, if applicable, shall be promptly returned to Buyer (less
one-half of any Escrow Holder charges incurred to date) and neither Seller nor
Buyer shall have any further obligations or liability to the other arising out
of this Agreement (except that Buyer shall promptly return to Seller all
documents which were delivered to Buyer relating to the Property).
9.2 ELECTION NOT TO TERMINATE. If on or before the Close of Escrow any part
of the Property is damaged or destroyed but this Agreement is not cancelled by
Buyer pursuant to Section 9.1 above, then if such damage or destruction is
covered by insurance, then Buyer shall take the Property as diminished by such
damage or destruction and, on the Close of Escrow, Buyer shall pay the Purchase
Price, less a credit in the amount of the insurance deductible under such
insurance policies, and Seller shall assign, transfer and set over to Buyer, all
of Seller's right, title and interest in and to said policies' proceeds with
respect to the Property.
9.2.1 Notwithstanding Section 9.2, if such damage is uninsured or the
insurance coverage is insufficient to cover the entire loss, Buyer shall have
the right (i) to proceed to Closing but shall receive a credit against the
Purchase Price not to exceed $150,000.00 for such uninsured or under-insured
damage; or (ii) terminate this Agreement pursuant to Section 9.1 hereof;
provided, however, that if Buyer elects to terminate, for a period of five (5)
business days after receipt of Buyer's election to terminate, Seller shall have
the right, at Seller's sole election, to give written notice to Buyer that
Seller will further credit Buyer with the reasonably estimated total cost of
such uninsured damage (or the shortfall, if the insurance proceeds are
inadequate to pay for the entire casualty loss) and, in case of such Seller
election, Buyer shall proceed to Close Escrow and the Purchase Price shall not
otherwise be reduced or diminished.
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9.3 If on or before the Close of Escrow any part of the Property is taken
or threatened to be taken by condemnation or other power of eminent domain but
this Agreement is not cancelled by Buyer pursuant to Section 9.1 above, then
Buyer shall proceed to Close of Escrow and pay the entire Purchase Price without
reduction for any such taking or threatened taking; provided however that Seller
shall assign to Buyer all of Seller's right, title and interest in and to any
awards that may in the future be made for such taking or threatened taking. In
no event shall the Closing Date be delayed in order to await payment of any
condemnation award.
ARTICLE 10: EXISTING TENANT CONSTRUCTION; TENANT IMPROVEMENT ALLOWANCES; LEASING
COMMISSIONS; RENT RETENTION
10.1 WILD OATS MARKETS LEASE. As of the date of this Agreement, Seller is
in the process of building out space on the Property to be occupied by a new
tenant known as Wild Oats Markets, Inc. dba Henry's Marketplace (herein "WILD
OATS"). Seller anticipates that the completion of Seller's work obligations
under the Wild Oats lease will not be completed prior to Close of Escrow.
10.2 SELLER PERFORMANCE OF WILD OATS OBLIGATIONS. Notwithstanding that the
Close of Escrow shall occur prior to the completion of all Seller's work
required by the Wild Oats lease, Seller covenants and agrees to diligently
prosecute to completion all of Seller's work in the Wild Oats premises, pursuant
to the terms and conditions of the Wild Oats lease. All of Seller's obligations
with respect to completion of Seller's work in the Wild Oats premises shall be
at Seller's sole cost and expense and Buyer shall have no monetary obligations
with respect thereto.
10.2.1 If Seller has not completed all of Seller's work with respect
to the Wild Oats premises by the Close of Escrow, Seller shall cause Escrow to
deposit with BUILDERS CONTROL SERVICE CO., 7470 N. Figueroa Street, Los Angeles,
CA. 90041-1709, ph. 323/255-9989, fax 323/255-7461 ("BUILDERS CONTROL"), a sum
equal to 110% of the amount necessary to complete Seller's work obligations. The
actual amount shall be reasonably determined by Seller's general contractor,
HOFMANN-FINN CONSTRUCTION, 3188-A Airway Avenue, Costa Mesa, CA. 92626,
ph. 714/540-4433, fax 714/540-4848 ("SELLER'S GENERAL CONTRACTOR"). Builders
Control will control all payments to Seller's General Contractor by way of a
payment voucher system utilized by Builders Control. Payments shall be approved
by both Seller and Buyer upon request, which approval will not be unreasonably
withheld, delayed or conditioned.
10.2.2 Builders Control shall submit to Buyer for Buyer's review, the
following, on a periodic basis: (i) invoices or vouchers signed by Seller's
General Contractor; (ii) progress or final mechanic lien releases, conditioned
only upon full payment, signed by Seller's General Contractor and any
subcontractor who has provided a California preliminary notice with respect to
any of Seller's work at the Wild Oats premises;
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(iii) a payment application to Builders Control signed by Seller. If such
invoice or voucher is payment for work performed by Seller's General Contractor
for the Wild Oats premises, Buyer shall immediately approve such invoice/voucher
for payment (Buyer shall have not rights of disapproval).
10.2.3 Builders Control will make payments in the form of bank check
or bank draft only, to Seller's General Contractor, pursuant to the approved
invoice/voucher, during the progress of Seller's work on the Wild Oats premises.
Any excess funds remaining with Builders Control after payment of all
invoices/vouchers for Seller's work shall be refunded to Seller.
10.2.4 Pursuant to Section 1.6 of Exhibit "C" to the Wild Oats lease,
Wild Oats is required to reimburse Seller $200,000.00 as tenant's contribution
towards the cost of construction of the Premises (the "TENANT CONTRIBUTION").
Notwithstanding the Close of Escrow and transfer and assignment of the Wild Oats
lease to Buyer, Seller shall retain the right to payment of the Tenant
Contribution when such right accrues under the Wild Oats lease. Seller shall
have the right to recover the Tenant Contribution directly from Wild Oats (in
which event Buyer shall provide reasonable written confirmation to Wild Oats, if
requested), including such legal action as Seller may elect, at Seller's sole
cost and expense (except that Seller shall not have the right to initiate any
action to evict Wild Oats nor have the right to terminate the Wild Oats lease).
In the event Wild Oats remits payment of the Tenant Contribution to Buyer, Buyer
shall forthwith remit the full amount of the Tenant Contribution to Seller
without further notice or demand.
10.3 ACCESS TO WILD OATS PREMISES. For as long as necessary after Close of
Escrow, Buyer shall allow Seller full, complete and unfettered access to the
Wild Oats premises and any construction staging areas in the common area of the
Property being used by Seller as part of Seller's work in the Wild Oats
premises. Seller shall not be charged any fees or costs by Buyer while Seller is
prosecuting completion of Seller's work in the Wild Oats premises nor in the
event any so-called "pickup work" or "punch list" work is to be performed after
substantial completion of Seller's work.
10.4 INDEMNIFICATION OF BUYER. Seller covenants and agrees to complete all
of Seller's work in the Wild Oats premises in accordance with Seller's
obligations under the Wild Oats lease, including completion of any "pickup work"
or "punch list" work, and further covenants and agrees that Buyer shall not be
required to expend any sums for any work in the Wild Oats premises which was
originally part of Seller's work obligations under the Wild Oats lease. Seller
shall indemnify and hold Buyer harmless from and against all claims, demands,
damages and causes of action arising out of Seller's failure to satisfy Seller's
obligations to complete construction of the build-out of the Wild Oats premises
as required by the Wild Oats Lease. The foregoing indemnity shall include
defense of any legal action which may be brought by Wild Oats arising out of
Seller's work obligations in the Wild Oats premises. Seller shall defend such
action by counsel reasonably satisfactory to Buyer and shall pay all attorney's
fees, court costs, expert fees, and other costs and expenses which may be
incurred as a result of such legal action, including any damages award which may
result from such legal action. Seller shall not be responsible for payment
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of any of Buyer's attorney's fees, costs or expenses arising out of any
litigation involving Wild Oats unless Buyer has first tendered defense of such
action to Seller and Seller has failed or refused to enter a defense thereto by
counsel reasonably satisfactory to Buyer.
10.5 TERMINATION OF SELLER'S OBLIGATIONS. Upon Seller's satisfactory
completion of Seller's work obligations with respect to the Wild Oats premises,
Seller shall have no further obligations or liabilities with respect thereto,
including any obligation to indemnify or defend Buyer pursuant to Section 10.4
above. The term "satisfactory completion of Seller's work obligations" shall
mean the acceptance by Wild Oats of the Wild Oats premises, as provided in the
Wild Oats lease, and the completion of all "punch list" work required by Wild
Oats. From and after such acceptance, Seller shall have no obligations or
residual liability to Buyer with respect to any of Seller's work in the Wild
Oats premises and Buyer shall assume sole liability and responsibility therefor,
including any latent defects which may subsequently be disclosed. At Buyer's
request, Seller shall provide Buyer with an assignment of all warranties
provided by Seller's contractors and subcontractors who provided work in the
Wild Oats premises.
10.6 TENANT IMPROVEMENT ALLOWANCES.
(a) Seller has committed to pay the following tenants a contribution
towards the cost of such tenants' improvement work in their premises (the "TI
ALLOWANCES"). The TI Allowances, as set forth in each of the following tenants'
leases, are as follows;
<Table>
Mark Tang dba Big Island BBQ, 1323 S. Harbor Blvd. $ 10,000.00
Orange County Credit Union, 1469 S. Harbor Blvd. $ 17,000.00
First Bank & Trust, 1375 S. Harbor Blvd. $ 88,000.00
</Table>
(b) Seller shall either pay the TI Allowances prior to Close of
Escrow, if the obligation to pay has arisen under a tenant's lease, or Seller
shall deposit the unpaid TI Allowance with Escrow and instruct Escrow to pay
each TI Allowance as each tenant's right to payment accrues under its lease.
10.7 UNPAID LEASING COMMISSIONS. Seller shall pay outside of Escrow all
leasing commissions which are due but unpaid by Seller as of Close of Escrow.
Seller's leasing broker, PACIFIC RETAIL PARTNERS, shall provide Buyer with an
estoppel statement which shall state that Pacific Retail Partners agrees to look
solely to Seller for payment of all unpaid leasing commissions arising from
leasing activities at the Property and that Pacific Retail Partners shall not
look to Buyer, the Property or any of the tenants of the Property for all or any
part of such unpaid leasing commissions. Seller warrants and represents to Buyer
that Pacific Retail Partners is the only broker entitled to leasing commissions
arising from leasing activities at the Property.
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10.8 RENT RETENTION IN ESCROW. Seller agrees that Buyer is entitled to the
rental income stream which would be generated, as of the Close of Escrow,
pursuant to certain existing Tenant Leases whose obligation to commence payment
of monthly minimum or base rent and Common Area expenses ("UNACCRUED RENT") may
not yet have accrued as of Close of Escrow because such tenants are not
obligated under their leases to commence payment of Unaccrued Rent as of the
Close of Escrow. The Unaccrued Rent tenants and their respective monthly rent
and Common Area expenses are:
<Table>
<Caption>
Name of Tenant Base/Minimum Rent CAM Expenses Total/Month
- ----------------- -------------------- -------------- -------------
Wild Oats $ 39,540.00 $ 9,429.00 $ 48,969.00
Sylvan Learning Center $ 5,970.00 $ 1,350.00 $ 7,320.00
Tang-Big Island BBQ $ 2,616.00 $ 415.00 $ 3,031.00
-----------
Total $ 59,320.00
</Table>
In order to assure that Buyer will receive the equivalent of Unaccrued Rent
which would otherwise be payable as of Close of Escrow, the amount of
$ 160,000.00 ("UNACCRUED RENT AMOUNT") shall be retained in Escrow as of Close
of Escrow, subject to the following:
10.8.1 As of the Close of Escrow, Buyer shall be allowed to withdraw a
sum from Escrow equal to the Unaccrued Rent of all Unaccrued Rent Tenants which
has accrued since Close of Escrow plus the amount which would accrue in advance
for the calendar month following the month of Close of Escrow ("VACANT AND
UNACCRUED RENT DRAW"). The monthly Unaccrued Rent Draw shall continue on the
first day of each subsequent calendar month until each of the Unaccrued Rent
Tenants' obligation to pay rent and Common Area expenses shall have accrued
pursuant to each of their leases.
10.8.2 The Unaccrued Rent Draw shall be adjusted and reduced as each
Unaccrued Rent Tenant's obligation to pay rent accrues pursuant to their leases
[e.g., if Buyer has withdrawn the $6,000 as the full month's Unaccrued Rent for
an Unaccrued Rent Tenant, on the first day of a 30-day month, and that Unaccrued
Rent Tenant's obligation to commence payment of rent under its lease accrues on
the fifth day of the month of the Unaccrued Rent Draw, then Seller shall be
entitled to a credit against the next Buyer Unaccrued Rent Draw for 25 days or
5/6 of $6,000 = $5,000]. Effective the date that all Unaccrued Rent Tenants'
obligation to commence payment of rent under each of their respective leases
shall have accrued, Buyer shall cease any further Unaccrued Rent Draws from
Escrow and any balance remaining on account shall be returned to Seller.
10.8.3 Seller does not guarantee nor warrant the payment of any rents
or other lease charges by any tenants under their respective Tenant Leases and
no such warranty or guaranty shall be implied from the foregoing. Buyer shall be
solely responsible for the collection of all rents and other charges from tenant
under the Tenant Leases from and after Close of Escrow and Seller's obligations
under this Section 10.8 are limited to the Unaccrued Rent Amount set forth in
Section 10.8 above.
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10.9 RENT RETENTION FOR VACANT SPACE. Seller agrees that Buyer is entitled
to the rental income stream which would be generated, as of the Close of Escrow,
for the vacant space on the Property consisting of 7,400 sq.ft. and identified
as Space F01 in the offering memorandum (the "VACANT SPACE"). At the Close of
Escrow, the amount of $ 186,600.00 ("VACANT SPACE RENT AMOUNT") and the amount
of $ 70,000.00 (for allowances and commissions pursuant to Section 10.9.3) shall
be retained in Escrow and be subject to the following:
10.9.1 As of the Close of Escrow, Buyer shall be allowed to withdraw a
sum from Escrow equal to the minimum/base rent plus estimated CAM expenses and
other net lease charges which would otherwise accrue on the Vacant Space from
the Close of Escrow plus the amount which would accrue in advance for the
calendar month following the month of Close of Escrow ("VACANT SPACE RENT
DRAW"). The monthly Vacant Space Rent Draw shall be $11,717.00 for minimum/base
rent and $2,800.00 for estimated monthly CAM costs and all other net charges
which might accrue under a lease applicable to the Vacant Space. The monthly
Vacant Space Rent Draw shall continue on the first day of each subsequent
calendar month until the earlier of the following to occur: (i) a tenant has
opened for business in all or a part of the Vacant Space and rent shall commence
to accrue pursuant to a written lease for such Vacant Space; in the event tenant
paid rent for a period prior to first opening for business, Seller shall be
credited with all such previously paid rents; in the event of a partial leasing
of the Vacant Space, the monthly Vacant Space Rent Draw shall be decreased pro
rata; or (ii) Buyer has received a Vacant Space Rent Draw for a period of
twenty-four (24) months.
10.9.2 Buyer shall use good faith and commercially reasonable efforts
to lease each and every Vacant Space as soon as practicable, provided that the
prospective tenant shall be reasonably acceptable to Buyer and subject to
Buyer's standard leasing conditions. Any lease for Vacant Space shall not
provide for the tenant thereof to receive a period of free rent in excess of
sixty (60) days nor shall Buyer grant any lease concessions which are not
commercially reasonable and which would adversely impact the ability of the
Vacant Space Rent Draw to be reduced or eliminated.
10.9.3 If a lease of Vacant Space results in a broker leasing
commission and/or tenant improvement allowance payable by Buyer, Seller shall be
liable for the full amount thereof provided the same is commercially reasonable;
provided, however, that in no event shall Seller's liability for such
commission(s) and/or improvement allowances exceed $70,000.00 for the Vacant
Space.
10.9.4 In no event shall Seller's liability for the Vacant Space Rent
Draw exceed the sum of $186,600.00.
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ARTICLE 11: MISCELLANEOUS PROVISIONS
11.1 BROKERAGE COMMISSIONS. Seller hereby represents and warrants to Buyer
that Seller has not entered into any agreement with any broker, salesperson or
finder in connection with the transactions covered by this Agreement other than
a separate broker's agreement between Seller and Marcus & Millichap, 19800
MacArthur Blvd., Suite 150, Irvine, California, 91612-2429 (the "BROKER")which
provides for Seller to pay a brokerage commission to Broker at Close of Escrow
(the "BROKERAGE COMMISSION"), as provided by the terms and conditions of the
separate listing agreement between Seller and Broker. Seller shall be solely
responsible for the payment of the Brokerage Commission. Except for any
Brokerage Commission which may be owed by Seller to Broker, Buyer hereby
warrants and represents to Seller that Buyer has made no statement or
representation nor entered into any agreement with any broker, salesperson or
finder in connection with the transaction covered by this Agreement. In the
event of a claim for any broker's or finder's fees or commissions in connection
with the negotiation or execution of this Agreement or the transaction
contemplated hereby, Seller shall indemnify, hold harmless and defend Buyer from
and against such claim if such claim shall be based upon any agreement alleged
to have been made by Seller; and Buyer shall indemnify, hold harmless and defend
Seller from and against such claim if such claim shall be based upon any
agreement alleged to have been made by Buyer.
11.2 TAX DEFERRED EXCHANGE. Each party agrees, at the request of any other
party, to cooperate in a tax deferred exchange transaction for the benefit of
the other party, provided such participation shall be at no cost, liability or
expense to the accommodating party nor materially or adversely affect or delay
the Close of Escrow; provided that the party to whom the request is made shall
incur no additional liability or costs in connection therewith and said party
shall not have an obligation to actually take title to an exchange property.
11.3 NOTICES. Any notice, demand, approval, consent or other communication
required or desired to be given under this Agreement in writing shall be
directed to the party involved at the address indicated below:
SELLER ANATON ASSOCIATES
c/o Howard B. Jones
Jones Development Group
3636 Birch Street, Suite 200
Newport Beach, CA. 92660
PH 949/752-7300
FAX 949/852-8475
FAX 949/494-7510
with a copy to: Thomas Dobyns, Esq.
653 S. "B" Street, Suite 100
Tustin, CA. 92780
PH 714/838-5588
FAX 714/838-1632
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BUYER INLAND REAL ESTATE ACQUISITIONS, INC.
2901 Butterfield Road
Oak Brook, IL 60523
PH 630/218-4948
FAX 630/218-4935
with a copy to: Gary Pechter, Counsel
INLAND REAL ESTATE ACQUISITIONS, INC.
2901 Butterfield Road
Oak Brook, IL 60523
PH 630/645-2084
FAX 630/218-4900
ESCROW HOLDER FIRST AMERICAN TITLE COMPANY
Attn: Paula Podvin
30 North LaSalle Street, Suite 310
Chicago, IL 60602
PH 312/917-7258
FAX 630/799-8716
Any notice, demand, approval, consent or other communication may be given by
personal delivery, fax (with hard copy mailed regular mail the same day), or
nationally recognized overnight air courier and shall be deemed delivered on the
same day that it is personally delivered, transmitted by facsimile (provided the
hard copy is sent the same day and the receipt or the facsimile transmission is
confirmed by follow-up telephone call the same day) or sent by overnight courier
for next business morning delivery, provided the same is properly addressed and
all fees and charges are prepaid by the sender. Notices transmitted to Seller
via facsimile must be transmitted to BOTH facsimile numbers for Seller.
11.4 MODIFICATION. This Agreement may not be modified or amended except by
a written agreement executed by the party to be charged with such modification
or amendment.
11.5 ATTORNEY'S FEES. In the event any legal action is commenced to enforce
or interpret, or for breach of, any provision of this Agreement, or for fraud,
rescission or any other tort or equitable relief, the prevailing party shall be
entitled to recover from the losing party all costs and expenses (including
without Limitation reasonable attorney's fees) incurred by the prevailing party,
in addition to all other relief and remedies to which the prevailing party may
be entitled.
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11.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inur to the benefit of, the successors and assigns of the parties. Buyer may
assign its rights under this Agreement to any affiliate or subsidiary of
Columbus Pacific Properties but such assignment shall not act to release or
discharge Buyer from any of its obligations or liabilities hereunder.
11.7 DUPLICATE, COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in duplicate counterparts, all of which together shall constitute a
single instrument, and each of which shall be deemed an original of this
Agreement for all purposes, notwithstanding that less than all the signatures
appear on any one counterpart. Authorized signatures transmitted by facsimile
shall be deemed as effective as if original signatures on this Agreement.
11.8 WAIVER OF JURY TRIAL. In the event of any action or proceeding being
brought arising out of this Agreement, the parties agree to waive trial by jury
and submit all issues to a judge sitting as trier of fact.
11.9 SECTION HEADINGS. The various section headings in this Agreement are
inserted for convenience of reference only, and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
11.10 SURVIVAL OF CONTENTS. All agreements, conditions, acknowledgements,
representations and other obligations set forth in this Agreement shall survive
the Close of Escrow, and any doctrine that would hold that performance is deemed
completed upon the closing shall not apply to this Agreement because many
obligations under this Agreement are to be performed after Close of Escrow.
11.11 HOLIDAYS. When performance of an obligation or satisfaction of a
condition set forth in this Agreement is required on or by a date that is a
Saturday, Sunday or legal holiday, such performance or satisfaction shall
instead be required on or by the next business day following that Saturday,
Sunday or holiday, notwithstanding any other provisions of this Agreement. The
term "business days" means that Saturday, Sunday and legal holidays are not
included in computing the passage of tune.
11.12 EXHIBITS. Exhibits A through K are attached to and incorporated into
this Agreement by reference.
11.13 ENTIRE AGREEMENT. This Agreement is the entire agreement of Seller
and Buyer with respect to the Property and the transaction contemplated hereby,
containing all of the terms and conditions to which Seller and Buyer have
agreed. This Agreement
35
<Page>
supersedes and replaces entirely all previous oral and written understandings,
letter(s) of intent between Seller and Buyer respecting the Property and the
transaction contemplated hereby.
11.14 TIME. Time is of the essence in this Agreement and each and every
provision of this Agreement and the performance of each and every term,
covenant, condition and provision hereof.
11.15 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California. This Agreement is entered into at Orange County,
California, and performance of its terms are expressly provided to occur
thereat.
11.16 SEVERABILITY. If any paragraph, section, sentence, clause or phrase
contained in this Agreement becomes or is held by any court of competent
jurisdiction to be illegal, null or void or against public policy, the remaining
paragraphs, sections, sentences, clauses and phrases contained in this Agreement
shall not be affected thereby.
11.17 AMBIGUITIES NOT CONSTRUED AGAINST DRAFTING PARTY. The doctrine that
any ambiguity contained in a contract shall be construed against the party whose
counsel has drafted the contract is expressly waived by each of the parties
hereto since counsel for both Seller and Buyer are active participants in
drafting this Agreement.
11.18 PRESS RELEASES. Prior to Close of Escrow, neither party shall make
any public release regarding this transaction or any aspect thereof, and each
party shall cause its officers, directors, partners, principals, employees,
agents, brokers and representatives not to make any public release of
information regarding the matters described in this Agreement.
11.19 CONFIDENTIALITY. Prior to Close of Escrow, Buyer agrees to use its
highest and best efforts not to provide copies of the Due Diligence Documents or
any other documents provided to Buyer by Seller, to any third parties except as
required by law, approved by Seller in advance, or as is reasonably necessary
for review and approval during the Review Period. Buyer and Seller agree that
(except as required by law, approved by the other party, or as is reasonably
determined, in good faith, to be necessary by Buyer to complete its due
diligence process) neither party will disclose the Purchase Price or other terms
of this Agreement to any third person. Any confidentiality agreement previously
executed by Buyer is deemed superseded and replaced in its entirety by Section
11.18 and 11.19 hereof.
11.20 NOT AN OFFER. This Agreement does not constitute an offer by Seller
to sell the Property nor an offer by Buyer to purchase the Property but is
prepared solely for the purpose of negotiations between the parties. Either
party may terminate negotiations for the purchase and sale of the Property, with
or without cause, at any time prior to full
36
<Page>
execution and delivery of this Agreement. Only a fully executed and delivered
Agreement shall be a binding contract between the parties and the parties
expressly waive the right to rely upon the doctrine of promissory estoppel,
substantial performance, partial performance or any other doctrine or rule of
law as a substitute for the requirement that this Agreement shall only be
binding on the parties when fully executed and delivered.
11.21 FURTHER ASSURANCES. Each party hereto agrees to do all acts and
things and to make, execute and deliver such written instruments as shall be
reasonably necessary to carry out the terms and provisions of this Agreement.
This covenant of further assurances shall survive Closing.
11.22 BUSINESS DAYS. If any date herein set forth for the performance of
any obligations of Seller or Buyer or for the delivery of any instrument or
notice as herein provided should be on a Saturday, Sunday or legal holiday, the
compliance with such obligations or delivery shall be deemed acceptable on the
next business day following such Saturday, Sunday or legal holiday. As used
herein, the term "legal holiday" means any state or federal holiday for which
financial institutions or post offices are generally closed in the State where
the Property is located.
SIGNATURE PAGE FOLLOWS
37
<Page>
IN WITNESS WHEREOF, this Agreement is executed by the parties on the dates
set opposite their signatures below, but shall be deemed dated for reference
purposes as of the date first written above.
SELLER
Dated: 5/27/04 ANATON ASSOCIATES
----------------- A California limited partnership
By: /s/ Howard B. Jones
--------------------------------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: /s/ David M. Whitney
--------------------------------------
David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: /s/ Janet N. Whitney
--------------------------------------
Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: /s/ John W. Phelps
-----------------------------------
John W. Phelps II, General Partner
By: /s/ James S. Phelps
-----------------------------------
James S. Phelps, General Partner
BUYER
Dated: 5/20/04 INLAND REAL ESTATE ACQUISITIONS, INC.
----------------- An Illinois corporation
By: /s/ [ILLEGIBLE]
--------------------------------
Its: SR V.P.
-------------------------
By:
--------------------------------
Its:
-------------------------
38
<Page>
EXHIBIT A-1
PROPERTY SITE PLAN
(Recitals A)
<Page>
LUCESCU GROUP @ FULLERTON METROCENTER
MARCUS & MILLICHAP FULLERTON, CALIFORNIA
SITE PLAN
[FLOOR PLAN]
EXHIBIT "A"
<Page>
EXHIBIT A-2
PROPERTY SCHEMATIC
(Recitals B, Section 4.2.14)
<Page>
Sub-lease C
Sublease B (subleased to
(subleased to Anaton by CORNER PARCEL
Anaton by Target.
Target) (leased to Anaton
by Fullerton Metro
Center LLC)
TARGET PARCEL Sub-Lease E
(Owned by Phelps Trust & leased (subleased Sub-Lease D
to Target) to Anaton (subleased to
by Target) Anaton by Target)
(Six parcels[B-G have been
leased to Anaton) Sub-Lease F
(subleased Sub-Lease G
to Anaton (subleased to
by Target) Anaton by Target)
PARCEL 2
NOT INCLUDED (Leased to Anaton by Fullerton
Metro Center, LLC)
PARCEL 3
(Leased to Anaton by Fullerton
Metro Center, LLC)
<Page>
EXHIBIT B-1
LEGAL DESCRIPTIONS FOR
CORNER PARCEL, PARCEL 2 AND PARCEL 3
(Recitals B-1)
<Page>
PARCEL 2 DESCRIPTION
PARCEL 2 OF PARCEL MAP NO. 85-375, AS SHOWN ON A MAP FILED IN BOOK 220, PAGES 38
THROUGH 41 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
ORANGE COUNTY; CALIFORNIA.
PARCEL 3 DESCRIPTION
PARCEL 3 OF PARCEL MAP NO. 85-375, AS SHOWN ON A MAP FILED IN BOOK 220, PAGES
38 THROUGH 41 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OR
ORANGE COUNTY, CALIFORNIA.
CORNER PARCEL DESCRIPTION
THAT PORTION OF THE EAST HALF OF THE NORTHEAST QUARTER OF SECTION 4, TOWNSHIP 4
SOUTH, RANGE 10 WEST, IN THE RANCHO SAN JUAN CAJON DE SANTA ANA, AS SHOWN ON A
MAP RECORDED IN BOOK 51, PAGE 10 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE
COUNTY, CALIFORNIA DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHEAST CORNER OF SAID SECTION 4, SAID CORNER BEING THE
CENTERLINE INTERSECTION OF ORANGETHORPE AVENUE AND HARBOR BOULEVARD, AS SAID
INTERSECTION IS SHOWN ON A MAP FILED IN BOOK 220, PAGES 38 TO 40 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY; THENCE
SOUTH ALONG THE EAST LINE OF SAID SECTION A DISTANCE OF 305.00 FEET; THENCE
SOUTH 89 DEG. 52' 15" WEST PARALLEL WITH THE NORTH LINE OF SAID SECTION 4, A
DISTANCE OF 57.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH, PARALLEL
WITH SAID EAST LINE OF SAID SECTION, A DISTANCE OF 129.95 FEET TO THE BEGINNING
OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 174.75 FEET;
THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 15 DEG. 11' 21"
AN ARC DISTANCE OF 46.33 FEET TO THE BEGINNING OF A REVERSE CURVE CONCAVE
NORTHWESTERLY AND HAVING A RADIUS OF 168.75 FEET; THENCE NORTHWESTERLY ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 01 DEG. 12' 25" AN ARC DISTANCE OF 3.55
FEET TO A POINT IN THE WEST LINE OF SAID HARBOR BOULEVARD, SAID POINT BEING
50.00 FEET WESTERLY OF THE EAST LINE OF SAID SECTION 4; THENCE NORTH ALONG SAID
WEST LINE OF HARBOR BOULEVARD. A DISTANCE OF 45.78 FEET TO THE BEGINNING OF A
TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 27.00 FEET; THENCE
NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 90 DEG. 07' 45" AN ARC
DISTANCE OF 42.47 FEET TO A LINE PARALLEL WITH AND 53 FEET SOUTHERLY OF THE
NORTH LINE OF SAID SECTION 4; THENCE PARALLEL WITH AND 53.00 FEET SOUTH OF THE
NORTH LINE OF SAID SECTION 4; SOUTH 89 DEG. 52' 15" WEST 124.99 FEET TO THE
BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 365.50
FEET; THENCE WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 7 DEG. 20' 46"
AN ARC DISTANCE OF 46.86 FEET TO A POINT IN THE SOUTH LINE OF SAID ORANGETHORPE
AVENUE, SAID POINT BEING 50.00 FEET SOUTHERLY OF THE NORTH LINE OF SAID SECTION
4; THENCE PARALLEL WITH SAID NORTH LINE, SOUTH 89 DEG. 52' 15" WEST 161.21 FEET;
THENCE SOUTH, PARALLEL WITH THE EAST LINE OF SAID SECTION, A DISTANCE OF 255.00
FEET; THENCE PARALLEL WITH THE NORTH LINE OF SAID SECTION, NORTH 89 DEG. 52' 15"
EAST 353.00 FEET TO THE TRUE POINT OF BEGINNING.
<Page>
EXHIBIT B-2
LEGAL DESCRIPTIONS FOR SUBLEASE
PARCELS B THROUGH G
(Recitals C-1)
<Page>
SUBLEASE
PARCEL "B" LEGAL DESCRIPTION
IN THE CITY OF FULLERTON, COUNTY OF ORANGE, STATE OF CALIFORNIA, A PORTION OF
PARCEL 3, AS SHOWN ON MAP RECORDED IN BOOK 21, PAGE 7, OF PARCEL MAPS IN THE
OFFICE OF THE RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE CENTERLINE INTERSECTION OF HARBOR BOULEVARD AND ORANGETHORPE
AVENUE; THENCE S 89 DEG. 52' 15" W, ALONG SAID CENTERLINE OF ORANGETHORPE
AVENUE, 1021.82 FEET; THENCE S 00 DEG. 07' 45" E, 50.00 FEET, TO A POINT IN THE
SOUTHERLY RIGHT OF WAY OF SAID ORANGETHORPE AVENUE, SAID POINT BEING THE TRUE
POINT OF BEGINNING; THENCE S 00 DEG. 07' 45" E, 90.00 FEET; THENCE
N 89 DEG. 52' 15" E, 145.00 FEET; THENCE N 00 DEG. 07' 45" W, 90.00 FEET TO A
POINT IN THE SOUTHERLY RIGHT OF WAY OF SAID ORANGETHORPE AVENUE; THENCE S 89
DEG. 52' 15" W ALONG SAID SOUTHERLY RIGHT OF WAY; 145.00 FEET, TO THE TRUE
POINT OF BEGINNING.
[PARCEL "B" MAP]
<Page>
SUBLEASE
PARCEL "C" LEGAL DESCRIPTION
IN THE CITY OF FULLERTON, COUNTY OF ORANGE, STATE OF CALIFORNIA, A PORTION OF
PARCEL 3, AS SHOWN ON MAP RECORDED IN BOOK 21, PAGE 7, OF PARCEL MAPS IN THE
OFFICE OF THE RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE CENTERLINE INTERSECTION OF HARBOR BOULEVARD AND ORANGETHORPE
AVENUE; THENCE S 89 DEG. 52' 15" W, 578.65 FEET; THENCE S 00 DEG. 07' 45" E,
50.00', TO A POINT IN THE SOUTHERLY RIGHT OF WAY OF SAID ORANGETHORPE AVENUE,
SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE S 00 DEG. 07' 45" E, 150.00
FEET; THENCE N 89 DEG. 52' 15" E, 105.00 FEET; THENCE N 00 DEG. 07' 45" W,
150.00 FEET, TO A POINT IN THE SOUTHERLY RIGHT OF WAY OF SAID ORANGETHORPE
AVENUE; THENCE S 89 DEG. 52' 15" W, ALONG SAID SOUTHERLY RIGHT OF WAY OF
ORANGETHORPE, 105.00 FEET, TO THE TRUE POINT OF BEGINNING.
[PARCEL "C" MAP]
<Page>
SUBLEASE
PARCEL "D" LEGAL DESCRIPTION
IN THE CITY OF FULLERTON, COUNTY OF ORANGE, STATE OF CALIFORNIA, A PORTION OF
PARCEL 3, AS SHOWN ON MAP RECORDED IN BOOK 21, PAGE 7, OF PARCEL MAPS IN THE
OFFICE OF THE RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE CENTERLINE INTERSECTION OF HARBOR BOULEVARD AND ORANGETHORPE
AVENUE; THENCE SOUTH, ALONG THE CENTERLINE OF SAID HARBOR BOULEVARD, 521.49
FEET; THENCE WEST, 50.00 FEET, TO A POINT IN THE WESTERLY RIGHT OF WAY OF SAID
HARBOR BOULEVARD SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE WEST,
160.00 FEET; THENCE NORTH, 130.00 FEET; THENCE EAST, 160.00 FEET TO A POINT IN
SAID WESTERLY RIGHT OF WAY OF HARBOR BOULEVARD; THENCE SOUTH ALONG SAID WESTERLY
RIGHT OF WAY 130.00 FEET TO THE TRUE POINT OF BEGINNING.
[PARCEL "D" MAP]
<Page>
SUBLEASE
PARCEL "E" LEGAL DESCRIPTION
IN THE CITY OF FULLERTON, COUNTY OF ORANGE, STATE OF CALIFORNIA, A PORTION OF
PARCEL 3, AS SHOWN ON MAP RECORDED IN BOOK 21, PAGE 7, OF PARCE MAPS IN THE
OFFICE OF THE RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE CENTERLINE INTERSECTION OF HARBOR BOULEVARD AND ORANGETHORPE
AVENUE; THENCE S 89 DEG. 52' 15" W ALONG SAID CENTERLINE OF ORANGETHORPE AVENUE,
632.54 FEET; THENCE S 0 DEG. 07' 15" E, 298.50 FEET, TO THE NORTHEASTERLY CORNER
OF THE MONTGOMERY WARD AND COMPANY BUILDING; THENCE S 0 DEG. 07' 45" E ALONG THE
EASTERLY FACE OF SAID MONTGOMERY WARD AND COMPANY BUILDING 95.00 FEET TO THE
TRUE POINT OF BEGINNING; THENCE CONTINUING S 0 DEG. 07' 15" E ALONG SAID
EASTERLY FACE OF MONTGOMERY WARD AND COMPANY BUILDING 140.00 FEET; THENCE N 89
DEG. 52 15" E 143.00 FEET; THENCE N 0 DEG. 07' 45" W, 140.00 FEET; THENCE S 89
DEG. 52' 15" W, 143.00 FEET TO THE TRUE POINT OF BEGINNING.
[PARCEL "E" MAP]
<Page>
SUBLEASE
PARCEL "F"
IN THE CITY OF FULLERTON, COUNTY OF ORANGE, STATE OF CALIFORNIA, A PORTION OF
PARCEL 3, AS SHOWN ON MAP RECORDED IN BOOK 21, PAGE 7, OF PARCEL MAPS IN THE
OFFICE OF THE RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
COMMENCING AT THE CENTERLINE INTERSECTION OF HARBOR BOULEVARD AND ORANGETHORPE
AVENUE; THENCE S 89 DEG. 52' 15" W ALONG SAID CENTERLINE OF ORANGETHORPE AVENUE,
632.54 FEET; THENCE S 0 DEG. 07' 45" E, 298.50 FEET TO THE NORTHEASTERLY CORNER
OF MONTGOMERY WARD AND COMPANY BUILDING; THENCE S 0 DEG. 07' 45" E, ALONG THE
EASTERLY FACE OF SAID MONTGOMERY WARD AND COMPANY BUILDING, 268.00 FEET, TO THE
TRUE POINT OF BEGINNING; THENCE CONTINUING S 0 DEG. 07' 45" E ALONG SAID
EASTERLY FACE OF MONTGOMERY WARD AND COMPANY BUILDING, 176.27 FEET TO A POINT IN
THE SOUTH LINE OF SAID PARCEL 3; THENCE N 89 DEG. 52' 15" E ALONG SAID SOUTH
LINE OF PARCEL 3, 143.00 FEET; THENCE N 0 DEG. 07' 49" W, 176.27 FEET; THENCE S
89 DEG. 52' 15" W, 143.00 FEET TO THE TRUE POINT OF BEGINNING.
[PARCEL "F" MAP]
AMENDED PAGE 24 OF EXHIBIT "A" TO SUBLEASE
FIRST AMENDMENT TO SUBLEASE
<Page>
LEGAL DESCRIPTION
SUBLEASE
PARCEL "G"
A PORTION OF PARCEL 3, IN THE CITY OF FULLERTON, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS SHOWN ON MAP FILED IN BOOK 21, PAGE 7 OF PARCEL MAPS, RECORDS OF
SAID COUNTY, DESCRIBED AS FOLLOWS:
BEING THE NORTHERLY 175.00 FEET OF THE SOUTHERLY 183.00 FEET OF THE
EASTERLY 270.00 FEET OF SAID PARCEL 3 THEREOF.
CONTAINS 1.085 ACRES, MORE OR LESS AND IS SHOWN ON "SHEET 2 OF 2" ATTACHED
HERETO AND BY THIS REFERENCE MADE A PART HEREOF.
PLAT TO ACCOMPANY LEGAL DESCRIPTION FOR
SUBLEASE PARCEL "G"
[PARCEL "G" MAP]
PARCEL 2
PARCEL MAP NO. 85-375
P.M.B. 220/38-41
<Page>
EXHIBIT C-1
FORM OF ASSIGNMENT
(RESTATED GROUND LEASE)
(Sec. 7.3.2, 7.4.1)
<Page>
FULLERTON METROCENTER
EFFECTIVE DATE: ____________
ASSIGNMENT, ASSUMPTION AND CONSENT
(RESTATED GROUND LEASE)
This Assignment, Assumption and Consent is dated as of the Effective Date
set forth above, and entered into between FULLERTON METRO CENTER, LLC., a
California limited liability company, as Landlord, ANATON ASSOCIATES, a
California limited partnership, as Assignor, and ___________, as Assignee, with
respect to the following:
R E C I T A L S:
A. Assignor and Assignee entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions (the "Purchase Agreement") dated as May
_______, 2004, whereby Assignor sold and Assignee purchased that certain
shopping center commonly known as Fullerton Metrocenter (the "Property"), as
more particularly set forth in the Purchase Agreement.
B. Included in the purchase and sale of the Property was all of Assignor's
right, title and interest in that certain Restated Ground Lease dated as of
December 1, 2003 (the "RESTATED GROUND LEASE"), between Landlord and Assignor,
covering a portion of the Property commonly known as Parcel 2, Parcel 3 and the
Corner Parcel. The legal description of each of the foregoing Parcels is set
forth in Exhibit "A" attached hereto.
C. The Restated Ground Lease is memorialized by that certain Amended and
Restated Memorandum of Lease (the "MEMORANDUM OF LEASE") dated as of December
19, 2003, and recorded January 08, 2004, as instrument no. 2004000015508, in the
Official Records of Orange County, California.
D. Assignor desires to convey and transfer all of Assignor's right, title
and interest in the Restated Ground Lease and the Memorandum of Lease to
Assignee and Assignee desires to accept and assume such conveyance and transfer
and for that purpose enter into this agreement (the "ASSIGNMENT & ASSUMPTION").
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS HEREIN AND OTHER
VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES
AGREE AS FOLLOWS:
1
<Page>
1. ASSIGNMENT OF RESTATED GROUND LEASE. As of the Effective Date, Assignor
does hereby transfer, assign and set over to Assignee all of Assignor's right,
title and interest, as Tenant, under the Restated Ground Lease and under the
Memorandum of Lease.
2. ASSUMPTION OF RESTATED GROUND LEASE. As of the Effective Date, Assignee
does hereby accept the transfer and assignment of the Restated Ground Lease and
Memorandum of Lease and assumes and agrees to faithfully perform and to be bound
by all of the terms, covenants, conditions and provisions of the Restated Ground
Lease and Memorandum of Lease for the balance of the term thereof.
3. EFFECTIVE DATE. The Effective Date hereof is the date of Close of Escrow
whereby Assignee acquired the Property from Assignor, said date being set forth
above and inserted by Escrow as of the Close of Escrow.
4. DISCHARGE OF ASSIGNOR. As of the Effective Date, Assignor is released
and discharged from any and all liability, past, present and future, under the
Restated Ground Lease and the Memorandum of Lease.
5. CONSENT BY LANDLORD. Landlord hereby consents to the within assignment
and assumption of the Restated Ground Lease and Memorandum of Lease; provided,
however, that such consent shall not be construed to relieve Assignee of the
obligation to obtain the express written consent of Landlord, in advance, to any
further assignment, which consent will not be unreasonably withheld, conditioned
or delayed.
6. EXECUTION OF SHORT FORM MEMORANDUM. The parties agree to execute and
cause to be recorded a Memorandum of Assignment and Assumption of Lease in order
to memorialize the provisions hereof as a matter of public record.
7. COUNTERPARTS. Any executed copy of this Assignment & Assumption shall be
deemed an original for all purposes. This Assignment & Assumption may be
executed in one or more counterparts, each of which shall be an original, and
all of which together shall constitute a single instrument.
8. SUCCESSORS AND ASSIGNS. The covenants and agreements contained in this
Assignment & Assumption shall be binding upon and shall inure to the benefit of
the parties hereto and their respective valid, permitted heirs, successors and
assigns.
2
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment & Assumption
as evidenced by the authorized signatures below.
ASSIGNOR
ANATON ASSOCIATES,
A California limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: Dated:
------------------------------- -----------------
David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: Dated:
------------------------------- -----------------
Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: Dated:
------------------------- -----------------
John W. Phelps II, General Partner
By: Dated:
------------------------- -----------------
James S. Phelps, General Partner
3
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment & Assumption
as evidenced by the authorized signatures below.
ASSIGNEE
[INSERT NAME OF BUYER/ASSIGNEE]
By:
----------------------------
Its:
----------------------------
Dated:
-------------------------
4
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment & Assumption
as evidenced by the authorized signatures below.
LANDLORD
FULLERTON METRO CENTER, LLC
A Delaware limited liability company
By: "TRUST"
JOHN W. PHELPS II AND JAMES S. PHELPS
AS TRUSTEES OF THE TESTAMENTARY TRUST
CREATED BY THE LAST WILL AND TESTAMENT
OF JOHN WILSON PHELPS, DECEASED
By: Dated:
------------------------------- --------------------
John W. Phelps II, Trustee
By: Dated:
------------------------------- --------------------
James S. Phelps, Trustee
By: "FULLERHEIM"
FULLERHEIM PARTNERS, LTD.
A California limited partnership
By: Dated:
------------------------------- --------------------
John W. Phelps II, General Partner
By: Dated:
------------------------------- --------------------
James S. Phelps, General Partner
5
<Page>
EXHIBIT C-2
SHORT FORM MEMORANDUM OF ASSIGNMENT
(RESTATED GROUND LEASE)
(Sec. 7.3.2, 7.4.1)
<Page>
Recording Requested By:
After Recording Mail To:
MEMORANDUM OF ASSIGNMENT AND ASSUMPTION
OF RESTATED GROUND LEASE
THIS MEMORANDUM OF ASSIGNMENT AND ASSUMPTION OF RESTATED GROUND LEASE
("MEMORANDUM OF ASSIGNMENT") is made as of ___________, 2004, between Fullerton
Metro Center, LLC, a Delaware limited liability company, as Landlord, Anaton
Associates, a California limited partnership, as Assignor, and ___________ , as
Assignee, with reference to that certain Assignment, Assumption and Consent
(Restated Ground Lease) dated _________ between such parties (the "ASSIGNMENT &
ASSUMPTION").
A. This Memorandum of Assignment is intended to evidence of record the
assignment and assumption of the Restated Ground Lease, described and
memorialized in that certain Amended and Restated Memorandum of Lease (the
"EXISTING MEMORANDUM OF LEASE") dated as of December 19, 2003, and recorded
January 08, 2004, as instrument no. 2004000015508, in the Official Records of
Orange County, California.
B. The legal description of the property covered by the Existing Memorandum
of Lease is attached hereto as Exhibit "A".
In addition, this Memorandum of Assignment shall provide third parties with
constructive notice of the following with respect to the Restated Ground Lease.
1. The Restated Ground Lease has been transferred and assigned from
Assignor to Assignee and Assignee has assumed and agreed to be bound by all the
terms, covenants, conditions and provisions of the Restated Ground Lease.
2. The Landlord of the Restated Ground Lease has consented to the
assignment and assumption thereof on the terms and conditions set forth in the
Assignment and Assumption.
This Memorandum of Assignment may be executed in counterparts which
together shall constitute but one and the same original.
This Memorandum of Assignment is prepared for the purpose of recordation
and in no way modifies the provisions of the Assignment & Assumption.
1
<Page>
IN WITNESS WHEREOF, the parties have executed this Memorandum of Assignment
and Assumption of Restated Ground Lease as evidenced by the authorized
signatures below.
ASSIGNOR
ANATON ASSOCIATES,
A California limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: Dated:
------------------------------- -----------------
David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: Dated:
------------------------------- -----------------
Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: Dated:
------------------------- -----------------
John W. Phelps II, General Partner
By: Dated:
------------------------- -----------------
James S. Phelps, General Partner
2
<Page>
IN WITNESS WHEREOF, the parties have executed this Memorandum of Assignment
and Assumption of Restated Ground Lease as evidenced by the authorized
signatures below.
ASSIGNEE
[INSERT NAME OF BUYER/ASSIGNEE]
By:
----------------------------
Title:
-------------------------
Dated:
-------------------------
3
<Page>
IN WITNESS WHEREOF, the parties have executed this Memorandum of Assignment
and Assumption of Restated Ground Lease as evidenced by the authorized
signatures below.
LANDLORD
FULLERTON METRO CENTER, LLC
A Delaware limited liability company
By: "TRUST"
JOHN W. PHELPS II AND JAMES S. PHELPS
AS TRUSTEES OF THE TESTAMENTARY TRUST
CREATED BY THE LAST WILL AND TESTAMENT
OF JOHN WILSON PHELPS, DECEASED
By: Dated:
------------------------------- --------------------
John W. Phelps II, Trustee
By: Dated:
------------------------------- --------------------
James S. Phelps, Trustee
By: "FULLERHEIM"
FULLERHEIM PARTNERS, LTD.
A California limited partnership
By: Dated:
------------------------------- --------------------
John W. Phelps II, General Partner
By: Dated:
------------------------------- --------------------
James S. Phelps, General Partner
4
<Page>
EXHIBIT D-1
FORM OF ASSIGNMENT
(WARDS/TARGET SUBLEASE)
(Sec. 7.3.2; 7.4.1)
<Page>
FULLERTON METROCENTER
EFFECTIVE DATE: _____________
ASSIGNMENT AND ASSUMPTION OF
WARDS/TARGET SUBLEASE
This Assignment and Assumption is dated as of the Effective Date set forth
above, and entered into between ANATON ASSOCIATES, a California limited
partnership, as Assignor, and ____________, as Assignee, with respect to the
following:
R E C I T A L S:
A. Assignor and Assignee entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions (the "Purchase Agreement") dated as May
____, 2004, whereby Assignor sold and Assignee purchased that certain shopping
center commonly known as Fullerton Metrocenter (the "Property"), as more
particularly set forth in the Purchase Agreement.
B. Included in the purchase and sale of the Property was all of Assignor's
right, title and interest in that certain sublease between Assignor, as
Sub-Tenant, and Montgomery Ward & Co., Incorporated ("WARDS"), as Sub-Landlord,
dated as of September 12, 1986 (the "WARDS/TARGET SUBLEASE"), covering a portion
of the Property commonly known as Sublease Parcel 'B', Sublease Parcel
'C', Sublease Parcel 'D', Sublease Parcel 'E', Sublease Parcel 'F' and Sublease
Parcel 'G', all as more particularly described therein. The legal descriptions
of each of the foregoing Sublease Parcels are set forth in Exhibit "A" attached
hereto.
C. The Wards/Target Sublease has been modified by a "First Amendment to
Sublease" dated April 9,1987, and by that certain "Fourth Amendment to Lease and
Second Amendment to Sublease" dated as of December 21, 2001 (collectively the
"WARDS/TARGET SUBLEASE AMENDMENTS"). By virtue of the Wards/Target Sublease
Amendments, Target Corporation ("TARGET") assumed the position of Wards as
Sub-Landlord under the Wards/Target Sublease.
D. The Wards/Target Sublease has been further supplemented, modified and
memorialized by the following: (i) a Memorandum of Sublease dated as of
September 12, 1986, and recorded May 15,1987, as Instrument No. 87-274838, in
the Official Records of Orange County; (ii) a First Amendment to Memorandum of
Sublease dated as of April 9, 1987, and recorded November 17, 1987, as
Instrument No, 87-646472, Official Records of Orange County; (iii) a
Supplemental Agreement Pertaining to Sublease and Memorandum of Sublease dated
as of November 17,1987, and recorded February 24,1988, as Instrument No.
88-080160, Official Records of Orange County; and (iv) the incorrectly entitled
"First
1
<Page>
[should read "Second"] Amendment to Memorandum of Sublease" dated as of
September 21, 2001, and recorded February 11, 2002, as Instrument No.
20020120386, Official Records of Orange County (all of the foregoing being
collectively the "WARDS/TARGET RECORDED DOCUMENTS").
E. For purposes hereof, reference to the Wards/Target Sublease shall
include the Wards/Target Sublease Amendments and the Wards/Target Recorded
Documents.
F. Assignor desires to convey and transfer all of Assignor's right, title
and interest in the Wards/Target Sublease to Assignee and Assignee desires to
accept and assume such conveyance and transfer and for that purpose enter into
this agreement (the "ASSIGNMENT & ASSUMPTION").
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS HEREIN AND OTHER
VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES
AGREE AS FOLLOWS:
1. ASSIGNMENT OF WARDS/TARGET SUBLEASE. As of the Effective Date, Assignor
does hereby transfer, assign and set over to Assignee all of Assignor's right,
title and interest, as Sub-Tenant, under the Wards/Target Sublease.
2. ASSUMPTION OF WARDS/TARGET SUBLEASE. As of the Effective Date, Assignee
does hereby accept the transfer and assignment of the Wards/Target Sublease and
assumes and agrees to faithfully perform and to be bound by all of the terms,
covenants, conditions and provisions of the Wards/Target Sublease for the
balance of the term thereof.
3. EFFECTIVE DATE. The Effective Date hereof is the date of Close of Escrow
whereby Assignee acquired the Property from Assignor, said date being set forth
above and inserted by Escrow as of the Close of Escrow.
4. CONSENT BY SUB-LANDLORD. Pursuant to Section 13.2 of the Wards/Target
Sublease, the consent of Sub-Landlord to this Assignment & Assumption is neither
necessary or required.
5. EXECUTION OF SHORT FORM MEMORANDUM. The parties agree to execute and
cause to be recorded a Memorandum of Assignment and Assumption of Wards/Target
Sublease in order to memorialize the provisions hereof as a matter of public
record.
6. COUNTERPARTS. Any executed copy of this Assignment & Assumption shall be
deemed an original for all purposes. This Assignment & Assumption may be
executed in one or more counterparts, each of which shall be an original, and
all of which together shall constitute a single instrument.
7. SUCCESSORS AND ASSIGNS. The covenants and agreements contained in this
Assignment & Assumption shall be binding upon and shall inure to the benefit of
the parties hereto and their respective valid, permitted heirs, successors and
assigns.
2
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment & Assumption
as evidenced by the authorized signatures below.
ASSIGNOR
ANATON ASSOCIATES,
A California limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: Dated:
------------------------------- -----------------
David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: Dated:
------------------------------- -----------------
Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: Dated:
------------------------- -----------------
John W. Phelps II, General Partner
By: Dated:
------------------------- -----------------
James S. Phelps, General Partner
3
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment & Assumption
as evidenced by the authorized signatures below.
ASSIGNEE
[INSERT NAME OF BUYER/ASSIGNEE]
By:
----------------------------
Its:
----------------------------
Dated:
-------------------------
4
<Page>
EXHIBIT D-2
SHORT FORM MEMORANDUM OF ASSIGNMENT
(WARDS/TARGET SUBLEASE)
(Sec. 7.3.2; 7.4.1)
<Page>
Recording Requested By:
After Recording Mail To:
MEMORANDUM OF ASSIGNMENT AND ASSUMPTION
OF WARDS/TARGET SUBLEASE
THIS MEMORANDUM OF ASSIGNMENT AND ASSUMPTION OF WARDS/TARGET SUBLEASE
("MEMORANDUM OF ASSIGNMENT") is made as of __________________, 2004, between
ANATON ASSOCIATES, a California limited partnership, as Assignor, and
______________, as Assignee, with reference to that certain Assignment and
Assumption of Wards/Target Sublease dated _______________ between such parties
(the "ASSIGNMENT & ASSUMPTION").
A. This Memorandum of Assignment is intended to evidence of record the
assignment and assumption of the Wards/Target Sublease, described and
memorialized in the following:
(i) the Memorandum of Sublease dated as of September 12, 1986, and
recorded May 15, 1987, as Instrument No. 87-274838, in the Official Records of
Orange County, California.
(ii) the First Amendment to Memorandum of Sublease dated as of April
9, 1987, and recorded November 17, 1987, as Instrument No. 87-646472, in the
Official Records of Orange County, California.
(iii) the Supplemental Agreement Pertaining to Sublease and Memorandum
of Sublease dated as of November 17,1987, and recorded February 24, 1988, as
Instrument No. 88-080160, in the Official Records of Orange County, California.
(iv) the incorrectly entitled First [should read "Second"] Amendment
to Memorandum of Sublease dated as of September 21, 2001, and recorded February
11, 2002, as Instrument No. 20020120386, in the Official Records of Orange
County, California.
B. The legal description of the property covered by the Wards/Target
Sublease is attached hereto as Exhibit "A".
1
<Page>
In addition, this Memorandum of Assignment shall provide third parties with
constructive notice of the following with respect to the Wards/Target Sublease:
1. The Wards/Target Sublease has been transferred and assigned from
Assignor to Assignee and Assignee has assumed and agreed to be bound by all the
terms, covenants, conditions and provisions of the Wards/Target Sublease for
the balance of the term thereof.
This Memorandum of Assignment may be executed in counterparts which
together shall constitute but one and the same original.
This Memorandum of Assignment is prepared for the purpose of recordation
and in no way modifies the provisions of the Assignment & Assumption.
SIGNATURE PAGES FOLLOW
2
<Page>
IN WITNESS WHEREOF, the parties have executed this Memorandum of Assignment
and Assumption of the Wards/Target Sublease as evidenced by the authorized
signatures below.
ASSIGNOR
ANATON ASSOCIATES,
A California limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: Dated:
------------------------------- -----------------
David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: Dated:
------------------------------- -----------------
Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: Dated:
------------------------- -----------------
John W. Phelps II, General Partner
By: Dated:
------------------------- -----------------
James S. Phelps, General Partner
3
<Page>
IN WITNESS WHEREOF, the parties have executed this Memorandum of Assignment
and Assumption of the Wards/Target Sublease as evidenced by the authorized
signatures below.
ASSIGNEE
[INSERT NAME OF BUYER/ASSIGNEE]
By:
----------------------------
Its:
----------------------------
Dated:
-------------------------
4
<Page>
EXHIBIT E-1
LEASEHOLD ESTOPPEL CERTIFICATE
(RESTATED GROUND LEASE)
(Sec. 3.2)
<Page>
LEASEHOLD ESTOPPEL CERTIFICATE
(AMENDED AND RESTATED GROUND LEASE)
TO: _______________________
_______________________
_______________________
Re: Amended and Restated Ground Lease dated December 1, 2003 (the "RESTATED
GROUND LEASE" "), and Amended and Restated Memorandum of Lease (the "RESTATED
GROUND LEASE MEMORANDUM") between FULLERTON METRO CENTER, LLC, a Delaware
limited liability company, as LANDLORD, and ANATON ASSOCIATES, a California
limited partnership, as TENANT, for the premises known as Parcel 2, Parcel 3,
and Corner Parcel (the "PREMISES"), located at Fullerton Metrocenter (the
"SHOPPING CENTER").
Be it known:
The undersigned Landlord and Tenant have been requested to confirm certain facts
with respect to the Restated Ground Lease and Restated Ground Lease Memorandum
as true and correct. These facts will be relied upon by a prospective purchaser
of the captioned Shopping Center or a prospective lender or mortgagee in making
a loan for which the Shopping Center will be security. With that understanding
and intention that you will rely on the information herein, the undersigned
confirm the following:
1. Tenant is in possession of the Premises described in the Restated Ground
Lease and Restated Ground Lease Memorandum.
2. There is no work required to be done by Landlord with respect to the
Premises or the Restated Ground Lease and Restated Ground Lease Memorandum.
3. The commencement date of the Lease was DECEMBER 01, 2003.
4. The initial term expires on DECEMBER 31, 2050.
5. There are no options to renew or extend the lease term.
6. The Lease is in full force and effect.
1
<Page>
7. A true and correct copy of the Restated Ground Lease and Restated Ground
Lease Memorandum are attached hereto. There are no other amendments,
modifications, supplements or extensions of the Restated Ground Lease or
Restated Ground Lease Memorandum, written or oral.
8. No rent under the Lease has been paid more than thirty (30) days in
advance of the due date. Tenant is currently paying Fixed Rent under the
Restated Ground Lease in the sum of $34,584.00 per month.
9. There is no Security Deposit paid to or being held by Landlord under the
Restated Ground Lease.
10. To the best of Tenant's knowledge, Landlord is not presently in default
under any of the terms, conditions or provisions of the Restated Ground Lease
and Tenant has not given Landlord a notice of default under the Restated Ground
Lease.
11. To the best of Landlord's knowledge, Tenant is not presently in default
under any of the terms, conditions or provisions of the Restated Ground Lease
and Landlord has not given Tenant a notice of default under the Restated Ground
Lease.
The undersigned certify that the foregoing is true and correct.
SIGNATURE PAGES FOLLOW
2
<Page>
LANDLORD
FULLERTON METRO CENTER, LLC
A Delaware limited liability company
By: "TRUST"
JOHN W. PHELPS II AND JAMES S. PHELPS
AS TRUSTEES OF THE TESTAMENTARY TRUST
CREATED BY THE LAST WILL AND TESTAMENT
OF JOHN WILSON PHELPS, DECEASED
By: Dated:
------------------------------- --------------------
John W. Phelps II, Trustee
By: Dated:
------------------------------- --------------------
James S. Phelps, Trustee
By: "FULLERHEIM"
FULLERHEIM PARTNERS, LTD.
A California limited partnership
By: Dated:
------------------------------- --------------------
John W. Phelps II, General Partner
By: Dated:
------------------------------- --------------------
James S. Phelps, General Partner
3
<Page>
TENANT
ANATON ASSOCIATES
A California limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones III, Trustee of the
Revocable Trust dtd 12/2/82, GENERAL PARTNER
By: Dated:
------------------------------- -----------------
David M. Whitney, Co-Trustee of the
Whitney Trust U/D/T dtd 6/17/91, GENERAL PARTNER
By: Dated:
------------------------------- -----------------
Janet N. Whitney, Co-Trustee of the
Whitney Trust U/D/T dtd 6/17/91, GENERAL PARTNER
By: FULLERHEIM PARTNERS
A California limited partnership, GENERAL PARTNER
By: Dated:
------------------------- -----------------
John W. Phelps II, General Partner
By: Dated:
------------------------- -----------------
James S. Phelps, General Partner
4
<Page>
EXHIBIT E-2
LEASEHOLD ESTOPPEL CERTIFICATE
(WARDS/TARGET/PHELPS LEASE)
(Sec. 3.2)
<Page>
LEASEHOLD ESTOPPEL CERTIFICATE
(WARDS/TARGET/PHELPS LEASE)
TO: __________________________
__________________________
__________________________
Re: Lease between The John Wilson Phelps Testamentary Trust, as Lessor, and the
former Montgomery Ward & Co., Incorporated (herein "Wards"), as Lessee, dated as
of May 1, 1964, and recorded October 16, 1964, as Instrument No. 14867, Book
7262, Page 621, Official Records of Orange County, California (herein the
"Wards/Target/Phelps Lease").
The Wards/Target/Phelps Lease includes the written Addendum to Lease dated
January 15, 1965, recorded February 5, 1965, as Instrument No. 5049 in Book
7405, Page 530, Official Records of Orange County, California (the "First
Amendment"), the written Addendum to Lease dated August 25, 1965, recorded
September 10, 1965, as Instrument No. 7394, in Book 7661, Page 701,' Official
Records of Orange County, California, then re-recorded November 8, 1965, as
Instrument No. 6463, in Book 7733, page 71, Official Records of Orange County,
California (herein the "Second Amendment"), the Addendum dated September 30,
1966, recorded November 28, 1966, as Instrument No. 14503, in Book 8113, Page
155, Official Records of Orange County, California (herein the "Third
Amendment"), and the unrecorded Fourth Amendment to Lease and Second Amendment
to Sublease dated December 21, 2001 (the "Fourth Amendment"). The term
"Wards/Target/Phelps Lease" includes all the foregoing written amendments.
Be it known:
The undersigned is Lessor under the Wards/Target/Phelps Lease. The undersigned
has been requested to confirm certain facts with respect to the
Wards/Target/Phelps Lease as true and correct. These facts will be relied upon
by a prospective purchaser of the Fullerton Metrocenter (the "SHOPPING CENTER ")
or a prospective lender or mortgagee in making a loan for which the Shopping
Center will be security. With that understanding and intention that you will
rely on the information herein, the undersigned confirm the following:
1. The Wards/Target/Phelps Lease is in full force and effect.
2. The current Lessee under the Wards/Target/Phelps Lease is Target
Corporation which is in possession of the premises under the Wards/Target/Phelps
Lease.
1
<Page>
3. The term of the Wards/Target/Phelps Lease expires on August 31, 2026,
and Lessee has two five (5) year options to extend the lease term.
4. The Wards/Target/Phelps Lease is not included with the sale of the
Shopping Center.
5. To the best of Lessor's knowledge, neither Lessor nor Lessee is in
default under any of the terms, conditions or provisions of the
Wards/Target/Phelps Lease, Lessor has not given to Lessee nor has Lessor
received from Lessee a notice of default under the Wards/Target/Phelps Lease.
The undersigned certify that the foregoing is true and correct.
LESSOR
JOHN W. PHELPS II AND JAMES S. PHELPS
AS TRUSTEES OF THE TESTAMENTARY TRUST
CREATED BY THE LAST WILL AND TESTAMENT
OF JOHN WILSON PHELPS, DECEASED
By: Dated:
------------------------------- -----------------
John W. Phelps II, Trustee
By: Dated:
------------------------------- -----------------
James S. Phelps, Trustee
2
<Page>
EXHIBIT E-3
LEASEHOLD ESTOPPEL CERTIFICATE
(FOR TARGET CORPORATION FOR THE
WARDS/TARGET SUBLEASE)
(Sec. 3.2)
<Page>
LEASEHOLD ESTOPPEL CERTIFICATE
(WARDS/TARGET SUBLEASE WITH ANATON)
TO: _________________________
_________________________
_________________________
Re: Sublease between TARGET CORPORATION ("TARGET"), as successor-in-interest to
the former Montgomery Ward & Co., Incorporated, as Sub-Landlord, and ANATON
ASSOCIATES ("ANATON"), as Sub-Tenant, dated as of September 12, 1986, as
subsequently amended and memorialized by a Memorandum dated September 12, 1986,
recorded May 15, 1987, as Instrument No. 87-274838, Official Records of Orange
County, California, and by a First Amendment to Sublease dated April 9, 1987,
and recorded November 17, 1987, as Instrument No. 87-646472, Official Records of
Orange County, California, and by that certain Supplemental Agreement pertaining
to Sublease and Memorandum of Sublease dated November 17, 1987, and recorded
February 24, 1998, as Instrument No. 88-080160, Official Records of Orange
County, California, and by that certain unrecorded Fourth Amendment to Lease and
Second Amendment to Sublease dated as of December 21, 2001 (collectively the
"WARDS/TARGET SUBLEASE"), covering certain premises commonly known as Sublease
Parcel 'B', Sublease Parcel 'C', Sublease Parcel 'D', Sublease Parcel 'E',
Sublease Parcel 'F' and Sublease Parcel 'G' (collectively the "SUBLEASE
PARCELS"), being a portion of the shopping center known as Fullerton
Metrocenter, Fullerton, California (the "SHOPPING CENTER").
Be it known:
The undersigned Sub-Landlord has been requested to confirm certain facts with
respect to the Wards/Target Sublease as true and correct. These facts will be
relied upon by a prospective purchaser of the captioned Shopping Center or a
prospective lender or mortgagee in making a loan for which the Shopping Center
will be security. With that understanding and intention that you will rely on
the information herein, the undersigned confirm the following:
1. The Wards/Target Sublease is in full force and effect.
2. To the best of Target's knowledge, Anaton is not presently in default
beyond any applicable cure period under any of the terms, conditions or
provisions of the Wards/Target Sublease and Target has not given Anaton a notice
of default under the Wards/Target Sublease which has not been cured by Anaton.
1
<Page>
3. To the best of Target's knowledge, Target is not in default beyond any
applicable cure period under any of the terms, conditions or provisions of the
Wards/Target Sublease and Target has not received from Anaton a notice of
default under the Wards/Target Sublease which has not been cured by Target.
The undersigned certify that the foregoing is true and correct.
DATED:
-------------------
SUB-LANDLORD
TARGET CORPORATION
A Minnesota Corporation
By:
----------------------------
Title:
----------------------------
2
<Page>
EXHIBIT F
FORM OF ESTOPPEL CERTIFICATE
(Sec. 3.1)
<Page>
TENANT ESTOPPEL CERTIFICATE
[INSTRUCTIONS TO TENANT: Please complete this form by filling in the missing
information in the blanks. If the information requested is not applicable in
your case, please write "N/A" in the blank. Thank you for your cooperation]
TO: _____________________
_____________________
_____________________
Re: Lease dated ____________ (the "LEASE""), between ANATON ASSOCIATES, as
LANDLORD, and __________________, as TENANT, for the premises located at
Fullerton Metrocenter (the "SHOPPING CENTER"), having a street address of
_________________, Fullerton, California (the "PREMISES").
Be it known:
The undersigned, as the captioned Tenant, has been requested to confirm certain
information in the Lease as true and correct. This information will be relied
upon by a prospective purchaser of the captioned Shopping Center or a
prospective lender or mortgagee in making a loan for which the Shopping Center
will be security. With that understanding and intention that you will rely on
the information in this Certificate, the undersigned confirms the following:
1. Tenant has accepted possession of the Premises described in the Lease
and Tenant has opened for business in the Premises.
2. All work required to be performed by Landlord under the Lease, if any,
has been completed in a satisfactory manner.
3. The commencement date of the Lease was ________________.
4. The initial Lease term expires on _________________.
5. The Lease gives Tenant ____________ options to extend the term of the
Lease for a period of _____ years each.
6. Tenant has not given Landlord any written or oral notice that Tenant
intends to vacate the Premises, in whole or in part, except: ________________
(if "NONE", so state).
<Page>
7. The Lease is in full force and effect.
8. A true and correct copy of the Lease and all amendments to the Lease are
attached to this Estoppel Certificate. There are no other amendments,
modifications, supplements or extensions of the Lease, written or oral.
9. Except as set forth below, no rent under the Lease has been paid more
than thirty (30) days in advance of the due date. Tenant is currently paying the
following amounts each month under the Lease:
(a) Minimum/Base Rent of $ ____________ per month which has been paid
through the month of _____________, 2004.
(b) Estimated Common Area Maintenance ("CAM") expenses in the
estimated monthly amount of $ _________________. This monthly sum includes
Tenant's pro rata share for real estate taxes and Landlord's insurance premiums.
10. Tenant has a Security Deposit under the Lease in the amount of $ _____.
11. The total square footage of the Premises is accurately set forth in the
Lease.
12. To the best of Tenant's knowledge, Landlord is not presently in default
under any of the terms, conditions or provisions of the Lease and Tenant has not
given Landlord a notice of default, except as follows: _________________________
________________________________________________________________________________
_____________________________________. (if "NONE", so state).
DATED:
---------------------
[INSERT TENANT NAME]
By:
---------------------------
Print Name:
---------------------
Its:
--------------------------
Print Title
<Page>
EXHIBIT G
TENANT LEASES
(Recital F, Sec. 4.2.15)
<Page>
FULLERTON METROCENTER
<Table>
<Caption>
POSSESSION DELINQUENT
TENANT SPACE SECURITY DEPOSIT Y/N Y/N
- ---------------------------------------------------------------------------------------------------------------------
Adelphia Communications Corp N01 $ 3,257.00 Y N
AT&T E03 $ 4,433.00 Y N
Avenue E01/02 $ 0.00 Y N
Bank of America Kiosk $ 0.00 Y N
Baskin Robbins G01 $ 2,885.00 Y N
Beauty Avenue J03 $ 8,553.00 Y N
Beneficial Finance P07 $ 0.00 Y N
Bennigan's Pad K $ 0.00 N N
Big Island BBQ H12 $ 2,616.00 Y N
Burger King Pad D $ 0.00 Y N
Brite Dental N03/04 $ 3,450.00 Y N
Cheap Tickets, Inc. H08B $ 4,180.00 N N
China Buffet G06 $ 14,076.00 Y N
Fantastic Sam's P06 $ 4,212.00 Y N
First Bank & Trust J01 $ 0.00 Y N
Gamestop, Inc. G-4 $ 0.00 Y N
GMP Vitamin H08A $ 4,080.00 Y N
Henry's Marketplace R05 $ 0.00 N N
H&R Block N05 $ 0.00 Y N
Jenny Craig P08 $ 3,713.00 Y N
Jewelry Mart L01/05 $ 16,000.00 Y N
KY Fried Chicken Pad C $ 0.00 Y N
Kim Sun Young Salon H09 $ 2,720.00 Y N
La Caffepia H10/11 $ 3,000.00 Y N
Lilacs Flowers & Gifts H04 $ 3,000.00 Y N
Matsunoya Rest. H02/03 $ 2,950.00 Y N
Metro Dry Cleaning G03 $ 3,875.00 Y N
Miry Collection Store R04 $ 8,048.00 Y N
Orange County's Credit Union R12 $ 6,800.00 Y N
Party America P01/02 $ 0.00 Y N
Payless Shoes E04 $ 0.00 Y N
PetsMart R01 $ 0.00 Y N
Pop's Unfinished Furniture F3A $ 8,312.00 Y N
Quizno's Subs G05 $ 2,562.00 Y N
Radio Shack H06/07 $ 0.00 Y N
Ruby's H01 $ 0.00 Y N
Sportmart, Inc. Q01 $ 0.00 Y N
Super Mex BPAD $ 11,500.00 Y N
Sylvan Learning Centers P03/05 $ 0.00 N N
Tilly's R02/03 $ 0.00 Y N
TipTop Nails H05 $ 2,250.00 Y N
Vans, Inc. Q02 $ 0.00 Y N
GriWest/WashMut/CitiFin N02 $ 0.00 Y N
Wherehouse Ent. F03 $ 0.00 Y N
----------------
TOTALS $ 126,472.00
================
VACANCY S.F.
- ------------
(vacancy) G02
(vacancy) F01
</Table>
<Page>
EXHIBIT H
CC&R'S ESTOPPEL FORM
(Sec. 3.3)
<Page>
CC&R'S ESTOPPEL CERTIFICATE
TO: ________________________
________________________
________________________
Re: The "Declaration and Agreement Establishing Covenants, Conditions,
Restrictions and Grant of Easements" dated September 12, 1986, and recorded May
15, 1987, as Instrument No. 87-274841, Official Records of Orange County; and
that "First Amendment to Declaration and Agreement Establishing Covenants,
Conditions, Restrictions and Grants of Easements" dated as of April 9, 1987, and
recorded November 17, 1987, as Instrument No. 87-646471, Official Records of
Orange County; and that "Second Amendment to Declaration and Agreement
Establishing Covenants, Conditions, Restrictions and Grants of Easements" dated
as of December 21, 2001, and recorded February 11, 2002, as Instrument No.
20020120384, Official Records of Orange County (herein collectively referred to
as the "CC&Rs"),being an encumbrance of record against that certain shopping
center commonly known as Fullerton Metrocenter (the "SHOPPING CENTER"),
Fullerton, California.
Be it known:
The undersigned, ANATON ASSOCIATES, as Seller of the Shopping Center, has been
requested to confirm certain facts with respect to the CC&R's as true and
correct. These facts will be relied upon by a prospective purchaser of the
Shopping Center or a prospective lender or mortgagee in making a loan for which
the Shopping Center will be security. With that understanding and intention that
you will rely on the information herein, the undersigned confirm the following:
1. The CC&R's are in full force and effect and have not been modified or
amended except as identified in the above caption.
2. To the best of Seller's knowledge, there is no default presently
existing under the CC&R's on the part of any party thereto and, to the best of
Seller's knowledge, no notice of default has been given by or to Seller with
respect to any other party to the CC&R's which default has not been fully cured.
3. The CC&R's are a valid encumbrance against the Shopping Center which are
enforceable pursuant to their stated terms and conditions.
1
<Page>
The undersigned certifies that the foregoing is true and correct.
DATED:
--------------------
ANATON ASSOCIATES
A California limited partnership
By:
-------------------------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/82, GENERAL PARTNER
By:
-------------------------------
David M. Whitney, Co-Trustee of the
Whitney Trust U/D/T dtd 6/17/91, GENERAL PARTNER
By:
-------------------------------
Janet N. Whitney, Co-Trustee of the
Whitney Trust U/D/T dtd 6/17/91, GENERAL PARTNER
By: FULLERHELM PARTNERS
A California limited partnership, GENERAL PARTNER
By:
-------------------------
John W. Phelps II, General Partner
By:
-------------------------
James S. Phelps, General Partner
2
<Page>
EXHIBIT I
BILL OF SALE
(Sec. 4.2.13, 7.4.3)
<Page>
BILL OF SALE
Fullerton Metrocenter
Escrow No. _____________
ANATON ASSOCIATES, a California limited partnership ("SELLER"), for
valuable consideration, receipt of which is hereby acknowledged, does hereby
sell, assign, transfer and set over to _______________ ("BUYER"),all of the
equipment and personal property listed on the inventory attached hereto as
Exhibit "A" (the "PERSONAL PROPERTY").
This sale and transfer is part of the purchase and sale of the shopping
center commonly known as FULLERTON METROCENTER, and pursuant to the executed
Purchase and Sale Agreement and Joint Escrow Instructions between Seller and
Buyer dated as of May ______, 2004.
Seller relinquishes to Buyer all of Seller's right, title and interest in
and to the Personal Property, whatever such right, title and interest may be,
and warrants that, to the best of Seller's knowledge, Seller has not encumbered
any of the Personal Property nor previously sold or assigned any right, title or
interest therein to any other person.
Seller neither makes nor grants any warranty or representation whatsoever
regarding the condition of the Personal Property and makes no warranty, express
or implied, regarding the merchantability or fitness for intended purpose of the
Personal Property. All Personal Property is sold and transferred to Buyer in its
"as is" condition with all faults.
Seller shall not be responsible for the payment of any transfer fees, sales
taxes, use taxes or any other fees or expenses in connection with the sale and
transfer of the Personal Property and Buyer shall be solely responsible
therefor.
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed by
its authorized representative as of the date set forth below.
ANATON ASSOCIATES
A California, limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones III
GENERAL PARTNER
By: Dated:
------------------------------- -----------------
John W. Phelps, as General Partner
of Fullerheim Partners, Ltd.
a California limited partnership,
GENERAL PARTNER
<Page>
EXHIBIT "A" TO BILL OF SALE
INVENTORY LIST
<Page>
EXHIBIT J
NOTICE TO TENANTS
(Sec. 7.4.8)
[Name of Tenant] [Escrow Closing Date]
[Address of Tenant]
[City, State, ZIP]
Re: Premises located at [shopping center
address], Fullerton, California
----------------------------------
Dear Tenant:
Effective the date of this letter, Fullerton Metrocenter Shopping Center was
acquired by [NAME OP PURCHASER]. As the new owner, [NAME OF PURCHASER] has
assumed all obligations as your Landlord under the lease covering your captioned
premises at the shopping center.
We wanted to advise you of the change. We also want to advise that the existing
property manager, Williams Real Estate Management, Inc. ("WREM"), will remain as
property manager in order to provide continuity during this change. You should
continue to remit payment of rent and other lease charges to WREM, except that
payment should now be made payable to [INSERT NAME OF NEW PAYEE]. This change is
effective commencing with the next installment of rent accruing under your
Lease.
If you have any questions or wish to discuss any aspect of your tenancy at
Fullerton Metrocenter, you may continue to contact Audrey or Becky at WREM for
the same level of service that you enjoyed under the previous owner.
As new owner, we anticipate a long and beneficial relationship with you and
wants you to know that Fullerton Metrocenter will be maintained at the same high
level of competency and attention that you have come to expect.
Sincerely,
[NEW OWNER REP] [OLD OWNER REP]
<Page>
EXHIBIT K
ASSIGNMENT OF TENANT LEASES
(Sec. 7.3.3, 7.4.2)
<Page>
FULLERTON METROCENTER
EFFECTIVE DATE: __________________
ASSIGNMENT OF TENANT LEASES, WARRANTIES
AND SERVICE CONTRACTS
This Assignment is entered into by and between ANATON ASSOCIATES, a
California limited partnership, as "SELLER", and __________________, as "BUYER",
a __________________, with respect to the following:
R E C I T A L S:
A. Seller and Buyer entered into that certain Purchase and Sale Agreement
and Joint Escrow Instructions dated as of May 18, 2004 (the "PURCHASE
AGREEMENT"), whereby Seller agreed to sell, assign and set over to Buyer all of
Seller's right, title and interest in and to a certain shopping center commonly
described as Fullerton Metrocenter (the "PROPERTY"), as more particularly set
forth therein.
B. Escrow closed for the transfer of the Property on _________ (the
"EFFECTIVE DATE") pursuant to Escrow No. _____________, with First American
Title Company, as Escrow Holder.
C. Included in the purchase and sale of the Property was all of Seller's
right, title and interest in all Tenant Leases (as defined in the Purchase
Agreement) as well as all Warranties and Service Contracts related to the
Property.
D. Seller desires to assign, transfer and set over to Buyer all of Seller's
right, title and interest in the Tenant Leases, the Warranties and the Service
Contracts and Buyer agrees to accept the foregoing, all as provided herein.
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS HEREIN AND OTHER
VALUABLE CONSIDERATION, RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES
AGREE AS FOLLOWS:
1. ASSIGNMENT OF TENANT LEASES. As of the Effective Date, Seller does
hereby transfer, assign and set over to Buyer all of Seller's right, title and
interest, as Landlord or Lessor, in and to the Tenant Leases, and all security
deposits and payments and prepaid rentals on such Tenant Leases. The Tenant
Leases being assigned and transferred hereby are set attached hereto as Exhibit
"A".
1
<Page>
2. ASSIGNMENT OF PERMITS AND LICENSES. As of the Effective Date, Seller
does hereby transfer, assign and set over to Buyer all of Seller's right, title
and interest, if any, in and to the name "Fullerton Metrocenter", and in and to
all operating and occupational permits, and all other licenses, permits and
certificates issued by any governmental agency, to the extent the same may be
sold and transferred by Seller, relating to the Property.
3. ASSIGNMENT OF WARRANTIES AND GUARANTIES. As of the Effective Date,
Seller does hereby transfer, assign and set over to Buyer all of Seller's right,
title and interest in any and all warranties and guaranties, if any, in effect
for any improvements on the Property.
4. Assignment OF SERVICE CONTRACTS. As of the Effective Date, Seller does
hereby transfer, assign and set over to Buyer all of Seller's right, title and
interest in any and all Service Contracts, if any, relating to the operation or
management of the Property.
5. ASSUMPTION OF TENANT LEASES. As of the Effective Date, Buyer does hereby
assume all obligations and liabilities of the landlord or lessor arising on or
after the Effective Date under all the Tenant Leases and including, without
limitation, the refund of all security deposits held in respect of such Tenant
Leases delivered herewith to Buyer.
6. DISCHARGE OF SELLER. As of the Effective Date, Seller is released and
discharged from any and all liability under the Tenant Leases which may or shall
accrue from and after the Effective Date.
7. SUCCESSORS AND ASSIGNS. The covenants and agreements contained in this
Assignment shall be binding upon and shall inure to the benefit of the parties
hereto and their respective valid, permitted heirs, successors and assigns.
SIGNATURE PAGES FOLLOW
2
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment as evidenced
by the authorized signatures below.
"SELLER"
ANATON ASSOCIATES,
A California limited partnership
By: Dated:
------------------------------- -----------------
Howard B. Jones, III, Trustee of the
Revocable Trust dtd 12/2/1982, as
General Partner
By: Dated:
------------------------------- -----------------
David M. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/1991,
as General Partner
By: Dated:
------------------------------- -----------------
Janet N. Whitney, Co-Trustee of The
Whitney Trust U/D/T dated 6/17/191,
as General Partner
By: Fullerheim Partners, Ltd.
A California limited partnership,
as General Partner
By: Dated:
------------------------- -----------------
John W. Phelps II, General Partner
By: Dated:
------------------------- -----------------
James S. Phelps, General Partner
3
<Page>
IN WITNESS WHEREOF, the parties have executed this Assignment as evidenced
by the authorized signatures below.
"BUYER"
[INSERT NAME OF BUYER/ASSIGNEE]
By:
----------------------------
Its:
----------------------------
Dated:
-------------------------
4
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FULLERTON METROCENTER
<Table>
<Caption>
POSSESSION DELINQUENT
TENANT SPACE SECURITY DEPOSIT Y/N Y/N
- ---------------------------------------------------------------------------------------------------------------------
Aelphia Communications Corp N01 $ 3,257.00 Y N
AT&T E03 $ 4,433.00 Y N
Avenue E01/02 $ 0.00 Y N
Bank of America Kiosk $ 0.00 Y N
Baskin Robbins G01 $ 2,885.00 Y N
Beauty Avenue J03 $ 8,553.00 Y N
Beneficial Finance P07 $ 0.00 Y N
Bennigan's Pad K $ 0.00 N N
Big Island BBQ H12 $ 2,616.00 Y N
Burger King Pad D $ 0.00 Y N
Brite Dental N03/04 $ 3,450.00 Y N
Cheap Tickets, Inc. H08B $ 4,180.00 N N
China Buffet G06 $ 14,076.00 Y N
Fantastic Sam's P06 $ 4,212.00 Y N
First Bank & Trust J01 $ 0.00 Y N
Gamestop, Inc. G-4 $ 0.00 Y N
GMP Vitamin H08A $ 4,080.00 Y N
Henry's Marketplace R05 $ 0.00 N N
H&R Block N05 $ 0.00 Y N
Jenny Craig P08 $ 3,713.00 Y N
Jewelry Mart L01/05 $ 16,000.00 Y N
KY Fried Chicken Pad C $ 0.00 Y N
Kim Sun Young Salon H09 $ 2,720.00 Y N
La Caffepia H10/11 $ 3,000.00 Y N
Lilacs Flowers & Gifts H04 $ 3,000.00 Y N
Matsunoya Rest. H02/03 $ 2,950.00 Y N
Metro Dry Cleaning G03 $ 3,875.00 Y N
Miry Collection Store R04 $ 8,048.00 Y N
Orange County's Credit Union R12 $ 6,800.00 Y N
Party America P01/02 $ 0.00 Y N
Payless Shoes E04 $ 0.00 Y N
PetsMart R01 $ 0.00 Y N
Pop's Unfinished Furniture F3A $ 8,312.00 Y N
Quizno's Subs G05 $ 2,562.00 Y N
Radio Shack H06/07 $ 0.00 Y N
Ruby's H01 $ 0.00 Y N
Sportmart, Inc. Q01 $ 0.00 Y N
Super Max BPAD $ 11,500.00 Y N
Sylvan Learning Centers P03/05 $ 0.00 N N
Tilly's R02/03 $ 0.00 Y N
TipTop Nails H05 $ 2,250.00 Y N
Vans, Inc. Q02 $ 0.00 Y N
GriWest/WashMat/CitiFin N02 $ 0.00 Y N
Wherehouse Ent. F03 $ 0.00 Y N
----------------
TOTALS $ 126,472.00
================
VACANCY S.F.
(vacancy) G02
(vacancy) F01
</Table>
EXHIBIT A - TENANT LEASES