8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

March 3, 2004
Date of Report (Date of earliest event reported)

INCOME GROWTH PARTNERS, LTD. X,
A CALIFORNIA LIMITED PARTNERSHIP

(Name of registrant as specified in its charter)

CALIFORNIA	0-18528	33-0294177
(State of organization)	(Commission file	(I.R.S. Employer
	number)	Identification No.)

11230 Sorrento Valley Road, Suite 220,
San Diego, California, 92121	(858) 457-2750
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

TABLE OF CONTENTS

	Item 2. Acquisition or Disposition of Assets
	Item 7. Financial Statements and Exhibits
SIGNATURES
EXHIBIT 10.1
EXHIBIT 10.2

Item 2. Acquisition or Disposition of Assets

On March 3, 2004, IGP X Mission Park Associates, L.P., a California limited partnership and a wholly-owned subsidiary of Income Growth Partners, Ltd. X, a California limited partnership, closed the sale of that certain 264 unit apartment complex located at 201-230 Woodland Parkway, San Marcos, California, known as Mission Park, to Pacifica Enterprises, LLC, a California limited liability company, for a cash purchase price of $36,000,000. To the knowledge of Income Growth Management, Inc., the general partner of Income Growth Partners, Ltd. X, there is no material relationship between Pacifica Enterprises, LLC and IGP X Mission Park Associates, L.P. or Income Growth Partners, Ltd. X, or any of their general partners, officers or affiliates.

Item 7. Financial Statements and Exhibits

(b)	Pro Forma financial information.
	The required pro forma financial information will be provided by amendment to this Form 8-K not later than May 17, 2004.
(c)	Exhibits.

10.1	Purchase and Sale Agreement and Escrow Instructions by and between IGP X Mission Park Associates, L.P. and Pacifica Enterprises, LLC dated effective as of December 2, 2003.
10.2	First Amendment to Purchase and Sale Agreement and Escrow Instructions by and between IGP X Mission Park Associates, L.P. and Pacifica Enterprises, LLC dated effective as of February 9, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 17, 2004
	INCOME GROWTH PARTNERS, LTD. X,
	A CALIFORNIA LIMITED PARTNERSHIP
	By:	Income Growth Management, Inc.,
		a California corporation, its General Partner
		By:	/s/ David W. Maurer
			David W. Maurer, President

EX-10.1 3 a97423exv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS BY AND BETWEEN IGP X MISSION PARK ASSOCIATES, L.P., A CALIFORNIA LIMITED PARTNERSHIP ("SELLER") AND PACIFICA ENTERPRISES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY ("BUYER") DATED EFFECTIVE AS OF DECEMBER 2, 2003 TABLE OF CONTENTS

PAGE ---- ARTICLE I. PURCHASE AND SALE.................................................... 1 Section 1.1 Agreement of Purchase and Sale........................... 1 Section 1.2 Property Defined......................................... 2 Section 1.3 Purchase Price........................................... 2 Section 1.4 Payment of Purchase Price................................ 2 Section 1.5 Opening of Escrow; Deposit............................... 2 Section 1.6 Deposit as Liquidated Damages............................ 3 Section 1.7 Escrow Holder............................................ 3 ARTICLE II. TITLE AND SURVEY.................................................... 3 Section 2.1 Contingency Period....................................... 3 Section 2.2 Title Examination........................................ 4 Section 2.3 Permitted Exceptions..................................... 4 Section 2.4 Conveyance of Title...................................... 5 ARTICLE III. REVIEW OF PROPERTY................................................. 5 Section 3.1 Right of Inspection...................................... 5 Section 3.2 Right of Termination..................................... 6 Section 3.3 Rights Upon Termination.................................. 7 ARTICLE IV. CLOSING............................................................. 7 Section 4.1 Time and Place........................................... 7 Section 4.2 Seller's Obligations at Closing.......................... 7 Section 4.3 Buyer's Obligations at Closing........................... 8 Section 4.4 Credits and Prorations................................... 9 Section 4.5 Transaction Taxes and Closing Costs...................... 12 Section 4.6 Conditions Precedent to Obligation of Buyer.............. 13 Section 4.7 Conditions Precedent to Obligation of Seller............. 13 ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS............................ 14 Section 5.1 Representations and Warranties of Seller................. 14 Section 5.2 Survival of Seller's Representations and Warranties...... 14 Section 5.3 Covenants of Seller...................................... 14 Section 5.4 Representations and Warranties of Buyer.................. 15 Section 5.5 Survival of Buyer's Representations and Warranties....... 15 Section 5.6 Covenant of Buyer Re: 1031 Exchange...................... 15 Section 5.7 Covenant of Buyer Re: Defeasance Loan.................... 15 ARTICLE VI. DEFAULT............................................................. 17 Section 6.1 Default by Buyer......................................... 17 Section 6.2 Default by Seller........................................ 17 Section 6.3 Recoverable Damages...................................... 17

i ARTICLE VII. RISK OF LOSS....................................................... 17 Section 7.1 Minor Damage............................................. 17 Section 7.2 Major Damage............................................. 17 Section 7.3 Definition of "Major" Loss or Damage..................... 18 ARTICLE VIII. COMMISSIONS....................................................... 18 Section 8.1 Brokerage Commissions.................................... 18 ARTICLE IX. DISCLAIMERS AND WAIVERS............................................. 18 Section 9.1 No Reliance on Documents................................. 18 Section 9.2 AS IS SALE; DISCLAIMERS.................................. 19 Section 9.3 Survival of Disclaimers.................................. 20 ARTICLE X. MISCELLANEOUS........................................................ 20 Section 10.1 Confidentiality.......................................... 20 Section 10.2 Public Disclosure........................................ 21 Section 10.3 Assignment............................................... 21 Section 10.4 Notices.................................................. 21 Section 10.5 Modifications............................................ 22 Section 10.6 Entire Agreement......................................... 22 Section 10.7 Further Assurances....................................... 22 Section 10.8 Counterparts............................................. 22 Section 10.9 Facsimile Signatures..................................... 22 Section 10.10 Severability............................................. 23 Section 10.11 Applicable Law........................................... 23 Section 10.12 No Third-Party Beneficiary............................... 23 Section 10.13 Captions................................................. 23 Section 10.14 Construction............................................. 23 Section 10.15 Recordation.............................................. 23 Section 10.16 Time of the Essence...................................... 23 EXHIBITS A - DESCRIPTION OF LAND B - LIST OF PERSONAL PROPERTY C - ESCROW HOLDER'S GENERAL PROVISIONS D - FORM OF DEED E - FORM OF BILL OF SALE G - FORM OF ASSIGNMENT OF LEASES F - FORM OF ASSIGNMENT OF CONTRACTS G - FORM OF TENANT NOTICE H-1 - FORM OF FIRPTA CERTIFICATE H-2 - FORM OF CALFIRPTA CERTIFICATE ii PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTION THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this "Agreement") is made effective as of December 2, 2003, by and between IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership ("Seller"), and PACIFICA ENTERPRISES, LLC, a California limited liability company ("Buyer"). The "Effective Date" of this Agreement shall be the day this Agreement is signed by the last to sign of Buyer or Seller, and a copy of the fully signed copy is delivered to the other party. ARTICLE I. PURCHASE AND SALE Section 1.1 Agreement of Purchase and Sale. Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the following: (a) that certain tract(s) or parcel(s) of land situated in the City of San Marcos, County of San Diego, California, consisting of approximately 13.59 acres of land and more particularly described in Exhibit "A" attached hereto and made a part hereof, together with all rights and appurtenances pertaining to such property, including any right, title and interest of Seller in and to adjacent streets, alleys or rights-of-way (the property described in clause (a) of this Section 1.1 being herein referred to collectively as the "Land"); (b) the building located on the Land, consisting of approximately a 264-unit residential apartment complex, commonly known as Mission Park, and any and all other buildings, structures, fixtures and other improvements affixed to or located on the Land, excluding fixtures owned by tenants (the property described in clause (b) of this Section 1.1 being herein referred to collectively as the "Improvements"); (c) any and all of Seller's right, title and interest in and to all tangible personal property located upon the Land or within the Improvements, including, without limitation, any and all appliances, furniture, carpeting, draperies and curtains, tools and supplies, and other items of personal property owned by Seller, located on and used exclusively in connection with the operation of the Land and the Improvements, which personal property includes without limitation the personal property listed on Exhibit "B" attached hereto (the property described in clause (c) of this Section 1.1 being herein referred to collectively as the "Personal Property"); (d) any and all of Seller's right, title and interest in and to the leases, licenses, and occupancy agreements covering all or any portion of the Real Property (as such term is defined in Section 1.2 hereof), to the extent they are in effect on the date of the Closing (as such term is defined in Section 4.1 hereof) (the property described in clause (d) of this Section 1.1 being referred to collectively as the "Leases"), together with all rents and other sums due thereunder (the "Rents") and any and all unapplied security deposits in Seller's possession in connection therewith (the "Security Deposits"), and Page 1 of 24 (c) any and all of Seller's right, title and interest in and to (i) all assignable contracts and agreements (collectively, the "Operating Agreements") a list of which shall be provided by Seller within ten (10) business days of the Effective Date, relating to the upkeep, repair, maintenance or operation of the Land, Improvements or Personal Property, (ii) all assignable existing warranties and guaranties (express or implied) issued to Seller in connection with the Improvements or the Personal Property, and (iii) all assignable existing permits, licenses, approvals and authorizations issued by any governmental authority in connection with the Property (the property described in clause (e) of this Section l.1 being sometimes herein referred to collectively as the "Intangibles"). Section 1.2 Property Defined. The Land and the Improvements arc hereinafter sometimes referred to collectively as the "Real Property." The Real Property, the Personal Property, the Leases and the Intangibles are hereinafter sometimes referred to collectively as the "Property." Section 1.3 Purchase Price. Seller is to sell and Buyer is to purchase the Property for the amount of Thirty-six Million Dollars ($36,000,000.00) (the "Purchase Price"). Section 1.4 Payment of Purchase Price. The Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be payable in full at Closing in cash by wire transfer of immediately available funds to a bank account designated by Seller in writing to Buyer prior to the Closing. Not less than one (1) business day prior to the Closing, Buyer shall deposit into Escrow (as defined in Section 1.5 below), in cash or other immediately available funds, the full amount of the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, minus the amount of the Deposit previously deposited by Buyer into Escrow. Section 1.5 Opening of Escrow; Deposit. Within one (1) business day of the execution and delivery of this Agreement, Buyer shall deposit with Stewart Title Company (the "Escrow Holder"), having its office at 311 Camino Del Rio North, Suite 900, San Diego, CA Attention: Michelle Mitchell, a fully executed original of this Agreement and the sum of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Initial Deposit") in good funds either by certified bank or cashier's check or by federal wire transfer. Within one (1) business day of expiration of the Contingency Period (as defined in Section 2.1 below), unless Buyer has elected to terminate this Agreement in the manner set forth herein, Buyer shall deposit the additional sum of Two Hundred and Fifty Thousand Dollars ($250,000.00) (the "Additional Deposit") in good funds either by certified bank or cashier's check or by federal wire transfer. The Initial Deposit and the Additional Deposit are hereinafter collectively referred to as the "Deposit". Escrow Holder shall hold the Deposit in an interest-bearing account of a federally insured bank or savings and loan association acceptable to Buyer, and shall otherwise handle the Deposit in accordance with the terms, and conditions of this Agreement. All interest accrued on the Deposit shall be credited to the Purchase Price upon the close of Escrow. Buyer shall be responsible for the payment of all costs and fees imposed on the Deposit account. The failure of Buyer to timely deliver any portion of the Deposit hereunder shall be a material default, and shall entitle Seller, at Seller's sole option, to terminate this Agreement immediately. Except as otherwise specifically provided in Sections 3.3 and 6.2, and Article VII hereof, the Deposit and the accrued interest thereon shall be (i) nonrefundable upon expiration of the Contingency Period and (ii) released to Page 2 of 24 Seller without the necessity of further instruction from Buyer upon expiration of the Contingency Period. Should Seller thereafter be obligated to close the Escrow and fail or refuse to do so, Seller shall return the Deposit to Buyer upon Buyer's written demand therefore. Section 1.6 Deposit as Liquidated Damages. AFTER THE EXPIRATION OF THE CONTINGENCY PERIOD, IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BY REASON OF BUYER'S DEFAULT UNDER THIS AGREEMENT, THE DEPOSIT (INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE RETAINED BY SELLER AS LIQUIDATED DAMAGES, SELLER'S ACTUAL DAMAGES IN THE EVENT THE SALE IS NOT CONSUMMATED ARE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE AT THE EFFECTIVE DATE. THEREFORE, BY SEPARATELY EXECUTING THIS SECTION 1.6 BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND NOT A PENALTY, AND SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER ARISING FROM A FAILURE OF THE SALE TO CLOSE. IN ADDITION, BUYER SHALL PAY ALL TITLE AND ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL THIS SECTION 1.6 LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY AGAINST THE OTHER PARTY DUE TO THE OTHER PARTY'S OBLIGATION TO INDEMNIFY SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT. BY THEIR SEPARATELY INITIALING THIS SECTION 1.6. BELOW, BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED. /s/ [Illegible] /s/ [Illegible] ------------------------ ----------------------- SELLER'S INITIALS BUYER'S INITIALS Section 1.7 Escrow Holder. Escrow Holder shall hold and dispose of the Deposit in accordance with the terms of this Agreement. If Escrow Holder is in doubt as to its duties or obligations with regard to the Deposit, or if Escrow Holder receives conflicting instructions from Buyer and Seller with respect to the Deposit, Escrow Holder shall not be required to disburse the Deposit and may, at its option, continue to hold the Deposit until both Buyer and Seller agree as to its disposition, or until a final judgment is entered by a court of competent jurisdiction directing its disposition, or Escrow Holder may interplead the Deposit in accordance with the laws of the state in which the Property is located. Escrow Holder's General Provisions are attached hereto as Exhibit "C" and made a part hereof. ARTICLE II. TITLE AND SURVEY Section 2.1 Contingency Periods. During the period beginning on the Effective Date and ending at 5:00 p.m. (local time at the Property) on that date which is fifteen (15) days following the Effective Date (hereinafter referred to as the "Contingency Period"), Buyer shall Page 3 of 24 have the right to review: (a) a current preliminary title report covering the Property and all underlying exceptions, which shall be obtained by Seller, at Seller's cost; (b) copies of the most recent property tax bills for the Property, and (c) a copy of the most current survey of the Real Property in Seller's possession, if any (the items referred to in clauses (a) through (c) of this Section 2.1 are hereinafter referred to as the "Title Contingency Items"). Seller shall deliver or cause to be delivered to Buyer the Title Contingency Items promptly after the Effective Date but in no event later than three (3) business days after the Effective Date. During the Contingency Period, Buyer shall also have the right to review a new or updated survey of the Real Property prepared by a licensed surveyor or engineer, obtained by Buyer at Buyer's sole cost (the "Survey"). Section 2.2 Title Examination. Buyer shall notify Seller in a reasonably detailed writing (the "Title Notice") prior to the expiration of the Contingency Period which exceptions to title (including survey matters), if any, will not be accepted by Buyer and the specific reasonable grounds for disapproval thereof. Any exception to title, which Buyer fails to disapprove prior to the expiration of the Contingency Period, shall be deemed conclusively to have been approved by Buyer. If Buyer notifies Seller in writing that Buyer objects to an exception to title, then Seller shall have five (5) business days after receipt of the Title Notice to notify Buyer that Seller either (a) will remove such objectionable exception from title on or before the Closing; provided that Seller may extend the Closing for such period as shall be required to effect such cure, but not beyond fifteen (15) days; or (b) elects not to cause such exception to be removed (a "Non-Removal Notice"). If Seller fails to notify Buyer of its election within said five (5) day period, then Seller shall be deemed to have delivered a Non-Removal Notice as to that exception. The procurement by Seller of a commitment for the issuance of the Title Policy or an endorsement thereto reasonably satisfactory to Buyer and insuring Buyer against any title exception, which was disapproved pursuant to this Section 2.2, shall be deemed a cure by Seller of such disapproval. If Seller gives (or is deemed to have given) Buyer a Non-Removal Notice, then Buyer shall have two (2) business days within which to notify Seller in writing that Buyer elects to either (i) nevertheless proceed with the purchase and take title to the Property subject to such exceptions, or (ii) terminate this Agreement pursuant to the provisions of Section 3.3 below. If Buyer fails to notify Seller in writing of its election within said two (2) business day period, then Buyer shall be deemed to have elected to proceed with the purchase and take title to the Property subject to such exceptions. Notwithstanding the foregoing, Buyer need not disapprove any monetary lien representing monies owed, and Seller hereby agrees to cause all such monetary liens (other than non-delinquent ad valorem real estate taxes and assessments) to be removed at or prior to Closing. If Seller fails to remove any such monetary lien prior to Closing, then Buyer shall apply such portion of the Purchase Price as is necessary to cause the removal of such items prior to Closing, and the proceeds of Escrow to be otherwise distributed to Seller upon Closing shall be reduced by the amount so applied. The operation of the notice and approval provisions of this Section 2.2 shall extend the Contingency Period only as to those matters which Buyer has disapproved as of the original expiration of the Contingency Period and only until such time as Buyer has either approved (or have been deemed to approved) the condition of title to the Real Property or elected to terminate this Agreement. Section 2.3 Permitted Exceptions. The Property shall be conveyed subject to the following matters, which are hereinafter referred to as the "Permitted Exceptions": Page 4 of 24 (a) those matters that are either approved or deemed approved by Buyer in accordance with Section 2.2 hereof; (b) the rights of tenants under the Leases; (c) the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the date of Closing, subject to proration as herein provided; (d) local, state and federal laws, ordinances or governmental regulations, including but not limited to building and zoning laws, ordinances and regulations, now or hereafter in effect relating to the Property; and (e) items shown on the Survey and not objected to by Buyer, or waived or deemed waived by Buyer in accordance with Section 2.2 hereof. Section 2.4 Conveyance of Title. At Closing, Seller shall convey and transfer to Buyer fee simple title to the Real Property by execution and delivery of the Deed (as defined in Section 4.2(a) hereof). Evidence of delivery of such title shall be the issuance by Stewart Title Insurance Company (the "Title Company"), or another national title company mutually approved by Buyer and Seller, of a ALTA Extended Coverage Owner's Policy of Title Insurance, with any creditors' rights exclusion deleted (the "Title Policy") covering the Real Property, in the full amount of the Purchase Price, showing fee title to the Property vested exclusively in Buyer, subject only to the Permitted Exceptions; however, if an ALTA survey acceptable to the Title Company does not currently exist and one is not obtained by Buyer, then Buyer shall accept a customary survey exception to the Title Policy. Buyer may obtain an ALTA Extended Coverage Owner's Policy of Title Insurance so long as the Closing is not thereby delayed. Buyer shall pay the additional premium for such policy and the cost of any required ALTA survey. ARTICLE III. REVIEW OF PROPERTY Section 3.1 Right of Inspection. During the Contingency Period, Buyer shall, at its own cost and expense, have the right to make a physical inspection of the Real Property, including an inspection of the environmental condition thereof pursuant to the terms and conditions of this Agreement, to examine at the Property (or the property manager's office, as the case may be) documents and files located at the Property or the property manager's office concerning the leasing, maintenance and operation of the Property, but excluding Seller's partnership or corporate records, internal memoranda, financial projections, budgets, appraisals, accounting and tax records and similar proprietary, confidential or privileged information (collectively, the "Confidential Documents"). If required by law, Seller shall use its best efforts to provide a Natural Hazards Disclosure Report to Buyer within fifteen (15) business days of the opening of Escrow. Seller shall also deliver to Buyer, within three (3) business days after the Effective Date, copies of the income and expense statements for the Property for the last two (2) calendar years and the current year to date (through October 31, 2003) and a current rent roll for the Property (the "Financial Documents"). Page 5 of 24 Any on-site inspections of the Property shall occur only (i) at reasonable times agreed upon by Seller and Buyer after at least one (1) business day's prior written notice to Seller; (ii) in a manner that will not unreasonably damage the Property, unreasonably disturb or disrupt the business activities of Seller or unreasonably interfere with the use of the Property by Seller or its tenants; and (iii) after delivery of evidence satisfactory to Seller that adequate public liability and other insurance respecting such work has been obtained by Buyer naming as additional insureds Seller and any other person or entity designated by Seller as having an insurable interest in the same. Seller may have a representative present during any such inspections. If Buyer desires to do any invasive testing at the Property, Buyer shall do so only after notifying Seller and obtaining Seller's prior written consent thereto, which consent may be subject to any terms and conditions imposed by Seller in its sole discretion, including, without limitation, the prompt restoration of the Property to substantially its condition prior to any such inspections or tests, at Buyer's sole cost and expense. Buyer shall keep the Property free and clear of any liens arising out of Buyer's entry onto or inspection of the Property. At Seller's option, Buyer will furnish to Seller copies of any reports received by Buyer relating to any inspection of the Property, without representation or warranty of any kind (express, implied or otherwise) as to the content and accuracy thereof, and at no charge to Seller other than the costs of reproduction. Buyer agrees to protect, indemnify, defend (with counsel satisfactory to Seller) and hold Seller harmless from and against any claim for liabilities, losses, costs, expenses (including reasonable attorneys' fees), damages or injuries arising out of, or directly resulting from the inspection of the Property by Buyer or its agents or consultants, and notwithstanding anything to the contrary in this Agreement, such obligation to indemnify and hold harmless Seller shall survive Closing or any termination of this Agreement. Section 3.2 Right of Termination. Prior to the expiration of the Contingency Period, Buyer shall provide Seller with written notice stating which Operating Agreements, if any, Buyer has disapproved. Buyer's disapproval of any Operating Agreements which cannot be terminated by Seller without liability on no more than sixty (60) days' notice shall be deemed a termination of this Agreement, unless Seller agrees within five (5) business days to terminate any disapproved Operating Agreements effective as of Closing (all Operating Agreements, minus any Operating Agreements Seller is obligated or has agreed to remove at Closing are hereinafter referred to as the "Approved Operating Agreements"). If Buyer fails to disapprove of any Operating Agreements prior to the expiration of the Contingency Period, then Buyer shall be deemed to have approved all Operating Agreements. Additionally, if for any reason whatsoever Buyer determines that the Property or any aspect thereof is unsuitable for Buyer's acquisition, Buyer shall have the right to terminate this Agreement by either giving written notice thereof to Seller, or failing to give Seller a written notice of Buyer's approval, prior to the expiration of the Contingency Period, and if Buyer exercises its right to terminate this Agreement within the Contingency Period, then this Agreement shall terminate in accordance with the provisions of Section 3.3 below. If Buyer fails to give Seller a notice of approval prior to the expiration of the Contingency Period, then Buyer shall be deemed to have disapproved the Property and this Agreement shall terminate. If Buyer gives Seller a written notice of approval within the Contingency Period, then Buyer shall be deemed to have approved of ail aspects of the Property, including, but not limited to all Operating Agreements other than those to be terminated as provided above (and except title and survey, which shall be governed by Article II hereof) and to have elected to proceed with the purchase of the Property pursuant to the terms hereof. Page 6 of 24 Section 3.3 Rights Upon Termination. If this Agreement is terminated by Buyer in the manner and within the applicable time period(s) provided pursuant to any of Sections 2.2, 3.2, or Article VII, or because of a failure of a condition precedent to Buyer's obligations hereunder as set forth in Section 4.6 below, then (i) the Deposit plus all accrued interest thereon shall be returned to Buyer, (ii) all instruments in Escrow shall be returned to the party depositing the same, (iii) Buyer shall return all items previously delivered by Seller to Buyer, (iv) Buyer and Seller shall each pay one-half (1/2) of all Escrow and title cancellation charges, and (iv) neither party shall have any further rights, obligations or liabilities whatsoever to the other party concerning the Property by reason of this Agreement, except for any indemnity obligations of either party pursuant to the provisions of this Agreement or otherwise expressly stated in this Agreement to survive termination. The provisions of this Section 3.3 shall survive the Closing. ARTICLE IV. CLOSING Section 4.1 Time and Place. The consummation of the transaction contemplated hereby (the "Closing") shall be consummated on or before that day which is sixty (60) days following the expiration of the Contingency Period, provided, however, if such day is not a business day, then the Closing shall occur on the next following business day (the "Closing Date"). The Closing shall be consummated through the Escrow administered by Escrow Holder. At the Closing, Seller and Buyer shall perform the obligations set forth in, respectively, Section 4.2 and Section 4.3 hereof, the performance of which obligations shall be concurrent conditions. Section 4.2 Seller's Obligations at Closing. Prior to Closing, Seller shall: (a) deliver to Buyer through Escrow a duly executed and acknowledged grant deed in the form attached hereto as Exhibit "D" (the "Deed"); (b) deliver to Buyer through Escrow a duly executed bill of sale in the form attached hereto as Exhibit "E" (the "Bill of Sale"): (c) assign to Buyer, and Buyer shall assume through Escrow the landlord/lessor interest in and to the Leases, Rents, and Security Deposits, by duly executed assignment and assumption agreement (the "Assignment of Leases") in the form attached hereto as Exhibit "F"; (d) to the extent assignable, assign to Buyer, and Buyer shall assume, through Escrow Seller's interest in the Approved Operating Agreements and the other intangibles by duly executed assignment and assumption agreement (the "Assignment of Contracts") in the form attached hereto as Exhibit "G"; (e) join with Buyer to execute notices in the form attached hereto as Exhibit "H" (the "Tenant Notices"), which Buyer shall send to each tenant under each of the Leases promptly after the Closing, informing such tenant of the sale of the Property and of the assignment to Buyer of Seller's interest in, and obligations under, the Leases (including, if Page 7 of 24 applicable, any Security Deposits), and directing that all Rent and other sums payable after the Closing under such Leases be paid as set forth in the notice; (f) if any representation or warranty of Seller needs to be modified due to changes since the Effective Date, deliver to Buyer a certificate, dated as of the date of Closing and executed on behalf of Seller by a duly authorized officer thereof, identifying any representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change. In no event shall Seller be liable to Buyer for, or be deemed to be in default hereunder by reason of, any breach of representation or warranty which results from any change that (i) occurs between the Effective Date and the date of Closing, and (ii) is expressly permitted under the terms of this Agreement or is beyond the reasonable control of Seller to prevent. The occurrence of a change in a representation and warranty which is not permitted hereunder or is beyond the reasonable control of Seller to prevent shall, if materially adverse to Buyer, constitute the non-fulfillment of the condition set forth in Section 4.6(b) hereof. If, despite changes or other matters described in such certificate, the Closing occurs, Seller's representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in such certificate; (g) deliver to the Title Company such evidence as the Title Company may reasonably require as to the authority of the Person or persons executing documents on behalf of Seller; (h) deliver to Buyer certificates in the form attached hereto as Exhibit "1-1 and "1-2 duly executed by Seller; (i) deliver to Buyer outside of Escrow the Leases and the Operating Agreements, together with such leasing and property files and records located at the Property or the property manager's office which are material in connection with the continued operation, leasing and maintenance of the Property, but excluding any Confidential Documents. For a period of one (1) year after the Closing, Buyer shall allow Seller and its representatives access without charge to all files, records and documents delivered to Buyer at the Closing, upon reasonable advance notice and at all reasonable times, to make copies of any and all such files, records and documents, which right shall survive the Closing; (j) deliver such affidavits as may be customarily and reasonably required by the Title Company, in a form reasonably acceptable to Seller; (k) deliver to Buyer exclusive possession and occupancy of the Property, subject to the Permitted Exceptions; (l) execute and deliver a closing statement acceptable to Seller; and (m) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement. Section 4.3 Buyer's Obligations at Closing. At, or prior to Closing, Buyer shall; (a) pay to Seller through Escrow the full amount of the Purchase Price (which Page 8 of 24 amount shall include the Deposit and all accrued interest as provided herein), as increased or decreased by prorations and adjustments as herein provided, in immediately available wire transferred funds pursuant to Section 1.4 hereof; (b) join Seller in execution and delivery through Escrow of the Assignment of Leases, Assignment of Contracts and Tenant Notices; (c) if any representation or warranty of Buyer set forth in Section 5.4 hereof needs to be modified due to changes since the Effective Date, deliver to Seller a certificate, dated as of the date of Closing and executed on behalf of Buyer by a duly authorized representative thereof, identifying any such representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change. In no event shall Buyer be liable to Seller for, or be deemed to be in default hereunder by reason of any breach of representation or warranty set forth in Section 5.4 hereof which results from any change that (i) occurs between the Effective Date and the date of Closing and (ii) is expressly permitted under the terms of this Agreement or is beyond the reasonable control of Buyer to prevent. The occurrence of a change in a representation or warranty which is not permitted hereunder or is beyond the reasonable control of Buyer to prevent shall, if materially adverse to Seller, constitute the non-fulfillment of the conditions set forth in Section 4.7(c) hereof. If, despite changes or other matters described in such certificate, the Closing occurs, Buyer's representations and warranties set forth in this Agreement shall be deemed to have been modified by all statements made in such certificate; (d) deliver to Seller such evidence as the Title Company may reasonably require as to the authority of the person or persons executing documents on behalf of Buyer; (e) deliver such affidavits, as may be customarily and reasonably required by the Title Company, in a form reasonably acceptable to Buyer; (f) execute and deliver a closing statement acceptable to Buyer; and (g) deliver such additional documents as shall be reasonably required to consummate the transaction contemplated by this Agreement. Section 4.4 Credits and Prorations. (a) All income and expenses of the Property shall be apportioned as of 12:01 a.m. on the day of Closing as if Buyer were vested with title to the Property during the entire day upon which Closing occurs. Such prorated items include without limitation the following: (i) Rents for the calendar month in which Closing occurs, as determined by the Seller's rent roll; (ii) taxes and assessments (including personal property taxes on the Personal Property) levied against the Property; (iii) utility charges for which Seller is liable, if any, such charges to be apportioned at Closing on the basis of the most recent meter reading occurring prior to Closing Page 9 of 24 (dated not more than fifteen (15) days prior to Closing) or, if unmetered, on the basis of a current bill for each such utility; (iv) any other operating expenses or other items pertaining to the Property which are customarily prorated between a buyer and a seller in the County in which the Property is located. (b) Notwithstanding anything contained in Section 4.4(a) hereof: (i) At Closing, Seller shall, at Seller's option, either deliver to Buyer any Security Deposits actually held by Seller pursuant to the Leases or credit to the account of Buyer the amount of such Security Deposits (to the extent such Security Deposits have not been applied against Delinquent Rents prior to the Effective Date or otherwise as provided in the Leases); (ii) Any taxes paid at or prior to Closing shall be prorated based upon the amounts actually paid. If taxes and assessments due and payable during the year of Closing have not been paid before Closing, Seller shall be charged at Closing an amount equal to that portion of such taxes and assessments which relates to the period before Closing and Buyer shall pay the taxes and assessments prior to their becoming delinquent. Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed shall be based upon the tax rate and/or assessed valuation fixed. To the extent that the actual taxes and assessments for the current year differ from the amount apportioned at Closing, the parties shall make all necessary adjustments by appropriate payments between themselves within thirty (30) days after such amounts are determined following Closing, subject to the provisions of Section 4.4(d) hereof. Buyer shall pay all supplemental taxes resulting from the change in ownership and reassessment occurring as the result of the Closing pursuant to this Agreement; (iii) Charges referred to in Section 4.4(a) hereof which are payable by any tenant to a third party shall not be apportioned hereunder, and Buyer shall accept title subject to any of such charges unpaid and Buyer shall look solely to the tenant responsible therefor for the payment of such charges. If Seller shall have paid any of such charges on behalf of any tenant, and shall not have been reimbursed therefor by the time of Closing, Buyer shall credit to Seller an amount equal to all such charges so paid by Seller; (iv) As to utility charges referred to in Section 4.4(a) (iii) hereof, Seller may upon notice to Buyer elect to pay one or more of all of said items accrued to the date hereinabove fixed for apportionment directly to the person or entity entitled thereto, and to the extent Seller so elects, such item shall not be apportioned hereunder, and Seller's obligation to pay such item directly in such case shall survive the Closing or any termination of this Agreement; (v) Unpaid and delinquent Rent collected by Seller and Buyer after the date of Closing shall be delivered as follows: (a) if Seller collects any unpaid or delinquent Rent for the Property, Seller shall, within fifteen (15) days after the receipt thereof, deliver to Buyer any such Rent which Buyer is entitled to hereunder relating to the date of Closing and any period Page 10 of 24 thereafter, and (b) if Buyer collects any unpaid or delinquent Rent from the Property, Buyer shall, within fifteen (15) days after the receipt thereof, deliver to Seller any such Rent which Seller is entitled to hereunder relating to the period prior to the date of Closing. Seller and Buyer agree that all Rent received by Seller or Buyer after the date of Closing shall be applied first to current Rent and then to delinquent Rent, if any, in the inverse order of maturity. Buyer will use commercially reasonable efforts after the Closing to collect all Rents in the usual course of Buyer's operation of the Property, but Buyer will not be obligated to institute any lawsuit or other collection procedures to collect delinquent Rents. Seller may attempt to collect any delinquent Rents owed to Seller and, after prior written notice to Buyer, may institute any lawsuit or collection procedures, but may not evict any tenant. If there shall be any Rents or other charges under any Leases which, although relating to a period prior to Closing, do not become due and payable until after Closing or are paid prior to Closing but are subject to adjustment after Closing (such as year end common area expense reimbursements and the like), then any Rents or charges of such type received by Buyer or its agents or Seller or its agents subsequent to Closing shall, to the extent applicable to a period extending through the Closing, be prorated between Seller and Buyer as of Closing and Seller's portion thereof shall be remitted promptly to Seller by Buyer together with a detailed accounting certified by Buyer's chief financial officer. (c) Seller may prosecute an appeal of the real property tax assessment for any tax years to and including the tax year in which the Closing occurs, and may take related action which Seller deems appropriate in connection therewith. Buyer shall cooperate with Seller in connection with such appeal and collection of a refund of real property taxes paid, provided that Buyer shall not be obligated to incur any material cost in doing so. Seller owns and holds all right, title and interest in and to such appeal and refund respecting time periods up to (but not including) the Closing Date, and all amounts payable in connection therewith shall be paid directly to Seller by the applicable authorities. If Buyer receives such refund or any part thereof, then Buyer shall promptly pay such amount to Seller. Any refund received by Seller shall be distributed as follows: first, to reimburse Seller for all costs incurred in connection with the appeal; second, with respect to refunds payable to tenants of the Real Property pursuant to the Leases, to such tenants in accordance with the terms of such Leases; and third, to Seller to the extent such appeal covers the period prior to the Closing, and to Buyer to the extent such appeal covers the period as of the Closing and thereafter. If and to the extent any such appeal covers the period after the Closing, Buyer shall have the right to participate in such appeal. (d) Except as otherwise provided herein, any revenue or expense amount which cannot be ascertained with certainty as of Closing shall be prorated on the basis of the parties' reasonable estimates of such amount, and shall be the subject of a final proration sixty (60) days after Closing, or as soon thereafter as the precise amounts can be ascertained. Buyer shall promptly notify Seller when it becomes aware that any such estimated amount has been ascertained. Once all revenue and expense amounts have been ascertained, Buyer shall prepare, and certify as correct, a final proration statement, which shall be subject to Seller's approval. Upon Seller's acceptance and approval of any final proration statement submitted by Buyer, such statement shall be conclusively deemed to be accurate and final. (e) The provisions of this Section 4.4 shall survive the Closing. Page 11 of 24 Section 4.5 Transaction Taxes and Closing Costs. (a) Seller and Buyer shall execute such returns, questionnaires and other documents as shall be required with regard to all applicable real property transaction taxes imposed by applicable federal, state or local law or ordinance; (b) Seller shall pay the fees of any counsel representing Seller in connection with this transaction. Seller shall also pay the following costs and expenses: (i) one-half (1/2) of the escrow fee, if any, which is charged by the Escrow Holder or Title Company; (ii) the premium for the CLTA Standard Coverage Owner's Policy of Title Insurance to be issued to Buyer by the Title Company at Closing; (iii) one-half (1/2) of the fees for recording the Deed; (iv) any documentary transfer tax or similar tax (including, without limitation, City and County documentary transfer taxes, as applicable) which becomes payable by reason of the transfer of the Property; and (v) the fees set forth in Section 8.1. (c) Buyer shall pay the fees of any counsel representing Buyer in connection with this transaction. Buyer shall also pay the following costs and expenses: (i) one-half (1/2) of the escrow fee, if any, which is charged by the Escrow Holder or Title Company; (ii) the premium for the Owner's Policy of Title Insurance to be issued to Buyer by the Title Company at Closing, and all endorsements thereto, but only to the extent that those costs exceed the cost of a CLTA Standard Coverage Owner's Policy; (iii) one-half (1/2) of the fees for recording the Deed and any additional recording fees; and (iv) the cost of the Survey, if required by Buyer's lender and/or the Title Company. (d) The Personal Property is included in this sale without charge, Buyer shall be responsible for the amount of any and all sales or similar taxes payable in connection with the transfer of the Personal Property; (e) All costs and expenses incident to this transaction and the Closing thereof, and not specifically described above, shall be paid by the party incurring same; and (f) The provisions of this Section 4.5 shall survive the Closing. Page 12 of 24 Section 4.6 Conditions Precedent to Obligation of Buyer. The obligation of Buyer to consummate the transaction contemplated hereunder shall be subject to the fulfillment on or before the date of Closing of all of the conditions set forth in this Section 4.6 below, any or all of which may be waived by Buyer in its sole and absolute discretion. In the event Buyer terminates this Agreement due to the non-satisfaction of any such conditions, then the termination provisions set forth in Section 3.3 above shall apply. (a) Seller shall have delivered to Buyer all of the items required to be delivered to Buyer pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.2 hereof; (b) All of the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the date of Closing; and (c) Seller shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Seller as of the date of Closing; and (d) The Title Company shall have issued or irrevocably committed to issue the Title Policy. Section 4.7 Conditions Precedent to Obligation of Seller. The obligation of Seller to consummate the transaction contemplated hereunder shall be subject to the fulfillment of all of the following conditions, any or all of which may be waived by Seller in its sole and absolute discretion: (a) Within thirty (30) days following expiration of the Contingency Period: (i) Seller shall have obtained the requisite approval of the partners and investors of Seller as required by the Agreement of Limited Partnership of Seller (and, notwithstanding to the contrary in this Agreement, if Seller terminates this Agreement due to failure of this condition, then (in addition to return of Buyer's Deposit) Seller shall reimburse Buyer for its actual, out-of-pocket costs incurred in connection with its proposed purchase of the Property, not to exceed a total of Fifty Thousand Dollars ($50,000.00), payable within ten (10) days after receipt of Buyer's written request for such reimbursement accompanied by reasonable supporting documentation); and (b) On or before the Closing: (i) Seller shall have received the Purchase Price as adjusted as provided herein, and payable in the manner provided for in this Agreement; (ii) Buyer shall have delivered to Seller all of the items required to be delivered to Seller pursuant to the terms of this Agreement, including but not limited to, those provided for in Section 4.3 hereof; (iii) All of the representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects as of the date of Closing; and Page 13 of 24 (iv) Buyer shall have performed and observed, in all material respects, all covenants and agreements of this Agreement to be performed and observed by Buyer as of the date of Closing. ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS Section 5.1 Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer as of the Effective Date that (a) Seller has been duly organized, is validly existing under the laws of the State of California; (b) Seller has the full right and authority to enter into this Agreement, to transfer all of the Property and to consummate or cause to be consummated the transaction contemplated by this Agreement; (c) the person signing this Agreement on behalf of Seller is authorized to do so, (d) Seller is not currently subject to any bankruptcy, insolvency or similar proceedings, (e) Seller has not received any notice from any governmental authority that the Property is currently in violation of applicable laws, regulations or ordinances, and (f) the Financial Documents are accurate and complete in all material respects. The representations and warranties contained in this Section 5.1 shall be deemed to have been made again as of the Closing, subject to Section 4.2(f) hereof. Section 5.2 Survival of Seller's Representations and Warranties. The representations and warranties of Seller set forth in Section 5.1 hereof, as updated as of the Closing in accordance with the terms of this Agreement, shall survive Closing for a period of six (6) months. No claim for a breach of any representation or warranty of Seller shall be actionable or payable if the breach in question results from or is based on a condition, state of facts or other matter which was known to Buyer prior to Closing, if Buyer elects to consummate the transactions described herein with such knowledge. Seller shall have no liability to Buyer for a breach of any representation or warranty unless (a) the valid claims for all such breaches collectively aggregate more than Ten Thousand Dollars ($10,000.00), in which event the full amount of such valid claims shall be actionable, up to the Cap (as defined in this Section), and (b) written notice containing a description of the specific nature of such breach shall have been given by Buyer to Seller prior to the expiration of said six-month period and an action shall have been commenced by Buyer against Seller within six months of Closing. Buyer agrees to also use commercially reasonable efforts to obtain recovery under any applicable insurance policies, service contracts and/or Leases, and Seller shall not be liable to Buyer to the extent Buyer's claim is satisfied from such insurance policies, service contracts or Leases. As used herein, the term "Cap" shall mean the total aggregate amount of Two Hundred and Fifty Thousand Dollars ($250,000.00). Section 5.3 Covenants of Seller. Seller hereby covenants with Buyer as follows: (a) Property Maintenance. From the Effective Date hereof until the Closing or earlier termination of this Agreement, Seller shall use reasonable efforts to operate and maintain the Property in a manner generally consistent with the manner in which Seller has operated and maintained the Property prior to the date hereof. Seller shall not create nor permit the creation of any title exceptions such as easements or liens to encumber the Property without Buyer's prior written approval in Buyer's sole and absolute discretion; Page 14 of 24 (b) Leasing. From the Effective Date through the Closing Date, Seller may continue to execute leases with tenants in the normal course of business provided Seller shall not execute any lease which has a term in excess of twelve (12) months or which grants concessions, or rent at lower rate than for similar units rented prior to Closing, without Buyer's written consent. (c) Material Change. During Escrow, Seller shall not cause, authority or allow any material change with respect to the Property without the Buyer's prior written approval, which may he granted or withheld in Buyer's sole and absolute discretion. Section 5.4 Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller as of the Effective Date that Buyer has been duly organized and is validly existing under the laws of California. Buyer has the full right and authority to enter into this Agreement and to consummate or cause to be consummated the transaction contemplated by this Agreement. The person signing this Agreement on behalf of Buyer is authorized to do so. There is no action, suit, arbitration, unsatisfied order or judgment, government investigation or proceeding pending against Buyer which, if adversely determined, could individually or in the aggregate materially interfere with the consummation of the transaction contemplated by this Agreement. Buyer is solvent, has timely and, to its knowledge, accurately filed all tax returns to be filed by it and Buyer is not in default in the payment of any taxes levied or assessed against it or any of its assets. The representations and warranties contained in this Section 5.4 shall be deemed to have been made again as of the Closing, subject to Section 4.2(f) hereof. Section 5.5 Survival of Buyer's Representations and Warranties. The representations and warranties of Buyer set forth in Section 5.4 hereof as updated as of the Closing in accordance with the terms of this Agreement, shall survive Closing for a period of ninety (90) days. Buyer shall have no liability to Seller for a breach of any representation or warranty unless written notice containing a description of the specific nature of such breach shall have been given by Seller to Buyer prior to the expiration of said ninety (90) day period and an action shall have been commenced by Seller against Buyer within ninety (90) days of Closing. Section 5.6 Covenant of Buyer Re: 1031 Exchange. Seller may be selling the Property as part of a multi-property transaction to qualify as a tax-free exchange ("1031 Exchange") under Section 1031 of the Internal Revenue Code of 1986, as amended. Buyer shall, to the extent provided below, cooperate with Seller's reasonable request to allow Seller to attempt to qualify for the 1031 Exchange; provided, however, that Buyer's obligation to cooperate with Seller shall be limited and conditioned as follows: (i) Buyer shall receive written notice from Seller at least five (5) business days prior to the scheduled Closing Date, which shall identify the parties involved in such 1031 Exchange and enclose all document for which Buyer's signature shall be required; (ii) in no event shall Buyer be required to execute any document or instrument which may (A) subject Buyer to any additional liability or obligation to Seller or any other individual, entity or governmental agency, (B) diminish or impair Buyer's rights under this Agreement, or (C) delay Closing; (iii) Seller shall pay for any and all additional costs and expenses incurred by Buyer in connection with accommodating the 1031 Exchange, and Buyer shall be entitled to a credit at Closing to reimburse Buyer for such costs and expenses; (iv) Seller shall not be relieved of any of its obligations under this Agreement by reason of the 1031 Exchange; and (v) Seller hereby indemnifies and agrees to defend, and hold Buyer, Buyer's Page 15 of 24 officers, directors, shareholders, beneficiaries, members, partners, agents, employees and attorneys, and their representative successors and assigns harmless from and against any claims, costs, damages, expenses (including, but not limited to, attorneys' fees and costs), liabilities and losses incurred by, claimed against or suffered by any of them arising out of the 1031 Exchange. The foregoing indemnity shall survive the Closing or any termination of this Agreement. Seller's failure to effectuate any intended 1031 Exchange shall not relieve Seller from its obligations to consummate the purchase and sale transaction contemplated by this Agreement and the consummation of such 1031 Exchange shall not be a condition precedent to Seller's obligations under this Agreement. Section 5.7 Covenant of Buyer Re: Defeasance Loan. The Property is currently encumbered by a loan in favor of Mellon Mortgage Company, which loan is commonly referred to as a "Defeasance Loan". Buyer shall, to the extent provided below, cooperate with Seller's reasonable requests in connection with Seller's defeasance of the Defeasance Loan prior to or concurrent with the Closing. In no event shall Buyer be required to execute any document or instrument which may (A) subject Buyer to any additional liability or obligation to Seller or any other individual, entity or governmental agency, (B) diminish or impair Buyer's rights under this Agreement, or (C) delay the Closing. Section 5.8 Covenant of Seller Re: 1031 Exchange. Buyer may be buying the Property as part of a 1031 Exchange. Seller shall, to the extent provided below, cooperate with Buyer's reasonable request to allow Buyer to attempt to qualify for the 1031 Exchange; provided. however, that Seller's obligation to cooperate with Buyer shall be limited and conditioned as follows: (i) Seller shall receive written notice from Buyer at least five (5) business days prior to the scheduled Closing Date, which shall identify the parties involved in such 1031 Exchange and enclose all document for which Seller's signature shall be required; (ii) in no event shall Seller be required to execute any document or instrument which may (A) subject Seller to any additional liability or obligation to Buyer or any other individual, entity or governmental agency, (B) diminish or impair Seller's rights under this Agreement, or (C) delay Closing; (iii) Buyer shall pay for any and all additional costs and expenses incurred by Buyer in connection with accommodating the 1031 Exchange, and Seller shall be entitled to a credit at Closing to reimburse Seller for such costs and expenses; (iv) Buyer shall not be relieved of any of its obligations under this Agreement by reason of the 1031 Exchange; and (v) Buyer hereby indemnifies and agrees to defend, and hold Seller, Seller's officers, directors, shareholders, beneficiaries, members, partners, agents, employees and attorneys, and their representative successors and assigns harmless from and against any claims, costs, damages, expenses (including, but not limited to, attorneys' fees and costs), liabilities and losses incurred by, claimed against or suffered by any of them arising out of the 1031 Exchange. The foregoing indemnity shall survive the Closing or any termination of this Agreement. Buyer's failure to effectuate any intended 1031 Exchange shall not relieve Buyer from its obligations to consummate the purchase and sale transaction contemplated by this Agreement and the consummation of such 1031 Exchange shall not be a condition precedent to Buyer's obligations under this Agreement. Page 16 of 24 ARTICLE VI. DEFAULT Section 6.1 Default by Buyer. If the sale of the Property as contemplated hereunder is not consummated due to Buyer's material default hereunder, then Seller shall be entitled, as its sole and exclusive remedy, to terminate this Agreement and retain the Deposit as liquidated damages as more particularly set forth in Section 1.6 above. Section 6.2 Default by Seller. If the sale of the Property as contemplated hereunder is not consummated due to Seller's material default hereunder, then Buyer shall be entitled, as its sole and exclusive remedy, to either (a) receive the return of the Deposit, which return shall operate to terminate this Agreement and release Seller from any and all liability hereunder, or (b) enforce specific performance of Seller's obligation to convey the Property to Buyer in accordance with the terms of this Agreement. The remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. Buyer expressly waives its rights to seek damages in the event of Seller's default hereunder. Buyer shall be deemed to have elected to terminate this Agreement and receive the Deposit if Buyer fails to file suit for specific performance against Seller in a court having jurisdiction in the County and State in which the Property is located, on or before 60 days following the date upon which Closing was to have occurred. Section 6.3 Recoverable Damages. Notwithstanding Sections 6.1 and 6.2 hereof, in no event shall the provisions of Sections 6.1 and 6.2 limit the damages recoverable by either party against the other party due to the other party's obligation to indemnify such party in accordance with this Agreement. ARTICLE VII. RISK OF LOSS Section 7.1 Minor Damage. In the event of loss or damage to the Property or any portion thereof which is not "Major" (as hereinafter defined), this Agreement shall remain in full force and effect provided that Seller shall, at Seller's option, either (a) perform any necessary repairs, or (b) assign to Buyer all of Seller's right, title and interest in and to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. If Seller elects to perform repairs upon the Property, Seller shall use reasonable efforts to complete such repairs promptly, and the date of Closing shall be extended for a reasonable time to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Buyer, the Purchase Price shall be reduced by an amount equal to the lesser of the deductible amount under Seller's insurance policy or the cost of such repairs as determined in accordance with Section 7.3 hereof. Upon Closing, full risk of loss with respect to the Property shall pass to Buyer. Section 7.2 Major Damage. Seller shall promptly notify Buyer of the occurrence of any "Major" loss or damage, which notice shall state the cost of repair or restoration thereof as opined by an architect or other qualified expert in accordance with Section 7.3 hereof. Buyer Page 17 of 24 shall have the right, exercisable by giving written notice to Seller within ten (10) days after receipt of Seller's written notice, to terminate this Agreement in which event the provisions of Section 3.3 shall apply. If Buyer does not elect to terminate this Agreement within said ten (10) day period, then Buyer shall be deemed to have elected to proceed with Closing. In that event Seller shall at Seller's option either (a) perform any necessary repairs, or (b) cause the Closing to occur promptly and assign to Buyer through Escrow all of Seller's right, title and interest in and to any claims and proceeds Seller may have with respect to any casualty insurance policies or condemnation awards relating to the premises in question. If Seller elects to perform repairs upon the Property, Seller shall use reasonable efforts to complete such repairs promptly, and the date of Closing shall be extended for a reasonable time in order to allow for the completion of such repairs. If Seller elects to assign a casualty claim to Buyer, the Purchase Price shall be reduced by an amount equal to the lesser of the deductible amount under Seller's insurance policy or the cost of such repairs as determined in accordance with Section 7.3 hereof. Upon Closing, full risk of loss with respect to the Property shall pass to Buyer. Section 7.3 Definition of "Major" Loss or Damage. For purposes of Sections 7.1 and 7.2, "Major" loss or damage refers to the following: (a) loss or damage to the Property hereof such that the cost of repairing or restoring the premises in question to substantially the same condition which existed prior to the event of damage would be, in the opinion of an architect or other qualified expert selected by Seller and reasonably approved by Buyer, equal to or greater than Five Hundred Thousand Dollars ($500,000), and (b) any loss due to a condemnation which permanently and materially impairs the current use of the Property. If Buyer does not give written notice to Seller of Buyer's reasons for disapproving an architect or other qualified expert within five (5) business days after receipt of notice of the proposed architect or other qualified expert, then Buyer shall be deemed to have approved the architect or other qualified expert selected by Seller. ARTICLE VIII. COMMISSIONS Section 8.1 Brokerage Commissions. With respect to the transaction contemplated by this Agreement, Seller shall be responsible for the payment of a real estate brokerage commission (the "Seller's Commission") to Hendricks & Partners (Dick Bassett) ("Brokers") pursuant to a separate written agreement between Seller and Brokers relating thereto. Each party hereto agrees that if any person or entity, other than Brokers, makes a claim for brokerage commissions or finder's fees other than the Seller's Commission related to the sale of the Property by Seller to Buyer, and such claim is made by, through or on account of any acts or alleged acts of said party or its representatives, then said party will protect, indemnify, defend and hold the other party free and harmless from and against any and all loss, liability, cost, damage and expense (including reasonable attorneys' fees) in connection therewith. The provisions of this paragraph shall survive Closing or any termination of this Agreement. ARTICLE IX. DISCLAIMERS AND WAIVERS Section 9.1 No Reliance on Documents. Except as expressly stated herein, Seller makes no representation or warranty as to the truth, accuracy or completeness of any materials, Page 18 of 24 data or information delivered by Seller or its brokers or agents to Buyer in connection with the transaction contemplated hereby. All materials, data and information delivered by Seller to Buyer in connection with the transaction contemplated hereby are provided to Buyer as a convenience only and any reliance on or use of such materials, data or information by Buyer shall be at the sole risk of Buyer, except as otherwise expressly stated herein. Neither Seller, nor any, affiliate of Seller, nor the person or entity, which prepared any report or reports delivered by Seller to Buyer, shall have any liability so Buyer for any inaccuracy in or omission from any such reports. Section 9.2 AS IS SALE; DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT. BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGERS OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT. BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS AND TAKES INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD "AS IS." BUYER REPRESENTS AND COVENANTS TO SELLER THAT BUYER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER, UPON CLOSING, Page 19 of 24 SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL, CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY, EXCEPT AS EXPRESSLY SET FORTH OTHERWISE IN THIS AGREEMENT. IN CONNECTION THEREWITH, BUYER EXPRESSLY WAIVES ALL RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES THAT: "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 BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR," Section 9.3 Survival of Disclaimers. The provisions of this Article IX shall survive Closing or any termination of this Agreement. ARTICLE X. MISCELLANEOUS Section 10.1 Confidentiality. Buyer and its representatives shall hold in confidence all data and information obtained with respect to Seller or its business, whether obtained before or after the execution and delivery of this Agreement, and shall not disclose the same to others; provided, however, that Buyer may disclose such data and information to the employees, lenders, prospective lenders, partners, prospective partners, consultants, accountants and attorneys of Buyer if such persons agree in writing to treat such data and information confidentially. If this Agreement is terminated or Buyer fails to perform hereunder, Buyer shall promptly return to Seller any statements, documents, schedules, exhibits or other written information obtained from Seller in connection with this Agreement or the transaction contemplated herein. With respect to any provision of this Agreement which refers to the termination of this Agreement and the return of the Deposit to Buyer, such Deposit shall not be returned to Buyer unless and until Buyer has fulfilled its obligation to return to Seller the materials described in the preceding sentence. In the event of a breach or threatened breach by Buyer or its agents or representatives of this Section 10.1, Seller shall be entitled to an injunction restraining Buyer or its agents or representatives from disclosing, in whole or in part, such confidential information. Nothing herein shall be construed as prohibiting Seller from pursuing any other available remedy at law or in equity for such breach or threatened breach. The provisions of this Section 10.1 shall Page 20 of 24 survive Closing or any termination of this Agreement. Section 10.2 Public Disclosure. Prior to and after the Closing, any release to the public of information with respect to the sale contemplated herein or any matters set forth in this Agreement will be made only in the form approved by Buyer and Seller. The provisions of this Section 10.2 shall survive the Closing or any termination of this Agreement. Section 10.3 Assignment. Subject to the provisions of this Section 10.3, the terms and provisions of this Agreement are to apply to and bind the permitted successors and assigns of the parties hereto. Buyer may not assign its rights under this Agreement without first obtaining Seller's written approval, which approval may be given or withheld in Seller's sole discretion. Notwithstanding the foregoing, Buyer may assign its rights and obligations under this Agreement to one or more entities in which Buyer or its principals retain a controlling ownership interest (including without limitation a limited partnership of which Buyer is the general partner). In the event that Buyer desires to assign its rights hereunder, (a) Buyer shall send Seller written notice of its request at least ten (10) business days prior to Closing, which request shall include the legal name and structure of the proposed assignee, as well as any other information that Seller may reasonably request, (b) if such proposed assignee is approved by Seller, then Buyer and the proposed assignee shall execute an assignment and assumption of this Agreement in form and substance reasonably satisfactory to Seller, and (c) in no event shall any assignment of this Agreement release or discharge Buyer from any liability or obligation hereunder unless expressly agreed otherwise by Seller in writing. Any transfer, directly or indirectly, of a controlling interest in any stock, partnership interest or other ownership interest in Buyer shall constitute an assignment of this Agreement. Section 10.4 Notices. Any notice pursuant to this Agreement shall be given in writing by (a) personal delivery, (b) reputable overnight delivery service with proof of delivery, (c) United States Mail, postage prepaid, registered or certified mail, return receipt requested, or (d) legible facsimile transmission, sent to the intended addressee at the address set forth below, or to such other address or to the attention of such other person as the addressee shall have designated by written notice sent in accordance herewith. Any notice so given shall be deemed to have been given upon receipt or refusal to accept delivery, or, in the case of facsimile transmission, as of the date of the facsimile transmission provided that an original of such facsimile is also sent to the intended addressee by means described in clauses (a), (b) or (c) above. Unless changed in accordance with the preceding sentence, the addresses for notices given pursuant to this Agreement shall be as follows: If to Seller: IGP X MISSION PARK ASSOCIATES, L.P. c/o Income Growth Management 11230 Sorrento Valley Road, Suite 220 San Diego, CA 92121-1329 Attention: Mr. David Maurer Telephone No. (858)457-2750 Facsimile No. (858)457-3104 Page 21 of 24 with a copy to: LAW OFFICES OF JON K. LADD, APC 11440, West Bernardo Court, Suite 214 San Diego, CA 92127-1643 Attention: Jon K. Ladd Telephone No. (858)451-1234 Facsimile No. (858)451-1208 If to Buyer: Pacifica Enterprises, LLC 12780 High Bluff Drive, Suite 160 San Diego, California 92130 Attn: Dario DeLuca Telephone No. (858)755-0216 Facsimile No. (858)755-1687 with a copy to: JUDKINS, GLATT, GETZ, GALLAGHER & BONANNO, LLP 530 B Street, Suite 1800 San Diego, CA 92101 Attention: Greg Judkins Telephone No. (619)232-4604 Facsimile No. (619)232-4616 Section 10.5 Modifications. This Agreement cannot be changed orally, and no executory agreement shall be effective to waive, change, modify or discharge it in whole or in part unless such executory agreement is in writing and is signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought. Section 10.6 Entire Agreement. This Agreement, including the exhibits and schedules hereto, contains the entire agreement between the parties hereto pertaining to the subject matter hereof and fully supersedes all prior written or oral agreements and understandings between the parties pertaining to such subject matter. Section 10.7 Further Assurances. Each party agrees that it will execute and deliver such other documents and take such other action, whether prior or subsequent to Closing, as may be reasonably requested by the other party to consummate the transaction contemplated by this Agreement. The provisions of this Section 10.7 shall survive the Closing. Section 10.8 Counterparts. This Agreement may be executed in counterparts, all such executed counterparts shall constitute the same agreement, and the signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. Section 10.9 Facsimile Signatures. In order to expedite the transaction contemplated herein, telecopied signatures may be used in place of original signatures on this Agreement or any document delivered pursuant hereto (other than the Deed, the notarized original of which shall be required prior to Closing). Seller and Buyer intend to be bound by the signatures on the telecopied document, are aware that the other party will rely on the telecopied signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form Page 22 of 24 of signature. Following any facsimile transmittal, the party shall promptly deliver the original instrument by reputable overnight courier in accordance with the notice provisions of this Agreement. Section 10.10 Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall nonetheless remain in full force and effect; provided that the invalidity or unenforceability of such provision does not materially adversely affect the benefits accruing to any party hereunder. Section 10.11 Application Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to any principal or rule of law that would require the application of the law of any other jurisdiction. Buyer and Seller agree that the provisions of this Section 10.11 shall survive the Closing or any termination of this Agreement. Section 10.12 No Third-Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Buyer only and are not for the benefit of any third party; and, accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing. Section 10.13 Captions. The section headings appearing in this Agreement are for convenience of reference only and are not intended, to any extent and for any purpose, to limit or define the text of any section or any subsection hereof. Section 10.14 Construction. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to take effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto. Section 10.15 Recordation. Neither party shall record this Agreement or any memorandum hereof without the prior written consent of the other party hereto. The provisions of this Section 10.15 shall survive the Closing or any termination of this Agreement. Section 10.16 Time of the Essence. Time is of the essence of each and every provision of this Agreement. // // // // // // Page 23 of 24 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the Effective Date. SELLER BUYER IGP X MISSION PARK ASSOCIATES PACIFICA ENTERPRISES, LLC, L.P., a California Limited a California limited liability Partnership company By: IGP X MISSION PARK ASSOCIATES By: /s/ DARIO DE LUCA MANAGEMENT, INC., -------------------------------- a California corporation Name: DARIO DE LUCA Title: Manager By: /s/ David W. Maurer -------------------------------- Name: David W. Maurer Title: President Page 24 of 24 ESCROW HOLDER CONSENT Escrow Holder hereby acknowledges that it has received fully executed or executed counterparts of the foregoing Agreement and agrees to act as Escrow Holder thereunder and to be bound by the provisions thereof. ESCROW HOLDER: STEWART TITLE COMPANY By: /s/Michelle Mitchell Date: 12/5/2003 Name: Michelle Mitchell Escrow No.: 1050927 Title: Commercial Escrow Officer 1 of 1 EXHIBIT "A" DESCRIPTION OF LAND THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO AND IS DESCRIBED AS FOLLOWS: LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9, 1989. TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN ON SAID MAP. Page 1 of 1 EXHIBIT "B" LIST OF PERSONAL PROPERTY [To be attached] Page 1 of 1 EXHIBIT "C" ESCROW HOLDER'S GENERAL PROVISIONS [To be attached] Page 1 of 1 GENERAL PROVISIONS 1. DEPOSIT OF FUNDS, OPPORTUNITY TO EARN INTEREST AND PRORATIONS All funds received in this escrow shall be deposited with other escrow funds into one or more non-interest bearing escrow accounts at a financial institution selected by Escrow Agent. Escrow Agent shall not be responsible and shall have no liability for any delay in closing this escrow if the funds deposited are not available for immediate withdrawal as a matter of right pursuant to California Insurance Code Section 12413.1 et. seq. Funds deposited in the financial institution are insured only to the limit provided by the Federal Deposit Insurance Corporation. Escrow Holder shall not be held responsible for lost interest due to wire delays caused by any bank or the Federal Reserve System, and recommends that all parties make themselves aware of banking regulations with regards to placement of wires. You have the opportunity to earn interest on the funds you deposit with us by instructing us to deposit your funds in an interest bearing account. (You do not have an opportunity to earn interest on any funds deposited by a lender) If you elect to earn interest, there is an additional fee in the amount of $50.00 for establishing and maintaining such an account. It is important that you consider this cost as it may exceed the actual interest you earn. Should you not elect to earn interest on your deposit, your funds will be deposited in our General Escrow Account at a financial institution insured by the EDIC. This is a non-interest bearing account; however, Stewart Title of California, Inc. may receive certain financial benefits from that financial institution because of the General Escrow Account and its on-going banking relationship. These benefits may include, without limitation, credits allowed by such financial institution on loans to Stewart Title of California, Inc. and earnings on investments made with the proceeds of such loans, accounting, reporting and other services and products of such financial institution. We do not have an obligation to account to you in any manner for the value of, or to compensate any party for, any benefit received by Stewart Title of California, Inc. Any such benefits shall be deemed additional compensation of Stewart Title of' California, Inc. for its services in connection with the escrow. All prorations and/or adjustments called for in this escrow shall he made on the basis of a 30 day month or 360 day year, unless otherwise instructed in writing. Proration of real property taxes including supplemental real property taxes, will be made on the basis of the latest available figures provided to Escrow Holder. The phrase close of escrow (COE) as used herein means the date on which instruments/documents are recorded. Disbursements from this escrow will be made by check of Escrow Holder. Unless otherwise instructed in writing, checks will be issued jointly to the parties designated as payees. Signatures (including initials) of principals or their duly authorized agents on any documents/instrument and/or instruction pertaining to this escrow indicate approval of same. 2. SPECIAL RECORDINGS If a "SPECIAL RECORDING" is arranged and completed, meaning recording the documents called for in this escrow, at any time other than the standard recording time for title companies, then all parties hereto represent and warrant that during the period of time between the standard recording time and the time the documents are actually recorded pursuant to the "SPECIAL RECORDING", no additional liens, encumbrances, or exceptions to the title whether involuntary or voluntary, of any kind or nature will attach to or be recorded against the subject property, nor will the subject property be otherwise transferred or conveyed. All parties hereby expressly agree to indemnify and hold Escrow Holder harmless from all claims, losses or damages and attorney's fees resulting from any such additional liens, encumbrances, exceptions to title, transfers or conveyances. 3. AUTHORIZATION TO DELIVER If it is necessary, proper or convenient for the consummation of this escrow, Escrow Holder is authorized to deposit or have deposited funds or documents, or both, handed to Escrow Holder under these escrow instructions with any duly authorized sub-escrow agent, including, but not limited to, any bank, trust company, title insurance company, title company, savings and loan association, or licensed escrow agent, at or before close of escrow in connection with closing this escrow. Any such deposit shall be deemed a deposit under the meaning of these escrow instructions. 4. AUTHORIZATION TO FURNISH COPIES Furnishing copies of any/all escrow instructions, amendments, supplements, preliminary reports, notices of cancellation and closing statements in this escrow to the real estate broker(s), lenders and/or attorney's representing principals to this escrow is authorized. Escrow holder shall not incur any liability to the parties for delivery of said copies. 5. TIME AND WRITTEN NOTIFICATION Time is of the essence. In the event the conditions of this escrow have not been complied with at the expiration of the time provided for herein you are permitted, though not required, to complete the same at the earliest possible date thereafter. No notice, demand or change of instructions shall be of any effect to alter, amend, supplement, or vary the terms of these instructions unless given in writing and signed by all parties affected thereby. 6. CANCELLATION PROVISIONS Any principal instructing Escrow Holder to cancel escrow shall file notice of cancellation in Escrow Holder's office in writing and so state the reason for cancellation. Upon receipt of same, Escrow Holder shall prepare cancellation instructions for signatures of the principals and shall forward same to the principals. Upon receipt of mutually agreeable cancellation instructions signed by all principals and after payment of Escrow Holder's cancellation charges, Escrow Holder is authorized to comply with such instructions and cancel the escrow. 7. ACTION IN INTERPLEADER OR OTHER COURT OR LEGAL PROCEEDINGS The principals hereto expressly agree that Escrow Holder has the absolute right, at its election, to file an action in interpleader requiring the principals to answer and litigate their several claims and rights among themselves and Escrow Holder is authorized to deposit with the clerk and the court, all documents, instruments and funds held in escrow, in the event such action is filed, the principals jointly and severally agree 1o pay Escrow Holder's cancellation charges and costs, expenses and reasonable attorney's fees it is required to expend or incur in such interpleader action, the amount thereof to be fixed and judgment therefore to be rendered by the court. Upon filing of such action, Escrow Holder is thereupon fully released and discharged from all obligations to further perform any duties or obligations otherwise imposed by the terms of this escrow. 8. PERSONAL PROPERTY TAX Escrow Holder is not responsible for any personal property tax which may be assessed to any former owner of the property that is the subject of this escrow, nor for the corporation or license tax of any corporation as a former owner. No examination or insurance as to the amount of payment of personal taxes is required unless specifically requested. 9. LIMITATION ON DUTY TO INFORM It is agreed by the parties hereto, that so far as Escrow Holder's rights and liabilities are involved, the transaction is an escrow and not any other legal relation and STEWART TITLE OF CALIFORNIA, INC. is an Escrow Holder only on the within expressed terms, and Escrow Holder shall have no responsibility for notifying any of the parties of this escrow of any sale, resale, loan, exchange or other transaction involving any property herein described or of the profit realized by any person, firm or corporation (broker, agent and parties to this and/or other escrow included), in connection therewith, regardless of the fact that such transaction(s) may be handled concurrently by Escrow Holder in this escrow or in another escrow. 10. LEGAL ADVICE The parties acknowledge and understand that Escrow Holder is not authorized to practice law, nor give financial advice. The parties are hereby advised to seek legal and financial counsel and advice concerning the effect of these escrow instructions. The parties acknowledge that no representations are made by Escrow Holder about the legal sufficiency, legal consequences, financial effect or tax consequences of the within escrow instructions. 11. DISCLOSURE OF CONDITIONS PRECEDENT The parties to this escrow, by execution thereof, acknowledge their duty to Escrow Holder of full disclosure of those matters, which shall effect the transfer of subject property and conditions of title (inclusive of real personal and intangible property, which matters may result in a lien against subject property). Disclosure shall include, but not limited to: water, stock, owners association or maintenance dues, contractual obligations not automatically terminated upon sale, notes, deeds of trust and vendors liens. 12. STATE/FEDERAL CODE NOTIFICATION According to Federal law, the Seller(s), when applicable, will be required to complete a 1099-S Worksheet that will be utilized to generate a 1099 reporting statement to the Internal Revenue Service. You are released from and shall have no liability, obligations or responsibility with respect to (a) withholding of funds pursuant to Section 1445 of the Internal Revenue Code of 1984, "Foreign Investors in Real Property Act" (FIRPTA), as amended (b) advising of requirements, (c) determining whether the seller is a foreign person, under such Section, or (d) obtaining a non-foreign affidavit or other exemption from withholding under such Section nor otherwise making any inquiry concerning compliance with such Section by any party to this transaction. IN ACCORDANCE WITH SECTION 18662 AND 18668 OF THE REVENUE AND TAXATION CODE, A BUYER MAY BE REQUIRED TO WITHHOLD ANY AMOUNT EQUAL TO 3-1/3 PERCENT OF THE SALES PRICE IN THE CASE OF A DISPOSITION OF CALIFORNIA REAL PROPERTY INTEREST. BY EITHER: 1) A SELLER WHO IS AN INDIVIDUAL OR DISBURSEMENT INSTRUCTIONS AUTHORIZED THE PROCEEDS TO BE SENT TO A FINANCIAL INTERMEDIARY OF THE SELLER, OR 2) A CORPORATE SELLER THAT HAS NO PERMANENT PLACE OF BUSINESS IN CALIFORNIA. FOR FAILURE TO WITHHOLD, THE BUYER MAY BECOME SUBJECT TO PENALTY EQUAL TO THE GREATER OF 10 PERCENT OF THE AMOUNT REQUIRED TO BE WITHHELD OR FIVE HUNDRED DOLLARS ($500.00). HOWEVER, NOTWITHSTANDING ANY OTHER PROVISION INCLUDED IN THE CALIFORNIA STATUTES REFERENCES ABOVE, NO BUYER WILL BE REQUIRED TO WITHHOLD ANY AMOUNT OR BE SUBJECT TO PENALTY FOR FAILURE TO WITHHOLD IF 1) THE SALES PRICE OF THE CALIFORNIA REAL PROPERTY CONVEYED DOES NOT EXCEED ONE HUNDRED THOUSAND DOLLARS ($100,000.00), OR 2) THE SELLER EXECUTES A WRITTEN CERTIFICATE, UNDER THE PENALTY OF PERJURY, CERTIFYING THAT THE SELLER IS A CORPORATION WITH A PERMANENT PLACE OF BUSINESS IN CALIFORNIA, OR 3) THE SELLER, WHO IS AN INDIVIDUAL, EXECUTES A WRITTEN CERTIFICATE UNDER THE PENALTY OF PERJURY, OF ANY OF THE FOLLOWING: A) THAT THE CALIFORNIA REAL PROPERTY BEING CONVEYED IS THE SELLER'S PRINCIPAL RESIDENCE (WITHIN THE MEANING OF SECTION 121 OF THE INTERNAL REVENUE CODE). B) THAT THE CALIFORNIA REAL PROPERTY BEING CONVEYED IS OR WILL BE EXCHANGED FOR PROPERTY OF LIKE KIND (WITHIN THE MEANING OF SECTION 1031 OF THE INTERNAL REVENUE CODE), BUT ONLY TO THE EXTENT OF THE AMOUNT OF GAIN NOT REQUIRED TO BE RECOGNIZED FOR CALIFORNIA INCOME TAX PURPOSES. C) THAT THE CALIFORNIA REAL PROPERTY HAS BEEN COMPULSORILY OR INVOLUNTARILY CONVERTED (WITHIN THE MEANING; OF SECTION 1033 OF THE INTERNAL REVENUE CODE) AND THAT THE SELLER INTENDS TO ACQUIRE PROPERTY SIMILAR OR RELATED IN SERVICE OR USE SO AS TO BE ELIGIBLE FOR NONRECOGNIT1ON OF GAIN FOR CALIFORNIA INCOME TAX PURPOSES. D) THAT THE CALIFORNIA REAL PROPERTY TRANSACTION WILL RESULT IN A LOSS FOR CALIFORNIA INCOME TAX PURPOSES. THE SELLER IS SUBJECT TO PENALTY FOR KNOWINGLY FILING A FRAUDULENT CERTIFICATE FOR THE PURPOSE OF AVOIDING THE WITHHOLDING REQUIREMENT. 13. NO ACTIVITY If there is no written activity by a principal to this escrow within any six - -month period after the time limit date is set forth, in the escrow instructions or written extension thereof, Escrow Holder's obligation shall terminate at Escrow Holder's option. All documents, monies or other items deposited with Escrow Holder shall he returned to the respective parties entitled thereto, less fees and charges herein provided. 14. CAPTIONS AND COUNTERPARTS Captions in these escrow instructions are inserted for convenience of reference only and do not define, describe or limit the scope of the intent of these instructions or any of the terms hereof. These instructions may be executed in counterparts, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original, and said counterparts together shall constitute one and the same instrument. 15. BINDING All terms of these escrow instructions shall be binding upon inure to the benefit and be enforceable by the parties hereto and there respective legal representatives, successors and assigns. In the event any term, covenant, condition, provision or agreement herein contained is held to be invalid or void by any court of competent jurisdiction, the invalidity of any such term, covenant, condition, provision or agreement shall in no way affect any other term, covenant, condition, provision or agreement herein contained. 16. USURY Escrow Holder is not to be concerned with any question of usury in any loan or encumbrance involved in the processing of this escrow and is hereby released of any liability or responsibility therefore. 17. CONFLICTING DEMANDS/INTERPLEADER NO notice, demand or change of instructions shall be of any effect in this escrow unless given in writing by all parties affected thereby. If conflicting demands are made in connection with this escrow, Escrow Holder shall have the absolute right to either withhold and stop all proceedings, or file suit in the interpleader and obtain an order from the court requiring the parties to interplead their several claims and rights amongst themselves. 18. FACSIMILE AND ELECTRONIC MAIL All parties acknowledge that documents and instructions may be transmitted via facsimile (FAX) and/or electronic mail (e-mail). In the event the principals of this transaction, their agents, or assigns, utilize "facsimile (FAX)" transmitted instructions, Escrow Holder may rely and act upon such instructions in the same manner as if original signed instructions were in the possession of Escrow Holder. Any instructions for release of funds will require original signatures prior to said release. 19. DISCRETIONARY TERMINATION At the sole discretion of Escrow Holder, Escrow Holder may elect to terminate its escrow relationship with the principals to the escrow. Funds and documents will be returned upon mutual instructions of the appropriate parties. 20. PURCHASE AGREEMENT If any form of Purchase agreement or amendment or supplement (collectively "Purchase Agreement") is deposited to this escrow, it is understood that such document shall be effective only as between the parties signing the Purchase Agreement. Escrow Holder's only duty is to comply with the instructions set forth in the escrow instructions and shall not be responsible for interpreting or acting on any provision of any Purchase Agreement on which these escrow instructions may he based. Escrow Holder shall not rely on any knowledge or understanding Escrow Holder may have of any such Purchase Agreement in ascertaining or performing the duties of Escrow Holder. In connection with any loan transaction, Escrow Holder is authorized to deliver a copy of any purchase agreement and a copy of all escrow instructions, supplements or amendments to the Lender 21. ENVIRONMENTAL DISCLOSURE Notwithstanding any actual or other knowledge on the part of Escrow Holder, the parties agree to release Escrow Holder from any and all liability of any kind or nature and to indemnify any and all liability of any kind or nature and to indemnify Escrow Holder of any loss, damages, claims, judgments or costs of any kind or nature resulting from or related to the release or discharge of hazardous or toxic wastes on the subject property whether it occurred in the past or present or may occur in the future which release or discharge is in violation of law, in excess of any state and federal standards, permit requirements and/or disclosure requirements existing at this time or which may exist at a future time. The parties represent that they made their own assessment of the condition of the subject property and have not relied on any of your representations in making the assessment. The parties are advised to seek independent legal and technical environmental expert advise in assessing the risks associated with potential hazardous or toxic wastes. 22. ADDITIONAL DOCUMENTS HANDED TO ESCROW HOLDER Parties agree to hand Escrow Holder applicable documentation to establish their authority to act. Those documents may include, but shall not be limited to the following: 1) If an individual: Statement of Information 2) If a corporation: A Corporate resolution signed by the Secretary of the Corporation, authorizing the acquisition, encumbrancing (if applicable), or sale of the subject property, and designating the authorized signatories on behalf of the corporation, together with a copy of the Articles of Incorporation & By-Laws. 3) If a Trust: copy of the Trust Agreement, any amendments thereto and/or a Certificate of Trust. 4) If a General Partnership: An original Statement of Partnership, in recordable form (if not already recorded) to be recorded in the County in which the subject property is located. A copy of the partnership agreement is also requested. 5) If a Limited Partnership: The LP-1 form, certified by the Secretary of State to record (if not already recorded) in the county in which the subject property is located. A copy of the partnership agreement is also requested. 6) If a Joint Venture: The requirements specified 1, 2, and 3 herein will be applicable as it relates to the entities which comprise the Joint Venture. 7) If a Limited Liability Company (LLC): The LLC1 certified by the Secretary of State to record (if not already recorded) in the county in which the subject property is located. The LLC1 must reflect an expiration date. One person must be named on the LLC1 as managing the LLC, or all members must sign. A copy of the operating agreement is required. The parties further acknowledge that in the event the partners of a partnership are individuals, it may be required that each such partner submit a completed and executed Statement of Information. If the Principals have any questions regarding the disposition of Unclaimed Funds, in excess of $50.00 the Principals should contact the Controller or successor agency for the State of California. 23. DESTRUCTION OF RECORDS Escrow Holder is authorized to destroy or otherwise dispose of any and all documents, papers, instructions, correspondence and other materials pertaining to this escrow at the expiration of seven (7) years from the close of escrow or cancellation thereof. 24. GOOD FUNDS California Insurance Code Section 12413. 1 regulates the disbursement of escrow and sub-escrow funds by title companies. The law requires that funds be deposited in the title company escrow account and available for withdrawal prior to disbursement. Funds received via wire transfer may be disbursed upon receipt. Funds received via cashier's checks or teller checks drawn on a California Bank may be disbursed on the next business day after the day of deposit. If funds are received by any other means, recording and/or disbursement may be delayed. STEWART TITLE OF CALIFORNIA, INC. shall not be responsible for accruals of interest or other charges resulting from compliance with the disbursement restrictions imposed by state law. If any check submitted is dishonored upon presentment for payment, you are authorized to notify all principals and/or their respective agents of such nonpayment. 25. CHANGE IN OWNERSHIP REPORT All parties are aware that a "Preliminary Change in Ownership Form" is to be filed with the office of the County Assessor upon recordation of all transfer documents involving real property. As an accommodation only, Escrow Holder shall provide necessary forms to the purchaser herein and in the event the completed form is deposited into escrow prior to close, Escrow Holder shall deliver same to County Assessor concurrently with recordation of the documents being recorded in this transaction. 26. APPLICATION OF PAYOFF FUNDS Should a check or wire be deemed unacceptable by lenders, creditors, lien holders or beneficiaries of Deeds of Trust, Escrow Holder is authorized to act on our behalf in requesting the funds, as well as any balance in an impound account, be applied towards the balance due. 27. INDEMNITY FOR ATTORNEY'S FEES AND COSTS In the event suit is brought by any party or parties to this escrow, including Stewart Title of California, Inc., as against each other or others, including, Stewart Title of California, Inc., which results in a dismissal of or judgment in favor of Stewart Title of California, Inc., the parties hereto agree to hold harmless, reimburse and indemnify Stewart Title of California, Inc., its officers and employees, from any loss, expenses, costs and attorney's fees incurred. THIS AGREEMENT IN ALL PARTS APPLIES TO, INURES TO THE BENEFIT OF, AND FUNDS ALL PARTIES HERETO, THEIR HEIRS, LEGATEES, DEVISEES, ADMINISTRATORS, EXECUTORS, SUCCESSORS AND ASSIGNS, AND WHENEVER THE CONTEXT SO REQUIRES THE MASCULINE GENDER INCLUDES THE FEMININE AND NEUTER, AND THE SINGULAR NUMBER INCLUDES THE PLURAL. THESE INSTRUCTIONS AND ANY OTHER AMENDMENTS, MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL HE CONSIDERED AS AN ORIGINAl AND BE EFFECTIVE AS SUCH. MY/OUR INITIAL (S) HERETO CONSTITUTES INSTRUCTION TO ESCROW HOLDER OF ALL TERMS AND CONDITIONS CONTAINED IN THIS AND ALL PRECEDING PAGES AND FURTHER SIGNIFIES THAT I/WE HAVE READ AND UNDERSTAND THESE GENERAL PROVISIONS. INITIAL:___________________________ NOTICE TO DEPOSITOR. Thank you for choosing Stewart Title of California (Stewart Title). As you have deposited and/or will be depositing funds with Stewart Title, we deem it important that you are aware of an opportunity to earn interest, or in the alternative, to benefit from reduced escrow fees. Should you not elect to earn interest on your deposit, Stewart Title will deposit your funds into its General Escrow Account at a financial institution insured by the FDIC. This is a non-interest bearing account; however, Stewart Title may receive certain financial benefits from that financial institution because of the General Escrow Account and its on-going banking relationship. These benefits may include, without limitation, credits allowed by such financial institution on loans to Stewart Title and earnings on investments made with the proceeds of such loans, accounting, reporting and other services and products of such financial institution. These financial benefits enable Stewart Title of California to offer lower escrow fees that would otherwise be unavailable. Unless you direct Stewart Title to open an interest-bearing account (as described below), Stewart Title shall have no obligation to account to you in any manner for the value of, or to compensate any party for, any benefit received by Stewart Title. Any such benefits shall be deemed additional compensation of Stewart Title for its services in connection with the escrow. If you elect, funds deposited prior to the close of escrow may be placed in an individual interest-bearing account. Should you elect to have your funds placed in an interest bearing account, Stewart Title personnel will expend time and effort to open said account, process signature cards, review and execute the account agreement, deal with account correspondence, process the proper closing of the account, maintain records and bank statements, and to process various other related duties. Stewart Title of California will charge an additional escrow fee in the amount of $50.200 for establishing and maintaining such an interest bearing account. IT IS IMPORTANT THAT YOU PROVIDE CAREFUL CONSIDERATION OF THIS COST, AS THE COST MAY EXCEED THE ACTUAL INTEREST EARNED. Please note the following examples of a $1,000.00 and a $5,000.00 deposit into a 3% interest bearing account for a period of 30 days: $1,000.00 x 3% / 360 days x 30 days = $2.50 $5,000.00 x 3% / 360 days x 30 days = $12.50 If you do not want your funds placed in an interest bearing account, you need do nothing further. Your funds will remain in or be placed in our General Escrow Account. If you do want your funds to earn interest, please execute and return this document to Stewart Title of California. We will then forward the necessary paperwork, which must also be returned, in order to establish your interest bearing account. Please be advised that you alone arc responsible for reporting any interest to the appropriate taxing authorities. ELECTION TO EARN INTEREST. I HEREBY AUTHORIZE AND INSTRUCT STEWART TITLE OF CALIFORNIA TO OPEN AN INTEREST BEARING ACCOUNT AT STEWART TITLE OF CALIFORNIA'S DEPOSITORY BANK. I HEREBY AUTHORIZE YOU TO CHARGE AND I HEREBY AGREE TO PAY THE ADDITIONAL ESCROW FEE FOR THIS SERVICE. Signature:______________________________ Date:______________________________ Signature:______________________________ Date:______________________________ EXHIBIT "D" FORM OF DEED RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: ___________________________________ ___________________________________ Attn:______________________________ MAIL TAX STATEMENTS TO: ___________________________________ ___________________________________ Attn: _____________________________ ________________________________________________________________________________ (Space Above This Line For Recorder's Use Only) GRANT DEED For valuable consideration, IGP X MISSION PARK ASSOCIATES, LP., a California limited partnership ("Grantor"), hereby GRANTS to_____________ ("Grantee"), all that certain real property situated in City of San Marcos, County of San Diego, State of California, more particularly described on Schedule, "1 attached hereto and incorporated herein by reference, together with ail rights and privileges appurtenant thereto; SUBJECT TO all taxes and other assessments; all restrictions in patents; all liens, encumbrances, easements, rights-of-way, covenants, conditions, restrictions, obligations and liabilities as may appear of record; all matters which would be revealed or disclosed in an accurate survey of the Property; all matters which would be revealed or disclosed by a physical inspection of the Property; and all interests of tenants in possession. Dated this______ day of_________________, 2003. GRANTOR: IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership By: IGP X MISSION PARK ASSOCIATES MANAGEMENT, INC., a California corporation By:_____________________________________ Name: David W. Maurer Title: President Page 1 of 2 SCHEDULE "1 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO AND IS DESCRIBED AS FOLLOWS: LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9, 1989. TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN ON SAID MAP. Page 2 of 2 STATE OF CALIFORNIA ) ) ss. COUNTY OF __________) On ________________ , 2003 before me, ________________ , a notary public in and for said State, personally appeared ________________ , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature______________ (Seal) Page 1 of 1 SEPARATE STATEMENT OF DOCUMENTARY TRANSFER TAX SAN DIEGO COUNTY RECORDER 1600 Pacific Highway San Diego, CA 92101 Dear Sir: In accordance with California Revenue and Taxation Code Section 11932, it is requested that this Statement of Documentary Transfer Tax due not be recorded with the attached deed, but be affixed to the deed after recordation and before return as directed on the deed. The deed names IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership, as Grantor, and__________________________, as Grantee. The land and improvements being transferred are located in the City of San Marcos, County of San Diego, State of California. The amount of the documentary transfer tax due on the attached deed is _______________ ($______________), computed on the full value of the improvements less encumbrances of record. IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership By: IGP X MISSION PARK ASSOCIATES MANAGEMENT, INC., a California corporation By:_____________________________________ Name: David W. Maurer Title: President Page 1 of 1 EXHIBIT "E" FORM OF BILL OF SALE FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership ("Seller"), does hereby sell and convey to__________ ("Buyer"), any and all of Seller's right, title and interest in and to all tangible personal property located upon the land described in Schedule "1 attached hereto and hereby made a part hereof (the "Land") or within the improvements located thereon, including, without limitation, any and all appliances, furniture, carpeting, draperies and curtains, tools and supplies, and other items of personal property owned by Seller (excluding cash and any software) and used exclusively in the operation of the Land and improvements, AS IS, WHERE IS, AND WITHOUT WARRANTY of title or use, and without warranty, express or implied, of merchantability or fitness for a particular purpose. TO HAVE AND TO MOLD all of said personal property unto Buyer, its successors and assigns, to its own use forever. IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the _____ day of ____________, 2003. SELLER IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership By: IGP X MISSION PARK ASSOCIATES MANAGEMENT, INC., a California corporation By:_____________________________________ Name: David W. Maurer Title: President Page 1 of 1 SCHEDULE "1 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO AND IS DESCRIBED AS FOLLOWS: LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9, 1989. TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN ON SAID MAP. Page 1 of 2 EXHIBIT "F" FORM OF ASSIGNMENT OF LEASES THIS ASSIGNMENT OF LEASES ("Assignment") is made as of this ____ day of ______________________, 2003, between IGP X MISSION PARK ASSOCIATES, L.P., a California limited partnership ("Assignor"), and_____________________________, a _________ ("Assignee"). Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in that certain Purchase and Sale Agreement and Escrow Instructions dated effective as of December 2, 2003, between Assignor, as Seller, and Assignee, as Buyer (the "Purchase Agreement"). Pursuant to the Purchase Agreement, Assignor is concurrently herewith transferring and conveying to Assignee all right, title and interest of Assignor in and to the Real Property described on Schedule "1 attached hereto and incorporated herein by reference. As part of such transaction, Assignor hereby assigns, transfers, sets over and conveys to Assignee all of Assignor's right, title and interest in, to and under the Leases, including the Lease(s) described on Schedule "2 attached hereto and incorporated herein by reference, together with all Security Deposits tendered under the Leases remaining in the possession of Assignor. Subject to the terms of the Purchase Agreement and the express obligations and responsibilities of the parties thereunder, Assignee does hereby assume and agree to perform all of Assignor's obligations and liabilities under or with respect to the Leases accruing from and after the date hereof. Assignor hereby agrees to indemnify Assignee and hold Assignee harmless from and against any and all claims pertaining to the Leases arising prior to Closing, and Assignee hereby agrees to indemnify Assignor and hold Assignor harmless from and against any and all claims pertaining to the Leases arising from and after the Closing, including without limitation, claims made by tenants with respect to tenants' Security Deposits to the extent paid, credited or assigned to Assignee pursuant to the Purchase Agreement. This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective heirs, executors, administrators, successors and assigns. Each entity constituting Assignee shall be jointly and severally liable for all obligations of Assignee hereunder. This Assignment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [SIGNATURE PAGE FOLLOWS] Page 1 of 2 IN WITNESS WHEREOF, Assignor and Assignee have each executed this Assignment as of the date first written above. ASSIGNOR ASSIGNEE IGP X MISSION PARK ASSOCIATES _________________________________, L.P., a California Limited Partnership a _______________________________ By: IGP X MISSION PARK ASSOCIATES By:______________________________ MANAGEMENT, INC., Name:_________________________ a California corporation Title:________________________ By:___________________________________ By:______________________________ Name: David W. Maurer Name:_________________________ Title: President Title:________________________ Page 2 of 2 SCHEDULE "1 LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO AND IS DESCRIBED AS FOLLOWS: LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9, 1989. TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN ON SAID MAP. Page 1 of 1 SCHEDULE "2 LEASES [TO BE ATTACHED] Page 1 of 1 EX-10.2 4 a97423exv10w2.txt EXHIBIT 10.2 EXHIBIT 10.2 FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS This First Amendment to Purchase and Sale Agreement and Escrow Instructions (First Amendment") is entered into and made effective this 9th day of February, 2004, between IGP X MISSION PARK ASSOCIATES, L.P, a California limited partnership ("Seller") and PACIFICA ENTERPRISES, LLC, a California limited liability company ("Buyer") with reference to the following facts: RECITALS A. Buyer and Seller entered into that certain Purchase and Sale Agreement and Escrow Instructions dated December 2, 2003 (the "Agreement") B. The parties desire to amend the Agreement as set forth in this First Amendment, C. All capitalized terms used in this First Amendment unless specifically defined herein shall have the same meaning as the capitalized terms used in the Agreement. NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are expressly acknowledged, Seller and Buyer agree as follows: AGREEMENT 1. Closing. Section 1.4 of the Agreement shall be deemed deleted and the following shall be deemed inserted in place thereof; 4.1 Time and Place. The consummation of the transaction contemplated hereby (the "Closing") shall he consummated on or before March 3. 2004 (the "Closing Date) 2. Condition. Precedent to Obligation of Seller. Section 4.7 (a) of the Agreement shall be deemed deleted and the following shall be deemed inserted in place thereof: (a) On or before February 23, 2004; Furthermore, the following shall be added immediately following subsection (i) of Section 4.7(a); Seller covenants agrees that on or before February 3, 2004, it will file a Proxy Statement with the Securities and Exchange Commission and mail the Proxy Statement to the partners of Seller requesting their approval of 1 the transaction contemplated by this Agreement. On such date, seller shall provide Buyer with written confirmation that the Proxy Statement has been filed and mailed in accordance with the foregoing. 3. Public Disclosure. Buyer acknowledges and agrees that in connection with Seller's requesting the consent of its partners in accordance with Section 4.7 (a) (1) of the Agreement, Seller's disclosure of the terms of the Agreement to Seller's partners shall not constitute a violation of Section 10.2 of the Agreement regarding Public Disclosure. 4. Executed Counterparts. This first Amendment may be executed in one or more counterparts, all of which together shall constitute a single agreement and each of which shall be an original for all purposes. 5. Confirmation. Except, as and to the extent modified by this first Amendment, all provisions of the Agreement shall remain in full force and effect SELLER BUYER IGP X MISSION PARK ASSOCIATES, L.P., PACIFICA ENTERPRISES, LLC, a California limited partnership a California limited liability company By: IGP X MISSION PARK ASSOCIATES By: /S/ DABTO DELUCA MANAGEMENT, INC., ---------------------------------- a California corporation Name: DABTO DELUCA Title: MANAGER By: /s/ David W. Maurer By: __________________________________ --------------------------------- Name:_____________________________ Name: David W. Maurer Title:____________________________ Title: President 2 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                    EXHIBIT 10.1

                          PURCHASE AND SALE AGREEMENT
                            AND ESCROW INSTRUCTIONS

                                 BY AND BETWEEN

                      IGP X MISSION PARK ASSOCIATES, L.P.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                                   ("SELLER")

                                      AND

                           PACIFICA ENTERPRISES, LLC,
                     A CALIFORNIA LIMITED LIABILITY COMPANY

                                   ("BUYER")

                     DATED EFFECTIVE AS OF DECEMBER 2, 2003



                               TABLE OF CONTENTS



                                                                                    PAGE
                                                                                    ----
                                                                                 
ARTICLE I. PURCHASE AND SALE....................................................      1

       Section 1.1     Agreement of Purchase and Sale...........................      1
       Section 1.2     Property Defined.........................................      2
       Section 1.3     Purchase Price...........................................      2
       Section 1.4     Payment of Purchase Price................................      2
       Section 1.5     Opening of Escrow; Deposit...............................      2
       Section 1.6     Deposit as Liquidated Damages............................      3
       Section 1.7     Escrow Holder............................................      3

ARTICLE II. TITLE AND SURVEY....................................................      3

       Section 2.1     Contingency Period.......................................      3
       Section 2.2     Title Examination........................................      4
       Section 2.3     Permitted Exceptions.....................................      4
       Section 2.4     Conveyance of Title......................................      5

ARTICLE III. REVIEW OF PROPERTY.................................................      5

       Section 3.1     Right of Inspection......................................      5
       Section 3.2     Right of Termination.....................................      6
       Section 3.3     Rights Upon Termination..................................      7

ARTICLE IV. CLOSING.............................................................      7

       Section 4.1     Time and Place...........................................      7
       Section 4.2     Seller's Obligations at Closing..........................      7
       Section 4.3     Buyer's Obligations at Closing...........................      8
       Section 4.4     Credits and Prorations...................................      9
       Section 4.5     Transaction Taxes and Closing Costs......................     12
       Section 4.6     Conditions Precedent to Obligation of Buyer..............     13
       Section 4.7     Conditions Precedent to Obligation of Seller.............     13

ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS............................     14

       Section 5.1     Representations and Warranties of Seller.................     14
       Section 5.2     Survival of Seller's Representations and Warranties......     14
       Section 5.3     Covenants of Seller......................................     14
       Section 5.4     Representations and Warranties of Buyer..................     15
       Section 5.5     Survival of Buyer's Representations and Warranties.......     15
       Section 5.6     Covenant of Buyer Re: 1031 Exchange......................     15
       Section 5.7     Covenant of Buyer Re: Defeasance Loan....................     15

ARTICLE VI. DEFAULT.............................................................     17

       Section 6.1     Default by Buyer.........................................     17
       Section 6.2     Default by Seller........................................     17
       Section 6.3     Recoverable Damages......................................     17


                                       i


                                                                                 
ARTICLE VII. RISK OF LOSS.......................................................     17

       Section 7.1     Minor Damage.............................................     17
       Section 7.2     Major Damage.............................................     17
       Section 7.3     Definition of "Major" Loss or Damage.....................     18

ARTICLE VIII. COMMISSIONS.......................................................     18

        Section 8.1    Brokerage Commissions....................................     18

ARTICLE IX. DISCLAIMERS AND WAIVERS.............................................     18

       Section 9.1     No Reliance on Documents.................................     18
       Section 9.2     AS IS SALE; DISCLAIMERS..................................     19
       Section 9.3     Survival of Disclaimers..................................     20

ARTICLE X. MISCELLANEOUS........................................................     20

       Section 10.1    Confidentiality..........................................     20
       Section 10.2    Public Disclosure........................................     21
       Section 10.3    Assignment...............................................     21
       Section 10.4    Notices..................................................     21
       Section 10.5    Modifications............................................     22
       Section 10.6    Entire Agreement.........................................     22
       Section 10.7    Further Assurances.......................................     22
       Section 10.8    Counterparts.............................................     22
       Section 10.9    Facsimile Signatures.....................................     22
       Section 10.10   Severability.............................................     23
       Section 10.11   Applicable Law...........................................     23
       Section 10.12   No Third-Party Beneficiary...............................     23
       Section 10.13   Captions.................................................     23
       Section 10.14   Construction.............................................     23
       Section 10.15   Recordation..............................................     23
       Section 10.16   Time of the Essence......................................     23



EXHIBITS

A      -     DESCRIPTION OF LAND

B      -     LIST OF PERSONAL PROPERTY

C      -     ESCROW HOLDER'S GENERAL PROVISIONS

D      -     FORM OF DEED

E      -     FORM OF BILL OF SALE

G      -     FORM OF ASSIGNMENT OF LEASES

F      -     FORM OF ASSIGNMENT OF CONTRACTS

G      -     FORM OF TENANT NOTICE

H-1    -     FORM OF FIRPTA CERTIFICATE

H-2    -     FORM OF CALFIRPTA CERTIFICATE

                                       ii



                           PURCHASE AND SALE AGREEMENT
                             AND ESCROW INSTRUCTION

         THIS PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (this
"Agreement") is made effective as of December 2, 2003, by and between IGP X
MISSION PARK ASSOCIATES, L.P., a California limited partnership ("Seller"), and
PACIFICA ENTERPRISES, LLC, a California limited liability company ("Buyer"). The
"Effective Date" of this Agreement shall be the day this Agreement is signed by
the last to sign of Buyer or Seller, and a copy of the fully signed copy is
delivered to the other party.

                                   ARTICLE I.
                                PURCHASE AND SALE

         Section 1.1 Agreement of Purchase and Sale. Subject to the terms and
conditions hereinafter set forth, Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase from Seller, the following:

                  (a)      that certain tract(s) or parcel(s) of land situated
in the City of San Marcos, County of San Diego, California, consisting of
approximately 13.59 acres of land and more particularly described in Exhibit "A"
attached hereto and made a part hereof, together with all rights and
appurtenances pertaining to such property, including any right, title and
interest of Seller in and to adjacent streets, alleys or rights-of-way (the
property described in clause (a) of this Section 1.1 being herein referred to
collectively as the "Land");

                  (b)      the building located on the Land, consisting of
approximately a 264-unit residential apartment complex, commonly known as
Mission Park, and any and all other buildings, structures, fixtures and other
improvements affixed to or located on the Land, excluding fixtures owned by
tenants (the property described in clause (b) of this Section 1.1 being herein
referred to collectively as the "Improvements");

                  (c)      any and all of Seller's right, title and interest in
and to all tangible personal property located upon the Land or within the
Improvements, including, without limitation, any and all appliances, furniture,
carpeting, draperies and curtains, tools and supplies, and other items of
personal property owned by Seller, located on and used exclusively in connection
with the operation of the Land and the Improvements, which personal property
includes without limitation the personal property listed on Exhibit "B" attached
hereto (the property described in clause (c) of this Section 1.1 being herein
referred to collectively as the "Personal Property");

                  (d)      any and all of Seller's right, title and interest in
and to the leases, licenses, and occupancy agreements covering all or any
portion of the Real Property (as such term is defined in Section 1.2 hereof), to
the extent they are in effect on the date of the Closing (as such term is
defined in Section 4.1 hereof) (the property described in clause (d) of this
Section 1.1 being referred to collectively as the "Leases"), together with all
rents and other sums due thereunder (the "Rents") and any and all unapplied
security deposits in Seller's possession in connection therewith (the "Security
Deposits"), and

                                  Page 1 of 24



                  (c)      any and all of Seller's right, title and interest in
and to (i) all assignable contracts and agreements (collectively, the "Operating
Agreements") a list of which shall be provided by Seller within ten (10)
business days of the Effective Date, relating to the upkeep, repair, maintenance
or operation of the Land, Improvements or Personal Property, (ii) all assignable
existing warranties and guaranties (express or implied) issued to Seller in
connection with the Improvements or the Personal Property, and (iii) all
assignable existing permits, licenses, approvals and authorizations issued by
any governmental authority in connection with the Property (the property
described in clause (e) of this Section l.1 being sometimes herein referred to
collectively as the "Intangibles").

         Section  1.2 Property Defined. The Land and the Improvements arc
hereinafter sometimes referred to collectively as the "Real Property." The Real
Property, the Personal Property, the Leases and the Intangibles are hereinafter
sometimes referred to collectively as the "Property."

         Section  1.3 Purchase Price. Seller is to sell and Buyer is to purchase
the Property for the amount of Thirty-six Million Dollars ($36,000,000.00) (the
"Purchase Price").

         Section  1.4 Payment of Purchase Price. The Purchase Price, as
increased or decreased by prorations and adjustments as herein provided, shall
be payable in full at Closing in cash by wire transfer of immediately available
funds to a bank account designated by Seller in writing to Buyer prior to the
Closing. Not less than one (1) business day prior to the Closing, Buyer shall
deposit into Escrow (as defined in Section 1.5 below), in cash or other
immediately available funds, the full amount of the Purchase Price, as increased
or decreased by prorations and adjustments as herein provided, minus the amount
of the Deposit previously deposited by Buyer into Escrow.

         Section  1.5 Opening of Escrow; Deposit. Within one (1) business day of
the execution and delivery of this Agreement, Buyer shall deposit with Stewart
Title Company (the "Escrow Holder"), having its office at 311 Camino Del Rio
North, Suite 900, San Diego, CA Attention: Michelle Mitchell, a fully executed
original of this Agreement and the sum of Two Hundred Fifty Thousand Dollars
($250,000.00) (the "Initial Deposit") in good funds either by certified bank or
cashier's check or by federal wire transfer. Within one (1) business day of
expiration of the Contingency Period (as defined in Section 2.1 below), unless
Buyer has elected to terminate this Agreement in the manner set forth herein,
Buyer shall deposit the additional sum of Two Hundred and Fifty Thousand Dollars
($250,000.00) (the "Additional Deposit") in good funds either by certified bank
or cashier's check or by federal wire transfer. The Initial Deposit and the
Additional Deposit are hereinafter collectively referred to as the "Deposit".
Escrow Holder shall hold the Deposit in an interest-bearing account of a
federally insured bank or savings and loan association acceptable to Buyer, and
shall otherwise handle the Deposit in accordance with the terms, and conditions
of this Agreement. All interest accrued on the Deposit shall be credited to the
Purchase Price upon the close of Escrow. Buyer shall be responsible for the
payment of all costs and fees imposed on the Deposit account. The failure of
Buyer to timely deliver any portion of the Deposit hereunder shall be a material
default, and shall entitle Seller, at Seller's sole option, to terminate this
Agreement immediately. Except as otherwise specifically provided in Sections 3.3
and 6.2, and Article VII hereof, the Deposit and the accrued interest thereon
shall be (i) nonrefundable upon expiration of the Contingency Period and (ii)
released to

                                  Page 2 of 24




Seller without the necessity of further instruction from Buyer upon expiration
of the Contingency Period. Should Seller thereafter be obligated to close the
Escrow and fail or refuse to do so, Seller shall return the Deposit to Buyer
upon Buyer's written demand therefore.

         Section  1.6 Deposit as Liquidated Damages. AFTER THE EXPIRATION OF THE
CONTINGENCY PERIOD, IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED BY REASON OF BUYER'S DEFAULT UNDER THIS AGREEMENT,
THE DEPOSIT (INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE
RETAINED BY SELLER AS LIQUIDATED DAMAGES, SELLER'S ACTUAL DAMAGES IN THE EVENT
THE SALE IS NOT CONSUMMATED ARE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE AT THE EFFECTIVE DATE. THEREFORE, BY SEPARATELY EXECUTING THIS SECTION
1.6 BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN
AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S
DAMAGES AND NOT A PENALTY, AND SHALL BE SELLER'S SOLE AND EXCLUSIVE REMEDY
AGAINST BUYER ARISING FROM A FAILURE OF THE SALE TO CLOSE. IN ADDITION, BUYER
SHALL PAY ALL TITLE AND ESCROW CANCELLATION CHARGES. NOTWITHSTANDING THE
FOREGOING, IN NO EVENT SHALL THIS SECTION 1.6 LIMIT THE DAMAGES RECOVERABLE BY
EITHER PARTY AGAINST THE OTHER PARTY DUE TO THE OTHER PARTY'S OBLIGATION TO
INDEMNIFY SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT. BY THEIR SEPARATELY
INITIALING THIS SECTION 1.6. BELOW, BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE
READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND THAT
EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS
LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.

        /s/ [Illegible]                               /s/ [Illegible]
       ------------------------                      -----------------------
         SELLER'S INITIALS                             BUYER'S INITIALS

         Section  1.7 Escrow Holder. Escrow Holder shall hold and dispose of the
Deposit in accordance with the terms of this Agreement. If Escrow Holder is in
doubt as to its duties or obligations with regard to the Deposit, or if Escrow
Holder receives conflicting instructions from Buyer and Seller with respect to
the Deposit, Escrow Holder shall not be required to disburse the Deposit and
may, at its option, continue to hold the Deposit until both Buyer and Seller
agree as to its disposition, or until a final judgment is entered by a court of
competent jurisdiction directing its disposition, or Escrow Holder may
interplead the Deposit in accordance with the laws of the state in which the
Property is located. Escrow Holder's General Provisions are attached hereto as
Exhibit "C" and made a part hereof.

                                   ARTICLE II.
                                TITLE AND SURVEY

         Section  2.1 Contingency Periods. During the period beginning on the
Effective Date and ending at 5:00 p.m. (local time at the Property) on that date
which is fifteen (15) days following the Effective Date (hereinafter referred to
as the "Contingency Period"), Buyer shall

                                  Page 3 of 24




have the right to review: (a) a current preliminary title report covering the
Property and all underlying exceptions, which shall be obtained by Seller, at
Seller's cost; (b) copies of the most recent property tax bills for the
Property, and (c) a copy of the most current survey of the Real Property in
Seller's possession, if any (the items referred to in clauses (a) through (c) of
this Section 2.1 are hereinafter referred to as the "Title Contingency Items").
Seller shall deliver or cause to be delivered to Buyer the Title Contingency
Items promptly after the Effective Date but in no event later than three (3)
business days after the Effective Date. During the Contingency Period, Buyer
shall also have the right to review a new or updated survey of the Real Property
prepared by a licensed surveyor or engineer, obtained by Buyer at Buyer's sole
cost (the "Survey").

         Section  2.2 Title Examination. Buyer shall notify Seller in a
reasonably detailed writing (the "Title Notice") prior to the expiration of the
Contingency Period which exceptions to title (including survey matters), if any,
will not be accepted by Buyer and the specific reasonable grounds for
disapproval thereof. Any exception to title, which Buyer fails to disapprove
prior to the expiration of the Contingency Period, shall be deemed conclusively
to have been approved by Buyer. If Buyer notifies Seller in writing that Buyer
objects to an exception to title, then Seller shall have five (5) business days
after receipt of the Title Notice to notify Buyer that Seller either (a) will
remove such objectionable exception from title on or before the Closing;
provided that Seller may extend the Closing for such period as shall be required
to effect such cure, but not beyond fifteen (15) days; or (b) elects not to
cause such exception to be removed (a "Non-Removal Notice"). If Seller fails to
notify Buyer of its election within said five (5) day period, then Seller shall
be deemed to have delivered a Non-Removal Notice as to that exception. The
procurement by Seller of a commitment for the issuance of the Title Policy or
an endorsement thereto reasonably satisfactory to Buyer and insuring Buyer
against any title exception, which was disapproved pursuant to this Section 2.2,
shall be deemed a cure by Seller of such disapproval. If Seller gives (or is
deemed to have given) Buyer a Non-Removal Notice, then Buyer shall have two (2)
business days within which to notify Seller in writing that Buyer elects to
either (i) nevertheless proceed with the purchase and take title to the Property
subject to such exceptions, or (ii) terminate this Agreement pursuant to the
provisions of Section 3.3 below. If Buyer fails to notify Seller in writing of
its election within said two (2) business day period, then Buyer shall be deemed
to have elected to proceed with the purchase and take title to the Property
subject to such exceptions. Notwithstanding the foregoing, Buyer need not
disapprove any monetary lien representing monies owed, and Seller hereby agrees
to cause all such monetary liens (other than non-delinquent ad valorem real
estate taxes and assessments) to be removed at or prior to Closing. If Seller
fails to remove any such monetary lien prior to Closing, then Buyer shall apply
such portion of the Purchase Price as is necessary to cause the removal of such
items prior to Closing, and the proceeds of Escrow to be otherwise distributed
to Seller upon Closing shall be reduced by the amount so applied. The operation
of the notice and approval provisions of this Section 2.2 shall extend the
Contingency Period only as to those matters which Buyer has disapproved as of
the original expiration of the Contingency Period and only until such time as
Buyer has either approved (or have been deemed to approved) the condition of
title to the Real Property or elected to terminate this Agreement.

         Section  2.3 Permitted Exceptions. The Property shall be conveyed
subject to the following matters, which are hereinafter referred to as the
"Permitted Exceptions":

                                  Page 4 of 24





                  (a)      those matters that are either approved or deemed
approved by Buyer in accordance with Section 2.2 hereof;

                  (b)      the rights of tenants under the Leases;

                  (c)      the lien of all ad valorem real estate taxes and
assessments not yet due and payable as of the date of Closing, subject to
proration as herein provided;

                  (d)      local, state and federal laws, ordinances or
governmental regulations, including but not limited to building and zoning laws,
ordinances and regulations, now or hereafter in effect relating to the Property;
and

                  (e)      items shown on the Survey and not objected to by
Buyer, or waived or deemed waived by Buyer in accordance with Section 2.2
hereof.

         Section  2.4 Conveyance of Title. At Closing, Seller shall convey and
transfer to Buyer fee simple title to the Real Property by execution and
delivery of the Deed (as defined in Section 4.2(a) hereof). Evidence of delivery
of such title shall be the issuance by Stewart Title Insurance Company (the
"Title Company"), or another national title company mutually approved by Buyer
and Seller, of a ALTA Extended Coverage Owner's Policy of Title Insurance, with
any creditors' rights exclusion deleted (the "Title Policy") covering the Real
Property, in the full amount of the Purchase Price, showing fee title to the
Property vested exclusively in Buyer, subject only to the Permitted Exceptions;
however, if an ALTA survey acceptable to the Title Company does not currently
exist and one is not obtained by Buyer, then Buyer shall accept a customary
survey exception to the Title Policy. Buyer may obtain an ALTA Extended Coverage
Owner's Policy of Title Insurance so long as the Closing is not thereby delayed.
Buyer shall pay the additional premium for such policy and the cost of any
required ALTA survey.

                                  ARTICLE III.
                               REVIEW OF PROPERTY

         Section  3.1 Right of Inspection. During the Contingency Period, Buyer
shall, at its own cost and expense, have the right to make a physical inspection
of the Real Property, including an inspection of the environmental condition
thereof pursuant to the terms and conditions of this Agreement, to examine at
the Property (or the property manager's office, as the case may be) documents
and files located at the Property or the property manager's office concerning
the leasing, maintenance and operation of the Property, but excluding Seller's
partnership or corporate records, internal memoranda, financial projections,
budgets, appraisals, accounting and tax records and similar proprietary,
confidential or privileged information (collectively, the "Confidential
Documents"). If required by law, Seller shall use its best efforts to provide a
Natural Hazards Disclosure Report to Buyer within fifteen (15) business days of
the opening of Escrow. Seller shall also deliver to Buyer, within three (3)
business days after the Effective Date, copies of the income and expense
statements for the Property for the last two (2) calendar years and the current
year to date (through October 31, 2003) and a current rent roll for the Property
(the "Financial Documents").

                                  Page 5 of 24



         Any on-site inspections of the Property shall occur only (i) at
reasonable times agreed upon by Seller and Buyer after at least one (1) business
day's prior written notice to Seller; (ii) in a manner that will not
unreasonably damage the Property, unreasonably disturb or disrupt the business
activities of Seller or unreasonably interfere with the use of the Property by
Seller or its tenants; and (iii) after delivery of evidence satisfactory to
Seller that adequate public liability and other insurance respecting such work
has been obtained by Buyer naming as additional insureds Seller and any other
person or entity designated by Seller as having an insurable interest in the
same. Seller may have a representative present during any such inspections. If
Buyer desires to do any invasive testing at the Property, Buyer shall do so only
after notifying Seller and obtaining Seller's prior written consent thereto,
which consent may be subject to any terms and conditions imposed by Seller in
its sole discretion, including, without limitation, the prompt restoration of
the Property to substantially its condition prior to any such inspections or
tests, at Buyer's sole cost and expense. Buyer shall keep the Property free and
clear of any liens arising out of Buyer's entry onto or inspection of the
Property. At Seller's option, Buyer will furnish to Seller copies of any reports
received by Buyer relating to any inspection of the Property, without
representation or warranty of any kind (express, implied or otherwise) as to the
content and accuracy thereof, and at no charge to Seller other than the costs of
reproduction. Buyer agrees to protect, indemnify, defend (with counsel
satisfactory to Seller) and hold Seller harmless from and against any claim for
liabilities, losses, costs, expenses (including reasonable attorneys' fees),
damages or injuries arising out of, or directly resulting from the inspection of
the Property by Buyer or its agents or consultants, and notwithstanding anything
to the contrary in this Agreement, such obligation to indemnify and hold
harmless Seller shall survive Closing or any termination of this Agreement.

         Section  3.2 Right of Termination. Prior to the expiration of the
Contingency Period, Buyer shall provide Seller with written notice stating which
Operating Agreements, if any, Buyer has disapproved. Buyer's disapproval of any
Operating Agreements which cannot be terminated by Seller without liability on
no more than sixty (60) days' notice shall be deemed a termination of this
Agreement, unless Seller agrees within five (5) business days to terminate any
disapproved Operating Agreements effective as of Closing (all Operating
Agreements, minus any Operating Agreements Seller is obligated or has agreed to
remove at Closing are hereinafter referred to as the "Approved Operating
Agreements"). If Buyer fails to disapprove of any Operating Agreements prior to
the expiration of the Contingency Period, then Buyer shall be deemed to have
approved all Operating Agreements. Additionally, if for any reason whatsoever
Buyer determines that the Property or any aspect thereof is unsuitable for
Buyer's acquisition, Buyer shall have the right to terminate this Agreement by
either giving written notice thereof to Seller, or failing to give Seller a
written notice of Buyer's approval, prior to the expiration of the Contingency
Period, and if Buyer exercises its right to terminate this Agreement within the
Contingency Period, then this Agreement shall terminate in accordance with the
provisions of Section 3.3 below. If Buyer fails to give Seller a notice of
approval prior to the expiration of the Contingency Period, then Buyer shall be
deemed to have disapproved the Property and this Agreement shall terminate. If
Buyer gives Seller a written notice of approval within the Contingency Period,
then Buyer shall be deemed to have approved of ail aspects of the Property,
including, but not limited to all Operating Agreements other than those to be
terminated as provided above (and except title and survey, which shall be
governed by Article II hereof) and to have elected to proceed with the purchase
of the Property pursuant to the terms hereof.

                                  Page 6 of 24



         Section  3.3 Rights Upon Termination. If this Agreement is terminated
by Buyer in the manner and within the applicable time period(s) provided
pursuant to any of Sections 2.2, 3.2, or Article VII, or because of a failure of
a condition precedent to Buyer's obligations hereunder as set forth in Section
4.6 below, then (i) the Deposit plus all accrued interest thereon shall be
returned to Buyer, (ii) all instruments in Escrow shall be returned to the party
depositing the same, (iii) Buyer shall return all items previously delivered by
Seller to Buyer, (iv) Buyer and Seller shall each pay one-half (1/2) of all
Escrow and title cancellation charges, and (iv) neither party shall have any
further rights, obligations or liabilities whatsoever to the other party
concerning the Property by reason of this Agreement, except for any indemnity
obligations of either party pursuant to the provisions of this Agreement or
otherwise expressly stated in this Agreement to survive termination. The
provisions of this Section 3.3 shall survive the Closing.

                                   ARTICLE IV.
                                    CLOSING

         Section  4.1 Time and Place. The consummation of the transaction
contemplated hereby (the "Closing") shall be consummated on or before that day
which is sixty (60) days following the expiration of the Contingency Period,
provided, however, if such day is not a business day, then the Closing shall
occur on the next following business day (the "Closing Date").

         The Closing shall be consummated through the Escrow administered by
Escrow Holder. At the Closing, Seller and Buyer shall perform the obligations
set forth in, respectively, Section 4.2 and Section 4.3 hereof, the performance
of which obligations shall be concurrent conditions.

         Section  4.2 Seller's Obligations at Closing. Prior to Closing, Seller
shall:

                  (a)      deliver to Buyer through Escrow a duly executed and
acknowledged grant deed in the form attached hereto as Exhibit "D" (the "Deed");

                  (b)      deliver to Buyer through Escrow a duly executed bill
of sale in the form attached hereto as Exhibit "E" (the "Bill of Sale"):

                  (c)      assign to Buyer, and Buyer shall assume through
Escrow the landlord/lessor interest in and to the Leases, Rents, and Security
Deposits, by duly executed assignment and assumption agreement (the "Assignment
of Leases") in the form attached hereto as Exhibit "F";

                  (d)      to the extent assignable, assign to Buyer, and Buyer
shall assume, through Escrow Seller's interest in the Approved Operating
Agreements and the other intangibles by duly executed assignment and assumption
agreement (the "Assignment of Contracts") in the form attached hereto as Exhibit
"G";

                  (e)      join with Buyer to execute notices in the form
attached hereto as Exhibit "H" (the "Tenant Notices"), which Buyer shall send to
each tenant under each of the Leases promptly after the Closing, informing such
tenant of the sale of the Property and of the assignment to Buyer of Seller's
interest in, and obligations under, the Leases (including, if

                                  Page 7 of 24



applicable, any Security Deposits), and directing that all Rent and other sums
payable after the Closing under such Leases be paid as set forth in the notice;

                  (f)      if any representation or warranty of Seller needs to
be modified due to changes since the Effective Date, deliver to Buyer a
certificate, dated as of the date of Closing and executed on behalf of Seller by
a duly authorized officer thereof, identifying any representation or warranty
which is not, or no longer is, true and correct and explaining the state of
facts giving rise to the change. In no event shall Seller be liable to Buyer
for, or be deemed to be in default hereunder by reason of, any breach of
representation or warranty which results from any change that (i) occurs between
the Effective Date and the date of Closing, and (ii) is expressly permitted
under the terms of this Agreement or is beyond the reasonable control of Seller
to prevent. The occurrence of a change in a representation and warranty which is
not permitted hereunder or is beyond the reasonable control of Seller to prevent
shall, if materially adverse to Buyer, constitute the non-fulfillment of the
condition set forth in Section 4.6(b) hereof. If, despite changes or other
matters described in such certificate, the Closing occurs, Seller's
representations and warranties set forth in this Agreement shall be deemed to
have been modified by all statements made in such certificate;

                  (g)      deliver to the Title Company such evidence as the
Title Company may reasonably require as to the authority of the Person or
persons executing documents on behalf of Seller;

                  (h)      deliver to Buyer certificates in the form attached
hereto as Exhibit "1-1 and "1-2 duly executed by Seller;

                  (i)      deliver to Buyer outside of Escrow the Leases and the
Operating Agreements, together with such leasing and property files and records
located at the Property or the property manager's office which are material in
connection with the continued operation, leasing and maintenance of the
Property, but excluding any Confidential Documents. For a period of one (1) year
after the Closing, Buyer shall allow Seller and its representatives access
without charge to all files, records and documents delivered to Buyer at the
Closing, upon reasonable advance notice and at all reasonable times, to make
copies of any and all such files, records and documents, which right shall
survive the Closing;

                  (j)      deliver such affidavits as may be customarily and
reasonably required by the Title Company, in a form reasonably acceptable to
Seller;

                  (k)      deliver to Buyer exclusive possession and occupancy
of the Property, subject to the Permitted Exceptions;

                  (l)      execute and deliver a closing statement acceptable to
Seller; and

                  (m)      deliver such additional documents as shall be
reasonably required to consummate the transaction contemplated by this
Agreement.

         Section  4.3      Buyer's Obligations at Closing. At, or prior to
Closing, Buyer shall;

                  (a)      pay to Seller through Escrow the full amount of the
Purchase Price (which

                                  Page 8 of 24



amount shall include the Deposit and all accrued interest as provided herein),
as increased or decreased by prorations and adjustments as herein provided, in
immediately available wire transferred funds pursuant to Section 1.4 hereof;

                  (b)      join Seller in execution and delivery through Escrow
of the Assignment of Leases, Assignment of Contracts and Tenant Notices;

                  (c)      if any representation or warranty of Buyer set forth
in Section 5.4 hereof needs to be modified due to changes since the Effective
Date, deliver to Seller a certificate, dated as of the date of Closing and
executed on behalf of Buyer by a duly authorized representative thereof,
identifying any such representation or warranty which is not, or no longer is,
true and correct and explaining the state of facts giving rise to the change. In
no event shall Buyer be liable to Seller for, or be deemed to be in default
hereunder by reason of any breach of representation or warranty set forth in
Section 5.4 hereof which results from any change that (i) occurs between the
Effective Date and the date of Closing and (ii) is expressly permitted under the
terms of this Agreement or is beyond the reasonable control of Buyer to prevent.
The occurrence of a change in a representation or warranty which is not
permitted hereunder or is beyond the reasonable control of Buyer to prevent
shall, if materially adverse to Seller, constitute the non-fulfillment of the
conditions set forth in Section 4.7(c) hereof. If, despite changes or other
matters described in such certificate, the Closing occurs, Buyer's
representations and warranties set forth in this Agreement shall be deemed to
have been modified by all statements made in such certificate;

                  (d)      deliver to Seller such evidence as the Title Company
may reasonably require as to the authority of the person or persons executing
documents on behalf of Buyer;

                  (e)      deliver such affidavits, as may be customarily and
reasonably required by the Title Company, in a form reasonably acceptable to
Buyer;

                  (f)      execute and deliver a closing statement acceptable to
Buyer; and

                  (g)      deliver such additional documents as shall be
reasonably required to consummate the transaction contemplated by this
Agreement.

         Section  4.4 Credits and Prorations.

                  (a)      All income and expenses of the Property shall be
apportioned as of 12:01 a.m. on the day of Closing as if Buyer were vested with
title to the Property during the entire day upon which Closing occurs. Such
prorated items include without limitation the following:

                           (i)      Rents for the calendar month in which
Closing occurs, as determined by the Seller's rent roll;

                           (ii)     taxes and assessments (including personal
property taxes on the Personal Property) levied against the Property;

                           (iii)    utility charges for which Seller is liable,
if any, such charges to be apportioned at Closing on the basis of the most
recent meter reading occurring prior to Closing

                                  Page 9 of 24



(dated not more than fifteen (15) days prior to Closing) or, if unmetered, on
the basis of a current bill for each such utility;

                           (iv)     any other operating expenses or other items
pertaining to the Property which are customarily prorated between a buyer and a
seller in the County in which the Property is located.

                  (b)      Notwithstanding anything contained in Section 4.4(a)
                           hereof:

                           (i)      At Closing, Seller shall, at Seller's
option, either deliver to Buyer any Security Deposits actually held by Seller
pursuant to the Leases or credit to the account of Buyer the amount of such
Security Deposits (to the extent such Security Deposits have not been applied
against Delinquent Rents prior to the Effective Date or otherwise as provided in
the Leases);

                           (ii)     Any taxes paid at or prior to Closing shall
be prorated based upon the amounts actually paid. If taxes and assessments due
and payable during the year of Closing have not been paid before Closing, Seller
shall be charged at Closing an amount equal to that portion of such taxes and
assessments which relates to the period before Closing and Buyer shall pay the
taxes and assessments prior to their becoming delinquent. Any such apportionment
made with respect to a tax year for which the tax rate or assessed valuation, or
both, have not yet been fixed shall be based upon the tax rate and/or assessed
valuation fixed. To the extent that the actual taxes and assessments for the
current year differ from the amount apportioned at Closing, the parties shall
make all necessary adjustments by appropriate payments between themselves within
thirty (30) days after such amounts are determined following Closing, subject to
the provisions of Section 4.4(d) hereof. Buyer shall pay all supplemental taxes
resulting from the change in ownership and reassessment occurring as the result
of the Closing pursuant to this Agreement;

                           (iii)    Charges referred to in Section 4.4(a) hereof
which are payable by any tenant to a third party shall not be apportioned
hereunder, and Buyer shall accept title subject to any of such charges unpaid
and Buyer shall look solely to the tenant responsible therefor for the payment
of such charges. If Seller shall have paid any of such charges on behalf of any
tenant, and shall not have been reimbursed therefor by the time of Closing,
Buyer shall credit to Seller an amount equal to all such charges so paid by
Seller;

                           (iv)     As to utility charges referred to in Section
4.4(a) (iii) hereof, Seller may upon notice to Buyer elect to pay one or more of
all of said items accrued to the date hereinabove fixed for apportionment
directly to the person or entity entitled thereto, and to the extent Seller so
elects, such item shall not be apportioned hereunder, and Seller's obligation to
pay such item directly in such case shall survive the Closing or any termination
of this Agreement;

                           (v)      Unpaid and delinquent Rent collected by
Seller and Buyer after the date of Closing shall be delivered as follows: (a) if
Seller collects any unpaid or delinquent Rent for the Property, Seller shall,
within fifteen (15) days after the receipt thereof, deliver to Buyer any such
Rent which Buyer is entitled to hereunder relating to the date of Closing and
any period

                                  Page 10 of 24




thereafter, and (b) if Buyer collects any unpaid or delinquent Rent from the
Property, Buyer shall, within fifteen (15) days after the receipt thereof,
deliver to Seller any such Rent which Seller is entitled to hereunder relating
to the period prior to the date of Closing. Seller and Buyer agree that all Rent
received by Seller or Buyer after the date of Closing shall be applied first to
current Rent and then to delinquent Rent, if any, in the inverse order of
maturity.

         Buyer will use commercially reasonable efforts after the Closing to
collect all Rents in the usual course of Buyer's operation of the Property, but
Buyer will not be obligated to institute any lawsuit or other collection
procedures to collect delinquent Rents. Seller may attempt to collect any
delinquent Rents owed to Seller and, after prior written notice to Buyer, may
institute any lawsuit or collection procedures, but may not evict any tenant. If
there shall be any Rents or other charges under any Leases which, although
relating to a period prior to Closing, do not become due and payable until after
Closing or are paid prior to Closing but are subject to adjustment after Closing
(such as year end common area expense reimbursements and the like), then any
Rents or charges of such type received by Buyer or its agents or Seller or its
agents subsequent to Closing shall, to the extent applicable to a period
extending through the Closing, be prorated between Seller and Buyer as of
Closing and Seller's portion thereof shall be remitted promptly to Seller by
Buyer together with a detailed accounting certified by Buyer's chief financial
officer.

                  (c)      Seller may prosecute an appeal of the real property
tax assessment for any tax years to and including the tax year in which the
Closing occurs, and may take related action which Seller deems appropriate in
connection therewith. Buyer shall cooperate with Seller in connection with such
appeal and collection of a refund of real property taxes paid, provided that
Buyer shall not be obligated to incur any material cost in doing so. Seller owns
and holds all right, title and interest in and to such appeal and refund
respecting time periods up to (but not including) the Closing Date, and all
amounts payable in connection therewith shall be paid directly to Seller by the
applicable authorities. If Buyer receives such refund or any part thereof, then
Buyer shall promptly pay such amount to Seller. Any refund received by Seller
shall be distributed as follows: first, to reimburse Seller for all costs
incurred in connection with the appeal; second, with respect to refunds payable
to tenants of the Real Property pursuant to the Leases, to such tenants in
accordance with the terms of such Leases; and third, to Seller to the extent
such appeal covers the period prior to the Closing, and to Buyer to the extent
such appeal covers the period as of the Closing and thereafter. If and to the
extent any such appeal covers the period after the Closing, Buyer shall have the
right to participate in such appeal.


                  (d)      Except as otherwise provided herein, any revenue or
expense amount which cannot be ascertained with certainty as of Closing shall be
prorated on the basis of the parties' reasonable estimates of such amount, and
shall be the subject of a final proration sixty (60) days after Closing, or as
soon thereafter as the precise amounts can be ascertained. Buyer shall promptly
notify Seller when it becomes aware that any such estimated amount has been
ascertained. Once all revenue and expense amounts have been ascertained, Buyer
shall prepare, and certify as correct, a final proration statement, which shall
be subject to Seller's approval. Upon Seller's acceptance and approval of any
final proration statement submitted by Buyer, such statement shall be
conclusively deemed to be accurate and final.

                  (e)      The provisions of this Section 4.4 shall survive the
Closing.

                                 Page 11 of 24


         Section 4.5       Transaction Taxes and Closing Costs.

                  (a)      Seller and Buyer shall execute such returns,
questionnaires and other documents as shall be required with regard to all
applicable real property transaction taxes imposed by applicable federal, state
or local law or ordinance;

                  (b)      Seller shall pay the fees of any counsel representing
Seller in connection with this transaction. Seller shall also pay the following
costs and expenses:

                           (i)      one-half (1/2) of the escrow fee, if any,
which is charged by the Escrow Holder or Title Company;

                           (ii)     the premium for the CLTA Standard Coverage
Owner's Policy of Title Insurance to be issued to Buyer by the Title Company at
Closing;

                           (iii)    one-half (1/2) of the fees for recording the
Deed;

                           (iv)     any documentary transfer tax or similar tax
(including, without limitation, City and County documentary transfer taxes, as
applicable) which becomes payable by reason of the transfer of the Property; and

                           (v)      the fees set forth in Section 8.1.

                  (c)      Buyer shall pay the fees of any counsel representing
Buyer in connection with this transaction. Buyer shall also pay the following
costs and expenses:

                           (i)      one-half (1/2) of the escrow fee, if any,
which is charged by the Escrow Holder or Title Company;

                           (ii)     the premium for the Owner's Policy of Title
Insurance to be issued to Buyer by the Title Company at Closing, and all
endorsements thereto, but only to the extent that those costs exceed the cost of
a CLTA Standard Coverage Owner's Policy;

                           (iii)    one-half (1/2) of the fees for recording the
Deed and any additional recording fees; and

                           (iv)     the cost of the Survey, if required by
Buyer's lender and/or the Title Company.

                  (d)      The Personal Property is included in this sale
without charge, Buyer shall be responsible for the amount of any and all sales
or similar taxes payable in connection with the transfer of the Personal
Property;

                  (e)      All costs and expenses incident to this transaction
and the Closing thereof, and not specifically described above, shall be paid by
the party incurring same; and

                  (f)      The provisions of this Section 4.5 shall survive the
Closing.

                                  Page 12 of 24


         Section 4.6       Conditions Precedent to Obligation of Buyer. The
obligation of Buyer to consummate the transaction contemplated hereunder shall
be subject to the fulfillment on or before the date of Closing of all of the
conditions set forth in this Section 4.6 below, any or all of which may be
waived by Buyer in its sole and absolute discretion. In the event Buyer
terminates this Agreement due to the non-satisfaction of any such conditions,
then the termination provisions set forth in Section 3.3 above shall apply.

                  (a)      Seller shall have delivered to Buyer all of the items
required to be delivered to Buyer pursuant to the terms of this Agreement,
including but not limited to, those provided for in Section 4.2 hereof;

                  (b)      All of the representations and warranties of Seller
contained in this Agreement shall be true and correct in all material respects
as of the date of Closing; and

                  (c)      Seller shall have performed and observed, in all
material respects, all covenants and agreements of this Agreement to be
performed and observed by Seller as of the date of Closing; and

                  (d)      The Title Company shall have issued or irrevocably
committed to issue the Title Policy.

         Section 4.7       Conditions Precedent to Obligation of Seller. The
obligation of Seller to consummate the transaction contemplated hereunder shall
be subject to the fulfillment of all of the following conditions, any or all of
which may be waived by Seller in its sole and absolute discretion:

                  (a)      Within thirty (30) days following expiration of the
Contingency Period:

                           (i)      Seller shall have obtained the requisite
approval of the partners and investors of Seller as required by the Agreement of
Limited Partnership of Seller (and, notwithstanding to the contrary in this
Agreement, if Seller terminates this Agreement due to failure of this condition,
then (in addition to return of Buyer's Deposit) Seller shall reimburse Buyer for
its actual, out-of-pocket costs incurred in connection with its proposed
purchase of the Property, not to exceed a total of Fifty Thousand Dollars
($50,000.00), payable within ten (10) days after receipt of Buyer's written
request for such reimbursement accompanied by reasonable supporting
documentation); and

                  (b)      On or before the Closing:

                           (i)      Seller shall have received the Purchase
Price as adjusted as provided herein, and payable in the manner provided for in
this Agreement;

                           (ii)     Buyer shall have delivered to Seller all of
the items required to be delivered to Seller pursuant to the terms of this
Agreement, including but not limited to, those provided for in Section 4.3
hereof;

                           (iii)    All of the representations and warranties of
Buyer contained in this Agreement shall be true and correct in all material
respects as of the date of Closing; and

                                  Page 13 of 24


                           (iv)     Buyer shall have performed and observed, in
all material respects, all covenants and agreements of this Agreement to be
performed and observed by Buyer as of the date of Closing.

                                   ARTICLE V.
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         Section 5.1       Representations and Warranties of Seller. Seller
hereby represents and warrants to Buyer as of the Effective Date that (a) Seller
has been duly organized, is validly existing under the laws of the State of
California; (b) Seller has the full right and authority to enter into this
Agreement, to transfer all of the Property and to consummate or cause to be
consummated the transaction contemplated by this Agreement; (c) the person
signing this Agreement on behalf of Seller is authorized to do so, (d) Seller is
not currently subject to any bankruptcy, insolvency or similar proceedings, (e)
Seller has not received any notice from any governmental authority that the
Property is currently in violation of applicable laws, regulations or
ordinances, and (f) the Financial Documents are accurate and complete in all
material respects. The representations and warranties contained in this Section
5.1 shall be deemed to have been made again as of the Closing, subject to
Section 4.2(f) hereof.

         Section 5.2       Survival of Seller's Representations and Warranties.
The representations and warranties of Seller set forth in Section 5.1 hereof,
as updated as of the Closing in accordance with the terms of this Agreement,
shall survive Closing for a period of six (6) months. No claim for a breach of
any representation or warranty of Seller shall be actionable or payable if the
breach in question results from or is based on a condition, state of facts or
other matter which was known to Buyer prior to Closing, if Buyer elects to
consummate the transactions described herein with such knowledge. Seller shall
have no liability to Buyer for a breach of any representation or warranty unless
(a) the valid claims for all such breaches collectively aggregate more than Ten
Thousand Dollars ($10,000.00), in which event the full amount of such valid
claims shall be actionable, up to the Cap (as defined in this Section), and (b)
written notice containing a description of the specific nature of such breach
shall have been given by Buyer to Seller prior to the expiration of said
six-month period and an action shall have been commenced by Buyer against Seller
within six months of Closing. Buyer agrees to also use commercially reasonable
efforts to obtain recovery under any applicable insurance policies, service
contracts and/or Leases, and Seller shall not be liable to Buyer to the extent
Buyer's claim is satisfied from such insurance policies, service contracts or
Leases. As used herein, the term "Cap" shall mean the total aggregate amount of
Two Hundred and Fifty Thousand Dollars ($250,000.00).

         Section 5.3       Covenants of Seller. Seller hereby covenants with
Buyer as follows:

                  (a)      Property Maintenance. From the Effective Date hereof
until the Closing or earlier termination of this Agreement, Seller shall use
reasonable efforts to operate and maintain the Property in a manner generally
consistent with the manner in which Seller has operated and maintained the
Property prior to the date hereof. Seller shall not create nor permit the
creation of any title exceptions such as easements or liens to encumber the
Property without Buyer's prior written approval in Buyer's sole and absolute
discretion;

                                  Page 14 of 24


                  (b)      Leasing. From the Effective Date through the Closing
Date, Seller may continue to execute leases with tenants in the normal course of
business provided Seller shall not execute any lease which has a term in excess
of twelve (12) months or which grants concessions, or rent at lower rate than
for similar units rented prior to Closing, without Buyer's written consent.

                  (c)      Material Change. During Escrow, Seller shall not
cause, authority or allow any material change with respect to the Property
without the Buyer's prior written approval, which may he granted or withheld in
Buyer's sole and absolute discretion.

         Section 5.4       Representations and Warranties of Buyer. Buyer hereby
 represents and warrants to Seller as of the Effective Date that Buyer has been
 duly organized and is validly existing under the laws of California. Buyer has
 the full right and authority to enter into this Agreement and to consummate or
 cause to be consummated the transaction contemplated by this Agreement. The
 person signing this Agreement on behalf of Buyer is authorized to do so. There
 is no action, suit, arbitration, unsatisfied order or judgment, government
 investigation or proceeding pending against Buyer which, if adversely
 determined, could individually or in the aggregate materially interfere with
 the consummation of the transaction contemplated by this Agreement. Buyer is
 solvent, has timely and, to its knowledge, accurately filed all tax returns to
 be filed by it and Buyer is not in default in the payment of any taxes levied
 or assessed against it or any of its assets. The representations and warranties
 contained in this Section 5.4 shall be deemed to have been made again as of the
 Closing, subject to Section 4.2(f) hereof.

         Section 5.5       Survival of Buyer's Representations and Warranties.
The representations and warranties of Buyer set forth in Section 5.4 hereof as
updated as of the Closing in accordance with the terms of this Agreement, shall
survive Closing for a period of ninety (90) days. Buyer shall have no liability
to Seller for a breach of any representation or warranty unless written notice
containing a description of the specific nature of such breach shall have been
given by Seller to Buyer prior to the expiration of said ninety (90) day period
and an action shall have been commenced by Seller against Buyer within ninety
(90) days of Closing.

         Section 5.6       Covenant of Buyer Re: 1031 Exchange. Seller may be
selling the Property as part of a multi-property transaction to qualify as a
tax-free exchange ("1031 Exchange") under Section 1031 of the Internal Revenue
Code of 1986, as amended. Buyer shall, to the extent provided below, cooperate
with Seller's reasonable request to allow Seller to attempt to qualify for the
1031 Exchange; provided, however, that Buyer's obligation to cooperate with
Seller shall be limited and conditioned as follows: (i) Buyer shall receive
written notice from Seller at least five (5) business days prior to the
scheduled Closing Date, which shall identify the parties involved in such 1031
Exchange and enclose all document for which Buyer's signature shall be required;
(ii) in no event shall Buyer be required to execute any document or instrument
which may (A) subject Buyer to any additional liability or obligation to Seller
or any other individual, entity or governmental agency, (B) diminish or impair
Buyer's rights under this Agreement, or (C) delay Closing; (iii) Seller shall
pay for any and all additional costs and expenses incurred by Buyer in
connection with accommodating the 1031 Exchange, and Buyer shall be entitled to
a credit at Closing to reimburse Buyer for such costs and expenses; (iv) Seller
shall not be relieved of any of its obligations under this Agreement by reason
of the 1031 Exchange; and (v) Seller hereby indemnifies and agrees to defend,
and hold Buyer, Buyer's

                                  Page 15 of 24


officers, directors, shareholders, beneficiaries, members, partners, agents,
employees and attorneys, and their representative successors and assigns
harmless from and against any claims, costs, damages, expenses (including, but
not limited to, attorneys' fees and costs), liabilities and losses incurred by,
claimed against or suffered by any of them arising out of the 1031 Exchange. The
foregoing indemnity shall survive the Closing or any termination of this
Agreement. Seller's failure to effectuate any intended 1031 Exchange shall not
relieve Seller from its obligations to consummate the purchase and sale
transaction contemplated by this Agreement and the consummation of such 1031
Exchange shall not be a condition precedent to Seller's obligations under this
Agreement.

         Section 5.7       Covenant of Buyer Re: Defeasance Loan. The Property
is currently encumbered by a loan in favor of Mellon Mortgage Company, which
loan is commonly referred to as a "Defeasance Loan". Buyer shall, to the extent
provided below, cooperate with Seller's reasonable requests in connection with
Seller's defeasance of the Defeasance Loan prior to or concurrent with the
Closing. In no event shall Buyer be required to execute any document or
instrument which may (A) subject Buyer to any additional liability or obligation
to Seller or any other individual, entity or governmental agency, (B) diminish
or impair Buyer's rights under this Agreement, or (C) delay the Closing.

         Section 5.8       Covenant of Seller Re: 1031 Exchange. Buyer may be
buying the Property as part of a 1031 Exchange. Seller shall, to the extent
provided below, cooperate with Buyer's reasonable request to allow Buyer to
attempt to qualify for the 1031 Exchange; provided. however, that Seller's
obligation to cooperate with Buyer shall be limited and conditioned as follows:
(i) Seller shall receive written notice from Buyer at least five (5) business
days prior to the scheduled Closing Date, which shall identify the parties
involved in such 1031 Exchange and enclose all document for which Seller's
signature shall be required; (ii) in no event shall Seller be required to
execute any document or instrument which may (A) subject Seller to any
additional liability or obligation to Buyer or any other individual, entity or
governmental agency, (B) diminish or impair Seller's rights under this
Agreement, or (C) delay Closing; (iii) Buyer shall pay for any and all
additional costs and expenses incurred by Buyer in connection with accommodating
the 1031 Exchange, and Seller shall be entitled to a credit at Closing to
reimburse Seller for such costs and expenses; (iv) Buyer shall not be relieved
of any of its obligations under this Agreement by reason of the 1031 Exchange;
and (v) Buyer hereby indemnifies and agrees to defend, and hold Seller, Seller's
officers, directors, shareholders, beneficiaries, members, partners, agents,
employees and attorneys, and their representative successors and assigns
harmless from and against any claims, costs, damages, expenses (including, but
not limited to, attorneys' fees and costs), liabilities and losses incurred by,
claimed against or suffered by any of them arising out of the 1031 Exchange. The
foregoing indemnity shall survive the Closing or any termination of this
Agreement. Buyer's failure to effectuate any intended 1031 Exchange shall not
relieve Buyer from its obligations to consummate the purchase and sale
transaction contemplated by this Agreement and the consummation of such 1031
Exchange shall not be a condition precedent to Buyer's obligations under this
Agreement.

                                  Page 16 of 24


                                   ARTICLE VI.
                                     DEFAULT

         Section 6.1       Default by Buyer. If the sale of the Property as
contemplated hereunder is not consummated due to Buyer's material default
hereunder, then Seller shall be entitled, as its sole and exclusive remedy, to
terminate this Agreement and retain the Deposit as liquidated damages as more
particularly set forth in Section 1.6 above.

         Section 6.2       Default by Seller. If the sale of the Property as
contemplated hereunder is not consummated due to Seller's material default
hereunder, then Buyer shall be entitled, as its sole and exclusive remedy, to
either (a) receive the return of the Deposit, which return shall operate to
terminate this Agreement and release Seller from any and all liability
hereunder, or (b) enforce specific performance of Seller's obligation to convey
the Property to Buyer in accordance with the terms of this Agreement. The remedy
of specific performance shall not be available to enforce any other obligation
of Seller hereunder. Buyer expressly waives its rights to seek damages in the
event of Seller's default hereunder. Buyer shall be deemed to have elected to
terminate this Agreement and receive the Deposit if Buyer fails to file suit for
specific performance against Seller in a court having jurisdiction in the County
and State in which the Property is located, on or before 60 days following the
date upon which Closing was to have occurred.

         Section 6.3       Recoverable Damages. Notwithstanding Sections 6.1 and
6.2 hereof, in no event shall the provisions of Sections 6.1 and 6.2 limit the
damages recoverable by either party against the other party due to the other
party's obligation to indemnify such party in accordance with this Agreement.

                                  ARTICLE VII.
                                  RISK OF LOSS

         Section 7.1       Minor Damage. In the event of loss or damage to the
Property or any portion thereof which is not "Major" (as hereinafter defined),
this Agreement shall remain in full force and effect provided that Seller shall,
at Seller's option, either (a) perform any necessary repairs, or (b) assign to
Buyer all of Seller's right, title and interest in and to any claims and
proceeds Seller may have with respect to any casualty insurance policies or
condemnation awards relating to the premises in question. If Seller elects to
perform repairs upon the Property, Seller shall use reasonable efforts to
complete such repairs promptly, and the date of Closing shall be extended for a
reasonable time to allow for the completion of such repairs. If Seller elects to
assign a casualty claim to Buyer, the Purchase Price shall be reduced by an
amount equal to the lesser of the deductible amount under Seller's insurance
policy or the cost of such repairs as determined in accordance with Section 7.3
hereof. Upon Closing, full risk of loss with respect to the Property shall pass
to Buyer.

         Section 7.2       Major Damage. Seller shall promptly notify Buyer of
the occurrence of any "Major" loss or damage, which notice shall state the cost
of repair or restoration thereof as opined by an architect or other qualified
expert in accordance with Section 7.3 hereof. Buyer

                                  Page 17 of 24

shall have the right, exercisable by giving written notice to Seller within ten
(10) days after receipt of Seller's written notice, to terminate this Agreement
in which event the provisions of Section 3.3 shall apply. If Buyer does not
elect to terminate this Agreement within said ten (10) day period, then Buyer
shall be deemed to have elected to proceed with Closing. In that event Seller
shall at Seller's option either (a) perform any necessary repairs, or (b) cause
the Closing to occur promptly and assign to Buyer through Escrow all of Seller's
right, title and interest in and to any claims and proceeds Seller may have with
respect to any casualty insurance policies or condemnation awards relating to
the premises in question. If Seller elects to perform repairs upon the Property,
Seller shall use reasonable efforts to complete such repairs promptly, and the
date of Closing shall be extended for a reasonable time in order to allow for
the completion of such repairs. If Seller elects to assign a casualty claim to
Buyer, the Purchase Price shall be reduced by an amount equal to the lesser of
the deductible amount under Seller's insurance policy or the cost of such
repairs as determined in accordance with Section 7.3 hereof. Upon Closing, full
risk of loss with respect to the Property shall pass to Buyer.

         Section 7.3       Definition of "Major" Loss or Damage. For purposes of
Sections 7.1 and 7.2, "Major" loss or damage refers to the following: (a) loss
or damage to the Property hereof such that the cost of repairing or restoring
the premises in question to substantially the same condition which existed prior
to the event of damage would be, in the opinion of an architect or other
qualified expert selected by Seller and reasonably approved by Buyer, equal to
or greater than Five Hundred Thousand Dollars ($500,000), and (b) any loss due
to a condemnation which permanently and materially impairs the current use of
the Property. If Buyer does not give written notice to Seller of Buyer's reasons
for disapproving an architect or other qualified expert within five (5) business
days after receipt of notice of the proposed architect or other qualified
expert, then Buyer shall be deemed to have approved the architect or other
qualified expert selected by Seller.

                                  ARTICLE VIII.
                                   COMMISSIONS

         Section 8.1       Brokerage Commissions. With respect to the
transaction contemplated by this Agreement, Seller shall be responsible for the
payment of a real estate brokerage commission (the "Seller's Commission") to
Hendricks & Partners (Dick Bassett) ("Brokers") pursuant to a separate written
agreement between Seller and Brokers relating thereto. Each party hereto agrees
that if any person or entity, other than Brokers, makes a claim for brokerage
commissions or finder's fees other than the Seller's Commission related to the
sale of the Property by Seller to Buyer, and such claim is made by, through or
on account of any acts or alleged acts of said party or its representatives,
then said party will protect, indemnify, defend and hold the other party free
and harmless from and against any and all loss, liability, cost, damage and
expense (including reasonable attorneys' fees) in connection therewith. The
provisions of this paragraph shall survive Closing or any termination of this
Agreement.

                                   ARTICLE IX.
                             DISCLAIMERS AND WAIVERS

         Section 9.1       No Reliance on Documents. Except as expressly stated
herein, Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials,

                                  Page 18 of 24


data or information delivered by Seller or its brokers or agents to Buyer in
connection with the transaction contemplated hereby. All materials, data and
information delivered by Seller to Buyer in connection with the transaction
contemplated hereby are provided to Buyer as a convenience only and any reliance
on or use of such materials, data or information by Buyer shall be at the sole
risk of Buyer, except as otherwise expressly stated herein. Neither Seller, nor
any, affiliate of Seller, nor the person or entity, which prepared any report or
reports delivered by Seller to Buyer, shall have any liability so Buyer for any
inaccuracy in or omission from any such reports.

         Section 9.2       AS IS SALE; DISCLAIMERS. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY
WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR
REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.

         UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL
ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT TO THE EXTENT
EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT. BUYER HAS NOT RELIED AND WILL
NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED
WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION,
OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY
SELLER, THE MANAGERS OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT
REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN
THIS AGREEMENT. BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS AND TAKES
INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD "AS IS."

         BUYER REPRESENTS AND COVENANTS TO SELLER THAT BUYER HAS CONDUCTED, OR
WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING
BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER
DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE
PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH
RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY,
AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON
BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN
SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET
FORTH IN THIS AGREEMENT. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE
MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL
AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S
INVESTIGATIONS, AND BUYER, UPON CLOSING,

                                  Page 19 of 24

SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY
AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT),
LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH
BUYER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR
ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL,
CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS,
OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY, EXCEPT AS
EXPRESSLY SET FORTH OTHERWISE IN THIS AGREEMENT.

         IN CONNECTION THEREWITH, BUYER EXPRESSLY WAIVES ALL RIGHTS UNDER
CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES THAT:

                  "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 BY HIM MUST HAVE
                  MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR,"

         Section 9.3 Survival of Disclaimers. The provisions of this Article IX
shall survive Closing or any termination of this Agreement.

                                   ARTICLE X.
                                  MISCELLANEOUS

         Section 10.1      Confidentiality. Buyer and its representatives shall
hold in confidence all data and information obtained with respect to Seller or
its business, whether obtained before or after the execution and delivery of
this Agreement, and shall not disclose the same to others; provided, however,
that Buyer may disclose such data and information to the employees, lenders,
prospective lenders, partners, prospective partners, consultants, accountants
and attorneys of Buyer if such persons agree in writing to treat such data and
information confidentially. If this Agreement is terminated or Buyer fails to
perform hereunder, Buyer shall promptly return to Seller any statements,
documents, schedules, exhibits or other written information obtained from Seller
in connection with this Agreement or the transaction contemplated herein. With
respect to any provision of this Agreement which refers to the termination of
this Agreement and the return of the Deposit to Buyer, such Deposit shall not be
returned to Buyer unless and until Buyer has fulfilled its obligation to return
to Seller the materials described in the preceding sentence. In the event of a
breach or threatened breach by Buyer or its agents or representatives of this
Section 10.1, Seller shall be entitled to an injunction restraining Buyer or its
agents or representatives from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting
Seller from pursuing any other available remedy at law or in equity for such
breach or threatened breach. The provisions of this Section 10.1 shall

                                  Page 20 of 24


survive Closing or any termination of this Agreement.

         Section 10.2      Public Disclosure. Prior to and after the Closing,
any release to the public of information with respect to the sale contemplated
herein or any matters set forth in this Agreement will be made only in the form
approved by Buyer and Seller. The provisions of this Section 10.2 shall survive
the Closing or any termination of this Agreement.

         Section 10.3      Assignment. Subject to the provisions of this Section
10.3, the terms and provisions of this Agreement are to apply to and bind the
permitted successors and assigns of the parties hereto. Buyer may not assign its
rights under this Agreement without first obtaining Seller's written approval,
which approval may be given or withheld in Seller's sole discretion.
Notwithstanding the foregoing, Buyer may assign its rights and obligations under
this Agreement to one or more entities in which Buyer or its principals retain a
controlling ownership interest (including without limitation a limited
partnership of which Buyer is the general partner). In the event that Buyer
desires to assign its rights hereunder, (a) Buyer shall send Seller written
notice of its request at least ten (10) business days prior to Closing, which
request shall include the legal name and structure of the proposed assignee, as
well as any other information that Seller may reasonably request, (b) if such
proposed assignee is approved by Seller, then Buyer and the proposed assignee
shall execute an assignment and assumption of this Agreement in form and
substance reasonably satisfactory to Seller, and (c) in no event shall any
assignment of this Agreement release or discharge Buyer from any liability or
obligation hereunder unless expressly agreed otherwise by Seller in writing. Any
transfer, directly or indirectly, of a controlling interest in any stock,
partnership interest or other ownership interest in Buyer shall constitute an
assignment of this Agreement.

         Section 10.4      Notices. Any notice pursuant to this Agreement shall
be given in writing by (a) personal delivery, (b) reputable overnight delivery
service with proof of delivery, (c) United States Mail, postage prepaid,
registered or certified mail, return receipt requested, or (d) legible facsimile
transmission, sent to the intended addressee at the address set forth below, or
to such other address or to the attention of such other person as the addressee
shall have designated by written notice sent in accordance herewith. Any notice
so given shall be deemed to have been given upon receipt or refusal to accept
delivery, or, in the case of facsimile transmission, as of the date of the
facsimile transmission provided that an original of such facsimile is also sent
to the intended addressee by means described in clauses (a), (b) or (c) above.
Unless changed in accordance with the preceding sentence, the addresses for
notices given pursuant to this Agreement shall be as follows:

                  If to Seller:      IGP X MISSION PARK ASSOCIATES, L.P.
                                     c/o Income Growth Management
                                     11230 Sorrento Valley Road, Suite 220
                                     San Diego, CA 92121-1329
                                     Attention: Mr. David Maurer
                                     Telephone No. (858)457-2750
                                     Facsimile No. (858)457-3104

                                  Page 21 of 24


                  with a copy to:    LAW OFFICES OF JON K. LADD, APC
                                     11440, West Bernardo Court, Suite 214
                                     San Diego, CA 92127-1643
                                     Attention: Jon K. Ladd
                                     Telephone No. (858)451-1234
                                     Facsimile No. (858)451-1208

                                     If to Buyer: Pacifica Enterprises, LLC
                                     12780 High Bluff Drive, Suite 160
                                     San Diego, California 92130
                                     Attn: Dario DeLuca
                                     Telephone No. (858)755-0216
                                     Facsimile No. (858)755-1687

                  with a copy to:    JUDKINS, GLATT, GETZ, GALLAGHER &
                                     BONANNO, LLP
                                     530 B Street, Suite 1800
                                     San Diego, CA 92101
                                     Attention: Greg Judkins
                                     Telephone No. (619)232-4604
                                     Facsimile No. (619)232-4616

         Section 10.5      Modifications. This Agreement cannot be changed
orally, and no executory agreement shall be effective to waive, change, modify
or discharge it in whole or in part unless such executory agreement is in
writing and is signed by the parties against whom enforcement of any waiver,
change, modification or discharge is sought.

         Section 10.6      Entire Agreement. This Agreement, including the
exhibits and schedules hereto, contains the entire agreement between the parties
hereto pertaining to the subject matter hereof and fully supersedes all prior
written or oral agreements and understandings between the parties pertaining to
such subject matter.

         Section 10.7      Further Assurances. Each party agrees that it will
execute and deliver such other documents and take such other action, whether
prior or subsequent to Closing, as may be reasonably requested by the other
party to consummate the transaction contemplated by this Agreement. The
provisions of this Section 10.7 shall survive the Closing.

         Section 10.8      Counterparts. This Agreement may be executed in
counterparts, all such executed counterparts shall constitute the same
agreement, and the signature of any party to any counterpart shall be deemed a
signature to, and may be appended to, any other counterpart.

         Section 10.9      Facsimile Signatures. In order to expedite the
transaction contemplated herein, telecopied signatures may be used in place of
original signatures on this Agreement or any document delivered pursuant hereto
(other than the Deed, the notarized original of which shall be required prior to
Closing). Seller and Buyer intend to be bound by the signatures on the
telecopied document, are aware that the other party will rely on the telecopied
signatures, and hereby waive any defenses to the enforcement of the terms of
this Agreement based on the form

                                  Page 22 of 24


of signature. Following any facsimile transmittal, the party shall promptly
deliver the original instrument by reputable overnight courier in accordance
with the notice provisions of this Agreement.

         Section 10.10 Severability. If any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of this Agreement shall nonetheless remain in full force and
effect; provided that the invalidity or unenforceability of such provision does
not materially adversely affect the benefits accruing to any party hereunder.

         Section 10.11 Application Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard
to any principal or rule of law that would require the application of the law of
any other jurisdiction. Buyer and Seller agree that the provisions of this
Section 10.11 shall survive the Closing or any termination of this Agreement.

         Section 10.12 No Third-Party Beneficiary. The provisions of this
Agreement and of the documents to be executed and delivered at Closing are and
will be for the benefit of Seller and Buyer only and are not for the benefit of
any third party; and, accordingly, no third party shall have the right to
enforce the provisions of this Agreement or of the documents to be executed and
delivered at Closing.

         Section 10.13 Captions. The section headings appearing in this
Agreement are for convenience of reference only and are not intended, to any
extent and for any purpose, to limit or define the text of any section or any
subsection hereof.

         Section 10.14 Construction. The parties acknowledge that the parties
and their counsel have reviewed and revised this Agreement and that the normal
rule of construction to take effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.

         Section 10.15 Recordation. Neither party shall record this Agreement
or any memorandum hereof without the prior written consent of the other party
hereto. The provisions of this Section 10.15 shall survive the Closing or any
termination of this Agreement.

         Section 10.16 Time of the Essence. Time is of the essence of each and
every provision of this Agreement.

//

//

//

//

//

//

                                  Page 23 of 24



         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.

SELLER                                       BUYER

IGP X MISSION PARK ASSOCIATES                PACIFICA ENTERPRISES, LLC,
L.P., a California Limited                   a California limited liability
Partnership                                  company

By: IGP X MISSION PARK ASSOCIATES            By: /s/ DARIO DE LUCA
    MANAGEMENT, INC.,                           --------------------------------
    a California corporation                    Name: DARIO DE LUCA

                                                Title: Manager

By: /s/ David W. Maurer
    --------------------------------
    Name: David W. Maurer
    Title: President

                                  Page 24 of 24



                              ESCROW HOLDER CONSENT

         Escrow Holder hereby acknowledges that it has received fully executed
or executed counterparts of the foregoing Agreement and agrees to act as Escrow
Holder thereunder and to be bound by the provisions thereof.

ESCROW HOLDER:

STEWART TITLE COMPANY

By: /s/Michelle Mitchell                         Date: 12/5/2003
Name: Michelle Mitchell                          Escrow No.: 1050927
Title: Commercial Escrow Officer

                                     1 of 1



                                   EXHIBIT "A"
                               DESCRIPTION OF LAND

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO AND IS DESCRIBED AS FOLLOWS:

LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309,
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9,
1989.

TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON
LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN
ON SAID MAP.

                                   Page 1 of 1



                                   EXHIBIT "B"
                            LIST OF PERSONAL PROPERTY

                                [To be attached]

                                   Page 1 of 1



                                   EXHIBIT "C"
                       ESCROW HOLDER'S GENERAL PROVISIONS

                                [To be attached]

                                   Page 1 of 1



                               GENERAL PROVISIONS

1.   DEPOSIT OF FUNDS, OPPORTUNITY TO EARN INTEREST AND PRORATIONS

All funds received in this escrow shall be deposited with other escrow funds
into one or more non-interest bearing escrow accounts at a financial institution
selected by Escrow Agent. Escrow Agent shall not be responsible and shall have
no liability for any delay in closing this escrow if the funds deposited are not
available for immediate withdrawal as a matter of right pursuant to California
Insurance Code Section 12413.1 et. seq. Funds deposited in the financial
institution are insured only to the limit provided by the Federal Deposit
Insurance Corporation. Escrow Holder shall not be held responsible for lost
interest due to wire delays caused by any bank or the Federal Reserve System,
and recommends that all parties make themselves aware of banking regulations
with regards to placement of wires.

You have the opportunity to earn interest on the funds you deposit with us by
instructing us to deposit your funds in an interest bearing account. (You do not
have an opportunity to earn interest on any funds deposited by a lender) If you
elect to earn interest, there is an additional fee in the amount of $50.00 for
establishing and maintaining such an account. It is important that you consider
this cost as it may exceed the actual interest you earn.

Should you not elect to earn interest on your deposit, your funds will be
deposited in our General Escrow Account at a financial institution insured by
the EDIC. This is a non-interest bearing account; however, Stewart Title of
California, Inc. may receive certain financial benefits from that financial
institution because of the General Escrow Account and its on-going banking
relationship. These benefits may include, without limitation, credits allowed by
such financial institution on loans to Stewart Title of California, Inc. and
earnings on investments made with the proceeds of such loans, accounting,
reporting and other services and products of such financial institution. We do
not have an obligation to account to you in any manner for the value of, or to
compensate any party for, any benefit received by Stewart Title of California,
Inc. Any such benefits shall be deemed additional compensation of Stewart Title
of' California, Inc. for its services in connection with the escrow.

All prorations and/or adjustments called for in this escrow shall he made on the
basis of a 30 day month or 360 day year, unless otherwise instructed in writing.
Proration of real property taxes including supplemental real property taxes,
will be made on the basis of the latest available figures provided to Escrow
Holder.

The phrase close of escrow (COE) as used herein means the date on which
instruments/documents are recorded.

Disbursements from this escrow will be made by check of Escrow Holder. Unless
otherwise instructed in writing, checks will be issued jointly to the parties
designated as payees. Signatures (including initials) of principals or their
duly authorized agents on any documents/instrument and/or instruction pertaining
to this escrow indicate approval of same.

2.   SPECIAL RECORDINGS

If a "SPECIAL RECORDING" is arranged and completed, meaning recording the
documents called for in this escrow, at any time other than the standard
recording time for title companies, then all parties hereto represent and
warrant that during the period of time between the standard recording time and
the time the documents are actually recorded pursuant to the "SPECIAL
RECORDING", no additional liens, encumbrances, or exceptions to the title
whether involuntary or voluntary, of any kind or nature will attach to or be
recorded against the subject property, nor will the subject property be
otherwise transferred or conveyed. All parties hereby expressly agree to
indemnify and hold Escrow Holder harmless from all claims, losses or damages and
attorney's fees resulting from any such additional liens, encumbrances,
exceptions to title, transfers or conveyances.

3.   AUTHORIZATION TO DELIVER

If it is necessary, proper or convenient for the consummation of this escrow,
Escrow Holder is authorized to deposit or have deposited funds or documents, or
both, handed to Escrow Holder under these escrow instructions with any duly
authorized sub-escrow agent, including, but not limited to, any bank, trust
company, title insurance company, title company, savings and loan association,
or licensed escrow agent, at or before close of escrow in connection with
closing this escrow. Any such deposit shall be deemed a deposit under the
meaning of these escrow instructions.

4.   AUTHORIZATION TO FURNISH COPIES

Furnishing copies of any/all escrow instructions, amendments, supplements,
preliminary reports, notices of cancellation and closing statements in this
escrow to the real estate broker(s), lenders and/or attorney's representing
principals to this escrow is authorized. Escrow holder shall not incur any
liability to the parties for delivery of said copies.

5.   TIME AND WRITTEN NOTIFICATION



Time is of the essence. In the event the conditions of this escrow have not been
complied with at the expiration of the time provided for herein you are
permitted, though not required, to complete the same at the earliest possible
date thereafter. No notice, demand or change of instructions shall be of any
effect to alter, amend, supplement, or vary the terms of these instructions
unless given in writing and signed by all parties affected thereby.

6.   CANCELLATION PROVISIONS

Any principal instructing Escrow Holder to cancel escrow shall file notice of
cancellation in Escrow Holder's office in writing and so state the reason for
cancellation. Upon receipt of same, Escrow Holder shall prepare cancellation
instructions for signatures of the principals and shall forward same to the
principals. Upon receipt of mutually agreeable cancellation instructions signed
by all principals and after payment of Escrow Holder's cancellation charges,
Escrow Holder is authorized to comply with such instructions and cancel the
escrow.

7.   ACTION IN INTERPLEADER OR OTHER COURT OR LEGAL PROCEEDINGS

The principals hereto expressly agree that Escrow Holder has the absolute
right, at its election, to file an action in interpleader requiring the
principals to answer and litigate their several claims and rights among
themselves and Escrow Holder is authorized to deposit with the clerk and the
court, all documents, instruments and funds held in escrow, in the event such
action is filed, the principals jointly and severally agree 1o pay Escrow
Holder's cancellation charges and costs, expenses and reasonable attorney's fees
it is required to expend or incur in such interpleader action, the amount
thereof to be fixed and judgment therefore to be rendered by the court. Upon
filing of such action, Escrow Holder is thereupon fully released and discharged
from all obligations to further perform any duties or obligations otherwise
imposed by the terms of this escrow.

8.   PERSONAL PROPERTY TAX

Escrow Holder is not responsible for any personal property tax which may be
assessed to any former owner of the property that is the subject of this escrow,
nor for the corporation or license tax of any corporation as a former owner. No
examination or insurance as to the amount of payment of personal taxes is
required unless specifically requested.

9.   LIMITATION ON DUTY TO INFORM

It is agreed by the parties hereto, that so far as Escrow Holder's rights and
liabilities are involved, the transaction is an escrow and not any other legal
relation and STEWART TITLE OF CALIFORNIA, INC. is an Escrow Holder only on the
within expressed terms, and Escrow Holder shall have no responsibility for
notifying any of the parties of this escrow of any sale, resale, loan, exchange
or other transaction involving any property herein described or of the profit
realized by any person, firm or corporation (broker, agent and parties to this
and/or other escrow included), in connection therewith, regardless of the fact
that such transaction(s) may be handled concurrently by Escrow Holder in this
escrow or in another escrow.

10.  LEGAL ADVICE

The parties acknowledge and understand that Escrow Holder is not authorized to
practice law, nor give financial advice. The parties are hereby advised to seek
legal and financial counsel and advice concerning the effect of these escrow
instructions. The parties acknowledge that no representations are made by Escrow
Holder about the legal sufficiency, legal consequences, financial effect or tax
consequences of the within escrow instructions.

11.  DISCLOSURE OF CONDITIONS PRECEDENT

The parties to this escrow, by execution thereof, acknowledge their duty to
Escrow Holder of full disclosure of those matters, which shall effect the
transfer of subject property and conditions of title (inclusive of real personal
and intangible property, which matters may result in a lien against subject
property). Disclosure shall include, but not limited to: water, stock, owners
association or maintenance dues, contractual obligations not automatically
terminated upon sale, notes, deeds of trust and vendors liens.

12.  STATE/FEDERAL CODE NOTIFICATION

According to Federal law, the Seller(s), when applicable, will be required to
complete a 1099-S Worksheet that will be utilized to generate a 1099 reporting
statement to the Internal Revenue Service.

You are released from and shall have no liability, obligations or responsibility
with respect to (a) withholding of funds pursuant to Section 1445 of the
Internal Revenue Code of 1984, "Foreign Investors in Real Property Act"
(FIRPTA), as amended (b) advising of requirements, (c) determining whether the
seller is a foreign person, under such Section, or (d) obtaining a non-foreign
affidavit or other exemption from withholding under such Section nor otherwise
making any inquiry concerning compliance with such Section by any party to this
transaction.

IN ACCORDANCE WITH SECTION 18662 AND 18668 OF THE REVENUE AND TAXATION CODE, A
BUYER MAY BE REQUIRED TO WITHHOLD ANY AMOUNT EQUAL TO 3-1/3 PERCENT OF THE SALES
PRICE IN THE CASE OF A DISPOSITION OF CALIFORNIA REAL PROPERTY INTEREST. BY
EITHER:



1)   A SELLER WHO IS AN INDIVIDUAL OR DISBURSEMENT INSTRUCTIONS AUTHORIZED THE
     PROCEEDS TO BE SENT TO A FINANCIAL INTERMEDIARY OF THE SELLER, OR

2)   A CORPORATE SELLER THAT HAS NO PERMANENT PLACE OF BUSINESS IN CALIFORNIA.

FOR FAILURE TO WITHHOLD, THE BUYER MAY BECOME SUBJECT TO PENALTY EQUAL TO THE
GREATER OF 10 PERCENT OF THE AMOUNT REQUIRED TO BE WITHHELD OR FIVE HUNDRED
DOLLARS ($500.00).

HOWEVER, NOTWITHSTANDING ANY OTHER PROVISION INCLUDED IN THE CALIFORNIA STATUTES
REFERENCES ABOVE, NO BUYER WILL BE REQUIRED TO WITHHOLD ANY AMOUNT OR BE SUBJECT
TO PENALTY FOR FAILURE TO WITHHOLD IF

1)   THE SALES PRICE OF THE CALIFORNIA REAL PROPERTY CONVEYED DOES NOT EXCEED
     ONE HUNDRED THOUSAND DOLLARS ($100,000.00), OR

2)   THE SELLER EXECUTES A WRITTEN CERTIFICATE, UNDER THE PENALTY OF PERJURY,
     CERTIFYING THAT THE SELLER IS A CORPORATION WITH A PERMANENT PLACE OF
     BUSINESS IN CALIFORNIA, OR

3)   THE SELLER, WHO IS AN INDIVIDUAL, EXECUTES A WRITTEN CERTIFICATE UNDER THE
     PENALTY OF PERJURY, OF ANY OF THE FOLLOWING:

     A)   THAT THE CALIFORNIA REAL PROPERTY BEING CONVEYED IS THE SELLER'S
          PRINCIPAL RESIDENCE (WITHIN THE MEANING OF SECTION 121 OF THE INTERNAL
          REVENUE CODE).

     B)   THAT THE CALIFORNIA REAL PROPERTY BEING CONVEYED IS OR WILL BE
          EXCHANGED FOR PROPERTY OF LIKE KIND (WITHIN THE MEANING OF SECTION
          1031 OF THE INTERNAL REVENUE CODE), BUT ONLY TO THE EXTENT OF THE
          AMOUNT OF GAIN NOT REQUIRED TO BE RECOGNIZED FOR CALIFORNIA INCOME TAX
          PURPOSES.

     C)   THAT THE CALIFORNIA REAL PROPERTY HAS BEEN COMPULSORILY OR
          INVOLUNTARILY CONVERTED (WITHIN THE MEANING; OF SECTION 1033 OF THE
          INTERNAL REVENUE CODE) AND THAT THE SELLER INTENDS TO ACQUIRE
          PROPERTY SIMILAR OR RELATED IN SERVICE OR USE SO AS TO BE ELIGIBLE FOR
          NONRECOGNIT1ON OF GAIN FOR CALIFORNIA INCOME TAX PURPOSES.

     D)   THAT THE CALIFORNIA REAL PROPERTY TRANSACTION WILL RESULT IN A LOSS
          FOR CALIFORNIA INCOME TAX PURPOSES.

THE SELLER IS SUBJECT TO PENALTY FOR KNOWINGLY FILING A FRAUDULENT CERTIFICATE
FOR THE PURPOSE OF AVOIDING THE WITHHOLDING REQUIREMENT.

13.  NO ACTIVITY

If there is no written activity by a principal to this escrow within any six
- -month period after the time limit date is set forth, in the escrow instructions
or written extension thereof, Escrow Holder's obligation shall terminate at
Escrow Holder's option. All documents, monies or other items deposited with
Escrow Holder shall he returned to the respective parties entitled thereto, less
fees and charges herein provided.

14.  CAPTIONS AND COUNTERPARTS

Captions in these escrow instructions are inserted for convenience of reference
only and do not define, describe or limit the scope of the intent of these
instructions or any of the terms hereof. These instructions may be executed in
counterparts, each of which so executed shall, irrespective of the date of its
execution and delivery, be deemed an original, and said counterparts together
shall constitute one and the same instrument.

15.  BINDING

All terms of these escrow instructions shall be binding upon inure to the
benefit and be enforceable by the parties hereto and there respective legal
representatives, successors and assigns. In the event any term, covenant,
condition, provision or agreement herein contained is held to be invalid or void
by any court of competent jurisdiction, the invalidity of any such term,
covenant, condition, provision or agreement shall in no way affect any other
term, covenant, condition, provision or agreement herein contained.

16.  USURY

Escrow Holder is not to be concerned with any question of usury in any loan or
encumbrance involved in the processing of this escrow and is hereby released of
any liability or responsibility therefore.

17.  CONFLICTING DEMANDS/INTERPLEADER

NO notice, demand or change of instructions shall be of any effect in this
escrow unless given in writing by all parties affected thereby. If conflicting
demands are made in connection with this escrow, Escrow Holder shall have the
absolute right to either



withhold and stop all proceedings, or file suit in the interpleader and obtain
an order from the court requiring the parties to interplead their several claims
and rights amongst themselves.

18.  FACSIMILE AND ELECTRONIC MAIL

All parties acknowledge that documents and instructions may be transmitted via
facsimile (FAX) and/or electronic mail (e-mail). In the event the principals of
this transaction, their agents, or assigns, utilize "facsimile (FAX)"
transmitted instructions, Escrow Holder may rely and act upon such instructions
in the same manner as if original signed instructions were in the possession of
Escrow Holder. Any instructions for release of funds will require original
signatures prior to said release.

19.  DISCRETIONARY TERMINATION

At the sole discretion of Escrow Holder, Escrow Holder may elect to terminate
its escrow relationship with the principals to the escrow. Funds and documents
will be returned upon mutual instructions of the appropriate parties.

20.  PURCHASE AGREEMENT

If any form of Purchase agreement or amendment or supplement (collectively
"Purchase Agreement") is deposited to this escrow, it is understood that such
document shall be effective only as between the parties signing the Purchase
Agreement. Escrow Holder's only duty is to comply with the instructions set
forth in the escrow instructions and shall not be responsible for interpreting
or acting on any provision of any Purchase Agreement on which these escrow
instructions may he based. Escrow Holder shall not rely on any knowledge or
understanding Escrow Holder may have of any such Purchase Agreement in
ascertaining or performing the duties of Escrow Holder. In connection with any
loan transaction, Escrow Holder is authorized to deliver a copy of any purchase
agreement and a copy of all escrow instructions, supplements or amendments to
the Lender

21.  ENVIRONMENTAL DISCLOSURE

Notwithstanding any actual or other knowledge on the part of Escrow Holder, the
parties agree to release Escrow Holder from any and all liability of any kind or
nature and to indemnify any and all liability of any kind or nature and to
indemnify Escrow Holder of any loss, damages, claims, judgments or costs of any
kind or nature resulting from or related to the release or discharge of
hazardous or toxic wastes on the subject property whether it occurred in the
past or present or may occur in the future which release or discharge is in
violation of law, in excess of any state and federal standards, permit
requirements and/or disclosure requirements existing at this time or which may
exist at a future time. The parties represent that they made their own
assessment of the condition of the subject property and have not relied on any
of your representations in making the assessment. The parties are advised to
seek independent legal and technical environmental expert advise in assessing
the risks associated with potential hazardous or toxic wastes.

22.  ADDITIONAL DOCUMENTS HANDED TO ESCROW HOLDER

Parties agree to hand Escrow Holder applicable documentation to establish their
authority to act. Those documents may include, but shall not be limited to the
following:

1)   If an individual: Statement of Information

2)   If a corporation: A Corporate resolution signed by the Secretary of the
     Corporation, authorizing the acquisition, encumbrancing (if applicable), or
     sale of the subject property, and designating the authorized signatories on
     behalf of the corporation, together with a copy of the Articles of
     Incorporation & By-Laws.

3)   If a Trust: copy of the Trust Agreement, any amendments thereto and/or a
     Certificate of Trust.

4)   If a General Partnership: An original Statement of Partnership, in
     recordable form (if not already recorded) to be recorded in the County in
     which the subject property is located. A copy of the partnership agreement
     is also requested.

5)   If a Limited Partnership: The LP-1 form, certified by the Secretary of
     State to record (if not already recorded) in the county in which the
     subject property is located. A copy of the partnership agreement is also
     requested.

6)   If a Joint Venture: The requirements specified 1, 2, and 3 herein will be
     applicable as it relates to the entities which comprise the Joint Venture.

7)   If a Limited Liability Company (LLC): The LLC1 certified by the Secretary
     of State to record (if not already recorded) in the county in which the
     subject property is located. The LLC1 must reflect an expiration date. One
     person must be named on the LLC1 as managing the LLC, or all members must
     sign. A copy of the operating agreement is required.

The parties further acknowledge that in the event the partners of a partnership
are individuals, it may be required that each such partner submit a completed
and executed Statement of Information.

If the Principals have any questions regarding the disposition of Unclaimed
Funds, in excess of $50.00 the Principals should contact the Controller or
successor agency for the State of California.

23.  DESTRUCTION OF RECORDS



Escrow Holder is authorized to destroy or otherwise dispose of any and all
documents, papers, instructions, correspondence and other materials pertaining
to this escrow at the expiration of seven (7) years from the close of escrow or
cancellation thereof.

24.  GOOD FUNDS

California Insurance Code Section 12413. 1 regulates the disbursement of escrow
and sub-escrow funds by title companies. The law requires that funds be
deposited in the title company escrow account and available for withdrawal prior
to disbursement. Funds received via wire transfer may be disbursed upon receipt.
Funds received via cashier's checks or teller checks drawn on a California Bank
may be disbursed on the next business day after the day of deposit. If funds are
received by any other means, recording and/or disbursement may be delayed.
STEWART TITLE OF CALIFORNIA, INC. shall not be responsible for accruals of
interest or other charges resulting from compliance with the disbursement
restrictions imposed by state law.

If any check submitted is dishonored upon presentment for payment, you are
authorized to notify all principals and/or their respective agents of such
nonpayment.

25.  CHANGE IN OWNERSHIP REPORT

All parties are aware that a "Preliminary Change in Ownership Form" is to be
filed with the office of the County Assessor upon recordation of all transfer
documents involving real property. As an accommodation only, Escrow Holder shall
provide necessary forms to the purchaser herein and in the event the completed
form is deposited into escrow prior to close, Escrow Holder shall deliver same
to County Assessor concurrently with recordation of the documents being recorded
in this transaction.

26.  APPLICATION OF PAYOFF FUNDS

Should a check or wire be deemed unacceptable by lenders, creditors, lien
holders or beneficiaries of Deeds of Trust, Escrow Holder is authorized to act
on our behalf in requesting the funds, as well as any balance in an impound
account, be applied towards the balance due.

27.  INDEMNITY FOR ATTORNEY'S FEES AND COSTS

In the event suit is brought by any party or parties to this escrow, including
Stewart Title of California, Inc., as against each other or others, including,
Stewart Title of California, Inc., which results in a dismissal of or judgment
in favor of Stewart Title of California, Inc., the parties hereto agree to hold
harmless, reimburse and indemnify Stewart Title of California, Inc., its
officers and employees, from any loss, expenses, costs and attorney's fees
incurred.

THIS AGREEMENT IN ALL PARTS APPLIES TO, INURES TO THE BENEFIT OF, AND FUNDS ALL
PARTIES HERETO, THEIR HEIRS, LEGATEES, DEVISEES, ADMINISTRATORS, EXECUTORS,
SUCCESSORS AND ASSIGNS, AND WHENEVER THE CONTEXT SO REQUIRES THE MASCULINE
GENDER INCLUDES THE FEMININE AND NEUTER, AND THE SINGULAR NUMBER INCLUDES THE
PLURAL. THESE INSTRUCTIONS AND ANY OTHER AMENDMENTS, MAY BE EXECUTED IN ANY
NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL HE CONSIDERED AS AN ORIGINAl AND BE
EFFECTIVE AS SUCH.

MY/OUR INITIAL (S) HERETO CONSTITUTES INSTRUCTION TO ESCROW HOLDER OF ALL TERMS
AND CONDITIONS CONTAINED IN THIS AND ALL PRECEDING PAGES AND FURTHER SIGNIFIES
THAT I/WE HAVE READ AND UNDERSTAND THESE GENERAL PROVISIONS.

                                             INITIAL:___________________________



NOTICE TO DEPOSITOR.

Thank you for choosing Stewart Title of California (Stewart Title). As you have
deposited and/or will be depositing funds with Stewart Title, we deem it
important that you are aware of an opportunity to earn interest, or in the
alternative, to benefit from reduced escrow fees.

Should you not elect to earn interest on your deposit, Stewart Title will
deposit your funds into its General Escrow Account at a financial institution
insured by the FDIC. This is a non-interest bearing account; however, Stewart
Title may receive certain financial benefits from that financial institution
because of the General Escrow Account and its on-going banking relationship.
These benefits may include, without limitation, credits allowed by such
financial institution on loans to Stewart Title and earnings on investments made
with the proceeds of such loans, accounting, reporting and other services and
products of such financial institution. These financial benefits enable Stewart
Title of California to offer lower escrow fees that would otherwise be
unavailable. Unless you direct Stewart Title to open an interest-bearing account
(as described below), Stewart Title shall have no obligation to account to you
in any manner for the value of, or to compensate any party for, any benefit
received by Stewart Title. Any such benefits shall be deemed additional
compensation of Stewart Title for its services in connection with the escrow.

If you elect, funds deposited prior to the close of escrow may be placed in an
individual interest-bearing account. Should you elect to have your funds
placed in an interest bearing account, Stewart Title personnel will expend time
and effort to open said account, process signature cards, review and execute the
account agreement, deal with account correspondence, process the proper closing
of the account, maintain records and bank statements, and to process various
other related duties. Stewart Title of California will charge an additional
escrow fee in the amount of $50.200 for establishing and maintaining such an
interest bearing account. IT IS IMPORTANT THAT YOU PROVIDE CAREFUL CONSIDERATION
OF THIS COST, AS THE COST MAY EXCEED THE ACTUAL INTEREST EARNED. Please note the
following examples of a $1,000.00 and a $5,000.00 deposit into a 3% interest
bearing account for a period of 30 days:

        $1,000.00 x 3% / 360 days x 30 days = $2.50
        $5,000.00 x 3% / 360 days x 30 days = $12.50

If you do not want your funds placed in an interest bearing account, you need do
nothing further. Your funds will remain in or be placed in our General Escrow
Account. If you do want your funds to earn interest, please execute and return
this document to Stewart Title of California. We will then forward the necessary
paperwork, which must also be returned, in order to establish your interest
bearing account. Please be advised that you alone arc responsible for reporting
any interest to the appropriate taxing authorities.

ELECTION TO EARN INTEREST.

I HEREBY AUTHORIZE AND INSTRUCT STEWART TITLE OF CALIFORNIA TO OPEN AN INTEREST
BEARING ACCOUNT AT STEWART TITLE OF CALIFORNIA'S DEPOSITORY BANK. I HEREBY
AUTHORIZE YOU TO CHARGE AND I HEREBY AGREE TO PAY THE ADDITIONAL ESCROW FEE FOR
THIS SERVICE.

Signature:______________________________     Date:______________________________

Signature:______________________________     Date:______________________________


                                   EXHIBIT "D"
                                  FORM OF DEED

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

___________________________________
___________________________________
Attn:______________________________

MAIL TAX STATEMENTS TO:

___________________________________
___________________________________
Attn: _____________________________
________________________________________________________________________________

                                 (Space Above This Line For Recorder's Use Only)

                                   GRANT DEED

         For valuable consideration, IGP X MISSION PARK ASSOCIATES, LP., a
California limited partnership ("Grantor"), hereby GRANTS to_____________
("Grantee"), all that certain real property situated in City of San Marcos,
County of San Diego, State of California, more particularly described on
Schedule, "1 attached hereto and incorporated herein by reference, together with
ail rights and privileges appurtenant thereto;

         SUBJECT TO all taxes and other assessments; all restrictions in
patents; all liens, encumbrances, easements, rights-of-way, covenants,
conditions, restrictions, obligations and liabilities as may appear of record;
all matters which would be revealed or disclosed in an accurate survey of the
Property; all matters which would be revealed or disclosed by a physical
inspection of the Property; and all interests of tenants in possession.

         Dated this______ day of_________________, 2003.

                                        GRANTOR:

                                        IGP X MISSION PARK ASSOCIATES, L.P.,
                                        a California limited partnership

                                        By: IGP X MISSION PARK ASSOCIATES
                                            MANAGEMENT, INC.,
                                            a California corporation

                                        By:_____________________________________
                                           Name: David W. Maurer
                                           Title: President

                                   Page 1 of 2



                                   SCHEDULE "1
                                LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO AND IS DESCRIBED AS FOLLOWS:

LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309,
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9,
1989.

TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON
LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN
ON SAID MAP.

                                   Page 2 of 2



STATE OF CALIFORNIA )
                    ) ss.
COUNTY OF __________)

         On ________________ , 2003 before me, ________________ , a notary
public in and for said State, personally appeared ________________ , personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

     WITNESS my hand and official seal.            Signature______________
                                                   (Seal)

                                  Page 1 of 1



                              SEPARATE STATEMENT OF
                            DOCUMENTARY TRANSFER TAX

SAN DIEGO COUNTY RECORDER
1600 Pacific Highway
San Diego, CA 92101

Dear Sir:

         In accordance with California Revenue and Taxation Code Section 11932,
it is requested that this Statement of Documentary Transfer Tax due not be
recorded with the attached deed, but be affixed to the deed after recordation
and before return as directed on the deed.

         The deed names IGP X MISSION PARK ASSOCIATES, L.P., a California
limited partnership, as Grantor, and__________________________, as Grantee. The
land and improvements being transferred are located in the City of San Marcos,
County of San Diego, State of California.

         The amount of the documentary transfer tax due on the attached deed is
_______________ ($______________), computed on the full value of the
improvements less encumbrances of record.

                                        IGP X MISSION PARK ASSOCIATES, L.P.,
                                        a California limited partnership

                                        By: IGP X MISSION PARK ASSOCIATES
                                            MANAGEMENT, INC.,
                                            a California corporation

                                        By:_____________________________________
                                           Name: David W. Maurer
                                           Title: President

                                   Page 1 of 1



                                   EXHIBIT "E"
                              FORM OF BILL OF SALE

         FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, IGP X MISSION PARK ASSOCIATES, L.P., a California limited
partnership ("Seller"), does hereby sell and convey to__________ ("Buyer"), any
and all of Seller's right, title and interest in and to all tangible personal
property located upon the land described in Schedule "1 attached hereto and
hereby made a part hereof (the "Land") or within the improvements located
thereon, including, without limitation, any and all appliances, furniture,
carpeting, draperies and curtains, tools and supplies, and other items of
personal property owned by Seller (excluding cash and any software) and used
exclusively in the operation of the Land and improvements, AS IS, WHERE IS, AND
WITHOUT WARRANTY of title or use, and without warranty, express or implied, of
merchantability or fitness for a particular purpose.

         TO HAVE AND TO MOLD all of said personal property unto Buyer, its
successors and assigns, to its own use forever.

         IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the
_____ day of ____________, 2003.

                                        SELLER

                                        IGP X MISSION PARK ASSOCIATES, L.P.,
                                        a California limited partnership

                                        By: IGP X MISSION PARK ASSOCIATES
                                            MANAGEMENT, INC.,
                                            a California corporation

                                        By:_____________________________________
                                           Name: David W. Maurer
                                           Title: President

                                   Page 1 of 1



                                   SCHEDULE "1
                                LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO AND IS DESCRIBED AS FOLLOWS:

LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309,
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9,
1989.

TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON
LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN
ON SAID MAP.

                                   Page 1 of 2



                                   EXHIBIT "F"
                          FORM OF ASSIGNMENT OF LEASES

         THIS ASSIGNMENT OF LEASES ("Assignment") is made as of this ____ day of
______________________, 2003, between IGP X MISSION PARK ASSOCIATES, L.P., a
California limited partnership ("Assignor"), and_____________________________, a
_________ ("Assignee"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in that certain Purchase and
Sale Agreement and Escrow Instructions dated effective as of December 2, 2003,
between Assignor, as Seller, and Assignee, as Buyer (the "Purchase Agreement").

         Pursuant to the Purchase Agreement, Assignor is concurrently herewith
transferring and conveying to Assignee all right, title and interest of Assignor
in and to the Real Property described on Schedule "1 attached hereto and
incorporated herein by reference. As part of such transaction, Assignor hereby
assigns, transfers, sets over and conveys to Assignee all of Assignor's right,
title and interest in, to and under the Leases, including the Lease(s) described
on Schedule "2 attached hereto and incorporated herein by reference, together
with all Security Deposits tendered under the Leases remaining in the possession
of Assignor.

         Subject to the terms of the Purchase Agreement and the express
obligations and responsibilities of the parties thereunder, Assignee does hereby
assume and agree to perform all of Assignor's obligations and liabilities under
or with respect to the Leases accruing from and after the date hereof.

         Assignor hereby agrees to indemnify Assignee and hold Assignee harmless
from and against any and all claims pertaining to the Leases arising prior to
Closing, and Assignee hereby agrees to indemnify Assignor and hold Assignor
harmless from and against any and all claims pertaining to the Leases arising
from and after the Closing, including without limitation, claims made by tenants
with respect to tenants' Security Deposits to the extent paid, credited or
assigned to Assignee pursuant to the Purchase Agreement.

         This Assignment shall be binding upon and inure to the benefit of
Assignor and Assignee and their respective heirs, executors, administrators,
successors and assigns. Each entity constituting Assignee shall be jointly and
severally liable for all obligations of Assignee hereunder.

         This Assignment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

                            [SIGNATURE PAGE FOLLOWS]

                                   Page 1 of 2



         IN WITNESS WHEREOF, Assignor and Assignee have each executed this
Assignment as of the date first written above.

ASSIGNOR                                     ASSIGNEE

IGP X MISSION PARK ASSOCIATES                _________________________________,
L.P., a California Limited Partnership       a _______________________________

By: IGP X MISSION PARK ASSOCIATES            By:______________________________
    MANAGEMENT, INC.,                           Name:_________________________
    a California corporation                    Title:________________________

By:___________________________________       By:______________________________
   Name: David W. Maurer                        Name:_________________________
   Title: President                             Title:________________________

                                   Page 2 of 2



                                  SCHEDULE "1
                               LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO AND IS DESCRIBED AS FOLLOWS:

LOTS 1 AND 2 OF CITY OF SAN MARCOS TRACT NO. 295, IN THE CITY OF SAN MARCOS,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12309,
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 9,
1989.

TOGETHER WITH THAT PORTION OF BOUGHER ROAD AND MISSION ROAD VACATED THEREON
LYING SOUTHEASTERLY AND IMMEDIATELY ADJACENT TO LOT 2, DESCRIBED ABOVE, AS SHOWN
ON SAID MAP.

                                   Page 1 of 1



                                   SCHEDULE "2
                                     LEASES

                                [TO BE ATTACHED]

                                   Page 1 of 1

EX-10.2

                                                                 EXHIBIT 10.2


                               FIRST AMENDMENT TO
                           PURCHASE AND SALE AGREEMENT
                             AND ESCROW INSTRUCTIONS

        This First Amendment to Purchase and Sale Agreement and Escrow
Instructions (First Amendment") is entered into and made effective this 9th day
of February, 2004, between IGP X MISSION PARK ASSOCIATES, L.P, a California
limited partnership ("Seller") and PACIFICA ENTERPRISES, LLC, a California
limited liability company ("Buyer") with reference to the following facts:

                                    RECITALS

         A.       Buyer and Seller entered into that certain Purchase and Sale
Agreement and Escrow Instructions dated December 2, 2003 (the "Agreement")

         B.       The parties desire to amend the Agreement as set forth in this
First Amendment,

         C.       All capitalized terms used in this First Amendment unless
specifically defined herein shall have the same meaning as the capitalized
terms used in the Agreement.

         NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
 which are expressly acknowledged, Seller and Buyer agree as follows:

                                   AGREEMENT

         1.       Closing. Section 1.4 of the Agreement shall be deemed deleted
and the following shall be deemed inserted in place thereof;

                           4.1      Time and Place. The consummation of the
                  transaction contemplated hereby (the "Closing") shall he
                  consummated on or before March 3. 2004 (the "Closing Date)

         2.       Condition. Precedent to Obligation of Seller. Section 4.7 (a)
of the Agreement shall be deemed deleted and the following shall be deemed
inserted in place thereof:

                  (a)      On or before February 23, 2004;

         Furthermore, the following shall be added immediately following
subsection (i) of Section 4.7(a);

                  Seller covenants agrees that on or before February 3, 2004, it
                  will file a Proxy Statement with the Securities and Exchange
                  Commission and mail the Proxy Statement to the partners of
                  Seller requesting their approval of

                                        1


                  the transaction contemplated by this Agreement. On such date,
                  seller shall provide Buyer with written confirmation that the
                  Proxy Statement has been filed and mailed in accordance with
                  the foregoing.

         3.       Public Disclosure. Buyer acknowledges and agrees that in
connection with Seller's requesting the consent of its partners in accordance
with Section 4.7 (a) (1) of the Agreement, Seller's disclosure of the terms of
the Agreement to Seller's partners shall not constitute a violation of Section
10.2 of the Agreement regarding Public Disclosure.

         4.       Executed Counterparts. This first Amendment may be executed in
one or more counterparts, all of which together shall constitute a single
agreement and each of which shall be an original for all purposes.

         5.       Confirmation. Except, as and to the extent modified by this
first Amendment, all provisions of the Agreement shall remain in full force and
effect

SELLER                                    BUYER

IGP X  MISSION PARK ASSOCIATES, L.P.,     PACIFICA ENTERPRISES, LLC,
a California limited partnership          a California limited liability company

By: IGP X MISSION PARK ASSOCIATES         By: /S/ DABTO DELUCA
    MANAGEMENT, INC.,                         ----------------------------------
    a California corporation                  Name: DABTO DELUCA
                                              Title: MANAGER

By: /s/ David W. Maurer                   By: __________________________________
    ---------------------------------         Name:_____________________________
    Name: David W. Maurer                     Title:____________________________
    Title: President

                                        2