Exhibit 10

PURCHASE AND SALE AGREEMENT

Between

CORPORATE REALTY INCOME FUND I, L.P.
(Seller)

and

MERCURY CASUALTY COMPANY
(Purchaser)

7301 Northwest Highway
Oklahoma City, Oklahoma  73132

Dated as of November 11, 2005

PURCHASE AND SALE AGREEMENT

          This Purchase and Sale Agreement (“Agreement”) is made as of November
11, 2005 (the “Effective Date”) by and between CORPORATE REALTY INCOME FUND I,
L.P., a Delaware limited partnership (“Seller”) and MERCURY CASUALTY COMPANY, a
California corporation (“Purchaser”).

          A.          Seller owns in fee simple a certain parcel of real
property located in the City of Oklahoma City, County of Oklahoma, State of
Oklahoma, commonly referred to as 7301 Northwest Highway and legally described
on Exhibit A attached hereto (hereinafter referred to as the “Real Property”).

          B.          Subject to the terms and conditions herein, Seller desires
to sell and Purchaser desires to purchase the Real Property together with the
other property described in Section 1.1.

          NOW THEREFORE, in consideration of the mutual covenants contained
herein, Seller and Purchaser agree as follows:

1.

PURCHASE AND SALE

 

 

 

1.1

Property

          Subject to the terms and conditions hereof, Seller hereby agrees to
sell, convey and assign to Purchaser, and Purchaser hereby agrees to purchase
and accept from Seller on the Closing Date (as defined in Section 4.1 below) the
following (collectively, the “Property”):

 

(a)

the Real Property, which is legally described on Exhibit A attached hereto,
together with any and all rights, privileges and easements appurtenant thereto,
which are owned by Seller, including without limitation all of Seller’s right,
title and interest in and to all minerals, oil, gas and other hydrocarbon
substances on and under the Real Property;

 

 

 

 

(b)

all buildings located on the Real Property, and all other improvements and
fixtures located on the Real Property which are owned by Seller, if any,
including without limitation any apparatus, equipment and appliances
incorporated therein and used in connection with the operation and occupancy
thereof, such as heating and air conditioning systems and facilities used to
provide any utility service, ventilation, or other services thereto, but
excluding fixtures owned by tenants (all of which are collectively referred to
as the “Improvements”);

 

 

 

 

(c)

all right, title and interest of Seller in and to any furniture, furnishings,
artwork, decorations and other tangible personal property located on and used in
connection with the Real Property and Improvements, including without limitation
the personal property listed on Schedule 1 (the “Personal Property”);

 

 

 

 

(d)

all assignable or transferable intangible property, including, but not limited
to:  (i) all guaranties and warranties (including guaranties and warranties
pertaining to construction of the Improvements); (ii) all air rights, excess
floor area rights and other development rights relating or appurtenant to the
Real Property or the Improvements; (iii) all rights to obtain utility service in
connection with the Improvements and the Real Property; (iv) all assignable
licenses and other governmental permits and permissions relating to the Real
Property, the Improvements or the operation thereof, including without
limitation the

 

 

licenses and permits listed on Schedule 2 (the “Permits”); and (v) all
assignable contracts and contract rights relating to the Real Property or the
Improvements, including the contracts listed on Schedule 3 (the “Service
Contracts”), which shall survive the Closing (all of the foregoing are
hereinafter collectively referred to as the “Intangible Property”); and

 

 

 

 

(e)

All right, title and interest of Seller in and to the leases and other occupancy
agreements covering all or any portion of the Real Property or the Improvements
to the extent they are in effect on the date of Closing (collectively the
“Leases”), together with all current rents and other sums due thereunder (the
“Rents”) and any and all security deposits in connection therewith (the
“Security Deposits”).  The Leases, in each case together with the current
monthly rent and Security Deposit relative thereto, are set forth on Schedule 4
(the “Rent Roll”).

 

 

 

2.

PURCHASE PRICE

          Purchaser shall pay as the total Purchase Price for the Property
(“Purchase Price”) the amount of Seven Million and No/100ths U.S. Dollars
($7,000,000.00), which shall be payable as follows:

 

2.1

Deposit

 

 

 

 

Within three (3) Business Days following the execution and delivery hereof,
Purchaser shall cause Twenty-Five Thousand and No/100ths U.S. Dollars
($25,000.00) (the “Initial Deposit”) to be delivered by wire transfer to Escrow
Holder (as hereinafter defined), and prior to the expiration of the Inspection
Period (unless this Agreement shall have been terminated in accordance with the
terms hereof) Purchaser shall cause an additional Fifty Thousand and No/100ths
U.S. Dollars ($50,000.00) (the “Final Deposit”) (the Initial Deposit and, when
made, the Final Deposit, collectively with all interest accrued thereon, the
“Deposit”) to be delivered by wire transfer to Escrow Holder, to be held by the
Escrow Holder in accordance with the terms and conditions of this Agreement. 
The Deposit shall be held in an interest bearing account or instrument, as
approved by Purchaser, as an earnest money deposit and, except as otherwise set
forth herein, shall be applied toward the Purchase Price at Closing.  Purchaser
will provide Escrow Holder with its Taxpayer Identification Number and such
additional information and documents as may be required by Escrow Holder.

 

 

 

The Escrow Holder shall be subject to the following terms and conditions:

 

 

 

(a)

The duties and obligations of the Escrow Holder shall be determined solely by
the express provisions of this Agreement and no implied duties and obligations
shall be read into this Agreement against the Escrow Holder.

 

 

 

 

(b)

The Escrow Holder shall be entitled to rely, and shall not be subject to any
liability in acting in reliance, upon any joint writing furnished to the Escrow
Holder by Purchaser and Seller and shall be entitled to treat as genuine the
document it purports to be, including any such letter, paper or other document
furnished to the Escrow Holder in connection with this Agreement.

 

 

 

 

(c)

In the event of any disagreement between Purchaser and Seller resulting in
adverse claims and demands being made in connection with or against the funds
held in the escrow created hereby, the Escrow Holder shall refuse to comply with
the claims and demands of either party until such disagreement is finally
resolved, either by Purchaser

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and Seller, as evidenced by a joint writing reflective thereof delivered to the
Escrow Holder pursuant to subparagraph (b) above, or by a court of competent
jurisdiction (in proceedings which the Escrow Holder or any other party may
initiate, it being understood and agreed by Purchaser and Seller that the Escrow
Holder has the authority (but no obligation) to initiate such proceedings).

 

 

 

 

(d)

In the event of a termination of this Agreement by either Seller or Purchaser as
permitted by the terms of this Agreement, the Escrow Holder is authorized and
directed by Seller and Purchaser to deliver the Deposit (as hereinafter defined)
to the party hereto entitled to same pursuant to the terms hereof no sooner than
the fifth Business Day and no later than the tenth Business Day following
receipt by the Escrow Holder and the non-terminating party of written notice of
termination delivered in accordance with Section 10 of this Agreement from the
terminating party and receipt of evidence satisfactory to the Escrow Holder that
the non-terminating party has in fact received written notice of such
termination in accordance with Section 10 of this Agreement, unless the
non-terminating party hereto notifies the Escrow Holder that it disputes the
right of the other party to receive the Deposit.  In such event, the Escrow
Holder shall either continue to hold the Deposit or interplead the Deposit into
a court of competent jurisdiction until such dispute is resolved, as more
specifically provided in Section 2.1(c) above.  All attorney’s fees and costs of
the Escrow Holder incurred in connection with such dispute or interpleader shall
be assessed against the party that is not awarded the Deposit, or if the Deposit
is distributed in part to both parties then in the inverse proportion of such
distribution.

 

 

 

 

2.2

Interest

          Any interest that accrues on the Deposit while held by Escrow Holder
shall be added to and become part of the Deposit.

 

2.3

Cash at Closing

          The balance of the Purchase Price, plus any other amounts required to
be paid by Purchaser at Closing, and plus or minus any prorations and credits as
provided for in this Agreement, in the form of immediately available U.S. funds,
shall be deposited by Purchaser with Escrow Holder in time to allow the Closing
to occur on the Closing Date (as hereinafter defined) by wire transfer as more
particularly set forth in Section 4.3 below.

3.

TITLE

 

 

 

 

3.1

Title Commitment; Survey

 

 

 

 

(a)

Within five (5) Business Days following the Effective Date, Seller shall deliver
to Purchaser a title report or commitment for title insurance (the “Title
Commitment”), issued by Chicago Title Insurance Company (“Title Company”) and
effective no earlier than [thirty (30)] days prior to the Effective Date, and
copies of all recorded documents referred to in the Title Commitment as
exceptions to title to the Property (the “Title Documents”).

 

 

 

 

(b)

Purchaser acknowledges receipt from Seller of a copy of an ALTA/ACSM As-Built
Survey dated September 18, 1996, by Grossman & Keith Engineering Company
(“Existing Survey”).  Purchaser shall have the right, at its sole cost and
expense, to obtain a current survey of the Real Property and Improvements or to
update the Existing Survey (the “Survey”) prepared in accordance with the
Minimum Standard Detail Requirements and Classifications for ALTA/ACSM Land
Title Surveys published in 1999.

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3.2

Review of Title

          Purchaser shall have until 5:00 p.m. Central Standard Time on the Out
Date (as defined below) to review  the Title Commitment, Title Documents and
Survey (collectively, “Title Evidence”) (the “Title Approval Date”)  and render
any objections as to matters of title in writing to Seller.  Any matters shown
in the Title Evidence not timely objected to by Purchaser shall be deemed waived
and Purchaser shall be deemed to agree to acquire the Property subject to such
exceptions (collectively, “Permitted Exceptions”) hereunder.  Except for
Required Removal Objections (as defined below) which must be removed by Seller,
Seller, in its sole and absolute discretion, may elect to remove or satisfy any
such objections, provided that Seller shall have three (3) Business Days from
the date of receipt of such objections to identify such objections that Seller
so elects removed or satisfied.  Subject to Purchaser’s approval, which may be
granted in Purchaser’s sole and absolute discretion, Seller may cause the Title
Company to issue a title endorsement or “insure over” any objection (each, a
“Seller Endorsement”) and it shall have the same effect as if such objection was
removed or satisfied by Seller.  If Seller shall fail to elect to have such
objections removed, insured over or satisfied within such time or during such
time delivers a written notice to Purchaser that notwithstanding Seller’s
reasonable efforts, such objections may not be cured, then Purchaser may, by
written notice to Seller within five (5) days after the expiration of such time
or the delivery of such written notice, either (a) terminate this Agreement
without any liability on its part, in which case the Deposit shall be refunded
to Purchaser, Purchaser shall return all documents, including all Due Diligence
Documents (as hereinafter defined in Section 3.6(d)), received from Seller, or
Seller’s agents, to Seller and neither party shall have any further rights or
obligations hereunder (except as set forth in Sections 3.5(a) and (e), 3.6(b),
9.1, 11.2 and 11.12 hereof), or (b) proceed to Closing and take title subject to
such objections, in which case such non-cured objections shall become Permitted
Exceptions hereunder.  After the Title Approval Date but prior to the Closing
Date, Purchaser shall also have the right to disapprove in writing any
additional item not previously set forth in the Title Commitment that Title
Company intends to show as an exception to title in the Title Policy.  Any such
additional item not specifically disapproved in writing delivered within three
(3) Business Days following Purchaser’s receipt of written notice of such
additional item shall be deemed disapproved.  Seller shall have until Closing to
remove or cause Title Company to insure over (subject to Purchaser’s approval,
which may be granted in Purchaser’s sole and absolute discretion) any such
disapproved item at Seller’s own expense.  Seller may elect to (a) extend the
Closing until the day after the date upon which Seller is able to remove or
cause Title Company to insure over (subject to Purchaser’s approval, which may
be granted in Purchaser’s sole and absolute discretion) any such disapproved
item (but in no event shall such extension exceed ten (10) Business Days after
the Closing Date), or (b) terminate this Agreement, unless Purchaser elects to
take title subject to such disapproved item, and, if Seller elects to terminate
this Agreement, Purchaser shall return all documents, including all Due
Diligence Documents, received from Seller or Seller’s agents, to Seller and the
Deposit shall be returned to Purchaser and, thereupon, neither Seller nor
Purchaser shall have any further obligation hereunder (except as set forth under
Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12 hereof).  Notwithstanding
anything in this Agreement to the contrary, and notwithstanding any approval or
consent given by Purchaser hereunder, Seller shall cause all mortgages and deeds
of trust encumbering Seller’s interest in the Real Property, and all mechanic’s
liens filed against the Property relating to work performed on the Property and
contracted for by Seller (collectively “Required Removal Objections”), to be
released and reconveyed from the Real Property, or, with respect to such
mechanic’s liens, otherwise bonded, on or prior to the Closing and shall cause
the Title Company to insure title to the Real Property as vested in Purchaser
without any exception for such matters.

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3.3

Vesting of Title

          At Closing, Seller shall convey all of Seller’s right, title and
interest in and to the Real Property and Improvements to Purchaser by special
warranty deed (as further described in Section 4.2(a)(i) below), subject to the
Permitted Exceptions, and shall convey Seller’s interest in the Personal
Property to Purchaser by bill of sale (as further described in Section
4.2(a)(ii) below).

 

3.4

Title Insurance

          At Closing, the Title Company shall issue to Purchaser an extended
ALTA Owner’s Policy of Title Insurance in the amount of the Purchase Price
insuring that title to the Real Property and Improvements is vested in Purchaser
subject only to the Permitted Exceptions (the “Title Policy”), provided that, if
required by the Title Company, Purchaser shall, at its sole cost and expense,
update the Existing Survey of the Property and deliver a copy of same, or the
Survey, certified to the Title Company in a manner that will allow the Title
Company to issue any additional coverage title policy.

 

3.5

Inspection Period

          Purchaser shall have until 5:00 p.m. Central Standard Time on December
23, 2005 (the “Inspection Period”) to inspect the Property and the Due Diligence
Documents, and to perform such other due diligence with respect to the Property
as Purchaser deems necessary in its sole and absolute discretion, subject to the
rights of tenants in possession of the Property.  Purchaser may, on or before
the expiration of the Inspection Period (the “Out Date”), in its sole and
absolute discretion, advise Seller and Escrow Holder, in writing, of its
election not to proceed with the purchase of the Property.  If Purchaser decides
that it will not proceed with the purchase of the Property, Purchaser shall on
or before the Out Date give notice to Seller and Escrow Holder that it is
terminating this Agreement.  If Purchaser fails to notify Seller and Escrow
Holder of its decision on or before the Out Date, Purchaser shall be deemed to
have elected to waive its right to terminate this Agreement pursuant to this
Section 3.5..  Upon any termination by Purchaser pursuant to this Section 3.5,
the Deposit shall be refunded to Purchaser, all documents, including all Due
Diligence Documents, received from Seller or Seller’s agents, shall be returned
by Purchaser to Seller, Purchaser shall, at Seller’s request, at no cost to
Seller, without representation or warranty, deliver to Seller true and correct
copies of all third party reports obtained by Purchaser with respect to the
Property, and, subject to Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12
hereof, neither party shall have any further rights or obligations hereunder. 
In the event this Agreement is not so terminated, the Deposit shall become
non-refundable (subject to the other terms and conditions of this Agreement) and
Seller and Purchaser shall proceed to Closing in accordance with the terms and
conditions hereof and the Inspection Period termination rights contained in this
Section 3.5 shall be deemed waived by Purchaser.  Purchaser shall not undertake
any soil borings, ground water testing or other “Phase II” investigative
procedures without first having obtained the prior written consent of Seller
which consent shall not be unreasonably withheld, conditioned or delayed.  In
connection with Purchaser’s inspection of the Property, Purchaser agrees that:

 

(a)

All inspection fees, engineering fees, or other expenses of any kind incurred by
Purchaser relating to the inspection of the Property will be at Purchaser’s sole
cost and expense;

 

 

 

 

(b)

Purchaser will give Seller reasonable advance notice of the dates of all
inspections and will schedule all tests and inspections during normal business
hours whenever feasible unless otherwise requested by Seller;

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(c)

Seller will have the right to have one or more representatives of Seller
accompany Purchaser and Purchaser’s representatives, agents or designees while
they are on the Property;

 

 

 

 

(d)

Any entry by Purchaser, its representatives, agents or designees will not
unreasonably interfere with Seller’s use of the Property or with the operations
of any tenant;

 

 

 

 

(e)

Purchaser will restore any damage caused to the Property by Purchaser’s entry on
the Property for inspection purposes at Purchaser’s sole cost and expense if
this transaction does not close; and

 

 

 

 

(f)

In making any inspection hereunder, Purchaser will treat and will cause any
representative of Purchaser to treat all information obtained by Purchaser
pursuant to the terms of this Agreement as strictly confidential in accordance
with Section 11.12 below.

Purchaser shall have the right to further inspect the Property as provided in
Section 3.6(b) hereafter (during normal business hours and upon notice to
Seller), including for the purpose of confirming that the Property is in the
same condition at Closing as existing at the end of the Inspection Period,
reasonable wear and tear excepted; provided, however, that such continuing right
of inspection shall in no way be deemed to extend or resurrect the Inspection
Period or constitute a condition to Closing, subject however, to the other terms
and conditions of this Agreement.  For purposes of this Agreement, the term
“Business Day” shall mean a day other than any Saturday, Sunday, or day upon
which national banks in Oklahoma City, Oklahoma, are not open for general
banking business.

          The covenants of Purchaser contained in this Section 3.5(a) and (e)
shall survive the Closing Date or any earlier termination of this Agreement.

 

3.6

Furnishing of Information

 

 

 

 

(a)

In furtherance of Purchaser’s rights set forth above, Seller has furnished, or
within five (5) Business Days after the Effective Date will furnish to Purchaser
or, at Seller’s option, make available at Seller’s offices at the Property for
inspection and copying (except with respect to the materials described in (i)
through (iii) below, copies of which shall be delivered to Purchaser), to the
extent in Seller’s possession or control:

 

 

 

 

 

(i)

a current rent roll (the “Rent Roll”) with respect to the Property attached as
Schedule 4, together with copies of all Leases and amendments and/or
modifications currently in effect, together with a list pertaining to the status
of rental payments by tenants under the Leases and any delinquencies in
connection therewith;

 

 

 

 

 

 

(ii)

copies of the environmental and property condition reports identified on
Schedule 6 and any other environmental study or report of the Property prepared
for Seller;

 

 

 

 

 

 

(iii)

copies of the Service Contracts, together with any engineering reports relative
to the Property prepared by third-parties;

 

 

 

 

 

 

(iv)

copies of service records for the Property and all systems and equipment therein
owned by Seller for the last five (5) years and operational manuals for each
such item;

6

 

 

(v)

copies of utility bills for the Property for the last twelve (12) months;

 

 

 

 

 

 

(vi)

copies of insurance certificates provided by tenants under the Leases;

 

 

 

 

 

 

(vii)

as-built plans and specifications for the Property, including all tenant
improvements;

 

 

 

 

 

 

(viii)

copies of all warranties relating to the Property or any portion thereof or any
of Seller’s equipment or the building systems therein;

 

 

 

 

 

 

(ix)

copies of licenses and permits relating to the Property and its operations;

 

 

 

 

 

 

(x)

copies of certificates of occupancy for the Property;

 

 

 

 

 

 

(xi)

annexation agreements, if any, affecting the Property;

 

 

 

 

 

 

(xii)

zoning and other use restrictions (governmental or otherwise), if any, affecting
the Property;

 

 

 

 

 

 

(xiii)

copies of the current tax bill for the Property, tax maps and current property
tax assessment information.

 

 

 

 

 

(b)

Seller will allow Purchaser and Purchaser’s agents reasonable access to the
Property during regular business hours to inspect the Property during the
Inspection Period and thereafter until the earlier of any termination of this
Agreement and the Closing Date, subject to Section 3.6(c) below and the terms of
the Leases.  Purchaser hereby indemnifies, defends and holds Seller and the
Property harmless from any and all costs, loss, damages or expenses, of any kind
or nature (including, without limitation, mechanics’ liens and reasonable
attorneys’ fees and expenses) directly arising out of or resulting from or
caused by such inspection, investigation, entry and/or other activities upon the
Property by Purchaser, its employees, agents, contractors, subcontractors,
and/or assigns.  Notwithstanding anything to the contrary herein, the indemnity
set forth in this Section 3.6(b) shall survive (i) any termination of this
Agreement and (ii) the Closing and shall not be merged therein.

 

 

 

 

 

(c)

During any period of entry upon the Property prior to Closing, Purchaser shall
maintain, with insurance companies acceptable to Seller, Comprehensive General
Liability or Commercial General Liability insurance, with limits of not less
than One Million Dollars ($1,000,000) combined single limit.  Each policy of
insurance shall name Seller as an additional insured.  A certificate, together
with any endorsements to the policy required to evidence the coverage which is
to be obtained hereunder, shall be delivered to Seller prior to the entry onto
the Property by Purchaser or its agents.

 

 

 

 

 

(d)

In addition to the information to be furnished to Purchaser under Section 3.6(a)
above, Seller shall make available for Purchaser’s inspection, and shall
continue to make available during the Inspection Period and thereafter until the
earlier of any termination of this Agreement and the Closing Date:  (i) the
Leases and lease files; (ii) copies of financial statements (if any) for the
Property for the last two (2) years and copies of such historical information in
Seller’s possession or the possession of Seller’s agents regarding operating
expenses of the Property as Purchaser shall reasonably request; (iii) the
documents listed in Section 3.6(a) above; and (iv) guaranties, warranties,
licenses,

7

 

 

governmental permits (including Certificates of Occupancy) and relevant,
pertinent reports and agreements in the possession of Seller or its agents
pertaining to the Property, if any (i.e., engineering reports, environmental
reports, development records and as-built plans and specifications) and Service
Contracts relating to the Property (collectively with the information described
in Section 3.6(a) above, the “Due Diligence Documents”), on site at the Property
or at the business office of Seller or its agents or otherwise.  Seller shall
reasonably cooperate with Purchaser to obtain any consents required in
connection with an assignment of any of the Due Diligence Documents.  All of the
Due Diligence Documents are confidential and shall not be distributed or
disclosed by Purchaser to any person or entity not associated with Purchaser in
accordance with Section 11.12 hereof.  Seller agrees to deliver to Purchaser a
copy of any written notices which Seller receives prior to Closing from any
governmental authority pertaining to any violation of law or ordinance
regulating the use of the Property which are received by Seller prior to the
Closing Date and of any notice which Seller receives prior to Closing from any
tenant regarding any default under any Lease.  If the transaction fails to close
for any reason whatsoever, Purchaser shall return to Seller all copies of the
Due Diligence Documents which Seller or its agents may have delivered to
Purchaser in accordance with this Section 3.6.  THE FURNISHING OF ANY MATERIALS,
DOCUMENTS, REPORTS, OR AGREEMENTS DESCRIBED ABOVE SHALL NOT BE INTERPRETED IN
ANY MANNER AS A REPRESENTATION OR WARRANTY OF ANY TYPE OR KIND BY SELLER, ANY
PARTNER OF SELLER OR AGENT OF SELLER, OR ANY OFFICER, DIRECTOR, OR EMPLOYEE OF
SELLER, OR ITS AGENTS, OR ANY OTHER PARTY RELATED IN ANY WAY TO ANY OF THE
FOREGOING.

 

 

 

 

(e)

Purchaser shall have the right to meet with representatives of Marathon Oil
Company during the Inspection Period and at any time prior to Closing regarding
its Lease provided that Seller or its agents may at Seller’s option attend any
such meeting.

 

 

 

4.

CLOSING

 

 

 

4.1

Closing

          The purchase and sale of the Property (“Closing”) shall occur on or
prior to December 30, 2005 (the “Closing Date”); provided, however, that each of
Seller and Purchaser shall be entitled to one (1) extension of the Closing Date
for a period not to exceed ten (10) days upon prior written notice thereof to
the other party.  Seller and Purchaser agree that this transaction shall close
in escrow through the Title Company, which shall serve as escrow holder
hereunder (“Escrow Holder”).  In this regard, Seller and Purchaser shall execute
Escrow Holder’s standard form general provisions and such other instructions
consistent herewith as Escrow Holder may require and are reasonably acceptable
to Seller and Purchaser;  provided, however, nothing in such general provisions
or instructions shall constitute an amendment to or modification of this
Agreement and, in the event of any conflict, the terms of this Agreement shall
prevail.  Purchaser and Seller shall endeavor to conduct a “pre-closing” on the
Business Day prior to the Closing Date with title transfer and payment of the
Purchase Price to be completed on the Closing Date as set forth in Section 4.3
below.

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4.2

Transactions at Closing

 

 

 

 

At least one (1) Business Day prior to the Closing Date:

 

 

 

(a)

Seller shall deliver or cause to be delivered to Escrow Holder the following
documents (collectively, the “Conveyance Documents”) duly executed and
acknowledged where appropriate:

 

 

 

 

 

 

(i)

A special warranty deed (the “Deed”) conveying the Real Property and the
Improvements, subject to the Permitted Exceptions, in the form attached hereto
as Exhibit E;

 

 

 

 

 

 

(ii)

Bill of Sale in the form set forth on Exhibit B attached hereto, conveying the
Personal Property to Purchaser;

 

 

 

 

 

 

(iii)

Two counterparts of the Assignment and Assumption Agreement (the “Assignment”)
in the form set forth on Exhibit C attached hereto, conveying all interest of
Seller as landlord in and to the Leases pertaining to the Real Property and
Improvements as more specifically set forth on Schedule B to the Assignment and
Assumption Agreement; and in and to any equipment leases, commission agreements
and service contracts, as set forth on Schedules C, D and E, respectively, to
the Assignment and Assumption Agreement;

 

 

 

 

 

 

(iv)

Certificate of non-foreign status in the form set forth on Exhibit D attached
hereto, to confirm that Purchaser is not required to withhold part of the
Purchase Price pursuant to Section 1445 of the Internal Revenue Code of 1986, as
amended;

 

 

 

 

 

 

(v)

Original executed copies of all Leases; provided, however, that the original
Leases shall be held at the Property for delivery to the Purchaser incident to
the Closing;

 

 

 

 

 

 

(vi)

Information required by the Title Company to comply with the real estate
reporting requirements set forth in Section 6045(e) of the Internal Revenue Code
of 1986, as amended;

 

 

 

 

 

 

(vii)

Certificate confirming that the representations and warranties of Seller under
this Agreement remain true and correct in the form attached hereto as Exhibit G;

 

 

 

 

 

 

(viii)

Evidence as to the authority of the person or persons executing documents on
behalf of the Seller reasonably acceptable to Purchaser and the Title Company;

 

 

 

 

 

 

(ix)

The Service Contracts which survive Closing, as provided in Section 9.5 below,
together with such leasing and property files and records pertaining to
day-to-day operation, leasing and maintenance of the Property, to the extent
such files and records are in the possession of Seller or Seller’s building
manager; provided, however, that such documentation shall be held at the
Property for delivery to the Purchaser incident to the Closing, and provided,
further, that proprietary information of Seller not relevant to the ownership or
operation of the Property shall not be included.  Until the earlier to occur of
(i) the sale of the Property by Purchaser, or (ii) the expiration of a period of
three (3) years after the Closing, Purchaser shall allow Seller and its agents
and representatives reasonable access without charge but without cost to
Purchaser to all files, records and documents delivered to Purchaser at the
Closing upon reasonable advance notice and at all reasonable times, to examine
and make copies of any and all such files, records and documents, which right
shall survive the Closing;

9

 

 

(x)

Affidavits as may be customarily and reasonably required by the Title Company,
in form reasonably acceptable to Seller;

 

 

 

 

 

 

(xi)

Closing Statement acceptable to Seller;

 

 

 

 

 

 

(xii)

An updated Rent Roll in the same form as set forth as Schedule 4, certified by
Seller as correct and complete as of the date of delivery thereof;

 

 

 

 

 

 

(xiii)

An estoppel certificate, executed by Marathon Oil. which (i) shall be dated no
earlier than December 1, 2005, and (ii) shall be substantially in the form of
Exhibit I attached hereto (or if such tenant declines to execute such form, then
in the form required under such tenant’s Lease);

 

 

 

 

 

 

(xiv)

keys to all locks on the Real Property and Improvements in Seller’s or Seller’s
building manager’s possession; and

 

 

 

 

 

 

(xv)

Such other documents as may be reasonably necessary and appropriate to complete
the Closing of the transaction contemplated herein.

 

 

 

 

 

(b)

Purchaser shall deliver to Escrow Holder the following:

 

 

 

 

 

 

(i)

The Purchase Price as adjusted in Section 2.3 above, and as further adjusted to
reflect the Purchaser’s share of closing costs, and any fees as more
particularly set forth in Section 4.3 below;

 

 

 

 

 

 

(ii)

Two counterparts of a duly executed and acknowledged Assignment (as described in
Section 4.2(a)(iii) above);

 

 

 

 

 

 

(iii)

Information required by the Title Company to comply with the real estate
reporting requirements set forth in Section 6045(i) of the Internal Revenue Code
of 1986, as amended;

 

 

 

 

 

 

(iv)

Evidence of the authority of the person or persons executing documents on behalf
of Purchaser reasonably acceptable to Seller and the Title Company;

 

 

 

 

 

 

(v)

Certificate confirming that the representations and warranties of Purchaser
under this Agreement remain true and correct in the form attached hereto as
Exhibit H;

 

 

 

 

 

 

(vi)

Closing Statement acceptable to Purchaser;

 

 

 

 

 

 

(vii)

Affidavits as may be customarily and reasonably required by the Title Company,
in form reasonably acceptable to Purchaser; and

 

 

 

 

 

 

(viii)

Such other documents as may be reasonably necessary and appropriate to complete
the Closing of the transaction contemplated herein.

10

 

(c)

Seller and Purchaser shall execute a tenant notification letter to all tenants
under the Leases (the “Tenant Notification Letter”) in the form attached hereto
as Exhibit F, and Purchaser shall, within forty-eight (48) hours following the
Closing, cause the Tenant Notification Letter to be delivered to such tenants.

 

 

 

 

 

4.3

Title Transfer and Payment of Purchase Price

 

 

 

 

 

(a)

Purchaser agrees to deliver the cash payment specified in Section 4.2(b)(i)
above by wiring the same to the Escrow Holder so that the wire may be confirmed
in time to allow Closing to occur on the Closing Date.  In addition, after all
Purchaser’s conditions set forth in Section 7.2 have been satisfied or waived,
Purchaser shall direct the Escrow Holder to deposit or wire the same into
Seller’s designated account(s) upon the recording by the Title Company of the
documents to be executed and delivered by Seller under Sections 4.2(a) above or
upon issuance by the Title Company of, or unconditional agreement by the Title
Company to issue, the Title Policy.

 

 

 

 

 

(b)

Upon receipt of all items specified in Section 4.2 and following the
satisfaction or waiver of all conditions precedent to Closing and upon Title
Company issuing or committing to issue the Title Policy, Escrow Holder shall
take the following actions:

 

 

 

 

 

 

(i)

Prorate any and all amounts to be prorated pursuant to Sections 5.1 and 5.2
below;

 

 

 

 

 

 

(ii)

Date and cause to be recorded the Deed as of Closing and designate that the Deed
be returned directly to Purchaser after recordation;

 

 

 

 

 

 

(iii)

Issue the Title Policy to Purchaser;

 

 

 

 

 

 

(iv)

Deliver the Deposit and the balance of the Purchase Price to Seller, plus or
minus appropriate adjustments;

 

 

 

 

 

 

(v)

Credit Purchaser with the total of any and all tenant security deposits then
held by Seller under the Leases and any and all prorated rents and other items;

 

 

 

 

 

 

(vi)

Deliver properly executed copies of the Closing Statement to Seller and to
Purchaser, which Closing Statement shall have been approved by Seller and
Purchaser prior to Closing;

 

 

 

 

 

 

(vii)

Deliver to Seller a copy of the Deed as recorded and executed originals of all
documents delivered by Purchaser to Escrow Holder pursuant to Section 4.2(b)
above;

 

 

 

 

 

 

(viii)

Deliver to Purchaser executed originals of all documents delivered by Seller to
Escrow Holder pursuant to Section 4.2(a) above, other than that set forth in
Section 4.2(a)(i) above; and

 

 

 

 

 

 

(ix)

Pay any broker’s commissions as provided herein.

 

4.4

Reporting Requirements

          The Escrow Holder shall comply with all applicable federal, state and
local reporting requirements relating to the closing of the transactions
contemplated herein.  Without limiting the generality of the foregoing, to the
extent the transactions contemplated by this Agreement involve a real

11

estate transaction within the purview of Section 6045 of the Internal Revenue
Code of 1986, as amended (the “Internal Revenue Code”), Escrow Holder shall have
sole responsibility to comply with the requirements of Section 6045 of the
Internal Revenue Code (and any similar requirements imposed by state or local
law).  Escrow Holder shall hold Purchaser, Seller and their respective counsel
free and harmless from and against any and all liability, claims, demands,
damages and costs, including reasonable attorneys’ fees and other litigation
expenses, arising or resulting from the failure of Escrow Holder to comply with
such reporting requirements. 

5.

PRORATIONS; CLOSING ITEMS

 

 

 

5.1

Prorations; Closing Costs

 

 

 

 

(a)

The amount due on any gas, electric, water, sewer, or other utility bill, or
service contract relating to the Property shall be prorated between Seller and
Purchaser as of the Closing Date, to the extent such utilities or service
contracts are the obligation of the Seller and are not a direct obligation of a
tenant under any of the Leases.  Any utility deposits made by Seller shall be
and remain the property of Seller.

 

 

 

 

(b)

All collected rents and other payments from each tenant under the Leases,
including, but not limited to, base rent, additional rent, percentage rent (if
any), and expense reimbursements, shall be prorated between Seller and Purchaser
as of the Closing Date.  Any security deposits or prepaid rent under the Leases
held by Seller shall be credited to Purchaser (including the balance of
estimated tax, insurance and common area maintenance payments made to Seller by
tenants under the Leases net of any payments by Seller thereon).  Purchaser
agrees to indemnify and hold harmless Seller from and against any loss, cost or
expense (including, but not limited to, attorneys’ fees and expenses) resulting
from any claim for such deposits or prepaid rent actually paid or credited to
Purchaser.  If any rent or other payments under the Leases are in arrears as of
the Closing Date (“Delinquent Rents”), the amount of any such Delinquent Rents
which are collected by Purchaser shall be paid by Purchaser to Seller after
Closing; provided, however, before any such payment to Seller, Purchaser shall
be entitled to deduct and retain from any such payment (i) Purchaser’s
reasonable costs of collection incurred with respect to such Delinquent Rents
(including attorneys’ fees), (ii) rents due for the month in which such payment
is received by Purchaser, and (iii) rents from such tenant attributable to any
period after the Closing that are past due on the date of receipt.  Any
Delinquent Rents which are received by Seller after the Closing shall be paid
entirely to Purchaser to be disbursed or retained by Purchaser as provided
above.  Purchaser agrees to use commercially reasonable efforts to collect
Delinquent Rents after the Closing provided Purchaser shall not be required to
bring any action or proceeding against any tenant on account of Delinquent
Rents.  Purchaser’s obligations hereunder with respect to the collection and
payment of Delinquent Rents shall survive the Closing.  Seller may make
reasonable efforts to collect Delinquent Rents other than those amount
attributable to any period after the Closing Date; provided, however, that
Seller shall not be entitled to pursue any action for eviction of any tenant
from the Property.  Notwithstanding anything herein to the contrary, Seller
shall be entitled to a credit, without deduction or offset, for all unpaid
rents, reimbursements and other payments (including Delinquent Rentals) due from
Mercury Insurance Services, LLC, as tenant under its Lease for the period prior
to Closing.  If Mercury Insurance Services, LLC, has paid prior to Closing any
rent or other sums attributable to any period following the Closing Date,
Purchaser will be entitled to a credit for such amounts.  The provisions of this
Section shall survive Closing and shall not be merged therein.

12

 

(c)

All real estate taxes payable in respect of the Property shall be prorated as of
the Closing Date; provided, Seller shall be entitled to recover any
reimbursements from the tenants on account of such taxes for the period prior to
Closing, and Purchaser shall immediately remit to Seller any such reimbursements
received by Purchaser upon receipt thereof.  Any real estate taxes due and
payable for any periods subsequent to the Closing shall be the obligation of
Purchaser and any real estate taxes due and payable for any periods prior to the
Closing shall be the obligation of Seller, provided Purchaser shall cooperate
with Seller to obtain any reimbursement from any tenant in respect of any such
taxes.  Seller and Purchaser agree to mutually cooperate with each other in
connection with ongoing tax reduction proceedings relating to prior tax years,
if any, and any ongoing or future proceedings relating to the year in which the
Closing occurs, if any, and any refund resulting therefrom (to the extent not
refundable to tenants under the Leases) shall be prorated between Seller and
Purchaser based on the Closing Date, after deducting therefrom the reasonable
out-of-pocket expenses incurred by the parties.  The provisions of the
immediately preceding two sentences shall survive Closing and shall not be
merged therein.

 

 

 

 

(d)

Purchaser shall pay for the cost of recording the Deed (excluding documentary
stamp tax); the premium for the Title Policy in excess of the premium for a
standard coverage policy; the cost of any endorsements (other than Seller
Endorsements) and special or extended coverages of any nature in connection with
the Title Policy; one-half (1/2) of any escrow and closing fees charged by
Escrow Holder; any surveys or updates prepared by or at the direction of
Purchaser; any taxes payable on the transfer of the Personal Property; and any
lender’s title insurance coverage on account of any other loan obtained by
Purchaser.  Purchaser shall pay for all costs relating to any financing obtained
by Purchaser in connection with its purchase of the Property, including any and
all costs incurred by Purchaser in performing any tests and investigations. 
Seller shall pay for the premium for a standard coverage title policy in the
amount of the Purchase Price; the cost of the Seller Endorsements (but not the
cost of any endorsements or special or extended coverages other than the Seller
Endorsements); the documentary stamp tax with respect to the recordation of the
Deed; one-half (1/2) of any escrow and closing fees charged by Escrow Holder;
any prepayment or reconveyance fee in connection with any payoff or release of
any existing deed of trust or mortgage; and the recording fees with respect to
documents which Seller elects to place of record in order to cure title
objections raised by Purchaser to the extent Seller elects to cure the same, as
fully described in Section 3.2.  Each party shall pay its own attorneys’ fees.

 

 

 

 

5.2

Calculation of Prorations

          For purposes of calculating prorations, Seller shall be deemed to be
in title to the Property, and therefore entitled to the income therefrom and
responsible for the expenses thereof, through the day prior to the Closing Date
and Purchaser shall be deemed to be in title to the Property, and therefore
entitled to the income therefrom and responsible for the expenses thereof, from
and after 12:01 a.m. on the Closing Date.  All prorations shall be made on the
basis of the actual number of days of the year and month which have elapsed as
of the Closing Date.  All prorations which cannot be ascertained as of the
Closing shall be prorated on the basis of the parties’ reasonable estimate of
such amount.  Except as otherwise stated above, if necessary, the amount of
prorations shall be adjusted in cash after Closing, as and when complete and
accurate information becomes available but in any event no later than ninety
(90) days after the Closing Date; provided, however, the ninety (90) day period
shall be extended for a reasonable time for any real property tax reduction or
abatement proceeds, which are to be prorated between Purchaser and Seller
pursuant to Section 5.1(c), and for any period of time which may be required for
reconciliation of tax, insurance, and common area maintenance expenses for the
calendar year in which the Closing Date occurs.  Purchaser and Seller each agree
to reasonably cooperate with the other with respect to such final proration. 
This provision shall survive Closing and shall not be merged therein.

13

6.

REPRESENTATIONS AND WARRANTIES

 

 

 

6.1

Seller’s Representations and Warranties

 

 

 

 

Seller hereby represents and warrants to Purchaser as follows:

 

 

 

 

(a)

Seller’s Entity.  Seller is a Delaware limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware. 
Seller has qualified as a foreign limited partnership in the state in which the
Property is located, and the execution and performance of this Agreement will
not violate any term of its limited partnership certificate or agreement, or any
judicial decree, statute or regulation by which it may be bound or affected.

 

 

 

 

(b)

Seller’s Authority.  Seller has full power and authority to enter into this
Agreement and to perform all its obligations hereunder, and has taken all action
required by law, its governing instruments, or otherwise to authorize the
execution, delivery and performance of this Agreement and all the deeds,
agreements, certificates, and other documents contemplated herein, and this
Agreement has been duly executed by and is a valid and binding agreement of
Seller,  enforceable in accordance with its terms, except as enforceability may
be limited by equitable principles or by the laws of bankruptcy, insolvency, or
other laws affecting creditors’ rights generally.

 

 

 

 

(c)

No Conflict or Lien.  Neither the execution or delivery of this Agreement nor
the consummation of the transactions contemplated herein will conflict with or
result in a breach of any contract, license or undertaking to which Seller is a
party or by which any of its property is bound, or constitute a default
thereunder or, except as contemplated herein, result in the creation of any lien
or encumbrance upon the Property.

 

 

 

 

(d)

No Proceedings.  No legal or administrative proceeding is (i)  pending or to the
best of Seller’s knowledge threatened against the Property or (ii) pending or to
the best of Seller’s knowledge threatened against Seller which relates to the
Property or Seller’s right to convey the Property to Purchaser as contemplated
in this Agreement. Seller shall have the right to, and shall promptly, update
the representation set forth herein to reflect any proceeding that first becomes
pending after the Effective Date, or of which Seller first acquires knowledge
after the Effective Date.

 

 

 

 

(e)

Leases; Service Contracts.  Seller has delivered to Purchaser a correct and
complete copy of each of the Leases and Service Contracts and any amendments
thereto.  The information regarding the Leases contained on the Rent Roll
attached as Schedule 4, which identifies all tenants of the Property as of the
Effective Date, is correct and complete as of the date of this Agreement. 
Except in connection with the transaction described on Schedule 5, no
commissions, tenant improvement costs or reimbursements for improvements are due
or could become due from Seller in connection with the Leases.  To the knowledge
of Seller, each of the Leases and Service Contracts is in full force and effect,
no notice has been given of any cancellation or surrender thereof, and neither
Seller nor the tenant or other party is in default thereunder.

14

 

(f)

Violations.  Seller has no knowledge of and has not received written notice from
any governmental body, authority or agency of any violation of federal, state or
local laws, ordinances, codes, rules or regulations affecting the Property,
including any notice with respect to any Hazardous Materials (as hereinafter
defined) or of any violation of any insurance requirements relative to the
Property, any matters identified in which have not been corrected.  Seller shall
have the right to, and shall promptly, update the representation set forth
herein to reflect any notice of which Seller first acquires knowledge after the
Effective Date.

 

 

 

 

(g)

Condemnation.  Seller has no knowledge of and has received no written notice of
any pending or threatened condemnation proceedings relating to the Property. 
Seller shall have the right to, and shall promptly, update the representation
set forth herein to reflect any proceeding that first becomes pending after the
Effective Date, or of which Seller first acquires knowledge after the Effective
Date.

 

 

 

 

(h)

Commissions.  No leasing commissions are due and payable with respect to the
existing terms of the Leases except as set forth on the Rent Roll described in
Section 3.6(a)(i) hereof; provided, however, that nothing contained in this
Section  6.1(h) shall be construed in any way to modify the obligations with
respect to leasing commissions and tenant improvements described in Sections 9.2
and 9.3 hereof.

 

 

 

 

(i)

Service Contracts.  All material Service Contracts affecting the Property are
accurately set forth on Schedule 3 hereto.  Except for the Service Contracts and
Leases and except for contracts entered into by Seller for tenant improvements
in connection with the transaction described on Schedule 5, Seller has not
entered into any contracts, subcontracts or agreements affecting the Property
(including outstanding offers or proposals given by Seller) that will be binding
upon Buyer after the Closing.

 

 

 

 

(j)

Bankruptcy. No petition has been filed by Seller, nor has Seller received
written notice of any petition filed against Seller, under the Federal
Bankruptcy Code or any similar state or federal Law.

          Except with respect to the warranties set forth in Section 6.1 hereof
or elsewhere in this Agreement, Seller has not made any warranty or
representation, express or implied, written or oral, concerning the Property,
including without limitation any representations relating to Hazardous Materials
(as defined in Section 6.3(c) below).

          All representations and warranties of Seller contained herein are
intended to and shall remain true and correct as of the Closing and shall
survive the delivery of the Deed for a period of one (1) year after Closing and
shall thereafter expire unless a claim thereunder has been commenced in
compliance with the next sentence and diligently pursued thereafter.  Any claims
by Purchaser with respect to such representations or warranties shall be
commenced by written notice to Seller within said one (1) year period and shall
be diligently pursued thereafter or shall be deemed waived by Purchaser. 
Notwithstanding the foregoing, Purchaser shall have no claim against Seller with
respect to the representations and warranties set forth in this Section 6.1 if
Purchaser had actual knowledge that a representation or warranty was untrue or
inaccurate or incorrect as of the time of Closing and Purchaser nevertheless
chose to proceed with Closing hereunder.

15

          Whenever in this Agreement a representation of Seller is based on the
“Seller’s knowledge” or words of similar import, such reference shall be deemed
to be to the actual knowledge of Robert F. Gossett, Jr., without investigation
or inquiry of any kind.  Seller represents that Robert F. Gossett, Jr. is
currently employed by Seller and, in consultation with Tom Fillmore, Seller’s
building manager, is the individual who has been primarily responsible for the
management of the Property on behalf of Seller for the two (2) year period
immediately prior to the date hereof.  There shall be no personal liability to
said individual arising out of said representations or warranties.  No knowledge
of parties affiliated with, employed by, or related by agency to Seller shall be
imputed to Seller or to the above-named person.

          Notwithstanding anything to the contrary contained in this Agreement,
the aggregate amount which may be collected by Purchaser pursuant to the
representations and warranties of Seller set forth herein (other than under
Section 6.1(i)) shall not exceed $200,000.

 

6.2

Purchaser’s Representations and Warranties

 

 

 

 

Purchaser represents, warrants, and covenants to Seller that:

 

 

 

 

(a)

Authority to Execute; Organization.  This Agreement constitutes the valid and
binding obligation of Purchaser and is enforceable against Purchaser in
accordance with its terms, except as enforceability may be limited by equitable
principles or by the laws of bankruptcy, insolvency, or other laws affecting
creditors’ rights generally.  Purchaser is a corporation validly organized and
in good standing under the laws of the state of its organization, and the
execution of this Agreement, delivery of money and all required documents,
Purchaser’s performance of this Agreement and the transaction contemplated
hereby have been duly authorized by the requisite action on the part of the
Purchaser and Purchaser’s directors, shareholders, partners, members or
trustees.

 

 

 

 

(b)

Recording.  Purchaser shall not record this Agreement or a memorandum hereof at
any time.

 

 

 

 

(c)

Litigation.  There is no litigation pending or, to Purchaser’s knowledge,
threatened, against Purchaser or any basis therefore before any court,
regulatory authority or administrative agency that would likely result in any
material adverse change in the business or financial condition of the Purchaser.

 

 

 

 

(d)

Financial Condition.  Purchaser has adequate financial resources to make timely
payment of all sums due from Purchaser hereunder and to perform all of its
obligations hereunder.

 

 

 

 

(e)

Purchaser Experience.  Purchaser is experienced in contracting for and
investigating the suitability of real property similar to the Property for the
acquisition thereof for investment purposes and is represented or has had an
opportunity to be represented by counsel in connection with this transaction. 
Purchaser has the responsibility under this Agreement to inspect the Property
and the real estate market in sufficient detail to fully satisfy itself with
respect to the environmental conditions and the market conditions affecting the
Property including, without limitation, property values, interest rates, and
similar market factors.  Purchaser has reached its conclusions based upon its
own analysis and without relying upon representations by Seller, its employees,
agents or consultants.

 

 

 

 

(f)

Terrorist Organizations.  Purchaser is not acting, directly or indirectly, for
or on behalf of any person, group, entity or nation named by the United States
Treasury Department as a Specifically Designated National and Blocked person, or
for or on behalf of any person, group, entity or nation designated in
Presidential Executive Order 13224 as a person who commits, threatens to commit,
or supports terrorism; and it is not engaged in this transaction directly or
indirectly on behalf of, or facilitating this transaction directly or indirectly
on behalf of, any such person, group, entity or nation.

16

 

6.3

Purchaser Accepts Property “As Is”

 

 

 

 

(a)

Purchaser Acknowledgment.  As of the expiration of the Inspection Period,
Purchaser acknowledges for Purchaser and Purchaser’s successors, heirs and
assignees, (i) that Purchaser has been given full opportunity to inspect and
investigate the Property, all improvements thereon and all aspects relating
thereto, either independently or through agents and experts of Purchaser’s
choosing, (ii) that Purchaser is acquiring the Property based solely upon
Purchaser’s own investigation and inspection thereof and Seller’s
representations and warranties set forth in Section 6.1(a) through (j) hereof
inclusive, and (iii) that the provisions of this Section 6.3(a) shall survive
Closing and shall not be merged therein.  SELLER AND PURCHASER AGREE THAT UPON
CLOSING THE PROPERTY SHALL BE SOLD AND THAT PURCHASER SHALL ACCEPT POSSESSION OF
THE PROPERTY ON THE CLOSING DATE “AS IS, WHERE IS, WITH ALL FAULTS” WITH NO
RIGHT OF SET-OFF OR REDUCTION IN THE PURCHASE PRICE, AND THAT EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN SECTION 6.1(a) THROUGH (j)
HEREOF INCLUSIVE, SUCH SALE SHALL BE WITHOUT REPRESENTATION OR WARRANTY OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTY OF INCOME
POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AND SELLER DOES HEREBY DISCLAIM AND RENOUNCE ANY SUCH REPRESENTATION OR
WARRANTY.  PURCHASER SPECIFICALLY ACKNOWLEDGES THAT PURCHASER IS NOT RELYING ON
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED,
FROM SELLER, SELLER’S AGENTS OR BROKERS, AS TO ANY MATTER CONCERNING THE
PROPERTY (EXCEPT FOR THE WARRANTIES SPECIFICALLY SET FORTH IN SECTION 6.1(a)
THROUGH (j) HEREOF INCLUSIVE), INCLUDING WITHOUT LIMITATION: (l) THE CONDITION
OR SAFETY OF THE PROPERTY OR ANY IMPROVEMENTS THEREON, INCLUDING, BUT NOT
LIMITED TO, PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR
CONDITIONING, IF ANY, FOUNDATIONS, SOIL AND GEOLOGY INCLUDING HAZARDOUS
MATERIALS (AS HEREINAFTER DEFINED), LOT SIZE, OR SUITABILITY OF THE PROPERTY OR
ITS IMPROVEMENTS FOR A PARTICULAR PURPOSE; (2) WHETHER THE APPLIANCES, IF ANY,
PLUMBING OR UTILITIES ARE IN WORKING ORDER; (3) THE HABITABILITY OR SUITABILITY
FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION; (4) THE
FITNESS OF ANY PERSONAL PROPERTY; OR (5) WHETHER THE IMPROVEMENTS ARE
STRUCTURALLY SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH APPLICABLE CITY,
COUNTY, STATE OR FEDERAL STATUTES, CODES OR ORDINANCES, INCLUDING, WITHOUT
LIMITATION THE REQUIREMENTS OF THE AMERICANS WITH DISABILITIES ACT, 42 USCA §
12101 et. seq.  SUBJECT ONLY TO THE WARRANTIES EXPRESSLY SET FORTH IN SECTIONS
6.1(a) THROUGH (i) HEREOF, PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT IT IS
RELYING SOLELY UPON ITS OWN INSPECTION OF THE PROPERTY AND NOT UPON ANY
REPRESENTATIONS MADE TO IT BY SELLER, ITS OFFICERS, DIRECTORS, CONTRACTORS,
AGENTS OR EMPLOYEES OR ANY PERSON

17

 

 

WHOMSOEVER.  ANY REPORTS, REPAIRS OR WORK REQUIRED BY PURCHASER ARE TO BE THE
SOLE RESPONSIBILITY OF PURCHASER AND PURCHASER AGREES THAT THERE IS NO
OBLIGATION ON THE PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS, OR REPAIR TO
THE PROPERTY AND PURCHASER ACKNOWLEDGES THAT, IN THE EVENT THAT PURCHASER ELECTS
TO PROCEED TO CLOSING PRIOR TO THE EXPIRATION OF THE INSPECTION PERIOD AS
PROVIDED IN THIS AGREEMENT, PURCHASER WILL HAVE COMPLETED ITS DUE DILIGENCE WITH
RESPECT TO THE PROPERTY TO ITS SATISFACTION.

 

 

 

 

(b)

No Claim for Hazardous Materials.  Upon Closing, Purchaser, for Purchaser and
Purchaser’s successors in interest, releases Seller from, and waives all claims
and liability which Purchaser may have against Seller for, any structural,
physical and environmental condition of the Property, including without
limitation the presence, discovery or removal of any Hazardous Materials in, at,
about or under the Property, or for, connected with or arising out of any and
all claims or causes of action based upon the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (“CERCLA”), the Superfund
Amendments and Reauthorization Act of 1986 (“SARA”), the Resource Conservation
and Recovery Act (“RCRA”), the Toxic Substances Control Act (the “TSCA”), as
such acts may be amended from time to time, or any other federal or state
statutory or regulatory cause of action arising from or related to Hazardous
Materials at, in or under the Property  (collectively, the “Hazardous Waste
Laws”).  The waiver and release of Purchaser set forth in this Section 6.3(b)
shall survive the Closing Date and shall be enforceable at any time after the
Closing Date.

 

 

 

 

(c)

“Hazardous Materials” Defined.  For purposes of this Agreement, the term
“Hazardous Material” shall mean any substance, chemical, waste or material that
is or becomes regulated by any federal, state or local governmental authority
because of its toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including, without limitation, those
substances regulated by the Hazardous Waste Laws.

 

 

 

 

(d)

No Representations as to Hazardous Materials.  Purchaser acknowledges that
Seller has made no representations or warranties whatsoever to Purchaser
regarding the presence or absence of any Hazardous Materials in, at, or under
the Property; provided, however, that Seller and Purchaser acknowledge that
Seller has made certain representations as to no proceedings, notices received,
knowledge or otherwise as more specifically set forth in Sections 6.1 (d), (f)
and (g)  hereof.  Purchaser has made such studies and investigations, conducted
such tests and surveys, and engaged such specialists as Purchaser has deemed
appropriate to evaluate fairly the Property and its risks from an environmental
and Hazardous Materials standpoint.

18

7.

CONDITIONS TO CLOSING

 

 

 

 

7.1

Seller’s Conditions

          The obligation of Seller to sell and convey the Property under this
Agreement is subject to the satisfaction of the following conditions precedent
or conditions concurrent (the satisfaction of which may be waived only in
writing by Seller):

 

(a)

Delivery and execution by Purchaser to Escrow Holder of all monies, items, and
other instruments required to be delivered by Purchaser to Escrow Holder and the
performance by Purchaser of all its obligations under this Agreement;

 

 

 

 

(b)

Purchaser’s covenants, warranties, and representations set forth herein shall be
true and correct as of the Closing Date; and

 

 

 

 

(c)

There shall be no uncured default by Purchaser of any of its obligations under
this Agreement.

 

 

 

 

7.2

Purchaser’s Conditions

          The obligation of Purchaser to acquire the Property under this
Agreement is subject to the satisfaction of the following conditions precedent
or conditions concurrent:

 

(a)

Delivery and execution by Seller to Escrow Holder of all monies, items and other
instruments to be delivered by Seller to Escrow Holder and the performance by
Seller of all its obligations under this Agreement, provided, however, that the
original Leases and Service Contracts which survive Closing, and the leasing and
property files and records pertaining to day-to-day operation, leasing and
maintenance of the Property, to the extent same are in the possession of Seller,
shall be held at the Property for delivery to the Purchaser incident to Closing;

 

 

 

 

(b)

Seller’s covenants, warranties and representations set forth herein shall be
true and correct as of the Closing Date;

 

 

 

 

(c)

There shall be no uncured default by Seller of any of its obligations under this
Agreement; and

 

 

 

 

(d)

Title Company shall be irrevocably committed to issue the Title Policy subject
to the Permitted Exceptions.

 

 

 

 

7.3

Failure of Condition

 

 

 

 

(a)

In the event of a failure of any condition contained in Section 7.1 or 7.2 above
which is not the result of a default by either party, the party for whose
benefit the condition existed may either waive the condition and proceed to
Closing or may terminate this Agreement in which event the Deposit and all
documents and funds deposited by Purchaser shall be immediately returned to
Purchaser, all documents deposited by Seller shall be immediately returned to
Seller, and neither party shall have any further rights or obligations hereunder
(except as set forth in Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12);

 

 

 

 

(b)

In the event of a failure of any condition contained in Section 7.2 above due to
a default by Seller, then Purchaser may in its sole discretion:

 

 

 

 

 

(i)

terminate this Agreement in which event the Deposit and all documents and funds
deposited by Purchaser shall be immediately returned to Purchaser, all documents
deposited by Seller shall be immediately returned to Seller, and neither party
shall have any further rights or obligations hereunder (except as set forth in
Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and 11.12), provided that in the

19

 

 

 

case of a willful and intentional default of Seller in its obligation to proceed
to Closing, or a willful and intentional failure to satisfy any condition set
forth in Section 7.2 and Purchaser elects not to proceed to Closing, Purchaser
shall be entitled to recovery from Seller of the actual out-of-pocket damages
incurred by Purchaser in connection with the transactions contemplated by this
Agreement (but not consequential, punitive or other damages), provided that in
no event shall the aggregate liability of Seller to Purchaser with respect to
such damages exceed Thirty Thousand Dollars ($30,000.00);

 

 

 

 

 

 

(ii)

pursue specific performance of Seller’s obligation to convey the Property to
Purchaser in accordance with the terms of this Agreement; or

 

 

 

 

 

 

(iii)

waive such default and close the transaction.

 

 

 

 

 

(c)

In the event of a failure of any condition contained in Section 7.1 above due to
a default by Purchaser after the expiration of the Inspection Period, Seller may
in its sole discretion:

 

 

 

 

 

(i)

terminate this Agreement and Seller shall retain as liquidated damages the
Deposit, as described in Article 12, in which event all documents deposited by
Purchaser shall be immediately returned to Purchaser, and all documents
deposited by Seller shall be immediately returned to Seller, copies of all third
party reports obtained by Purchaser shall be delivered to Seller in accordance
with Section 3.5, and neither party shall have any further rights or obligations
hereunder (except as set forth in Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and
11.12); or

 

 

 

 

 

 

(ii)

Seller may waive such default and close the transaction.

 

 

 

 

 

(d)

Seller waives any rights it may have to specific performance in the event of a
default by Purchaser with the exclusive remedy of Seller being the right to
liquidated damages more fully described in Section 12 hereof.  Except as
expressly provided in Section 7.3(b)(i) above, Purchaser waives any right to any
claim of any nature for damages or otherwise in the event of a default by Seller
and Purchaser acknowledges that its exclusive remedies in the event of a default
by Seller shall be to either terminate this Agreement in accordance with Section
7.3(b)(i) above, to seek specific performance in accordance with Section
7.3(b)(ii) above, or waive such default and close the transaction in accordance
with Section 7.3(b)(iii) above.

 

 

 

 

8.

DAMAGE OR DESTRUCTION OF THE PROPERTY; CONDEMNATION

 

 

 

8.1

Damage or Destruction of the Property

 

 

 

 

(a)

If, between the Effective Date and the Closing Date, the Property is Materially
Damaged or Destroyed (as hereinafter defined), Purchaser may elect in writing,
within ten (10) Business Days after receipt of notice by Purchaser from Seller
of such damage or destruction (the “Casualty Notice Date”), accompanied by
information regarding the amount and payment of insurance, to terminate this
Agreement or to purchase all of the Property without regard to such damage or
destruction.  If Purchaser fails to notify Seller of Purchaser’s election,
Purchaser will be deemed to have elected not to proceed with the purchase of all
of the Property.  If Purchaser elects not to proceed, this Agreement shall

20

 

 

terminate in which event the Deposit and all documents and funds deposited by
Purchaser shall be immediately returned to Purchaser, all documents deposited by
Seller shall be immediately returned to Seller, and neither party shall have any
further rights or obligations hereunder (except as set forth in Sections 3.5(a)
and (e), 3.6(b), 9.1, 11.2 and 11.12).  In the event that Purchaser purchases
the Property, Seller shall have no obligation to repair any such damage or
destruction, nor shall the Purchase Price be adjusted except as provided in
8.1(b) below.  “Materially Damaged or Destroyed” shall mean damage or
destruction the repair or replacement of which either would not be permitted due
to the then effective requirements of any applicable law, ordinance, rule or
regulation of any governmental or quasi-governmental agency having jurisdiction,
or, as determined by a licensed general contractor having at least five (5)
years experience in the construction of commercial office buildings, selected by
Seller and reasonably approved by Purchaser, would exceed Five Hundred Thousand
Dollars ($500,000) as to any casualty of a type against which insurance is
maintained (a “Major Insured Casualty”) or would exceed Two Hundred Fifty
Thousand Dollars ($250,000) as to any casualty against which insurance is not
maintained (a “Major Uninsured Casualty”).  As used herein, repair or
replacement means such repair or replacement to the Improvements as may be
required to restore the Improvements to a condition having substantially the
same design, specifications and equipment of the Improvements immediately prior
to the casualty.  If, between the Effective Date and the Closing Date, the
Property sustains  damage which is not within the definition of Materially
Damaged or Destroyed , the parties shall proceed to Closing.  If between the
Effective Date and the Closing Date, the Property is Materially Damaged or
Destroyed due to a Major Uninsured Casualty, Seller may elect in writing, within
five (5) days after the Casualty Notice Date, to terminate this Agreement.  If
Seller fails to notify Purchaser of Seller’s election, Seller will be deemed to
have elected not to proceed with the sale of all of the Property.

 

 

 

 

(b)

If Purchaser elects or is required to purchase the Property despite such damage
or destruction, Seller shall assign its rights to and Purchaser shall be
entitled to receive any insurance proceeds (with any accrued interest thereon)
at or after Closing (as the same are available) and Purchaser shall receive a
credit toward the Purchase Price (i) for the insurance deductible relative to
Seller’s insurance on the Property with respect to an insured casualty,
including a Major Insured Casualty, or (ii) for the cost of repair not covered
by insurance with respect to an uninsured casualty, including a Major Uninsured
Casualty.  Seller shall reasonably cooperate with Purchaser to allow Purchaser
to collect any available insurance proceeds.  Seller agrees to maintain until
the Closing the level of insurance coverage in effect on the Property as of the
Effective Date.

 

 

 

 

(c)

If, as a result of any casualty, any determination, election or agreement
required by the terms of this Section 8.1 is not made by the scheduled Closing
Date, the Closing Date shall be extended for an appropriate time, not to exceed
twenty (20) days, after such determination, election or agreement.

 

 

 

 

8.2

Condemnation

          If prior to Closing all or any part of the Property is subject to a
proposed taking by any public authority, Seller shall promptly notify Purchaser
in writing of such proposed taking and Purchaser may terminate this Agreement by
notice to Seller within five (5) days after written notice thereof.  If
Purchaser so elects, this Agreement shall terminate in which event the Deposit
and all documents and funds deposited by Purchaser shall be immediately returned
to Purchaser, all documents deposited by Seller shall be immediately returned to
Seller, and neither party shall have any further rights or obligations

21

hereunder (except as set forth in Sections 3.5(a) and (e), 3.6(b), 9.1, 11.2 and
11.12).  If Purchaser does not so elect to terminate this Agreement, Purchaser
shall accept the Property subject to the taking without a reduction in the
Purchase Price and shall receive at Closing an assignment of all of Seller’s
rights to any condemnation award [to the extent that such amount does not exceed
the Purchase Price plus any legal fees and expenses actually expended in
obtaining such award, with any condemnation award in excess of such amount to be
divided equally between Seller and Purchaser].  Seller shall reasonably
cooperate with Purchaser to allow Purchaser to collect any such award.

9.

COMMISSIONS AND EXPENSES; COVENANTS

 

 

 

 

9.1

Payment of the Sale Commission

          Purchaser and Seller represent and warrant to each other that no real
estate broker or agent has been authorized to act on either parties’ behalf
except Grubb & Ellis (“Seller’s Agent”) under a separate commission agreement
between Seller and Seller’s Agent, and Corporate Realty Associates (“Purchaser’s
Agent”) under a separate commission agreement between Purchaser and Purchaser’s
Agent.  Seller and Purchaser will pay or cause to be paid to Seller’s Agent and
Purchaser’s Agent, respectively, at Closing, the commission payable under such
commission agreements.  Purchaser hereby indemnifies Seller and holds Seller
harmless from and against any and all demands or claims which now or hereafter
may be asserted against Seller for any brokerage fees, commissions or similar
types of compensation which may be claimed by any broker which was engaged or
which claims to have been engaged by Purchaser and all expenses and costs in
handling or defending any such demand or claim, including reasonable attorneys’
fees.  Seller hereby indemnifies Purchaser and holds Purchaser harmless from and
against any and all demands or claims which now or hereafter may be asserted
against Purchaser for any brokerage fees, commissions or similar types of
compensation which may be claimed by any broker which was engaged or which
claims to have been engaged by Seller and all expenses and costs in handling or
defending any such demand or claim, including reasonable attorneys’ fees.  This
provision shall survive (i) any termination of this Agreement and (ii) the
Closing and shall not be merged therein.

 

9.2

Leasing Commissions/Tenant Improvements

 

 

 

 

(a)

Seller shall pay all leasing commissions or tenant improvement costs payable
under Leases executed prior to the Effective Date except for commissions and
costs payable by reason of any expansion, extension or renewal of such Leases
(but only to the extent such expansions, extensions or renewals are pursuant to
option rights expressly set forth in such Leases as of the Effective Date,
herein called the “Existing Rights”) occurring on or after the Effective Date,
which shall be paid by Seller and Purchaser as hereinafter provided. 
Notwithstanding anything herein to the contrary, Seller shall be entitled to
enter into and consummate the leasing matter described in Schedule 5, which
matter is hereby approved by Purchaser, provided that Seller shall pay all
leasing commissions and tenant improvement costs payable in connection
therewith.  Except for the matter described in Schedule 5, Seller shall not,
without Purchaser’s prior written consent which Purchaser may withhold in its
sole and absolute discretion, (a) enter into a new lease; (b) modify or amend
any Lease (unless such renewal, extension or expansion option is an Existing
Right); or (c) consent to any assignment or sublease in connection with any
Lease.  If Seller desires to do any of the foregoing, a summary of the business
terms of any amendment, renewal or expansion of an existing Lease (unless such
renewal or expansion is pursuant to and in accordance with the terms of any
Existing Rights, in which case Seller and Purchaser agree that any such renewal
or expansion shall be effective upon the valid exercise by a tenant pursuant to
the terms of any such Existing Rights with Seller to provide notice of such
occurrence) or of any new lease or consent

22

 

 

which Seller wishes to execute between the Effective Date and the Closing Date
will be submitted to Purchaser prior to execution by Seller.  Purchaser agrees
to notify Seller in writing within ten (10) Business Days after its receipt
thereof of either its approval or disapproval thereof, including all leasing
commissions, tenant improvement and inducement payments to be incurred in
connection therewith.  If Purchaser informs Seller within such ten (10) Business
Day period that Purchaser does not approve the amendment, renewal or expansion
of the existing Lease or the new lease or consent to assignment or sublease (a
“New Lease Agreement”) or if Purchaser fails to respond within the ten (10)
Business Day period, , then Seller shall not enter into the proposed New Lease
Agreement. All leasing commissions and tenant improvement costs, inducement
payments, attorneys’ fees and other fees paid or expenses incurred with respect
to any New Lease Agreement (regarding which Seller has advised Purchaser in the
requisite summary of business terms delivered to Purchaser as required above)
approved by Purchaser as set forth above in this Section 9.2(a) shall be the
obligation of Purchaser and Seller, divided pro rata based upon an allocation
determined by the rental income received by Seller relative to such New Lease
Agreement prior to Closing and the total rental income projected to be paid
during the initial term of such New Lease Agreement.

 

 

 

 

(b)

To the extent Seller shall be obligated for any leasing commissions, tenant
improvement costs, inducement payments, attorneys’ fees or other fees payable in
connection with any Lease or New Lease Agreement pursuant to Section 9.2(a)
above for which actual payment thereof has not been made by or on behalf of
Seller on or before the Closing, Purchaser shall receive a credit at Closing for
all such unpaid commissions, costs, expenses and fees.

 

 

 

 

9.3

Lease Expense Reimbursement and Assumption

          At Closing, Purchaser shall (i) reimburse Seller for all leasing
commissions, tenant improvement costs, inducement payments, attorneys’ fees and
other fees paid or expenses incurred by Seller under any New Lease Agreement
made on or after the Effective Date, if any, which has been approved by
Purchaser pursuant to Section 9.2, less the pro rata share of all such costs and
expenses otherwise payable by Seller pursuant to the last sentence of Section
9.2(a) above and (ii) assume all obligations of the landlord under Leases which
either (a) arise after Closing or (b) are continuing covenants of the landlord
which apply after Closing, if any. 

 

9.4

Maintenance of the Property; Property Personnel

          Between Seller’s execution of this Agreement and the Closing, Seller
shall maintain, repair and replace the Property in a manner consistent with past
practices, and at least sufficiently to keep the Property in its existing
condition, reasonable wear and tear excepted, and shall not defer any repairs,
replacements or maintenance of the Property.

 

9.5

Service Contracts

          Seller shall not, after the date of this Agreement, enter into any
service contract affecting the Property or any amendment thereof, which shall be
an obligation of Purchaser after Closing, or waive, compromise or settle any
rights of Seller under any Service Contract which shall be assumed by Purchaser
upon Closing, or agree to, or modify, amend, or terminate any Service Contract
which shall be assumed by Purchaser upon Closing, without in each case obtaining
Purchaser’s prior written consent thereto which may be withheld in Purchaser’s
sole and absolute discretion.  Seller shall terminate at or before Closing those
existing Service Contracts that Seller is contractually entitled to terminate
without cost and that Purchaser designates to Seller, on or before the Out Date,
as not to survive Closing.

23

10.

NOTICES

          All notices, requests or demands to a party hereunder shall be in
writing and shall be effective (i) when received by overnight courier service or
facsimile telecommunication (provided that a copy of such notice, request or
demand is deposited into the United States mail within one (1) Business Day of
the facsimile transmission), or (ii) three (3) days after being deposited into
the United States mail (sent certified or registered, return receipt requested),
in each case addressed as follows (or to such other address as Purchaser or
Seller may designate in writing in accordance with this Section 10):

 

If to Seller:

 

 

 

Corporate Realty Income Fund I, L.P.

 

475 Fifth Avenue, 21st Floor

 

New York, New York  10017

 

Attention:  Robert F. Gossett, Jr.

 

Phone No.:  (212) 696-1134

 

Fax No.:  (212) 696-1271

 

 

 

With a copy to:

 

 

 

Arnold & Porter LLP

 

399 Park Avenue

 

New York, New York  10022

 

Attention:  Michael J. Canning, Esq.

 

Phone No.:  (212) 715-1110

 

Fax No.:  (212) 715-1399

 

 

 

If to Purchaser:

 

 

 

MERCURY CASUALTY COMPANY

 

4484 Wilshire Boulevard

 

Los Angeles, CA  90010

 

Attention:  John Sutton

 

Telephone No.:  (323) 857-4938

 

Fax No.:  (323) 857-7116

 

 

 

With a copy to:

 

 

 

Kelly Lytton & Vann LLP

 

1900 Avenue of the Stars, Suite 1450

 

Los Angeles, CA  90067

 

Attention:  James D. Robinson

 

Telephone No.:  (310) 277-5333

 

Telecopy No.:  (310) 277-5953

24

 

If to Escrow Holder:

 

 

 

Chicago Title Insurance Company

 

171 N. Clark Street, 04CI

 

Chicago, IL  60601

 

Phone No.:  (312) 223-3360

 

Fax No.:  (312) 223-5791

11.

MISCELLANEOUS

 

 

 

11.1

Time

          Time is of the essence in the performance of each party’s obligations
hereunder.

 

11.2

Attorneys’ Fees

          If any legal action, arbitration or other proceeding is commenced to
enforce or interpret any provision of this Agreement, the prevailing party shall
be entitled to an award of its attorneys’ fees and expenses.  The phrase
“prevailing party” shall include a party which receives substantially the relief
desired whether by dismissal, summary judgment, judgment or otherwise.  This
provision shall survive (i) any termination of this Agreement and (ii) the
Closing and shall not be merged therein.

 

11.3

No Waiver

          No waiver by any party of the performance or satisfaction of any
covenant or condition shall be valid unless in writing and shall not be
considered to be a waiver by such party of any other covenant or condition
hereunder.

 

11.4

Entire Agreement

          This Agreement contains the entire agreement between the parties
regarding the Property and supersedes all prior agreements, whether written or
oral, between the parties regarding the same subject.  This Agreement may only
be modified in writing.

 

11.5

Survival

          Except for (i) the representations and indemnity obligations of
Purchaser and Seller under this Agreement, (ii) the post-closing obligations of
Purchaser and Seller under this Agreement and (iii) as otherwise specifically
provided in this Agreement, none of the agreements, warranties and
representations contained herein shall survive Closing.

 

11.6

Successors

          Subject to Section 11.7, this Agreement shall bind and inure to the
benefit of the parties hereto and to their respective legal representatives,
successors and permitted assigns.

 

11.7

Assignment

          Purchaser shall be entitled, without Seller’s prior consent, to assign
Purchaser’s rights in and to this Agreement to an entity controlled by or under
common control with Purchaser (a “Permitted Assignee”).  Seller’s written
consent shall be required for any other assignment of Purchaser’s rights to a

25

nominee under this Agreement.  Any attempted unpermitted assignment, except with
Seller’s prior written consent, shall be ineffective and shall constitute a
default under this Agreement.  Notwithstanding any assignment hereunder,
Purchaser shall remain liable for the obligations of Purchaser under this
Agreement.  Purchaser represents, warrants and certifies to Seller that
Purchaser has not assigned, transferred or encumbered or agreed to assign,
transfer or encumber, directly or indirectly, all or any portion of its rights
or obligations under this Agreement.  Purchaser shall give written notice of any
proposed assignment at least five (5) Business Days prior to Closing.  If there
is an assignment permitted hereunder or if Seller approves such assignment,
Seller shall have no obligation to reissue any surveys, or title commitments
previously delivered to Purchaser, nor shall Seller be responsible for any costs
or expenses of any nature associated with such transfer.

 

11.8

Relationship of the Parties

          The parties acknowledge that neither party is an agent for the other
party, and that neither party shall or can bind or enter into agreements for the
other party.

 

11.9

Governing Law

          This Agreement and the legal relations between the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Oklahoma.

 

11.10

Possession; Risk of Loss

          Seller shall deliver to Purchaser possession of the Property on the
Closing Date, subject only to the Leases and Permitted Exceptions.  All risk of
loss or damage with respect to the Property shall pass from Seller to Purchaser
upon Closing.

 

11.11

Review by Counsel

          The parties acknowledge that each party and its counsel have reviewed
and approved this Agreement, and the parties hereby agree that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Agreement
or any amendments or exhibits hereto.

 

11.12

Confidentiality

 

 

 

 

(a)

Seller and Purchaser hereby covenant and agree that, at all times after the date
of execution hereof and prior to the Closing, unless consented to in writing by
the other party, no press release or other public disclosure concerning this
transaction shall be made, and each party agrees to use best efforts to prevent
disclosure of this transaction, other than (i) to directors and officers of the
parties, limited partners, members and/or shareholders of Seller, Purchaser or
Permitted Assignee, and employees, prospective lenders of Purchaser or Permitted
Assignee, attorneys, accountants, agents and affiliates of the parties who are
involved in the ordinary course of business with this transaction, all of which
shall be instructed to comply  with the confidentiality provisions hereof, or
(ii) as required by law or in response to lawful process or subpoena or other
valid or enforceable order of a court of competent jurisdiction.

26

 

(b)

Notwithstanding anything to the contrary contained elsewhere herein, Purchaser
hereby acknowledges that all information furnished by Seller or its agents or
representatives to Purchaser or obtained by Purchaser in the course of
Purchaser’s investigation of the Property, or in any way arising from or
relating to any and all studies or entries upon the Property by Purchaser, its
agents or representatives, shall be treated as confidential information and
further, that if any such confidential information is disclosed to unpermitted
third parties prior to the Closing, Seller may suffer damages and irreparable
harm.  In connection therewith, Purchaser hereby expressly understands,
acknowledges and agrees (i) that Purchaser will not disclose any of the contents
or information contained in or obtained as a result of any reports or studies
made in connection with Purchaser’s investigation of the Property, in any form
whatsoever (including, but not limited to, any oral information received by
Purchaser during the course of Purchaser’s inspection of the Property), to any
party prior to the Closing other than (a) the Seller, Seller’s employees, agents
or representatives, or Purchaser’s or a Permitted Assignee’s agents, employees,
representatives, attorneys, consultants or potential institutional lenders
without the prior express written consent of Seller (which consent shall not be
unreasonably withheld) or (b) as required by law or in response to lawful
process or subpoena or other valid and enforceable order of a court of competent
jurisdiction; (ii) that in making any disclosure of such information as
permitted hereunder, Purchaser will advise said parties of the confidentiality
of such information and the potential of damage to Seller as a result of any
disclosure of such information by said third party; and (iii) that Seller is
relying on Purchaser’s covenant not to disclose any of the contents or
information contained in any such reports or investigations to unpermitted third
parties prior to Closing (all of which is deemed to be confidential information
by the provisions of this Section).  In the event this Agreement is terminated,
Purchaser agrees to return to Seller all information, studies, or reports
Purchaser or Purchaser’s agents have obtained from Seller or Seller’s agents,
contractors or representatives with respect to the Property or the condition of
the Property.  In the event either Purchaser or Purchaser’s agents, employees,
representatives, attorneys, consultants or potential institutional lenders cause
a breach of Purchaser’s duty of confidentiality hereunder, Purchaser shall be
liable to Seller for damages and Seller may pursue all of its remedies afforded
it under this Agreement.  This provision shall survive (i) any termination of
this Agreement and (ii) the Closing and shall not be merged therein.

 

 

 

 

11.13

Termination

          Upon termination of this Agreement for any reason by either party,
Purchaser shall have the obligation to return to Seller all Due Diligence
Documents and copies thereof (including the survey) and any other information or
documentation received by Purchaser from Seller or Seller’s agents with respect
to the Property and shall not disclose to any unpermitted third party the
contents thereof.

 

11.14

Waiver of Jury Trial

          THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT THAT EITHER PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THE PROPERTY, THE
CONVEYANCE DOCUMENTS OR ANY OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH, OR
IN RESPECT OF ANY COURSE OF CONDUCT, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF EITHER PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF
THE PARTIES TO ENTER INTO THIS TRANSACTION.

PURCHASER’S INITIALS: /s/ JS   SELLER’S INITIALS: /s/ RFG

27

 

11.15

Counterparts

          This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, and the counterparts taken together shall
constitute a single agreement.

 

11.16

Limitation on Liability

          Purchaser expressly agrees that the obligations and liabilities of
Seller under this Agreement and any document referenced herein shall not
constitute personal obligations of the officers, directors, employees, agents,
affiliates, members, representatives, partners, stockholders or other principals
and representatives of Seller.  Notwithstanding anything to the contrary,
Seller’s liability, if any, arising in connection with this Agreement or with
the Property shall, prior to Closing, be limited to the remedies as set forth in
Section 7.3 of this Agreement and, post-Closing, shall be limited in accordance
with Section 6.1 of this Agreement.  The limitations of liability contained in
this section shall apply equally and inure to the benefit of Seller’s present
and future officers, directors, affiliates, members, representatives, trustees,
partners, shareholders, agents and employees, and their respective heirs,
successors and assigns.

 

11.17

Partial Invalidity

          If any term or provision of this Agreement or the application thereof
to any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each such term and provision
of this Agreement shall be valid and be enforced to the fullest extent permitted
by law.

 

11.18

Construction

          Headings at the beginning of each section and subsection are solely
for the convenience of Purchaser and Seller and are not a part of this Agreement
and shall have no effect upon the construction or interpretation of any part
hereof.  Whenever required by the context of this Agreement, the singular shall
include the plural and the masculine shall include the feminine, and vice
versa.  This Agreement shall not be construed as if it had been prepared by one
of the parties, but rather as if Purchaser and Seller had prepared the same. 
Unless otherwise indicated, all references to sections and subsections are to
this Agreement.  All Exhibits referred to in this Agreement are attached hereto
and incorporated herein by this reference.  In the event the stated date for
Closing or the date on which Purchaser or Seller is required to take any action
under the terms of this Agreement is not a Business Day, the action shall be
taken on the next succeeding Business Day thereafter.

12.

LIQUIDATED DAMAGES

          IF PURCHASER SHALL BREACH OR DEFAULT IN ANY OF ITS OBLIGATIONS UNDER
THIS AGREEMENT AFTER THE INSPECTION PERIOD, SELLER SHALL BE ENTITLED TO
TERMINATE THIS AGREEMENT AND RETAIN THE AMOUNT OF THE DEPOSIT DESCRIBED IN
SECTION 2.2 AS LIQUIDATED DAMAGES.  SELLER AND PURCHASER ACKNOWLEDGE THAT
SELLER’S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE DEPOSIT IS A
REASONABLE ESTIMATE OF SELLER’S DAMAGES.  SELLER AND PURCHASER SPECIFICALLY
FURTHER AGREE AFTER NEGOTIATION THAT THIS SECTION 12 IS INTENDED TO AND DOES
LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE SELLER’S EXCLUSIVE
REMEDY AGAINST PURCHASER, BOTH AT LAW AND IN EQUITY ARISING FROM OR RELATED TO A
BREACH OR DEFAULT BY PURCHASER OF ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS

28

AGREEMENT.  THE PROVISIONS OF THIS SECTION 12 SHALL NOT BE CONSTRUED AS A
LIMITATION ON THE OBLIGATIONS OF PURCHASER UNDER SECTIONS 3.5(a) and (e),
3.6(b), 9.1, 11.2 and 11.12  HEREOF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
EACH OF THE PARTIES TO ENTER INTO THIS TRANSACTION.

PURCHASER’S INITIALS: /s/ JS   SELLER’S INITIALS: /s/ RFG

13.

NO RECORDING

          The provisions hereof shall not constitute a lien on the Property and
this Agreement shall not be placed or suffered to be placed by Purchaser for
recording with the office of the recorder (clerk) for the county in which the
Property is located.  Purchaser hereby appoints Seller as Purchaser’s true and
lawful attorney-in-fact, coupled with an interest, for the purposes of the
execution of such documents and doing such acts as shall be necessary to effect
the discharge of the recording of this Agreement if such recording shall have
been accomplished in violation of this Section.

14.

EFFECTIVENESS

          This Agreement shall only be effective if a counterpart is signed by
both Seller and Purchaser.

29

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

 

SELLER:

 

 

 

CORPORATE REALTY INCOME FUND I, L.P.

 

 

 

By:

/s/ Robert F. Gossett, Jr.

 

 

--------------------------------------------------------------------------------

 

 

Robert F. Gossett, Jr.

 

 

General Partner

 

 

 

 

By:

1345 Realty Corporation,

 

 

General Partner

 

By:

/s/ Robert F. Gossett, Jr.

 

 

--------------------------------------------------------------------------------

 

 

Robert F. Gossett, Jr.

 

 

President

 

PURCHASER:

 

 

 

MERCURY CASUALTY COMPANY, a

 

California corporation

 

 

 

By:

/s/ John E. Sutton

 

 

--------------------------------------------------------------------------------

 

Name:

John E. Sutton

 

Title:

Assistant to Chairman/CEO

 

 

 

 

ESCROW HOLDER:

 

 

 

Chicago Title Insurance Company

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

Its:

 

 

 

--------------------------------------------------------------------------------

30

TABLE OF CONTENTS

EXHIBIT A

Legal Description of Property

 

 

EXHIBIT B

Bill of Sale

 

 

EXHIBIT C

Assignment and Assumption Agreement

 

 

EXHIBIT D

Seller’s Affidavit

 

 

EXHIBIT E

Form of Special Warranty Deed

 

 

EXHIBIT F

Tenant Notification Letter

 

 

EXHIBIT G

Form of Seller’s Recertification of Representations and Warranties

 

 

EXHIBIT H

Form of Purchaser’s Recertification of Representations and Warranties

 

 

EXHIBIT I

Form of Tenant Estoppel Certificate

 

 

 

 

SCHEDULE 1

Personal Property

 

 

SCHEDULE 2

Permits

 

 

SCHEDULE 3

Service and Other Contracts

 

 

SCHEDULE 4

Rent Roll

 

 

SCHEDULE 5

Approved Leasing Matters

 

 

SCHEDULE 6

Environmental and Property Condition Reports

[EXHIBITS AND SCHEDULES WILL BE PROVIDED TO THE COMMISSION UPON REQUEST]