Document:

EXHIBIT 10.2 

 

 

PURCHASE AND SALE AGREEMENT 

 

Between 

 

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

and 

 

HEARTLAND INVESTMENTS,
INC.
(Purchaser) 

 

2630 Corporate Place
Monterey Park,
California 

 

Dated as of November 20, 2006

PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement
(“Agreement”) is made as of November 20, 2006 (the “Effective Date”), by and
between CORPORATE REALTY INCOME FUND I, L.P., a Delaware limited partnership
(“Seller”), and HEARTLAND INVESTMENTS, INC., a California corporation
(“Purchaser”). 

     A. Seller owns in fee simple a
certain parcel of real property located at 2630 Corporate Place, in the City of
Monterey Park, County of Los Angeles, State of California, commonly referred to
as the Kotura Building (collectively, as hereinafter described, “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 that are owned by
      Seller, including without limitation all of Seller’s right, title and
      interest, if any, 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 that 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 Five Million
Three Hundred Thousand and No/100ths U.S. Dollars ($5,300,000.00), which shall
be payable as follows: 

     2.1 Deposit 

	 	Purchaser shall cause One Hundred Thousand and 00/100 Dollars
      ($100,000) to be delivered by wire transfer to Escrow Holder (as
      hereinafter defined) simultaneously with the receipt by Purchaser of a fully
      executed copy of this Agreement, and shall cause an additional One Hundred
      Thousand and
      00/100 Dollars ($100,000) to be delivered by wire transfer to Escrow
      Holder on the
      Out Date (as hereinafter defined) unless Purchaser shall elect, pursuant
      to Section 3.5 below, on or before the Out Date, not to proceed with the purchase
      of the Property, and such amounts (collectively with all interest accrued
      thereon, the “Deposit”), shall 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 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).
		 

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	      	(d)	      	Subject to the provisions of
      Section 11.13 below and Seller’s right to retain the Deposit as liquidated
      damages pursuant to Section 12 below, 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 

     Except as provided in Section 2.1
above and in other provisions of this Agreement where Seller shall be entitled
to retain the Deposit as liquidated damages pursuant to Section 12 below,
interest on the Deposit shall accrue to the benefit of Purchaser. 

     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 into escrow
with the 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; INSPECTION; FINANCING; ESTOPPELS

     3.1 Title Commitment;
Survey

	      	(a)	      	Concurrently with the receipt by
      Purchaser of a fully executed copy of this Agreement, Purchaser shall
      order from Chicago Title Insurance Company, Attn: Maggie Watson (“Title
      Company”) a commitment (the “Title Commitment”) for an Owner’s Policy of
      Title Insurance (Form T-1), and a copy of all recorded documents referred
      to in the Title Commitment as exceptions to title to the Property (the
      “Title Documents”).
		 
		(b)		Purchaser acknowledges that prior
      to the Effective Date, Seller has delivered to Purchaser an ALTA survey of
      the Real Property and Improvements made by Psomas and Associates dated
      March 26, 1992 (the “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”) in accordance
      with the Minimum Standard Detail Requirements and Classifications for
      ALTA/ACSM Land Title Surveys published in 2005.
		 

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     3.2 Review of
Title 

     Purchaser shall have until 5:00 p.m.
Pacific Daylight 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 to remove or
satisfy. Subject to Purchaser’s approval, which may be granted in Purchaser’s
sole and absolute discretion, Seller may cause the Title Company to issue, at
Seller’s cost, 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 does not elect to remove, insure over
or satisfy such objections within such time or thereafter delivers 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 approved. 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 not caused by Purchaser (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 grant 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 (Form T-1) 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 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.
Pacific Daylight Time on December 1, 2006 (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 reasonably deems necessary,
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 discretion, advise Seller and Escrow Holder, in writing, of its election to
proceed or not to proceed with the purchase of the Property. If Purchaser, in
its sole discretion, 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 not to terminate this Agreement
pursuant to this Section 3.5. Upon any termination, in the absence of a default
by Purchaser, 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 Purchaser notifies Seller of its election to proceed
with the purchase, then this Agreement will not be 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
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 Monterey Park,
California, or the Escrow Holder, 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 one
      (1) Business Day after the Effective Date will deliver to Purchaser’s
      office in California, to the extent in Seller’s possession or control,
      copies of the following:
		 
		 		(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 (Seller has advised Purchaser that
      the Property is currently leased in its entirety to Kotura,
      Inc.);
		 
		 		(ii)		copies of the environmental,
      geology, and all other property condition reports in Seller’s possession,
      which are identified on Schedule 5, and any other environmental study or
      report of the Property prepared for Seller;
						  
				(iii) 		copies of the Service Contracts, including
      any property management agreement (Seller has previously indicated to
      Purchaser that there are no Service Contracts or property management
      agreement);
						  
		(iv) 		copies of all warranties relating to the
      Property or any portion thereof or any of Seller’s equipment or the
      building systems therein;

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				(v)	      	copies of licenses and permits
      relating to the Property and its operations;
				 
				(vi)		copies of the originally issued
      certificate of occupancy for the Property;
				 
				(vii)		copies of the current tax bill
      for the Property, and documentation concerning any property tax appeals
      during the past three years;
				 
				(viii)		the most recent survey of the
      Property (Seller has previously indicated that the Existing Survey is the
      only survey of which Seller is aware);
				 
				(ix)		operating statements regarding
      operation of the Property for the previous three (3) years and the year to
      date income expense reports relating to the operation of the Property for
      2006 to date (Seller has advised Purchaser that the Property is operated
      under its Lease by Kotura, Inc., and Seller can provide information only
      relative to taxes, insurance and association fees);
				 
				(x)		copies of all utility bills for
      the past (12) twelve months of operations paid by Seller (Seller has
      advised Purchaser that all utilities are paid by Kotura, Inc. under its
      Lease);
				 
				(xi)		copies of any documentation
      relating to litigation that is in process;
				 
				(xii)		all common area maintenance
      and/or expense pass through reconciliations for the past three (3) years,
      including the current estimates;
				 
				(xiii)		aging report; and
				 
		   		(xiv)		site plans for the
      Property.
	      		      	 
		(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, the following insurance:
      Worker’s Compensation Insurance as required by law and Employer’s
      Liability Insurance; Comprehensive General Liability or Commercial General
      Liability insurance (“CGL”), with limits of not less than One Million
      Dollars ($1,000,000). The CGL policy of insurance shall name Seller as an
      additional insured with respect to the liabilities for which Purchaser has
      indemnified Seller under Section 3.6(b) above. Further, the CGL policy of
      insurance shall state that such policy is primary and noncontributing with
      any insurance carried by Seller. Such policy shall contain a provision
      that the naming of the

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		 		additional insured shall not
      negate any right the additional insured would have as a claimant under the
      policy if not so named and shall contain severability of interest and
      cross-liability clauses. 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. The certificate shall expressly
      provide that no less than ten (10) days prior written notice shall be
      given Seller in the event of any material alteration to or cancellation of
      the coverages evidenced by said certificate. A renewal certificate for
      each of the policies required by this Section 3.6(c) shall be delivered to
      Seller not less than ten (10) days prior to the expiration date of the
      term of such policy. Any policies required by the provisions of this
      Section may be made a part of a blanket policy of insurance with a “per
      project, per location endorsement” so long as such blanket policy contains
      all of the provisions required herein and does not reduce the coverage,
      impair the rights of the other party to this Agreement or negate the
      requirements of this Agreement.
		 
	      	(d)	      	In addition to the information to
      be furnished to Purchaser under Section 3.6(a) above, Seller shall make
      available to Purchaser for inspection and copying on site at the Property
      or at the business office of Seller or its agents or otherwise, or at
      Seller’s option deliver to Purchaser, such documents, materials and
      information concerning the Property as Seller may have in its possession
      or under its control (including without limitation (i) lease files; (ii)
      copies of financial statements, if any, for the Property for the last
      three (3) years and copies of such historical information in the
      possession of Seller or Seller’s agents regarding operating expenses of
      the Property; (iii) guaranties, warranties, licenses, governmental permits
      (including certificates of occupancy); (iv) relevant, pertinent reports
      and agreements in the possession of Seller or Seller’s agents pertaining
      to the Property, if any (i.e., engineering reports, environmental reports,
      development records and as-built plans and specifications), excluding only
      (x) materials that Seller shall have obtained or developed in connection
      with the potential sale of the Property, including analyses of the value
      of the Property, and (y) materials that are subject to attorney-client
      privilege or work-product doctrine (collectively with the information
      described in Section 3.6(a) above, the “Due Diligence Documents”). 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.
		  
		  

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     3.7 Tenant Estoppel
Certificates 

     At least
five (5) Business Days prior to the Closing, Seller shall deliver to Purchaser
an estoppel certificate (the “Estoppel Certificate”) duly executed by Kotura,
Inc. The Estoppel Certificate shall be in the form required under the terms of
Kotura, Inc.’s Lease, as set forth on Exhibit
I attached hereto. Seller shall not be deemed
to be in default of its obligations under this Agreement as a result of Kotura’s
failure to deliver the Estoppel Certificate.

4.
CLOSING 

     4.1 Closing 

     The purchase and sale of the
Property (“Closing”) shall occur on December 14, 2006 (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 five (5) 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, Attn: Maggie
Watson, 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. 

     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 grant 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;

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		 		(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 one (1) year 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;
		 
		 		(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)		keys to all locks on the Real
      Property and Improvements in Seller’s or Seller’s building manager’s
      possession; and
		 
		 		(xiv)		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);
		 

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		      	(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.
			 

	      	(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 under the Leases and any and all
      prorated rents and other items;
		 

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	      	(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 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 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 parties shall endeavor to
      cause the utility and service providers of Seller to open new accounts
      with Purchaser effective as of the Closing Date. If that cannot be
      accomplished, 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 not a direct or indirect 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. The balance remaining from 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 promptly paid by Purchaser to
      Seller

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		 	      	after Closing. Purchaser shall be
      entitled to deduct 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.
      Purchaser agrees to include in its normal invoicing of tenants an
      appropriate statement seeking collection of any Delinquent Rents. Seller
      may make reasonable efforts to collect Delinquent Rents from and after the
      Closing Date; provided, however, that Seller shall not be entitled to
      pursue any action for eviction of any tenant from the Property. The
      provisions of this Section shall survive Closing and shall not be merged
      therein.
		 
	      	(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 transfer 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; any recording fees with respect to the recordation of the
      documents relating to any Purchaser financing; 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 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 transfer 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.
		 

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     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.

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 would materially adversely affect the Property or Seller’s right to convey the Property to Purchaser as contemplated in this Agreement.

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	     	(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 (Seller has advised Purchaser that Kotura, Inc. is the only tenant in the building and that there are no Service Contracts). 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 as set forth on Schedule 4, 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.
		  
		(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.
		 
		(g)		Condemnation. Seller has no knowledge of and has received no written notice of any pending or threatened condemnation proceedings relating to the Property.
		 
		(h)		Commissions. Except as set forth on Schedule 4, no leasing commissions are due and payable with respect to the existing terms of the Leases; 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, 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.
		 
		(k)		Kotura, Inc. Right of First Offer. Kotura, Inc. has waived its right of first offer under Section 33 of the Lease and Seller may sell the Property as provided for herein without any further duty or obligation to Kotura, Inc. with respect thereto.
		 
		(l)	     	Knowledge of Property. Robert F. Gossett, Jr. is the individual with primary knowledge of, and responsibility for, the Property.

     Except with respect to the warranties set forth in Section 6.1, 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). 

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     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 one (1) year after closing 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.

     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. 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 shall not exceed $200,000, plus any legal fees and costs awarded under Section 11.2.

     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)		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 other than as expressly set forth in this Agreement, without relying upon representations by Seller, its employees, agents or consultants.

16

	     	(e)	    	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.
		 
		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, 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, 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), 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 SECTION 6.1, PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT IT IS RELYING SOLELY UPON ITS

17

	      	 		OWN INSPECTION OF THE PROPERTY AND NOT UPON ANY REPRESENTATIONS MADE TO IT BY SELLER, ITS OFFICERS, DIRECTORS, CONTRACTORS, AGENTS OR EMPLOYEES. 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. Except to the extend arising out of a breach of any representations or warranties expressly set forth in this Agreement and then subject to the specific limitations on liability therefore provided in Section 6.1 of this Agreement, 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). 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.

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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;
		 
		(d)		Title Company shall be irrevocably committed to issue the Title Policy subject to the Permitted Exceptions: and
		 
		(e)		The Property shall be in substantially the same condition at Closing as existing at the end of the Inspection Period, reasonable wear and tear and damage caused by Purchaser excepted.

     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);

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	      	(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 upon such termination Seller shall reimburse Purchaser an amount not to exceed $25,000 for costs and expenses actually incurred by Purchaser in connection with its due diligence and closing related costs (including reasonable attorney’s fees and expenses), which sum shall be paid to Purchaser within ten (10) days of presentment by Purchaser of invoices, receipts and such other documentation reasonably acceptable to Seller substantiating Purchaser’s claim for reimbursement hereunder, 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);
		 
		 		(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 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)	     	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. 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.

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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 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 (a) the repair or replacement of which 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 (b) that, 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
Thousand Dollars ($200,000) as to any casualty against which insurance is not maintained (a “Major Uninsured Casualty”), or (c) that would permit Kotura, Inc. to terminate its current Lease of its premises at the Property (a “Lease Termination 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 or a Lease Termination 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 pursuant to the terms hereof 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.

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	     	(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 fifteen (15) 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 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 (a) Trenton Bonner/Grubb & Ellis/BRE Commercial (“Seller’s Agent”) and (b) Steve Sprenger/Grubb & Ellis Company (Buyer’s Agent”). Seller will pay or cause to be paid to Seller’s Agent and Buyer’s Agent, at Closing, their respective commission payable pursuant to their applicable commission agreements. No commissions will be due if the Closing does not occur. 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.

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     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. 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) or of any new Lease 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 five (5) 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 five (5) Business Day period that Purchaser does not approve the amendment, renewal or expansion of the existing Lease or the new Lease (a “New Lease Agreement”), and such notice is given after the expiration of the Inspection Period, then Seller shall not enter into the proposed New Lease Agreement. If such notice is given prior to the Out Date, Seller may elect by written notice to the Purchaser prior to the Out Date, (i) not to enter into the proposed New Lease Agreement or (ii) to proceed with such New Lease Agreement; provided, however, that in the event that Seller
elects to proceed with such New Lease Agreement and the parties shall thereafter proceed to Closing, all leasing commissions, tenant improvement costs, inducement payments, attorneys’ fees or other fees payable incident to the initial tenancy under such New Lease Agreement shall be paid by Seller. In the event Purchaser fails to notify Seller in writing of its approval or disapproval of any New Lease Agreement within the five (5) Business Day period set forth above, Purchaser shall be deemed to have approved such 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 or deemed 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 or deemed 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.

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     9.4 Maintenance of the Property; Property Personnel

     Between Seller’s execution of this Agreement and the Closing, Seller shall continue to operate the Property in a manner consistent with the historical operations of the Property, and shall maintain the Property in its existing condition and repair, reasonable wear and tear excepted.

     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. 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 (Seller has advised Purchaser that there are no Service Contracts).

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.

                    With a copy to:

                    Arnold & Porter LLP
                    399 Park Avenue
                    New York, New York 10022
                    Attention: Michael J. Canning, Esq.

                    If to Purchaser:

                    Heartland Investments, Inc.
                    433 N. Camden Drive - Suite 820
                    Beverly Hills, CA 90210
                    Attention: Kevin Mansfield

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                    With a copy to:

                    Liner Yankelevitz Sunshine Regenstreif, LLP
                    1100 Glendon Avenue, 14th Floor
                    Los Angeles, CA 90024
                    Attention: Mitchell C. Regenstreif

                    If to Escrow Holder:

                    Chicago Title Insurance Company
                    24300 Tower Center Drive-Suite No. 320
                    Valencia, CA 91355
                    Attention: Maggie Watson

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.

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     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 some or all of Purchaser’s rights in and to this Agreement to one or more entities affiliated with Purchaser (a “Permitted Assignee”). Seller’s written consent shall be required for any other assignment of Purchaser’s rights to a 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 California.

     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 commercially reasonable 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.

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	     	(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, as a result of Purchaser’s failure to use commercially reasonable efforts to prevent such disclosure, 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.

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     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/ AO’C SELLER’S INITIALS: /s/ RFG

     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.

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12. LIQUIDATED DAMAGES

     IF ESCROW DOES NOT CLOSE DUE TO BREACH OR DEFAULT BY PURCHASER IN ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT AFTER THE INSPECTION PERIOD, THEN SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND RETAIN THE AMOUNT OF THE DEPOSIT DESCRIBED IN SECTION 2.1 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 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/ AO’C 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.

 

Signatures on following pages

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     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	: 
	 
	HEARTLAND
      INVESTMENTS, INC., a California
corporation

	By:	     	/s/ Anthony O’Carroll	 
	Name:		Anthony O’Carroll
	Title:		Vice
      President

	ESCROW HOLDER:	 
	 	
	CHICAGO TITLE INSURANCE
COMPANY

	By:     	                                                         	 
	Its:	 	 

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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 Limited 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 		Environmental and Property Condition ReportsComprehensive Healthcare Solutions Warrant 11/28/05 A-02

    THIS
      WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
      AND
      THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. THAT SUCH REGISTRATION
      IS NOT REQUIRED.

    

    Right
      to
      Purchase 133,333 shares of Common

    Stock
      of
      Comprehensive Healthcare Solutions, Inc.

    (subject
      to adjustment as provided herein)

    

    COMMON
      STOCK PURCHASE WARRANT A

    

    
      	
              No.
                A-02

            	
              Issue
                Date: November
                28, 2005

            

    

    

    COMPREHENSIVE
      HEALTHCARE SOLUTIONS, INC., a corporation organized under the laws of the State
      of Delaware (the "Company"), hereby certifies that, for value received Nite
      Capital, LP, Fax: (847) 968-2648 or its assigns (the "Holder"), is entitled,
      subject to the terms set forth below, to purchase from the Company at any time
      after the Issue Date until 5:00 p.m., E.S.T on the date three (3) years from
      the
      date hereof (the "Expiration Date"), up to 133,333 fully paid and nonassessable
      shares of the common stock of the Company (the "Common Stock"), $.10 par value
      per share at a per share purchase price of $.40. The aforedescribed purchase
      price per share, as adjusted from time to time as herein provided, is referred
      to herein as the "Purchase Price." The number and character of such shares
      of
      Common Stock and the Purchase Price are subject to adjustment as provided
      herein. The Company may reduce the Purchase Price without the consent of the
      Holder. Capitalized terms used and not otherwise defined herein shall have
      the
      meanings set forth in that certain Subscription Agreement (the "Subscription
      Agreement"), dated November 28, 2005, entered into by the Company and Holders
      of
      the Warrants.

    

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings:

    

      (a)
      The
      term "Company" shall include Comprehensive Healthcare Solutions, Inc. and any
      corporation which shall succeed or assume the obligations of Comprehensive
      Healthcare Solutions, Inc. hereunder.

    

      (b)
      The
      term "Common Stock" includes (a) the Company's Common Stock, $.10 par value
      per
      share, as authorized on the date of the Subscription Agreement, and (b) any
      other securities into which or for which any of the securities described in
      (a)
      may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     (c)
      The
      term "Other Securities" refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      holder of the Warrant at any time shall be entitled to receive, or shall have
      received, on the exercise of the Warrant, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 4 or otherwise.

    

      1.
      Exercise of Warrant.

    

    1.1.
      Number of Shares Issuable upon Exercise. From and after the Issue Date through
      and including the Expiration Date, the Holder hereof shall be entitled to
      receive, upon exercise of this Warrant in whole in accordance with the terms
      of
      subsection 1.2 or upon exercise of this Warrant in part in accordance with
      subsection 1.3, shares of Common Stock of the Company, subject to adjustment
      pursuant to Section 4.

    

    1.2.
      Full
      Exercise. This Warrant may be exercised in full by the Holder hereof by delivery
      of an original or facsimile copy of the form of subscription attached as Exhibit
      A hereto (the "Subscription Form") duly executed by such Holder and surrender
      of
      the original Warrant within five (5) days of exercise, to the Company at its
      principal office or at the office of its Warrant Agent (as provided
      hereinafter), accompanied by payment, in cash, wire transfer or by certified
      or
      official bank check payable to the order of the Company, in the amount obtained
      by multiplying the number of shares of Common Stock for which this Warrant
      is
      then exercisable by the Purchase Price then in effect.

    

    1.3.
      Partial Exercise. This Warrant may be exercised in part (but not for a
      fractional share) by surrender of this Warrant in the manner and at the place
      provided in subsection 1.2 except that the amount payable by the Holder on
      such
      partial exercise shall be the amount obtained by multiplying (a) the number
      of
      whole shares of Common Stock designated by the Holder in the Subscription Form
      by (b) the Purchase Price then in effect. On any such partial exercise, the
      Company, at its expense, will forthwith issue and deliver to or upon the order
      of the Holder hereof a new Warrant of like tenor, in the name of the Holder
      hereof or as such Holder (upon payment by such Holder of any applicable transfer
      taxes) may request, the whole number of shares of Common Stock for which such
      Warrant may still be exercised.

    

    1.4.
      Fair
      Market Value. Fair Market Value of a share of Common Stock as of a particular
      date (the "Determination Date") shall mean:

    

    (a)
      If
      the Company's Common Stock is traded on an exchange or is quoted on the National
      Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ"), National
      Market System, the NASDAQ SmallCap Market or the American Stock Exchange, LLC,
      then the closing or last sale price, respectively, reported for the last
      business day immediately preceding the Determination Date;

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)
      If
      the Company's Common Stock is not traded on an exchange or on the NASDAQ
      National Market System, the NASDAQ SmallCap Market or the American Stock
      Exchange, Inc., but is traded in the over-the-counter market, then the average
      of the closing bid and ask prices reported for the last business day immediately
      preceding the Determination Date;

    

    (c)
      Except as provided in clause (d) below, if the Company's Common Stock is not
      publicly traded, then as the Holder and the Company agree, or in the absence
      of
      such an agreement, by arbitration in accordance with the rules then standing
      of
      the American Arbitration Association, before a single arbitrator to be chosen
      from a panel of persons qualified by education and training to pass on the
      matter to be decided; or

    

    (d)
      If
      the Determination Date is the date of a liquidation, dissolution or winding
      up,
      or any event deemed to be a liquidation, dissolution or winding up pursuant
      to
      the Company's charter, then all amounts to be payable per share to holders
      of
      the Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then issuable
      upon exercise of all of the Warrants are outstanding at the Determination
      Date.

    

    1.5.
      Company Acknowledgment. The Company will, at the time of the exercise of the
      Warrant, upon the request of the Holder hereof acknowledge in writing its
      continuing obligation to afford to such Holder any rights to which such Holder
      shall continue to be entitled after such exercise in accordance with the
      provisions of this Warrant. If the Holder shall fail to make any such request,
      such failure shall not affect the continuing obligation of the Company to afford
      to such Holder any such rights.

    

    1.6.
      Trustee for Warrant Holders. In the event that a bank or trust company shall
      have been appointed as trustee for the Holder of the Warrants pursuant to
      Subsection 3.2, such bank or trust company shall have all the powers and duties
      of a warrant agent (as hereinafter described) and shall accept, in its own
      name
      for the account of the Company or such successor person as may be entitled
      thereto, all amounts otherwise payable to the Company or such successor, as
      the
      case may be, on exercise of this Warrant pursuant to this Section
      1.

    

    1.7
      Delivery of Stock Certificates, etc. on Exercise. The Company agrees that the
      shares of Common Stock purchased upon exercise of this Warrant shall be deemed
      to be issued to the Holder hereof as the record owner of such shares as of
      the
      close of business on the date on which this Warrant shall have been surrendered
      and payment made for such shares as aforesaid. As soon as practicable after
      the
      exercise of this Warrant in full or in part, and in any event within five (5)
      business days thereafter, the Company at its expense (including the payment
      by
      it of any applicable issue taxes) will cause to be issued in the name of and
      delivered to the Holder hereof, or as such Holder 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

       

      (upon
        payment by such Holder of any applicable transfer taxes) may direct in
        compliance with applicable securities laws, a certificate or certificates
        for
        the number of duly and validly issued, fully paid and nonassessable shares
        of
        Common Stock (or Other Securities) to which such Holder shall be entitled
        on
        such exercise, plus, in lieu of any fractional share to which such Holder
        would
        otherwise be entitled, cash equal to such fraction multiplied by the then
        Fair
        Market Value of one full share of Common Stock, together with any other stock
        or
        other securities and property (including cash, where applicable) to which
        such
        Holder is entitled upon such exercise pursuant to Section 1 or
        otherwise.

    

    

    2.
      Cashless Exercise.

    

    (a)
      If a
      Registration Statement (as defined in the Subscription Agreement) ("Registration
      Statement") is effective and the Holder may sell its shares of Common Stock
      upon
      exercise hereof pursuant to the Registration Statement, this Warrant may be
      exercisable in whole or in part for cash only as set forth in Section 1 above.
      If no such Registration Statement is available during the time that such
      Registration Statement is required to be effective pursuant to the terms of
      the
      Subscription Agreement, then payment upon exercise may be made at the option
      of
      the Holder either in (i) cash, wire transfer or by certified or official bank
      check payable to the order of the Company equal to the applicable aggregate
      Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of
      the
      Warrants in accordance with Section (b) below or (iii) by a combination of
      any
      of the foregoing methods, for the number of Common Stock specified in such
      form
      (as such exercise number shall be adjusted to reflect any adjustment in the
      total number of shares of Common Stock issuable to the holder per the terms
      of
      this Warrant) and the holder shall thereupon be entitled to receive the number
      of duly authorized, validly issued, fully-paid and non-assessable shares of
      Common Stock (or Other Securities) determined as provided herein.

    

    (b)
      If
      the Fair Market Value of one share of Common Stock is greater than the Purchase
      Price (at the date of calculation as set forth below), in lieu of exercising
      this Warrant for cash, the holder may elect to receive shares equal to the
      value
      (as determined below) of this Warrant (or the portion thereof being cancelled)
      by surrender of this Warrant at the principal office of the Company together
      with the properly endorsed Subscription Form in which event the Company shall
      issue to the holder a number of shares of Common Stock computed using the
      following formula:

     

    
      	 	
              X
                =

            	
              Y
                (A-B)

                  
                A

            
	
              Where

            	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                holder

            
	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable under the Warrant or,
                if only
                a portion of the Warrant is being exercised, the portion of the Warrant
                being exercised (at the date of such calculation)

            
	 	
              A
                =
                

            	
              the
                Fair Market Value of one share of the Company's Common Stock (at
                the date
                of such calculation)

            
	 	
              B
                =

            	
              Purchase
                Price (as adjusted to the date of such
                calculation)

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    (c)
      The
      Holder may employ the cashless exercise feature described in Section (b) above
      only during the pendency of a Non-Registration Event as described in Section
      11
      of the Subscription Agreement.

    

    For
      purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
      and acknowledged that the Warrant Shares issued in a cashless exercise
      transaction shall be deemed to have been acquired by the Holder, and the holding
      period for the Warrant Shares shall be deemed to have commenced, on the date
      this Warrant was originally issued pursuant to the Subscription
      Agreement.

    

    3.
      Adjustment for Reorganization, Consolidation, Merger, etc.

    

    3.1.
      Reorganization, Consolidation, Merger, etc. In case at any time or from time
      to
      time, the Company shall (a) effect a reorganization, (b) consolidate with or
      merge into any other person or (c) transfer all or substantially all of its
      properties or assets to any other person under any plan or arrangement
      contemplating the dissolution of the Company, then, in each such case, as a
      condition to the consummation of such a transaction, proper and adequate
      provision shall be made by the Company whereby the Holder of this Warrant,
      on
      the exercise hereof as provided in Section 1, at any time after the consummation
      of such reorganization, consolidation or merger or the effective date of such
      dissolution, as the case may be, shall receive, in lieu of the Common Stock
      (or
      Other Securities) issuable on such exercise prior to such consummation or such
      effective date, the stock and other securities and property (including cash)
      to
      which such Holder would have been entitled upon such consummation or in
      connection with such dissolution, as the case may be, if such Holder had so
      exercised this Warrant, immediately prior thereto, all subject to further
      adjustment thereafter as provided in Section 4.

    

    3.2.
      Dissolution. In the event of any dissolution of the Company following the
      transfer of all or substantially all of its properties or assets, the Company,
      prior to such dissolution, shall at its expense deliver or cause to be delivered
      the stock and other securities and property (including cash, where applicable)
      receivable by the Holder of the Warrants after the effective date of such
      dissolution pursuant to this Section 3 to a bank or trust company (a "Trustee")
      having its principal office in New York, NY, as trustee for the Holder of the
      Warrants.

    

    3.3.
      Continuation of Terms. Upon any reorganization, consolidation, merger or
      transfer (and any dissolution following any transfer) referred to in this
      Section 3, this Warrant shall continue in full force and effect and the terms
      hereof shall be applicable to the Other Securities and property receivable
      on
      the exercise of this Warrant after the consummation of such reorganization,
      consolidation or merger or the effective date of dissolution following any
      such
      transfer, as the case may be, and shall be binding upon the issuer of any Other
      Securities, including, in the case of any such transfer, the person acquiring
      all or substantially all of the properties or assets of the Company, whether
      or
      not such person shall have expressly assumed the terms of this Warrant as
      provided in Section 4. In the event this Warrant does not continue in full
      force
      and effect after the consummation of the transaction described in this Section
      3, then only in such event will the Company's securities and property (including
      cash, where applicable) receivable by the Holder of the Warrants be delivered
      to
      the Trustee as contemplated by Section 3.2.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    3.4
      Share
      Issuance. Until the Expiration Date, if the Company shall issue any Common
      Stock
      except for the Excepted Issuances (as defined in the Subscription Agreement),
      prior to the complete exercise of this Warrant for a consideration less than
      the
      Purchase Price that would be in effect at the time of such issue, then, and
      thereafter successively upon each such issue, the Purchase Price shall
      automatically and with no action required by the Company or Holder, be reduced
      to such other lower issue price. For purposes of this adjustment, the issuance
      of any security or debt instrument of the Company carrying the right to convert
      such security or debt instrument into Common Stock or of any warrant, right
      or
      option to purchase Common Stock shall result in an adjustment to the Purchase
      Price upon the issuance of the above-described security, debt instrument,
      warrant, right, or option and again at any time upon any subsequent issuances
      of
      shares of Common Stock upon exercise of such conversion or purchase rights
      if
      such issuance is at a price lower than the Purchase Price in effect upon such
      issuance. The reduction of the Purchase Price described in this Section 3.4
      is
      in addition to the other rights of the Holder described in the Subscription
      Agreement.

    

    4.
      Extraordinary Events Regarding Common Stock. In the event that the Company
      shall
      (a) issue additional shares of the Common Stock as a dividend or other
      distribution on outstanding Common Stock, (b) subdivide its outstanding shares
      of Common Stock, or (c) combine its outstanding shares of the Common Stock
      into
      a smaller number of shares of the Common Stock, then, in each such event, the
      Purchase Price shall, simultaneously with the happening of such event, be
      adjusted by multiplying the then Purchase Price by a fraction, the numerator
      of
      which shall be the number of shares of Common Stock outstanding immediately
      prior to such event and the denominator of which shall be the number of shares
      of Common Stock outstanding immediately after such event, and the product so
      obtained shall thereafter be the Purchase Price then in effect. The Purchase
      Price, as so adjusted, shall be readjusted in the same manner upon the happening
      of any successive event or events described herein in this Section 4. The number
      of shares of Common Stock that the Holder of this Warrant shall thereafter,
      on
      the exercise hereof as provided in Section 1, be entitled to receive shall
      be
      adjusted to a number determined by multiplying the number of shares of Common
      Stock that would otherwise (but for the provisions of this Section 4) be
      issuable on such exercise by a fraction of which (a) the numerator is the
      Purchase Price that would otherwise (but for the provisions of this Section
      4)
      be in effect, and (b) the denominator is the Purchase Price in effect on the
      date of such exercise.

    

    5.
      Certificate as to Adjustments. In each case of any adjustment or readjustment
      in
      the shares of Common Stock (or Other Securities) issuable on the exercise of
      the
      Warrants, the Company at its expense will promptly cause its Chief Financial
      Officer or other appropriate designee to compute such adjustment or readjustment
      in accordance with the terms of the Warrant and prepare a certificate setting
      forth such adjustment or readjustment and showing in detail the facts upon
      which
      such adjustment or readjustment is based, including a statement of (a) the
      consideration received or receivable by the Company for any additional shares
      of
      Common Stock (or Other Securities) issued or 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

       

      sold
        or
        deemed to have been issued or sold, (b) the number of shares of Common Stock
        (or
        Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase
        Price and the number of shares of Common Stock to be received upon exercise
        of
        this Warrant, in effect immediately prior to such adjustment or readjustment
        and
        as adjusted or readjusted as provided in this Warrant. The Company will
        forthwith mail a copy of each such certificate to the Holder of the Warrant
        and
        any Warrant Agent of the Company (appointed pursuant to Section 11
        hereof).

    

    

    6.
      Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
      Statements. The Company will at all times reserve and keep available, solely
      for
      issuance and delivery on the exercise of the Warrants, all shares of Common
      Stock (or Other Securities) from time to time issuable on the exercise of the
      Warrant. This Warrant entitles the Holder hereof to receive copies of all
      financial and other information distributed or required to be distributed to
      the
      holders of the Company's Common Stock.

    

    7.
      Assignment; Exchange of Warrant. Subject to compliance with applicable
      securities laws, this Warrant, and the rights evidenced hereby, may be
      transferred by any registered holder hereof (a "Transferor"). On the surrender
      for exchange of this Warrant, with the Transferor's endorsement in the form
      of
      Exhibit B attached hereto (the "Transferor Endorsement Form") and together
      with
      an opinion of counsel reasonably satisfactory to the Company that the transfer
      of this Warrant will be in compliance with applicable securities laws, the
      Company at its expense, but with payment by the Transferor of any applicable
      transfer taxes, will issue and deliver to or on the order of the Transferor
      thereof a new Warrant or Warrants of like tenor, in the name of the Transferor
      and/or the transferee(s) specified in such Transferor Endorsement Form (each
      a
      "Transferee"), calling in the aggregate on the face or faces thereof for the
      number of shares of Common Stock called for on the face or faces of the Warrant
      so surrendered by the Transferor. No such transfers shall result in a public
      distribution of the Warrant.

    

    8.
      Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
      Company of the loss, theft, destruction or mutilation of this Warrant and,
      in
      the case of any such loss, theft or destruction of this Warrant, on delivery
      of
      an indemnity agreement or security reasonably satisfactory in form and amount
      to
      the Company or, in the case of any such mutilation, on surrender and
      cancellation of this Warrant, the Company at its expense, will execute and
      deliver, in lieu thereof, a new Warrant of like tenor.

    

    9.
      Registration Rights. The Holder of this Warrant has been granted certain
      registration rights by the Company. These registration rights are set forth
      in
      the Subscription Agreement. The terms of the Subscription Agreement are
      incorporated herein by this reference. Upon the occurrence of a Non-Registration
      Event, or in the event the Company is unable to issue Common Stock upon exercise
      of this Warrant that has been registered in a Registration Statement described
      in Section 11 of the Subscription Agreement, within the time periods described
      in the Subscription Agreement, which Registration Statement must be effective
      for the periods set forth in the Subscription Agreement, then upon written
      demand made by the Holder, the Company will pay to the Holder of this Warrant,
      in lieu of delivering Common Stock, a sum equal to the closing price of the
      Company's Common Stock on the principal market or exchange upon which the Common
      Stock is listed for trading on the trading date immediately preceding the date
      notice is given by the Holder, less the Purchase Price, for each share of Common
      Stock designated in such notice from the Holder.

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.
      Maximum Exercise.

    

    (a)
      Notwithstanding anything to the contrary contained herein, the number of shares
      of Common Stock that may be acquired by the Subscriber upon exercise of this
      Warrant (or otherwise in respect hereof) shall be limited to the extent
      necessary to insure that, following such exercise (or other issuance), the
      total
      number of shares of Common Stock then beneficially owned by such Subscriber
      and
      its affiliates and any other persons whose beneficial ownership of Common Stock
      would be aggregated with the Subscriber's for purposes of Section 13(d) of
      the
      1934 Act, does not exceed 4.999% of the total number of issued and outstanding
      shares of Common Stock (including for such purpose the shares of Common Stock
      issuable upon such exercise). For such purposes, beneficial ownership shall
      be
      determined in accordance with Section 13(d) of the 1934 Act and the rules and
      regulations promulgated thereunder. By written notice to the Company, a
      Subscriber may waive the provisions of this Section 10(a) as to itself but
      any
      such waiver will not be effective until the 61st day after delivery thereof
      and
      such waiver shall have no effect on any other Subscriber.

    

    (b)
      Notwithstanding anything to the contrary contained herein, the number of shares
      of Common Stock that may be acquired by the Subscriber upon exercise of this
      Warrant (or otherwise in respect hereof) shall be limited to the extent
      necessary to insure that, following such exercise (or other issuance), the
      total
      number of shares of Common Stock then beneficially owned by such Subscriber
      and
      its affiliates and any other persons whose beneficial ownership of Common Stock
      would be aggregated with the Subscriber's for purposes of Section 13(d) of
      the
      1934 Act, does not exceed 9.999% of the total number of issued and outstanding
      shares of Common Stock (including for such purpose the shares of Common Stock
      issuable upon such exercise). For such purposes, beneficial ownership shall
      be
      determined in accordance with Section 13(d) of the 1934 Act and the rules and
      regulations promulgated thereunder. This provision may not be
      waived.

    

    11.
      Warrant Agent. The Company may, by written notice to the Holder of the Warrant,
      appoint an agent (a "Warrant Agent") for the purpose of issuing Common Stock
      (or
      Other Securities) on the exercise of this Warrant pursuant to Section 1,
      exchanging this Warrant pursuant to Section 7, and replacing this Warrant
      pursuant to Section 8, or any of the foregoing, and thereafter any such
      issuance, exchange or replacement, as the case may be, shall be made at such
      office by such Warrant Agent.

    

    12.
      Transfer on the Company's Books. Until this Warrant is transferred on the books
      of the Company, the Company may treat the registered holder hereof as the
      absolute owner hereof for all purposes, notwithstanding any notice to the
      contrary.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    13.
      Notices. All notices, demands, requests, consents, approvals, and other
      communications required or permitted hereunder shall be in writing and, unless
      otherwise specified herein, shall be (i) personally served, (ii) deposited
      in
      the mail, registered or certified, return receipt requested, postage prepaid,
      (iii) delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company, to: Comprehensive Healthcare
      Solutions, Inc., 45 Ludlow Street, Suite 602, Yonkers, NY 10705, Attn: John
      Treglia, CEO, telecopier number: (914) 375-2994, with a copy by telecopier
      only
      to: Anslow & Jaclin, LLP, 195 Route 9 South, Suite 204, Manalapan, NJ 07726,
      telecopier number: (732) 577-1188, and (ii) if to the Holder, to the address
      and
      telecopier number listed on the first paragraph of this Warrant, with a copy
      by
      telecopier only to: Kogan & Associates LLC, attn: Simon Kogan, 39 Broadway,
      Suite 2250?New York, NY 10006 telecopier number: 212-482-8104. The Company
      shall
      notify the placement agent upon exercise of any warrants. 

    

    14.
      Miscellaneous. This Warrant and any term hereof may be changed, waived,
      discharged or terminated only by an instrument in writing signed by the party
      against which enforcement of such change, waiver, discharge or termination
      is
      sought. This Warrant shall be construed and enforced in accordance with and
      governed by the laws of New York. Any dispute relating to this Warrant shall
      be
      adjudicated in New York County in the State of New York. The headings in this
      Warrant are for purposes of reference only, and shall not limit or otherwise
      affect any of the terms hereof. The invalidity or unenforceability of any
      provision hereof shall in no way affect the validity or enforceability of any
      other provision.

    

     

    
      
         

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above.

    

    
      	
              Witness:

            	
              COMPREHENSIVE
                HEALTHCARE SOLUTIONS, INC.

            
	 	
              By:
                _________________________________

            
	 	
              Name:
                _______________________________

            
	
              ______________________________

            	
              Title:
                ________________________________

            

    

    

     

    
      
         

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

    

    TO:
      COMPREHENSIVE HEALTHCARE SOLUTIONS, INC.

    

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.____), hereby irrevocably elects to purchase (check applicable
      box):

    

    ___
      ________ shares of the Common Stock covered by such Warrant; or

    

    ___
      the
      maximum number of shares of Common Stock covered by such Warrant pursuant to
      the
      cashless exercise procedure set forth in Section 2.

    

    The
      undersigned herewith makes payment of the full purchase price for such shares
      at
      the price per share provided for in such Warrant, which is $___________________.
      Such payment takes the form of (check applicable box or boxes):

    

    ___
      $__________ in lawful money of the United States; and/or

    

    ___
      the
      cancellation of such portion of the attached Warrant as is exercisable for
      a
      total of _______ shares of Common Stock (using a Fair Market Value of $_______
      per share for purposes of this calculation); and/or

    

    ___
      the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2, to exercise this Warrant
      with respect to the maximum number of shares of Common Stock purchasable
      pursuant to the cashless exercise procedure set forth in Section 2.

    

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to _____________________________________________________
      whose
      address is

    ____________________________________________________________________________________________________________________________________________________________

    

    Number
      of
      Shares of Common Stock Beneficially Owned on the date of exercise:

    Less
      than
      five percent (5%) of the outstanding Common Stock of Comprehensive Healthcare
      Solutions, Inc.

    

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the "Securities Act"), or pursuant to an exemption from registration
      under the Securities Act.

    

    
      	
               

               

              Dated:___________________
                

            	
               

               

              _______________________________________

              (Signature
                must conform to name of

              holder
                as specified on the face of the

              Warrant)

            
	 	 
	 	
              _______________________________________

              _______________________________________

              _______________________________________

              (Address)

            

    

     

    
      
         

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

    

    

    FORM
      OF
      TRANSFEROR ENDORSEMENT

    (To
      be
      signed only on transfer of Warrant)

    

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading "Transferees" the right represented
      by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. to which the within Warrant
      relates specified under the headings "Percentage Transferred" and "Number
      Transferred," respectively, opposite the name(s) of such person(s) and appoints
      each such person Attorney to transfer its respective right on the books of
      COMPREHENSIVE HEALTHCARE SOLUTIONS, INC. with full power of substitution in
      the
      premises.

    

    
      	
              Transferees

            	
              Percentage
                Transferred

            	
              Number
                Transferred

            
	 	 	 
	
               

               

              Dated:
                _________________________________ 

            	
               

               

              _____________________________________________

              (Signature
                must conform to name of holder as specified on the face of the
                warrant)

            
	
               

               

              Signed
                in the presence of: 

               

              _______________________________________

              (Name)

            	
               

               

               

               

              _____________________________________________

              _____________________________________________

              (Address)

            
	
               

              Accepted
                and Agreed

               

              _______________________________________

              (Transferee)

            	
               

               

               

              _____________________________________________

              _____________________________________________

              (Address)

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