Document:

Exhibit
10.13

 

 

CONTRACT OF SALE

 

BETWEEN

 

LSF PRESIDIO INVESTMENT
I, LLC

 

and

 

AMERIVEST CAMELBACK INC.

 

 

2710-2850 E. Camelback
Road

Phoenix, Arizona

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I PURCHASE AND SALE

  	
   

  
	
   

  	
   

  
	
   

  	
  1.1

  	
  Property.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE PRICE

  	
   

  
	
   

  	
   

  
	
   

  	
  2.1

  	
  Purchase Price.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Method of Payment.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Failure to Make Deposit.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Independent Consideration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
   

  	
  3.1

  	
  Deliveries.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Inspections.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Inspection Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Disclaimer of Warranties.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Release of Claims

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  Contracts to be
  Assumed by Purchaser.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.7

  	
  Estoppels

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.8

  	
  Subordination,
  Non-disturbance and Attornment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV SURVEY AND TITLE

  	
   

  
	
   

  	
   

  
	
   

  	
  4.1

  	
  Survey

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Title Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.3

  	
  Title Policy.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.4

  	
  Title.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.5

  	
  Bill of Sale.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V SELLER’S COVENANTS

  	
   

  
	
   

  	
   

  
	
   

  	
  5.1

  	
  Seller
  hereby covenants and agrees with Purchaser as follows:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI CLOSING

  	
   

  
	
   

  	
   

  
	
   

  	
  6.1

  	
  Closing Date.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.3

  	
  Closing Prorations and
  Costs.

  	
   

  

 

i

 

	
   

  	
  6.4

  	
  Real Estate
  Taxes and Special Assessments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.5

  	
  Closing
  Estimates and Final Adjustments.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII CASUALTY

  	
   

  
	
   

  	
   

  
	
   

  	
  7.1

  	
  Casualty.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.2

  	
  Condemnation.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.3

  	
  Waiver.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII REAL ESTATE COMMISSIONS

  	
   

  
	
   

  	
   

  
	
   

  	
  8.1

  	
  Indemnity.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX TERMINATION AND REMEDIES

  	
   

  
	
   

  	
   

  
	
   

  	
  9.1

  	
  Remedies.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Liquidated Damages.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  X ASSIGNMENT OF CONTRACT

  	
   

  
	
   

  	
   

  
	
   

  	
  10.1

  	
  Assignment.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
   

  	
  11.1

  	
  Entire Agreement.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.2

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.3

  	
  Time of Essence

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.4

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.5

  	
  Gender; Numbers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.6

  	
  Headings.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.7

  	
  Days

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.8

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.9

  	
  Holidays

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.10

  	
  Attorneys’ Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.11

  	
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.12

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.13

  	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.14

  	
  Acceptance of Offer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.15

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.16

  	
  Recording

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.17

  	
  Counterparts

  	
   

  

 

ii

 

	
   

  	
  11.18

  	
  No Third Party Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.19

  	
  No Joint Venture

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.20

  	
  Exhibits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.21

  	
  No Personal Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.22

  	
  Real Estate Reporting
  Person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.23

  	
  Exchange of Properties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
   

  	
  12.1

  	
  Purchaser’s
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.2

  	
  Seller’s
  Representations and Warranties

  	
   

  

 

iii

 

CONTRACT OF SALE

 

THIS CONTRACT OF
SALE (this “Contract”) is entered into as of the Effective Date (as
defined in Section 2.2(a) hereof) by and between LSF PRESIDIO
INVESTMENT I, LLC, a Delaware limited liability company (the “Seller”),
and AMERIVEST CAMELBACK INC., an Arizona corporation (the “Purchaser”),
upon the terms and conditions set forth herein.

 

ARTICLE I

 

PURCHASE AND SALE

 

1.1                                 Property.  For and in
consideration of the premises, undertakings and mutual covenants of the parties
set forth herein, Seller hereby agrees to sell, transfer, assign and/or convey
unto Purchaser and Purchaser hereby agrees to accept, buy and pay for the
following properties, rights, interests and assets (hereinafter referred to,
collectively, as the “Property” and/or the “Project”):

 

(a)                                  That
certain tract of real property located in the City of Phoenix, Maricopa County,
Arizona, described in Exhibit A attached hereto and by this
reference incorporated herein for all purposes (the “Land”), together
with all right, title and interest of Seller in and to (i) all improvements
located thereon (the “Improvements”); (ii) the rights, benefits,
privileges, easements, tenements, hereditaments, and appurtenances thereon or
in anywise appertaining to such real property, including that certain
Declaration of Conditions and Restrictions, recorded in Docket 12246, page
1155, records of Maricopa County, Arizona (the “Declaration”), subject,
in each case however, to the “Permitted Exceptions” (as hereinafter defined);
and (iii) all development rights, air rights, sewer rights and permits, water,
water rights, riparian rights, and water stock relating to the Land;

 

(b)                                 All
equipment, machinery, furniture, furnishings, supplies, and other tangible
personal property and fixtures of any kind owned by Seller and attached to or
located within the Improvements and used in connection with the ownership,
maintenance or operation of the Land or the Improvements, excluding any items
of personal property owned by tenants at Project (“Tenants”) as set
forth in the Rent Roll (hereafter defined) and further excluding any items of
personal property owned by third parties and leased to Seller (collectively,
the “Personalty”);

 

(c)                                  All
of Seller’s right, title, and interest in any leases, occupancy agreements, or
other agreements demising space in, providing for the use of and/or occupancy
of the Improvements or the Land (collectively, the “Leases”), as set
forth on the rent roll attached hereto as Exhibit F (the “Rent Roll”);

 

(d)                                 All
of Seller’s right, title, and interest in all agreements, other than Leases, if
any, for the leasing or licensing of rooftop space of equipment,
telecommunications equipment, cable access and other space, equipment, and
facilities

 

1

 

that are located
on or within the Project and generate income to Seller including agreement that
may be made by Seller after the Effective Date and prior to Closing as
permitted by this Agreement (“Licenses”);

 

(e)                                  To
the extent only the same are assignable by Seller to Purchaser, all of Seller’s
right, title, and interest in and to any and all (i) contracts or agreements,
such as maintenance, service or utility contracts relating to the ownership, maintenance
and operation of the Land or the Improvements, which are to be assigned to
Purchaser pursuant to the provisions of Section 3.6 below (but expressly
excluding the property management agreement for the Project), (ii) warranties
and guaranties currently in force and effect with respect to the Land, the
Improvements, the Personalty, the Licenses, and/or the Leases, (iii) all
permits or similar documents relating to the Land, the Improvements, the
Personalty, the Licenses, and/or the Leases, (iv) telephone exchanges and other
identifying material relating to the Property, (v) CAD files, plans, drawings,
specifications, surveys, engineering reports and other technical descriptions
of the Land or the Improvements, (vi) all leasing commission obligations, and
(vii) other property (real, personal or mixed) owned by Seller and used in
connection with the ownership, leasing, maintenance, service or operation of
the Land, the Improvements, the Licenses, or the Leases; and

 

(f)                                    All
of Seller’s right, title and interest in and to all rights to the trade names,
assumed names, or business names or similar names by which the Property is
currently operated, including, but not limited to “Camelback Lakes Office
Complex,” and the goodwill and other intangible assets associated with the
operation of the Property by Seller except for any trade names, symbols, or
marks relating to Seller’s name, the name of any direct or indirect general
partner, member, or venturer in Seller, or any derivative of any of the
foregoing.

 

The Property
described in subsections (c), (d), (e), and (f) of this Section 1.1 is
hereinafter sometimes referred to as the “Intangible Property.”  The Property shall not include, and Seller
shall retain (to the extent each of the following accrued prior to Closing
(defined below)), any cash, bank accounts, prepaid obligations and accounts
receivable, claims and causes of action, and rights to receive insurance or
condemnation proceeds; provided, however, any prepaid obligations so retained
by Seller shall be prorated in accordance with the provisions of Article VI and
casualty and condemnation proceeds shall be paid to Purchaser to the extent
required by Article VII.

 

ARTICLE II

 

PURCHASE PRICE

 

2.1                                 Purchase Price. 
The purchase price for the Property shall be an amount equal to the sum
of Thirty-two Million and No/100 Dollars ($32,000,000.00) (the “Purchase
Price”).

 

2.2                                 Method of Payment.  The Purchase Price shall be payable as follows:

 

2

 

(a)                                  “Effective
Date” means the last date upon which Seller and Purchaser shall have fully
executed this Contract, as indicated by the signature blocks set forth
below.  Within three (3) Business Days
(as hereinafter defined) after the Effective Date (such date hereinafter referred
to as the “Escrow Date”), the parties hereto shall exchange fully
executed originals of this Contract and shall cause one (1) fully executed
original of this Contract to be delivered to Chicago Title Insurance Company
(the “Escrow Agent”), whose national account office is located at 2001
Bryan Street, Suite 1700, Dallas, Texas 75201, Attention Ted Darby, and an
earnest money deposit (the “Earnest Money Deposit”) in the amount of
$320,000.00 in immediately available funds shall be deposited by Purchaser with
the Escrow Agent.  The Earnest Money
Deposit shall be placed in an interest bearing account by the Escrow Agent and
any income or interest earned on the Earnest Money Deposit prior to Closing (as
hereinafter defined) shall be deemed a part of the Earnest Money Deposit for
all purposes of this Contract. 
Notwithstanding anything to the contrary contained herein, Purchaser
may, in Purchaser’s sole and absolute discretion, and at any time on or prior
to the expiration of the Inspection Period elect to terminate this Contract in
accordance with Section 3.3 hereof and receive a
refund of the Earnest Money Deposit by giving written notice to Seller and
Escrow Agent.  Upon such termination,
the Earnest Money Deposit shall be immediately returned to Purchaser, and
neither Seller nor Purchaser shall have any further rights or liabilities under
this Contract, except as provided in Sections 3.2, 8.1, 9.1, 11.10, and 11.15
hereof.

 

(b)                                 The
balance of the Purchase Price, after reducing the Purchase Price by the amount
of the Earnest Money Deposit (including all interest credited thereto pursuant
to Section
2.2(a) above) and adjusting the Purchase Price to take into
account prorations, charges and credits in accordance with the terms of this
Contract, shall be paid by Purchaser in same day funds immediately available to
the Escrow Agent at the Closing.

 

2.3                                 Failure to Make Deposit.  If Purchaser fails to timely make the
deposit of the Earnest Money Deposit with the Escrow Agent as provided for in Section
2.2, then Seller, in its sole discretion shall have the right to
terminate this Contract, and upon any such termination neither Seller nor
Purchaser shall have any further rights or liabilities under this Contract.

 

2.4                                 Independent Consideration.  Notwithstanding anything herein to the
contrary, Seller shall retain $100.00 as independent consideration for Seller’s
performance hereunder from the proceeds of the Earnest Money Deposit delivered
to the Title Company by the Purchaser.

 

ARTICLE III

 

DELIVERIES AND INSPECTIONS

 

3.1                                 Deliveries. 
Seller has, on or before the Effective Date, delivered to Purchaser, the
following items and documents (the “Delivered Documents”) pertaining to
the Property:

 

3

 

(a)                                  to
the extent in Seller’s possession, copies of all certificates of insurance,
certificates of occupancy, warranties, licenses, permits, authorizations and
approvals relating to the construction, occupancy and operation of the Land and
the Improvements;

 

(b)                                 a
complete copy of all Leases, including any amendments thereto;

 

(c)                                  copies
of all real estate tax bills for the calendar year, 2002 and 2003 and
confirmation of rental tax payments;

 

(d)                                 complete
copies of all service, maintenance and similar contracts entered into by Seller
in connection with the Property and all leasing commission obligations
currently in effect on the Property (the “Service Contracts”);

 

(e)                                  a
copy of the most recent survey of the Land in Seller’s possession;

 

(f)                                    to
the extent in Seller’s possession, the most recent site plan and the most
recent floor plans and building elevations for the buildings on the Property;
and

 

(g)                                 to
the extent in Seller’s possession, and not otherwise addressed in (a) through
(f) above, the items identified in Exhibit I attached hereto.

 

Failure of
Purchaser to terminate this Contract prior to the expiration of the Inspection
Period shall be deemed approval by Purchaser of any material or information
delivered to Purchaser pursuant to this Section 3.1.  Purchaser acknowledges and agrees that,
(a) Seller delivers the material and information described in this Section
3.1 without representation or warranty as to the accuracy
thereof, and (b) Purchaser specifically acknowledges and agrees that Seller
shall have no liability or responsibility for any inaccuracy thereof.  PURCHASER ACKNOWLEDGES AND UNDERSTANDS THAT
THE DELIVERED DOCUMENTS AND OTHER MATERIALS AND ANY INFORMATION (AS DEFINED IN SECTION
11.15 HEREOF) PROVIDED TO PURCHASER PURSUANT TO THIS CONTRACT
MAY HAVE BEEN PREPARED BY PARTIES OTHER THAN SELLER AND, EXCEPT AS EXPRESSLY
SET FORTH IN THIS CONTRACT, THAT NEITHER SELLER NOR ANY OF ITS EMPLOYEES,
AGENTS, BROKERS OR CONTRACTORS MAKE NOR HAVE MADE ANY REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS, CONTENT OR
ACCURACY THEREOF.  PURCHASER
SPECIFICALLY RELEASES SELLER, AND ITS EMPLOYEES, AGENTS, BROKERS AND
CONTRACTORS FROM ALL CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEY’S FEES WHETHER
SUIT IS INSTITUTED OR NOT), WHETHER KNOWN OR UNKNOWN, LIQUIDATED OR CONTINGENT,
ASSERTED AGAINST OR INCURRED BY PURCHASER BY REASON OF THE INFORMATION
CONTAINED IN (OR THAT SHOULD HAVE BEEN CONTAINED IN) SUCH DELIVERED DOCUMENTS
AND/OR OTHER MATERIALS.

 

4

 

3.2                                 Inspections. 
Purchaser and its employees and agents shall have the right and
permission after the Effective Date and through the Inspection Period  to
enter upon the Project or any part thereof at all reasonable times upon at
least two (2) Business Days’ advance notice by Purchaser to Seller, in a manner
not to unreasonably disturb any Tenant nor damage or injure the Project, to
inspect all aspects of the Project, at Purchaser’s sole cost and expense, and
to make such inspections, studies and tests of the Project, at Purchaser’s sole
cost and expense, which Purchaser deems necessary or advisable; provided,
however, that Seller shall have the right to approve and be present for any
such inspections, studies and test of the Project.  Purchaser shall indemnify and hold harmless Seller from and
against any and all losses, claims, costs (including attorney’s fees and costs
of court), damages or judgments caused to the Project, any Tenant thereof, or
Seller (including any mechanics’ and/or materialmen’s liens or claims thereof
that may be filed or asserted against the Project or Seller by anyone
performing such work, studies, tests or inspections or entering the Project or
providing materials in connection therewith on behalf of Purchaser) which arise
from or relate to such inspections, studies and tests made by or on behalf of
Purchaser.  Immediately following any
such inspections, studies and tests made by or on behalf of Purchaser,
Purchaser shall be required, at Purchaser’s sole cost and expense, to return
the Project to the condition the Project was in prior to commencement of such
inspections, studies and tests. 
Additionally, in the event the Closing does not occur (due to no fault
of Seller), Purchaser shall promptly deliver to Seller, without representation
or warranty, at no cost or expense to Seller, (i) copies of any and all
studies, tests or inspection reports Purchaser has obtained or obtains with
respect to the Property, and (ii) any and all copies of the Delivered
Documents.  In addition, Seller will
make available to Purchaser at Seller’s offices in Phoenix the general ledger
and building maintenance reports for the Project for the most recent twelve
(12) months.

 

Notwithstanding
the foregoing, Purchaser shall not conduct a Phase II environmental assessment
unless same is required by a Phase I inspection and provided Purchaser obtains
Seller’s prior written consent, not to be unreasonably withheld.  Additionally, notwithstanding anything to
the contrary set forth elsewhere in this Contract, Purchaser shall not, without
first obtaining the prior written consent of Seller (which Seller may withhold
in its sole and absolute discretion) disclose to any party whomsoever (other
than Purchaser’s attorneys, consultants and lender) any environmental
information Purchaser obtains with respect to the Property, unless such
disclosure is required by applicable law or by order of a court or tribunal of
competent jurisdiction.  In the event
that Purchaser is or becomes legally compelled by applicable law or by order of
a court or tribunal of competent jurisdiction to disclose any of such
information, Purchaser will (if time and law permits) provide Seller with at
least fifteen (15) days advance written notice (or if applicable law forces an
earlier disclosure, with as much advance written notice as is possible under
the circumstances) so that Seller may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
paragraph.  Purchaser shall promptly
deliver to Seller, without representation or warranty, at no cost or expense to
Seller, copies of any and all environmental information Purchaser has obtained
or obtains with respect to the Property.

 

Purchaser has no right
under this Contract to reduce the Purchase Price on account of any inspections,
studies or tests made by Purchaser, or for any other reason.  Seller has no legal duty to agree to, nor
even consider, any such request made by Purchaser.

 

5

 

3.3                                 Inspection Period.

 

(a)                                  Purchaser’s
obligations under this Contract shall be conditioned upon its receipt and
approval, at Purchaser’s sole cost and expense, of various reports (geological,
engineering, soil, drainage, flood plain, environmental, etc.) satisfactory to
Purchaser of inspections and its review of the Property and of all matters
related thereto, in each case in Purchaser’s sole and absolute discretion.  Purchaser shall have until 5:00 p.m.,
Mountain Standard Time, on February 11, 2004 (the “Inspection Period”),
to make such inspections, review and approve the Delivered Documents, and
otherwise review and approve the Property, all at Purchaser’s sole cost and
expense.

 

(b)                                 Prior
to the expiration of the Inspection Period, Purchaser shall determine, in its
sole and absolute discretion, whether it intends to purchase the Property, and
if Purchaser determines that it does not wish to proceed with the acquisition
of the Property from Seller pursuant to this Contract, Purchaser shall deliver
on or prior to the expiration of the Inspection Period written notice (the “Non-Feasibility
Notice”) to Seller and Escrow Agent that Purchaser has elected to terminate
this Contract, and upon Seller’s and Escrow Agent’s receipt of such notice (i)
this Contract shall terminate, (ii) Purchaser shall be entitled to receive a
prompt refund of the Earnest Money Deposit, (iii) Purchaser shall return to
Seller all of the Delivered Documents within four (4) days after such transaction,
and (iv) neither Seller nor Purchaser shall have any further rights or
liabilities under this Contract, except for the obligations contained in Sections
3.2, 3.3, 8.1, 9.1, 11.10, and 11.15 hereof, which shall survive
any such termination.  If Purchaser
fails to deliver the Non-Feasibility Notice to Seller and Escrow Agent on or
before the expiration of the Inspection Period, all objections by Purchaser to
the condition of the Property or status of title to the Property shall be
deemed waived, Purchaser shall have no right to terminate this Contract
pursuant to this Section 3.3, and the Earnest Money
Deposit shall thereafter be retained in escrow as security for performance of
this Contract by Purchaser.

 

3.4                                 Disclaimer of Warranties.  PURCHASER IS ACQUIRING THE PROPERTY “AS
IS” WITH ALL FAULTS AND DEFECTS. 
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS CONTRACT, SELLER HEREBY
SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, ORAL OR WRITTEN,
INCLUDING, BUT NOT LIMITED TO THOSE CONCERNING (I) THE NATURE AND CONDITION OF
THE PROPERTY AND THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND
USES WHICH PURCHASER MAY ELECT TO CONDUCT THEREON, (II) THE MANNER,
CONSTRUCTION, CONDITION AND STATE OF REPAIR OR LACK OF REPAIR OF ANY
IMPROVEMENTS LOCATED ON THE PROPERTY, (III) THE NATURE AND EXTENT OF ANY
RIGHT-OF-WAY, LEASES, POSSESSION, LIEN, ENCUMBRANCE, LICENSE, RESERVATION,
CONDITION OR OTHERWISE, (IV) THE ACCURACY OF ANY INFORMATION PROVIDED TO
PURCHASER, AND (V) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY
LAWS, RULES, ORDINANCES, OR REGULATIONS OF ANY GOVERNMENT OR OTHER BODY, IT
BEING SPECIFICALLY UNDERSTOOD THAT PURCHASER SHALL HAVE THE FULL OPPORTUNITY
DURING THE INSPECTION

 

6

 

PERIOD TO DETERMINE FOR
ITSELF THE CONDITION OF THE PROPERTY. 
THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN “AS IS”
BASIS, AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF THE
AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
CONTRACT, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY
OF QUANTITY, QUALITY, CONDITION, HABITABILITY, MERCHANTABILITY, SUITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, ANY IMPROVEMENTS, THE
PERSONALTY, OR SOIL, WATER, AIR OR OTHER ENVIRONMENTAL CONDITIONS.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS CONTRACT, SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING THE
PROPERTY.  PURCHASER ACKNOWLEDGES THAT,
EXCEPT AS EXPRESSLY PROVIDED HEREIN, PURCHASER IS PURCHASING THE PROPERTY BASED
SOLELY UPON PURCHASER’S OWN INDEPENDENT INVESTIGATIONS AND FINDINGS AND NOT IN
RELIANCE UPON ANY INFORMATION PROVIDED BY SELLER OR SELLER’S AGENTS OR
CONTRACTORS. WITHOUT LIMITING THE FOREGOING, PURCHASER ACKNOWLEDGES THAT SELLER
HAS MADE NO AGREEMENT TO ALTER, REPAIR OR IMPROVE ANY OF THE PROPERTY.

 

3.5                                 Release of Claims.  Except as otherwise set forth herein, without limiting the
provisions of Section 3.4, Purchaser releases Seller and its
employees, agents and brokers from any and all claims (whether known or
unknown, and whether contingent or liquidated) arising from or related to (a)
any defects, errors or omissions in the design or construction of any
improvements upon the Property, whether the same are a result of negligence or
otherwise; or (b) other conditions (including environmental conditions) affecting
the Property, whether the same are a result of negligence or otherwise.  The release set forth in this Section
3.5 specifically includes without limitation any claims under
any Environmental Laws (hereafter defined), under the Americans with Disabilities
Act of 1990, 42 U.S.C. §§ 12101 et  seq. (or any other federal,
state or local laws similar thereto), or with respect to any Environmental Risk
(hereafter defined).  “Environmental
Laws” means all laws (federal, state, local or foreign) relating to pollution
or the environment or relating to public health, welfare, or safety, including
without limitation, the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act (42 U.S.C. §§ 6901 et  seq.), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. §§ 9601 et  seq.), the Emergency Planning and Community
Right to Know Act (42 U.S.C. §§ 11001 et  seq.), the Clean Air Act
(42 U.S.C. §§ 7401 et  seq.), the Clean Water Act (33 U.S.C. §§
1251 et  seq.), the Toxic Substances Control Act (15 U.S.C. §§
2601 et  seq.), the Hazardous Materials Transportation Act (49
U.S.C. §§ 1801 et  seq.), the Occupational Safety and Health Act
(29 U.S.C. §§ 651 et  seq.), the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C. §§ 136 et  seq.), and the Safe
Drinking Water Act (42 U.S.C. §§ 300f et  seq.), as any of the
same may be amended from time to time, any state or local law dealing with
environmental matters, any common law, and any regulations, orders, rules, procedures,
guidelines and the like promulgated in connection therewith, regardless of
whether the same are in existence on the date of this Contract.  An “Environmental Risk” means any
risk of liability under Environmental Laws, including without limitation,
(a) the presence, release, or

 

7

 

discharge of any
petroleum or petroleum products or constituents, radioactive materials,
asbestos in any form that is or could become friable, lead-based paint,
polychlorinated biphenyls (“PCBs”); and (b) the presence, release, or discharge
of any “hazardous substance,” “hazardous waste,” “hazardous materials,”
“pollutants,” or “contaminants” (as defined by any Environmental Laws).  IT IS SPECIFICALLY INTENDED BY SELLER AND PURCHASER
THAT THE RELEASE CONTAINED HEREIN BE WITHOUT LIMIT, IRRESPECTIVE OF THE CAUSE
OR CAUSES OF ANY SUCH CLAIMS (INCLUDING, WITHOUT LIMITATION, PRE-EXISTING
CONDITIONS, STRICT LIABILITY OR THE NEGLIGENCE OF ANY PARTY OR PARTIES
[INCLUDING SELLER], WHETHER SUCH NEGLIGENCE BE SOLO, JOINT OR CONCURRENT,
ACTIVE OR PASSIVE).

 

3.6                                 Contracts to be Assumed by Purchaser.  At Closing, Purchaser shall take an
assignment of and assume all of the Service Contracts, except for those Service
Contracts capable of termination without penalty or payment of any kind that
Purchaser elects in writing not to accept prior to the end of the Inspection
Period (the “Rejected Contracts”); and Purchaser also shall assume all
obligations under the Service Contracts but not the Rejected Contracts, which
shall be terminated at Closing (the Service Contracts less the Rejected
Contracts being herein referred to as the “Assigned Contracts”), which
are to be performed after the Closing. 
Purchaser also will cooperate with Seller in any efforts made by Seller
to have Seller released from any liability that may accrue after the Closing
under any of the Assigned Contracts. 
After the end of the Inspection Period, Seller will terminate any
Assigned Contract if directed by Purchaser, but only if Purchaser agrees in a
written instrument in form and of content acceptable to Seller to pay all
termination penalties and costs payable pursuant to such terminated Assigned
Contract and otherwise agrees to indemnify and hold harmless Seller from all loss,
cost and expense that may arise from such termination, and provided that no
such termination shall be effective prior to the Closing.

 

3.7                                 Estoppels. 
Seller shall request that all Tenants execute statements in the form
attached hereto as Exhibit G (“Tenant Estoppel”); provided,
however, that if the form of Tenant Estoppel attached hereto as Exhibit G
requests information in addition to or different from that required to be given
pursuant to a Tenant’s Lease, such Tenant may execute an estoppel certificate
in the form required pursuant to its Lease and be deemed to have provided a
Tenant Estoppel within the meaning of this Section 3.7 and shall be deemed
satisfactory to and accepted by Purchaser. 
Receipt no later than five days prior to Closing of the Tenant Estoppels
from Tenants leasing eighty-five percent (85%) of the leased net rentable area
of the Improvements, to include Tenant Estoppels from 100% of the Tenants
leasing 10,000 square feet or more of net rentable area in the Improvements,
shall be a condition to Purchaser’s obligation to Close hereunder.  Seller shall deliver requests for the SNDAs
(hereinafter defined) and Tenant Estoppels to the Tenants within ten days after
the Effective Date.  Seller shall
promptly deliver to Purchaser any Tenant Estoppels received by Seller.

 

3.8                                 Subordination, Non-disturbance and
Attornment.  Seller shall
reasonably cooperate with Purchaser to obtain from all Tenants a subordination,
non-disturbance, and attornment agreement in a form reasonably acceptable to
Purchaser and Purchaser’s lender (“SNDA”) no later than five days prior to
Closing.  Receipt of the SNDAs shall not
be a condition of Purchaser’s obligation to Close.

 

8

 

ARTICLE IV

 

SURVEY AND TITLE

 

4.1                                 Survey.  Seller
shall deliver to Purchaser within ten (10) days after the Effective Date of
this Contract a copy of an update of the most recent survey of the Land in
Seller’s possession (the “Survey”). 
Purchaser shall have the right to obtain an additional update and
re-certification of the Survey at Purchaser’s sole cost and expense.

 

4.2                                 Title Commitment.

 

(a)                                  Seller
has delivered to Purchaser, on or before the Effective Date of this Contract,
an ALTA Form 1992 title commitment (the “Title Commitment”) from the
Escrow Agent setting forth the status of the title to the Land and the
Improvements, pursuant to which the Escrow Agent agrees to insure title to the
Land and the Improvements pursuant to an ALTA Owner’s Extended Coverage Policy
in the full amount of the Purchase Price (the “Title Policy”), and (ii)
legible copies of all documents referred to in the Title Commitment (the “Title
Documents”).

 

(b)                                 If
any exceptions appear in the Title Commitment, other than the standard printed
exceptions, that are unacceptable to Purchaser, then Purchaser shall, within
ten (10) days after the Effective Date (the “Title Review Period”),
notify Seller in writing of such fact. 
If, on or before five (5) days after receipt of such notice (the “Title
Cure Period”) from Purchaser, Seller fails to either cure or
agree to cure by Closing any such objection (without having any obligation to
do so), then Purchaser may terminate this Contract by delivering written notice
to Seller and the Escrow Agent within five (5) days after the end of the Title
Cure Period, and upon such termination Purchaser, subject to the provisions of Section
3.3 above, shall be entitled to a prompt return of the Earnest
Money Deposit as Purchaser’s sole and exclusive remedy for Seller’s failure to
eliminate or modify any title exceptions. 
Failure of Purchaser to notify Seller and the Escrow Agent as aforesaid
and/or to terminate this Contract as permitted under this Section 4.2 shall be
deemed approval by Purchaser of any unacceptable exceptions which have not been
eliminated or modified, and Purchaser shall accept such title as Seller can
deliver.  For the purposes of this
Contract, (i) the lien for general real estate taxes for the calendar year
during which the Closing shall occur and subsequent years, (ii) all easements,
restrictions, other conditions or encumbrances which are shown on the Title
Commitment and/or the Survey and which are not objected to by Purchaser and/or
are not cured by Seller as described above, (iii) the Declaration, and (iv) the
Leases are hereinafter collectively referred to as the “Permitted Exceptions”.

 

4.3                                 Title Policy. 
Seller shall pay the premium for a standard owner’s policy of title
insurance, and Purchaser shall pay the costs of any extended coverage and/or
title endorsements that Purchaser elects to obtain.

 

9

 

4.4                                 Title.  At the
Closing, Seller shall convey to Purchaser, by Special Warranty Deed in form
attached hereto as Exhibit C (the “Deed”),
indefeasible fee simple to the Land and the Improvements, free and clear of any
and all liens, encumbrances, conditions, easements, assessments, restrictions
and other conditions, except for the following:

 

(a)                                  All
of the Leases and other agreements, recorded and unrecorded, which burden the
Property, and the rights of the tenants and other parties claiming thereunder;

 

(b)                                 The
Assigned Contracts; and

 

(c)                                  The
Permitted Exceptions.

 

4.5                                 Bill of Sale. 
At the Closing, Seller shall assign and transfer to Purchaser, by bill
of sale and assignment of leases and service contracts executed by Seller and
Purchaser in the form attached hereto as Exhibit D (the “Bill of Sale”),
all of Seller’s right, title and interest in and to the Leases, Personalty,
Assigned Contracts, and Intangible Property, free and clear of any and all
liens, security interests, encumbrances, conditions, easements, assessments and
restrictions, except for the matters described in Section 4.4 hereof.

 

ARTICLE V

 

SELLER’S COVENANTS

 

5.1                                 Seller hereby covenants and agrees with
Purchaser as follows:

 

(a)                                  At
all times from the Effective Date to the Closing, Seller shall cause to be
maintained in force, “all-risk” casualty insurance upon the Project in the same
amounts as the insurance coverage on the Project on the Effective Date.

 

(b)                                 At
all times from the Effective Date to the Closing, Seller shall operate and
maintain the Project in substantially the same manner as it is now managed, and
Seller shall use reasonable efforts to maintain the physical condition of the
Project in its current condition, reasonable and ordinary wear and tear and
damage by fire, other casualty and condemnation excepted.

 

(c)                                  Seller
shall neither transfer nor remove any Personalty or fixtures from the Project
subsequent to the Effective Date, unless the same are no longer needed for the
maintenance and operation of the Project or except for purposes of replacement
thereof, in which case such replacements shall be promptly installed prior to
Closing and shall be comparable in quality to the items being replaced.

 

(d)                                 “New
Document” means (1) any lease, lease extension, lease modification or lease
termination; (2) any other document creating or consenting to an additional
encumbrance upon the Land or the Improvements; and (3) any contract or
agreement entered into by Seller that will bind Purchaser after the Closing,
unless the

 

10

 

same is terminable
without penalty on no more than thirty (30) days notice.  Seller shall promptly notify Purchaser of
any New Document.  Seller shall not,
after the expiration of the Inspection Period, enter into any New Document
without the prior written consent of Purchaser, which shall be deemed given if
no response is made by Purchaser within five (5) Business Days after Seller’s
written request for approval.

 

(e)                                  Seller
has finalized plans for updating and modifying the HVAC system for the
Property.  The work remaining to be
performed consists of replacing the four (4) original rooftop HVAC units that
have not previously been replaced. 
Seller either will complete the replacement of such units, at Seller’s
cost, prior to Closing or provide to Purchaser a credit against the Purchase
Price equal to 100% of the cost of the replacement work not performed by
Closing as reasonably determined by Seller.

 

ARTICLE VI

 

CLOSING

 

6.1                                 Closing Date.  Provided Purchaser does not elect to terminate this Contract
pursuant to the provisions of this Contract permitting Purchaser to do so, the
consummation of the purchase and sale contemplated hereby (the “Closing”)
shall be held at the offices of the Escrow Agent on or before March 12, 2004
(the “Closing Date”); provided, however, Seller shall have the right to
extend the Closing Date for up to an additional ten (10) business days in order
to satisfy the conditions set forth in Section 3.7.

 

6.2                                 Closing.

 

(a)                                  Except
as otherwise provided below, at Closing, Seller shall deliver or cause to be
delivered to Purchaser each of the following items:

 

(1)                                  The
duly executed and acknowledged Deed, conveying the Land and the Improvements to
Purchaser as provided in Section 4.4;

 

(2)                                  The
duly executed Bill of Sale as provided in Section 4.5;

 

(3)                                  All
master keys in Seller’s possession to all locks on the Project and the original
copy of the Leases, to the extent in Seller’s possession;

 

(4)                                  An
executed affidavit confirming that Seller is not a foreign entity in accordance
with the provisions of Section 1445 of the Internal Revenue Code of 1986, as
amended;

 

(5)                                  An
executed notice to the Tenants under the Leases in the form of Exhibit E
attached hereto (the “Notice to Tenant”);

 

11

 

(6)                                  Evidence
acceptable to the Escrow Agent and Purchaser authorizing consummation by Seller
of the purchase and sale transaction contemplated hereby and the execution and
delivery of the closing documents on behalf of Seller;

 

(7)                                  The
originals of all books and records of account, correspondence with Tenants and
suppliers, Assigned Contracts, Leases and all Lease files, Licenses,
maintenance records and warranties, and other agreements, plans, and
specifications and other items affecting the Property, to the extent in
Seller’s possession;

 

(8)                                  Intentionally
Deleted.

 

(9)                                  Pay
all costs associated with Title Policy except any portion of the premium in
excess of the premium for a standard coverage owner’s form and endorsements
that Purchaser or its lender may desire to the Title Policy;

 

(10)                            Any
other Closing documents that may be reasonably required by the Escrow Agent or
Purchaser to consummate this purchase and sale; and

 

(11)                            The
SNDAs, to the extent secured pursuant to Section 3.8 above, and Estoppels in
accordance with Section 3.7 above.

 

(b)                                 At
the Closing, Purchaser shall:

 

(1)                                  Deliver
the Purchase Price for the Property required to be paid in accordance with Section
2.2;

 

(2)                                  Deliver
evidence acceptable to the Escrow Agent and Seller authorizing consummation by
Purchaser of the purchase and sale transaction contemplated hereby and the
execution and delivery of the closing documents on behalf of Purchaser;

 

(3)                                  Execute
the Bill of Sale described in Section 6.2(a)(2);

 

(4)                                  Execute
and deliver the “As-Is” Certificate in the form of Exhibit B hereto;

 

(5)                                  Execute
the Notice to Tenant and immediately deliver a copy of same to Tenant;

 

(6)                                  Intentionally
Deleted.

 

(7)                                  Pay
all costs associated with any premium in excess of the premium for a standard
owner’s policy of title insurance and for any deletions,

 

12

 

modifications,
amendments or endorsements Purchaser or its lender may desire to the Title
Policy; and

 

(8)                                  Deliver
all additional documents and instruments as in the opinion of the Escrow Agent
are necessary to the proper consummation of this transaction.

 

6.3                                 Closing Prorations and Costs.  Provided the Purchase Price for the Property
required to be paid in accordance with Section 2.2 is received by the Title
Company no later than 2:00 p.m., Mountain Standard Time, on the Closing Date,
the items in subparagraphs (a) through (f) of this Section 6.3 shall be
apportioned or prorated between Seller and Purchaser as of 11:59 p.m., Mountain
Standard Time, on the day immediately preceding the Closing Date (with all
prorations to be made on a 365 day year basis) (if funds are received after
2:00 PM, Mountain Standard Time, on the Closing Date, the prorations shall be
made as of the Closing Date rather than the day immediately preceding the
Closing Date):

 

(a)                                  Assessments
under Recorded Documents.  Any
assessments under any recorded document constituting a lien or charge on the
Property which are due and payable in the calendar year in which the Closing
occurs.

 

(b)                                 Collected
Rent.  All collected rent and other
income under the Leases in effect at the Closing, but excluding payments that
may constitute rent but are provided for in other subparagraphs of this Section
6.3.  Seller shall be
charged with any rentals actually collected by Seller before Closing but
applicable to any period of time after Closing.  Uncollected rent and other income shall not be prorated.  If Purchaser collects after Closing any
delinquent rents or other income relating to Seller’s period of ownership of
the Property, Purchaser shall remit promptly such sums to Seller.  Purchaser shall bill and attempt to collect
such delinquent rent and other income in the ordinary course of business, but
shall not be required to take legal action, or terminate any Leases or threaten
to terminate any Leases to collect any delinquencies.  After Closing, Seller shall have the right to institute legal action
or otherwise collect any rents delinquent for any period prior to the Closing
without prejudice to Purchaser’s obligations hereunder, however, Seller shall
have no right to cause any such Tenant to be evicted or to exercise any other
“landlord” remedy set forth in such Tenant’s lease other than to sue Tenants no
longer in possession of the premises at the Project for collection.

 

(c)                                  Utilities.  All utilities, including water, sewer,
electric, and gas, based upon the last reading of meters prior to the Closing.  Seller shall endeavor to obtain meter
readings on the day before the Closing Date, and if such readings are obtained,
there shall be no proration of such items. 
Seller shall pay at Closing the bills therefor for the period to and
including the Closing Date, and Purchaser shall pay the bills therefor for the
period subsequent thereto; provided, however, if the utility company will not
issue separate bills or meter readings cannot be obtained on the day before the
Closing Date, Purchaser will receive a credit against the Purchase Price for
Seller’s portion and will pay the entire bill prior to delinquency after the
Closing.  No proration shall be made for
utility expenses that are separately metered to and paid directly by Tenant and
for which

 

13

 

Seller has no
obligation to pay.  Additionally, Seller
shall retain the right to receive reimbursement or refund of all security
deposits held by any such utility companies in connection with the provision of
services prior to the Closing Date and Purchaser shall arrange to make its own
utility deposits.

 

(d)                                 Fees
and Charges under Service Contracts. 
Fees and charges under such Assigned Contracts as are being assigned to
and assumed by Purchaser at the Closing, on the basis of the periods to which
such Assigned Contracts relate.

 

(e)                                  Expense
Reimbursement.  Where the Leases
contain Tenant obligations for taxes, common area expenses, operating expenses
or additional charges of any other nature (“Expense Reimbursement”), and
where Seller shall have collected any portion thereof in excess of amounts
incurred by Seller for such items for the period prior to the Closing Date,
then there shall be an adjustment and credit given to Purchaser on the Closing
Date for such excess amounts collected. 
Purchaser shall apply all such excess amounts to the charges owed by
Purchaser for such items for the period after the Closing Date and, if required
by the Leases, shall rebate or credit the Tenants with any remainder.  If it is determined at any time after
Closing that the amount collected during Seller’s ownership period exceeded
expenses incurred during the same period by more than the amount previously
credited to Purchaser at Closing, then Seller shall promptly pay to Purchaser
the deficiency.  If it is determined
after Closing that the amount collected during Seller’s ownership period
exceeded expenses incurred during the same period by less than the amount
previously credited to Purchaser at Closing, then Purchaser shall promptly pay
to Seller the deficiency.  Also, if it
is determined after Closing that the amount collected during Seller’s ownership
period is less than the expenses incurred during the same period, then
Purchaser shall promptly pay to Seller the deficiency upon receipt from Tenants
of the deficiency.

 

(f)                                    Other
Income or Expenses.  Seller shall be
responsible for and shall pay any and all Tenant improvement costs, Tenant
improvement allowances, and leasing commissions in connection with the Leases
listed on the Rent Roll.  Purchaser

 

14

 

shall be
responsible for and shall pay any and all Tenant improvement costs, Tenant
improvement allowances, and leasing commissions pertaining to all New Documents
entered into by Seller, in accordance with this Agreement, after the Effective
Date and prior to the termination of the Inspection Period without Purchaser’s
approval, or entered into by Seller after the termination of the Inspection
Period which have been approved or deemed approved by Purchaser.  In addition, Purchaser shall receive a
credit against the Purchase Price to the extent provided in Section
5.1(e) above All other expenses related to the ownership or
operation of the Property shall be prorated in the manner customary in the
State of Arizona.

 

(g)                                 General
Closing Costs.  Each party shall pay
all of the fees and expenses of its own counsel in entering into and
consummating the transactions described in this Contract.  Seller and Purchaser agree to execute any
real estate transfer declarations required by the state, county or municipality
in which the Project is located.  All
other customary costs in connection with the Closing, including recording and
similar charges, will be apportioned in accordance the custom in Maricopa
County, Arizona.

 

(h)                                 Tenant
Security Deposits.  Seller shall
retain all Tenant security deposits under the Leases, and Purchaser shall
receive a credit at Closing against the Purchase Price equal to the sum of all
such deposits.  Purchaser shall,
immediately upon taking possession of the Property, deliver to all Tenants a
copy of the Notice to each Tenant, notifying Tenant of the transfer of the
Property to Purchaser and Purchaser’s receipt and responsibility for such
Tenant’s security deposit.

 

(i)                                     Possession
of Property.  At the Closing,
possession of the Property shall be delivered to Purchaser, subject only to the
matters described in Section 4.4 above.

 

(j)                                     Seller
shall provide to Buyer at Closing a credit (“Credit”) against the balance of
the Purchase Price payable at Closing in the amount by which (i) the base
rental income, together with parking revenue in the amount of $115,000.00
(collectively “Base Rent”), as shown on the Rent Roll attached hereto as Exhibit
F, for the twelve month period beginning on the first day of the month
immediately after the month in which the Closing occurs is less than (ii) the
amount of $4,300,000.00.  To the extent
that the Rent Roll for the Property and corresponding Base Rent does not
increase between the Effective Date and the date of Closing such that the Base
Rent at Closing remains the same as that shown on the Rent Roll attached to
this Agreement, Purchaser and Seller agree that if the Closing occurs in the
month of March 2004 the Credit shall be $355,691; and if the Closing occurs in
the month of April 2004 the Credit shall be $293,704.  If new Leases are entered into prior to Closing, then the Credit
shall be adjusted to take into account the rent to be paid thereunder during
such 12 month period, calculated in the same manner as set forth above in this
Section 6.3(j).  Base Rent shall not be
reduced by reason of any failure of a Tenant to pay rent or a default by Tenant
under its Lease.

 

6.4                                 Real Estate Taxes and Special
Assessments.  Real estate
taxes for the year in which the Closing occurs shall be prorated based on the
date of the Closing.  Purchaser will be
responsible for payment of all subsequent real estate taxes.  Purchaser or Seller shall be given a

 

15

 

credit for such proration
at the Closing.  All prorations will be
based upon the last known actual net real estate taxes payable according to the
public record, subject to post-Closing adjustments as provided herein.  Purchaser shall remit to Seller any refund
of real estate taxes received with respect to the Property which pertain to the
period of Seller’s ownership.

 

6.5                                 Closing Estimates and Final
Adjustments.

 

(a)                                  In
connection with the Closing, Seller agrees to prepare or cause its representatives
or accountants to prepare a schedule of tentative adjustments required by Sections
6.3 and 6.4 and to provide such schedule to Purchaser and Escrow
Agent not less than two (2) Business Days prior to the Closing Date for review
and approval by Purchaser and its representatives or accountants.  Such adjustments, if and to the extent known
or estimated and agreed upon as of the Closing Date, shall be paid by Purchaser
to Seller (if the prorations result in a net credit to Seller), or by Seller to
Purchaser (if the prorations result in a net credit to Purchaser) by a credit
against the amount payable on account of the Purchase Price payable on the
Closing Date.

 

(b)                                 Any
such adjustments not finally determined or agreed upon as of such Closing Date
shall be paid by Purchaser to Seller, or by Seller to Purchaser, as the case
may be, from time to time in cash as soon as practicable following the receipt
or determination of the information necessary to make the adjustments after the
Closing Date.  Seller and Purchaser
agree to cooperate and use their best efforts to make such adjustments no later
than one hundred and twenty (120) days after the Closing Date.

 

(c)                                  Without
limiting the generality of subparagraph (b) above, after year-end (or other
applicable period) adjustments with the Tenants under the Leases for taxes,
assessments, maintenance charges, and operating expenses, Purchaser shall
prepare and present to Seller a calculation of the re-proration of taxes,
assessments, Expense Reimbursements, and those operating expenses to which the
Expense Reimbursements relate, based upon the actual amount of such items
charged to or received by the parties for the year or other applicable fiscal
period.  The parties shall make the
appropriate adjusting payment between them within thirty (30) days after
presentment to Seller of Purchaser’s calculation.

 

(d)                                 For
a period of twelve (12) months following the Closing Date, Purchaser and
Purchaser’s successors and assigns shall make available to Seller and its
successors and assigns, and Seller shall make available to Purchaser and
Purchaser’s successors and permitted assigns, and their respective employees,
agents and representatives all books and records maintained with respect to the
Property which relate to any of the items to be prorated or allocated under
this Contract in connection with such Closing, which books and records shall be
made available for inspection and copying upon reasonable notice during
ordinary business hours.  Any such
inspection shall be at reasonable intervals and at the inspecting party’s sole
cost and expense.

 

(e)                                  Seller
agrees to cooperate with Purchaser through March 31, 2005 in connection with
any audit of the Property performed in connection with 8K

 

16

 

compliance issues
of the Securities and Exchange Commission, provided that such cooperation shall
not require Seller to expend any funds or incur any expenses or liability, and
if Seller incurs any expense, Purchaser shall reimburse Seller therefor.  The provisions of this Subsection 6.5(e)
shall survive Closing.

 

ARTICLE VII

 

CASUALTY

 

7.1                                 Casualty.  If prior to the Closing, (a) all or a substantial part of the
Project is damaged or destroyed by fire or other casualty whatsoever, and (b)
the cost of repair for which is reasonably estimated by a qualified independent
third party retained by Seller to be less than $500,000, Purchaser shall accept
the Project in its then condition and proceed with the Closing without any
abatement or reduction in the Purchase Price, in which event Purchaser shall be
entitled to (i) an assignment of all of Seller’s right, title and interest in
and to any claims Seller may have under the insurance policies covering the
Project and any insurance proceeds payable by reason of such casualty, and (ii)
a credit against the Purchase Price in the amount of Seller’s insurance
deductible(s).  If Purchaser is required
to proceed under clause (b) above, Seller shall not compromise, settle or
adjust any claims to such proceeds without Purchaser’s prior written
consent.  If the cost of repair is
reasonably estimated to exceed $500,000, the Purchaser may terminate this
Contract by delivering written notice of such termination to Seller and the
Escrow Agent within ten (10) days after Purchaser receives notice of that the
estimated cost of repair will exceed $500,000.

 

If a portion of
the Project is damaged by fire or other cause whatsoever, and Purchaser either
has no right to terminate this Contract pursuant to Section 7.1, or Purchaser
has elected, or is deemed to have elected, not to exercise such termination
right, then this Contract shall continue in full force and effect, and
Purchaser shall accept the Property in its then condition and proceed with the
Closing, subject to the other provisions of this Contract, without any
abatement or reduction in the Purchase Price. 
In such event, Purchaser shall be entitled to (x) an assignment of all
of Seller’s right, title and interest in and to any claims Seller may have
under the insurance policies covering the Project and any insurance proceeds
payable by reason of such casualty, and (y) a credit against the Purchase Price
in the amount of Seller’s insurance deductible(s), and Seller shall not
compromise, settle or adjust any claims to such proceeds without Purchaser’s
prior written consent.

 

7.2                                 Condemnation.  If eminent domain or condemnation proceedings are commenced
against an immaterial portion of the Property, then this Contract shall not
terminate, and at Closing all rights to the proceeds thereof shall be assigned
by Seller to Purchaser.  Notwithstanding
the foregoing, if any eminent domain or condemnation proceedings are commenced
against any material portion of the Property, then Purchaser shall have the
right, as its sole and exclusive remedy, to terminate this Contract by
delivering written notice of such termination to Seller and the Escrow Agent
within ten (10) days after Purchaser receives notice of the commencement of
such proceedings.  Upon such
termination, the Earnest Money Deposit shall be returned to Purchaser, and
neither Seller nor Purchaser shall have any further rights or liabilities under
this Contract, except as provided in Sections 3.2, 3.3, 8.1, 9.1, 11.10, and 11.15.

 

17

 

If Purchaser elects not
to terminate this Contract as provided by this Section 7.2, then the
Closing shall take place as herein provided without abatement of the Purchase
Price, and there shall be assigned to Purchaser at the Closing all right, title,
and interest of Seller in and to any condemnation awards.

 

7.3                                 Waiver. 
Purchaser and Seller agree that the provisions of Sections 7.1 and 7.2
shall govern the respective rights and obligations of Purchaser and Seller with
regard to the subject matter of Sections 7.1 and 7.2.

 

ARTICLE VIII

 

REAL ESTATE COMMISSIONS

 

8.1                                 Indemnity.  Purchaser and Seller represent and warrant
to each other that it has engaged no real estate broker or agent in connection
with the sale of the Property other than Mike Auther, of Jacor Partners (the “Broker”).  Seller shall pay a real estate commission to
the Broker, pursuant to the terms of a separate agreement between Seller and
Broker.  Otherwise, each of Purchaser
and Seller shall indemnify and hereby agree to hold the other party harmless
from any brokerage or finder’s fee or commission claimed by any person claiming
by, through or under the indemnifying party for or on account of this Contract
or the transactions contemplated hereby.

 

ARTICLE IX

 

TERMINATION AND REMEDIES

 

9.1                                 Remedies.

 

(a)                                  Except
as specifically provided otherwise herein, if Purchaser fails to perform its
obligations at Closing for any reason other than a failure by Seller to perform
its obligations hereunder, then Seller may as its exclusive remedy, terminate
this Contract by delivering written notice of such termination to Purchaser and
the Escrow Agent, in which event the Earnest Money Deposit shall be forfeited
and paid to Seller as liquidated damages for Purchaser’s default hereunder.

 

(b)                                 If
Purchaser terminates this Contract pursuant to any provision hereof expressly
permitting it to do so, the Earnest Money Deposit shall be immediately returned
to Purchaser, and neither Seller nor Purchaser shall have any further rights or
liabilities under this Contract, except for the indemnity obligations and other
agreements contained in Sections 3.2, 3.3, 8.1, 11.10 and 11.15
hereof, which shall survive any such termination.

 

(c)                                  Except
as specifically provided otherwise herein, if, at or prior to Closing, Seller
defaults in performing its obligations hereunder for any reason other than a
failure by Purchaser to perform its obligations hereunder, and Seller fails to
cure such default within ten (10) days after written notice from Purchaser to
Seller specifying such

 

18

 

default, Purchaser
may, as its sole and exclusive remedy, either (i) terminate this Contract by
delivering written notice of such termination to Seller and the Escrow Agent
and receive a return of the Earnest Money Deposit, or (ii) pursue specific
performance of Seller’s obligation to convey the Property to Purchaser, in
which event Purchaser shall be deemed to have accepted the condition of
Seller’s title to the Property. 
Purchaser waives all other remedies (including the right to recover
damages) arising from Seller’s breach of this Contract.

 

9.2                                 Liquidated Damages.  Seller and Purchaser hereby acknowledge and agree they have
included provisions for payment of liquidated damages in this Contract, because,
in the event of a breach by Purchaser, the actual damages incurred by Seller
can reasonably be expected to approximate the amount of liquidated damages
called for herein, and because the actual amount of such damages would be
difficult if not impossible to accurately measure.

 

ARTICLE X

 

ASSIGNMENT OF CONTRACT

 

10.1                           Assignment. 
Purchaser shall not assign its rights or delegate its duties under this
Contract without the written consent of Seller; provided, however, Purchaser
may, without first obtaining Seller’s written consent, assign its rights under
this Contract to any Affiliate (defined below) of Purchaser, or to a party
acting as Purchaser’s qualified intermediary in a tax deferred exchange under
Section 1031 of the Internal Revenue Code, so long as Purchaser gives Seller at
least five (5) days’ prior written notice of such assignment.  In the event Purchaser assigns or delegates
its rights hereunder in accordance with the immediately preceding sentence, Purchaser
shall provide Seller with an original of the assignment document, which shall
be subject to Seller’s approval (which approval shall not be unreasonably
withheld, conditioned or delayed) and must (a) provide that the assignee
assumes all of Purchaser’s obligations and liabilities hereunder, (b) expressly
run to the benefit of Seller, and (c) contain provisions whereby the individual
or entity initially executing this Contract agrees to be and remain jointly and
severally liable for all of Purchaser’s obligations and liabilities (including,
without limitation, obligations and liabilities in the nature of and/or
relating to indemnity and/or reimbursement) hereunder, or alternatively, such
individual or entity shall provide a written guaranty, in form and substance
reasonably acceptable to Seller, guaranteeing any such assignee’s performance
of such obligations and the payment and/or satisfaction of any such liabilities
hereunder.  For the purposes of this
paragraph, the term “Affiliate” means (x) an entity that directly or
indirectly controls, is controlled by or is under common control with
Purchaser, (y) an entity at least a majority of whose economic interest is
owned by Purchaser or its principals, or (z) an entity in which Purchaser
retains a direct interest of not less than 25% and which entity is controlled
by Purchaser; and the term “control” means the power to direct the
management of such entity through voting rights, ownership or contractual
obligations.

 

19

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1                           Entire Agreement.  This Contract embodies the entire agreement between the parties
and cannot be varied except by the written agreement of the parties.  All prior agreements between Seller and
Purchaser relating to the subject matter hereof, including without limitation
all letters of intent or proposed letters of intent, are terminated and of no
further force and effect.  Except as
otherwise expressly provided in this Contract, Seller makes no representations,
warranties or agreements with respect to the Property.

 

11.2                           Survival.  All
terms and provisions contained in this Contract shall merge into the documents
executed at Closing and shall not survive the Closing; provided, however, the
provisions of (i) Sections 6.3, Section 6.4 and Section
6.5 which contemplate performance of obligations after the
Closing, and the provisions of Article XII, shall survive the Closing
for a period of one (1) year following the Closing, and (ii) Section
3.4 and the provisions of Articles VIII, IX, and this Article
XI shall survive forever without limitation.

 

11.3                           Time of Essence.  Time is of the essence in this Contract.

 

11.4                           Notices.  Any
notice required or permitted to be delivered hereunder shall be deemed to be
delivered (a) when received by the addressee if delivered by courier service,
(b) if mailed, two (2) days after deposit in the United States mail, postage
prepaid, certified mail, return receipt requested, or (c) if sent by telecopy,
when transmission is received by the addressee with electronic or telephonic
confirmation, in each such case addressed or telecopied to Seller or Purchaser,
as the case may be, at the address or telecopy number set opposite the
signature of such party hereto.

 

11.5                           Gender; Numbers.  Words of any gender used in this Contract shall be held and
construed to include any other gender, and words in the singular number shall
be held to include the plural and vice versa unless the context requires
otherwise.

 

11.6                           Headings. 
The captions used in connection with the articles and sections of this
Contract are for convenience only and shall not be deemed to construe or limit
the meaning of the language of this Contract.

 

11.7                           Days.  Except
where Business Days are expressly referred to, references in this Contract to
days are to calendar days, not Business Days. 
“Business Day” means any calendar day except a Saturday, Sunday
or banking holiday.

 

11.8                           Governing Law. 
THIS CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ARIZONA.

 

11.9                           Holidays.  If the final date of any period provided for herein for the
performance of an obligation or for the taking of any action falls on a day
other than a Business Day, then the time of such period shall be deemed
extended to the next day which is a Business Day.

 

20

 

11.10                     Attorneys’
Fees.  If a legal action is
brought to enforce the terms of this Contract, the prevailing party shall be
entitled to collect its costs of court, including reasonable attorneys’ fees.

 

11.11                     Interpretation.  The parties acknowledge that each party and
its counsel have reviewed this Contract and 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 Contract or
any amendments or exhibits hereto.

 

11.12                     Severability.  If any provisions of this Contract are held
to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable, and this Contract shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Contract, and the remaining provisions of this
Contract shall remain in full force and effect and not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Contract, provided that both parties may still effectively realize the complete
benefit of the transaction contemplated hereby.

 

11.13                     Amendments.  No modification or amendment of this Contract
shall be effective unless made in writing and executed by both Seller and
Purchaser.  If any approval or consent
is required pursuant to any provision of this Contract, such approval or
consent shall be deemed given only if it is in writing, executed by the party
whose approval or consent is required.

 

11.14                     Acceptance
of Offer.  This Contract
constitutes an offer by Seller to sell the Property on the terms and conditions
set forth herein.  Unless sooner
terminated or withdrawn by notice in writing to Purchaser, this offer shall
lapse and terminate at 5:00 p.m., Mountain Time on January 14, 2004, unless
prior to such time Purchaser has executed and delivered to Seller four (4)
fully executed counterparts of this Contract. 
In the event this offer terminates pursuant to the provisions of the
immediately preceding sentence, Seller shall have no further duties,
obligations or liabilities to Purchaser hereunder.

 

11.15                     Confidentiality.

 

(a)                                        Seller
and Purchaser agree to keep the terms of this Contract confidential until
Closing if the Closing occurs and for two (2) years following the Effective
Date, if the Closing does not occur; provided, however, that each party may
disclose this Contract and the Information (defined below) to its attorneys,
accountants, partners or prospective partners (and parties who own an interest
in such partners), financial advisors, consultants, engineers, lenders, and
Escrow Agent (the “Recipient Parties”) and as may be required by any and
all laws or regulations applicable to Purchaser.  Purchaser also may disclose the terms of this Contract to any
other party as approved by Seller (and upon such disclosure, the party to whom
disclosure is made shall be deemed a Recipient Party) as long as prior to such
disclosure such Recipient Party agrees to be bound by the provisions of this Section
11.15 by an instrument reasonably acceptable to Seller in form
and content.

 

21

 

(b)                                       “Information”
means (1) all documents and other written information furnished (whether prior
to, simultaneously with or subsequent to the execution hereof) by or on behalf
of Seller with respect to the Property, including the documents furnished under
Sections
3.1, 4.1 and 4.2 of this Contract, and (2) all analyses, compilations,
forecasts, studies, tests, assessments or other documents which contain or
otherwise reflect such information or Purchaser’s review of, or interest in,
the Property, regardless of when the same are obtained.  Purchaser agrees that, except as otherwise
provided herein, the Information will be kept confidential and shall not,
without Seller’s prior written consent, be disclosed by Purchaser or by the
Recipient Parties in any manner whatsoever, in whole or in part to any third
party other than any of the Recipient Parties, and Purchaser shall instruct the
Recipient Parties not to use the Information for any purpose other than in
connection with Purchaser’s purchase of the Property. Moreover, Purchaser
agrees to reveal the Information only to such of the Recipient Parties who need
to know the Information for the purpose of evaluating the Property, who are
informed by Purchaser of the confidential nature of the Information and who
agree to act in accordance with the terms and conditions of this Section
11.15.  In any event,
Purchaser agrees to take such steps as are reasonably practicable to maintain
the confidentiality of the Information and prevent any disclosure thereof in
violation of this Section 11.15 by any of Purchaser’s
agents, partners, representatives or employees.

 

(c)                                        If
the Closing does not occur, all copies of the Information provided by Seller
will be returned to Seller, and copies of any other Information obtained by or
on behalf of Purchaser shall be delivered to Seller, within ten (10) days upon
Seller’s request.  That portion of the
Information which consists of analyses, compilations, forecasts, studies or
other documents prepared by the Recipient Parties and which are based upon or
contain summaries of the Information will, at Seller’s request, be destroyed
(except to the extent a consultant retains a copy of any report prepared by it)
and in all events shall continue to be subject to the terms of this Section
11.15 for two (2) years following the Effective Date.

 

(d)                                       The
term “Information” shall not include such portions of the information
which (i) are or become generally available to the public other than as a
result of a disclosure by Purchaser or Purchaser’s agents, partners,
representatives or employees, or (ii) are or become available to Purchaser on a
non-confidential basis from a source (other than Seller or Seller’s agents)
which is not prohibited from disclosing such information to Purchaser by a
legal, contractual or fiduciary obligation.

 

(e)                                        If
Purchaser or any of the Recipient Parties to whom Purchaser transmits the
Information becomes legally compelled by order of a court or tribunal of
competent jurisdiction to disclose any of the Information, Purchaser will (if
time and law permits) provide Seller with prompt notice so that Seller may seek
a protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 11.15.

 

22

 

(f)                                          Neither
Seller nor Purchaser shall make any public announcements or issue any press
releases regarding the transaction contemplated by this Contract prior to
Closing; after Closing, any such announcement or release by either party which
contains the name of the other party, any direct or indirect partner or
venturer in such other party, or any derivative of any of the foregoing shall
be subject to the other party’s approval.

 

11.16                     Recording.  This Contract shall not be placed of public
record.

 

11.17                     Counterparts.  This Contract may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument.

 

11.18                     No
Third Party Rights.  Nothing in
this Contract, express or implied, is intended to confer upon any persons other
than the parties hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Contract.

 

11.19                     No Joint
Venture.  Notwithstanding
anything to the contrary contained herein, this Contract shall not be deemed or
construed to make the parties hereto partners or joint venturers, or to render
either party liable for any of the debts or obligations of the other.

 

11.20                     Exhibits.  Exhibits  A through I,
inclusive, which are attached hereto and incorporated herein by reference.

 

11.21                     No
Personal Liability.  No member,
partner, investor, employee, officer, director or representative of Seller or
Seller’s members shall have any personal liability under this Contract or any
document executed in connection with the transactions contemplated in this
Contract.

 

11.22                     Real
Estate Reporting Person.  Escrow
Agent is hereby designated the “real estate reporting person” for purposes of
Section 6045 of Title 26 of the United States Code and Treasury Regulation
1.6045-4 and any instructions or settlement statement prepared by Escrow Agent
shall so provide.  Upon the consummation
of the transaction contemplated by this Contract, Escrow Agent shall file the
Form 1099 information return and send the statement to Seller as required under
the aforementioned statute and regulation.

 

11.23                     Exchange
of Properties. Purchaser and Seller acknowledge that either Seller or
Purchaser may desire to structure the transaction evidenced hereby as part of
an exchange of properties (i) of like-kind within the contemplation of Section
1031 of the Internal Revenue Code, or (ii) involving condemnation proceeds
within the contemplation of Section 1033 of the Internal Revenue Code.  Any such exchange of properties is referred
to herein as an “Exchange”.  The
parties agree to cooperate with each other in structuring such an Exchange
provided that (a) such cooperation shall be without out-of-pocket cost or
expense to the party not structuring such Exchange; (b) the party structuring
such Exchange shall pay all of the other party’s out-of-pocket costs or expenses
arising due to such Exchange; (c) the party structuring such Exchange shall
give notice of the proposed structure of the Exchange at least two (2)

 

23

 

Business Days prior to
the Closing Date; (d) no such Exchange structure shall require the party that
does not structure such Exchange to hold legal or equitable title to any
property other than the Property; and (e) no such Exchange or structuring in
relation thereto shall delay or operate to postpone the Closing Date or any
time periods set forth in this Contract, nor shall the obligations of any of
the parties hereto be modified, amended or assigned as a result of any such
Exchange.

 

ARTICLE XII

 

REPRESENTATIONS AND
WARRANTIES

 

12.1                           Purchaser’s Representations and
Warranties.  Purchaser hereby
represents and warrants the following to Seller:

 

(a)                                  Purchaser
is an Arizona corporation, which is duly formed, validly existing and in good
standing under the laws of the State of Arizona and has the full right, power
and authority to enter into, and to perform all of its obligations under, this
Contract, and all persons signing this Contract and/or any documents and
instruments in connection herewith on behalf of Purchaser have full power and
authority to do so;

 

(b)                                 To
Purchaser’s actual knowledge, there are no actions, suits or proceedings
pending or threatened, before or by any judicial or administrative body, any
arbiter or any governmental authority, against or affecting Purchaser which
would affect Purchaser’s ability to perform its obligations under this
Contract;

 

(c)                                  To
Purchaser’s knowledge, neither the execution or delivery of this Contract nor
the performance of Purchaser’s obligations under this Contract violates, or
will violate, any contract or agreement to which Purchaser is a party or by
which Purchaser is otherwise bound; and

 

(d)                                 Purchaser
has (or as of the Closing Date will have) sufficient funds available to it to
fund the payment of the Purchase Price at Closing.

 

12.2                           Seller’s Representations and
Warranties.  Seller represents
and warrants to Purchaser as of the date hereof, and such representations and
warranties be deemed remade by Seller to Purchaser as of the Closing Date:

 

(a)                                  Seller
is a limited liability company which is duly formed, validly existing and in
good standing under the laws of the State of Delaware and has the full right,
power and authority to enter into, and to perform all of its obligations under,
this Contract, and all persons signing this Contract and/or any documents and
instruments in connection herewith on behalf of Seller have full power and
authority to do so;

 

(b)                                 This
Contract is, and all other documents executed by Seller pursuant hereto will
be, duly authorized, executed, and delivered by Seller and is and will be the
legal, valid, and binding obligations of Seller, enforceable against Seller, in
accordance with their respective terms, and, to Seller’s Knowledge, this
Contract and

 

24

 

such documents do
not and will not violate any provisions of any agreement, order or judgment to
which Seller, is a party or to which it is subject;

 

(c)                                  To
Seller’s Knowledge, Seller’s execution of this Contract, consummation of the
transactions herein contemplated, and performance and observance of the
obligations of Seller hereunder and under all other agreements and instruments
herein mentioned to which Seller is a party will not conflict with or result in
the breach of any law, regulation, order, writ, injunction or decree of any court
or governmental authority or of any agreement or instrument to which Seller is
now a party or to which it or the Property is subject, or constitute a default
thereunder and, to Seller’s Knowledge, no consent, waiver or approval by any
third party is required in connection with the execution and delivery by Seller
of this Contract or the performance by Seller of the obligations to be
performed by Seller under this Contract;

 

(d)                                 Seller
has received no written notice from any city, county, state or other
governmental authority of any violation of any law, statute, ordinance,
regulation, or administrative or judicial order or holding with respect to the
Property, which violation has not been corrected;

 

(e)                                  That
to the best of Seller’s Knowledge, (i) the Property, or any part thereof, has
never been used as a sanitary landfill or waste dump site; (ii) no underground
storage tanks are present on the Property; (iii) there is no litigation with
respect to the Property relating to Environmental Law violations; (iv) no
notice of violation or other written communication has been received by Seller
from a governmental agency or any other person or entity alleging or suggesting
an Environmental Law violation on the Property; and (v) Seller has not
deposited or released any “hazardous substance”, “hazardous waste”, “hazardous
materials”, “pollutants”, or “contaminants” as defined by any Environmental
Laws, on the Property in violation of Environmental Laws in existence as of the
Effective Date.

 

(f)                                    To
Seller’s Knowledge, there are not any existing or threatened litigation,
condemnation or similar proceedings against or involving the Property or
Seller’s interest therein;

 

(g)                                 There
are no attachments, levies, executions, assignments for the benefit of
creditors, receivership, conservatorship, or voluntary or involuntary
proceedings in bankruptcy (or pursuant to any other debt or relief laws) filed
by Seller, or, to Seller’s Knowledge, pending in any current judicial or
administrative proceedings against Seller;

 

(h)                                 The
Leases that are listed or referenced on the Rent Roll provided by Seller under
Section 3.1(b), constitute all of the Leases affecting the Property, as such
Rent Roll, is modified, amended or supplemented from time to time after the
Effective Date in accordance with the Contract.  The Leases have not been modified or amended except as identified
on the Rent Roll.  To Seller’s actual
Knowledge,  (i) Seller has not sent
written notice to any Tenant claiming that the Tenant is in default under its
Lease,

 

25

 

which default
remains uncured; (ii) no person has or claims any right of occupancy or
possession of any part of the Property except pursuant to a Lease or the
Permitted Encumbrances; (iii) except as set forth in the Tenant Estoppels, no
Tenant has asserted any defense, offset, claim or counterclaim in writing
against Seller under a Lease, and Seller has not received notice of any default
under any Lease; (iv) there are no Tenant improvement allowances or leasing
commissions unpaid as of the date hereof that will not be either paid by
Seller, prior to Closing, or escrowed at Closing, as provided above; (v) the
Rent Roll reflects the actual rent due from Tenants under the Leases; (vi)
except as set forth in the Leases and on the Rent Roll, no Tenant is entitled
to any free rent, abatement of rent, or similar concession, and Seller has not
accepted any prepaid rent or prepayment of any other sum due under the Leases
for more than thirty (30) days in advance; (vii) Seller has delivered to
Purchaser true and complete copies of all Leases entered into by Seller as
landlord, and Seller has delivered to Purchaser true and complete copies of all
other Leases in Seller’s possession; and (viii) the security deposits set forth
on the Rent Roll are all the security deposits paid by the Tenants under the
Leases.

 

(i)                                     Other
than those service contracts, maintenance agreements, leasing commission or
brokerage agreements, repair contracts, property management contracts, contracts
for the purchase or delivery of labor, services, materials or goods, supplies
or equipment or similar agreements entered into by or on behalf of Seller (A)
which are included in the Delivered Documents, (B) which will be terminated
prior to Closing, or (C) which are cancelable on no more than thirty (30) days’
notice without the payment of any termination fee or cancellation penalty (all
of the foregoing contracts or agreements referenced in clauses (A) (B) or (C)
hereof are collectively referred to as the “Contracts”), Seller does not
have any other agreements presently affecting the Property other than the
Leases and the Permitted Encumbrances. 
Seller has delivered to Purchaser true and complete copies of each of
the Contracts.  The Contracts represent
the complete agreement between Seller and such other parties as to the services
to be performed or materials to be provided thereunder and the compensation to
be paid for such services or materials, as applicable.  Seller has no Knowledge of any default under
any of the Contracts.

 

(j)                                     To
the best of Seller’s Knowledge, the Delivered Documents prepared by Seller and
delivered to Purchaser are or will be true, accurate, and complete and Seller
does not know of any material misstatements contained in the Delivered
Documents; provided that Seller does not represent and warrant the accuracy of
projections or budgets.

 

(k)                                  For
purposes of this Contract, the term “to Seller’s Knowledge” shall mean the
present actual (as opposed to constructive or imputed) knowledge solely of
Julie Echols (the asset manager), without any independent investigation or
inquiry whatsoever.

 

(l)                                     If
any representation or warranty made by Seller in this Contract is not true as
of the date hereof (or as of the Closing Date), and Purchaser becomes aware of
such untrue representation on or prior to Closing, then Purchaser shall have
the right, as

 

26

 

its sole and
exclusive remedy (Purchaser hereby waiving all other remedies), either (i) to
terminate this Contract in accordance with the provisions hereof by delivering
written notice to Seller and the Escrow Agent prior to Closing, in which case
the Earnest Money Deposit shall be paid to Purchaser, and neither Seller nor
Purchaser shall have any further rights or obligations under this Contract,
except as provided in Sections 3.2, 3.3, 8.1, 9.1, 11.10, and 11.15
hereof, or (ii) to elect to purchase the Property subject to such untrue
representation or warranty without any adjustment to the Purchase Price.

 

(m)                               If,
however, Purchaser first discovers such untrue representation or warranty after
the Closing Date but within one (1) year after the Closing Date, then (a)
Seller shall have no liability whatsoever unless and until the damages caused
by such untrue representation or warranty exceed $32,000, and (b) Seller’s
total liability, if any, to Purchaser or any other party with respect to any
and all such untrue representations or warranties in the aggregate shall in no
event exceed $320,000.00.

 

(n)                                 Notwithstanding
anything contained in this Contract to the contrary, any and all
representations and warranties of Seller contained in this Section 12.2 shall
survive the Closing only for a period of one (1) year after the Closing Date
and shall in all events be subject to the limitation on liability specified in
the immediately preceding sentence. 
From and after the expiration of such 1 year period, Seller shall have
no liability whatsoever to Purchaser with respect to any such representations
or warranties, as to which a claim was not made by Purchaser within such 1 year
period (unless otherwise provided in Articles VIII, IX and XI).

 

[END OF PAGE; SIGNATURE
PAGES FOLLOW]

 

27

 

EXECUTED by Seller the
15th day of January, 2004.

 

	
  ADDRESS:

  	
  LSF PRESIDIO INVESTMENT
  I, LLC, 

  
	
  c/o Presidio
  Investments, Ltd.

  	
  a Delaware limited
  liability company

  
	
  2001 Bryan Tower

  	
   

  
	
  Suite 2000

  	
   

  
	
  Dallas, TX  75201

  	
  By:

  	
  LSF Presidio Holdings,
  LLC, a Delaware limited liability

  
	
  Attention:  Julie Echols

  	
   

  	
  company, its sole
  member

  
	
  Telecopy No:
  214.691.1930

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Lone Star Fund III
  (U.S.), L.P., a Delaware limited

  partnership, its co-manager

  	 

	
   

  	
   

  
	
  With copies to:

  	
   

  
	
   

  	
  By:

  	
  Lone Star Partners III,
  L.P., a Delaware 

  	 

	
  Hudson Advisors

  	
   

  	
  limited partnership,
  its general partner

  	 

	
  717 N. Harwood

  	
   

  
	
  Suite 2200

  	
  By:

  	
  Lone Star Management
  Co. III, Ltd., its general partner

  
	
  Dallas, TX 75201

  	
   

  
	
  Attn: Joe Jernigan

  	
   

  
	
  Telecopy No:
  214.459.1475

  	
   

  
	
   

  	
  By:

  	
  Mary Etta Ford

  
	
  AND

  	
  Name:

  	
  Mary Etta Ford

  
	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  
	
  Baker Botts L.L.P.

  	
   

  
	
  2001 Ross Avenue

  	
  By:

  	
  Presidio Arizona
  Holdings LLC, a Texas limited 

  
	
  Dallas, TX  75201-2980

  	
   

  	
  liability company, its
  co-manager

  
	
  Attention:  Jonathan W. Dunlay

  	
   

  	
   

  
	
  Telecopy No:  214.661.4711

  	
  By:

  	
  Presidio Investments,
  Ltd., a Texas limited 

  
	
   

  	
   

  	
  partnership, its sole
  member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Centenary Partners,
  Ltd., a Texas limited partnership, its general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Continental Star
  Investments, Inc., a Texas corporation, its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Michael G. Loftis

  
	
   

  	
  Name:

  	
  Michael G. Loftis

  
	
   

  	
  Title:

  	
  President

  
													

 

28

 

EXECUTED by
Purchaser the 13th day of January, 2004.

 

	
  ADDRESS:

  	
  AMERIVEST CAMELBACK
  INC.,

  
	
   

  	
  an Arizona corporation

  
	
   

  
	
  AmeriVest Properties,
  Inc.

  
	
  1780 South Bellaire Street

  
	
  Suite 515

  	
  By:

  	
   

  	
  John B. Greenman

  	
   

  
	
  Denver, Colorado  80222

  	
  Name:

  	
   

  	
  John B. Greenman

  	
   

  
	
  Attention:  John B. Greenman

  	
  Title:

  	
   

  	
  Vice President

  	
   

  
	
  Telephone:  303.297.1800

  
	
  Telecopy:  303.291.7353

  
	
   

  
	
  With a copy to:

  
	
   

  
	
  Steven G. Wright, Esq.

  
	
  Isaacson, Rosenbaum,
  Woods & Levy, P.C.

  
	
  633 Seventeenth Street

  
	
  Suite 2200

  
	
  Denver, Colorado  80202

  
	
  Telephone:  303.292.5656

  
	
  Telecopy:  303.292.3152

  
							

 

29

 

	
  Attachments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Receipt and
  Acknowledgment

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Legal Description

  
	
  Exhibit B

  	
  -

  	
  “As-Is” Certificate

  
	
  Exhibit C

  	
  -

  	
  Form of Special
  Warranty Deed

  
	
  Exhibit D

  	
  -

  	
  Form of Bill of Sale
  and Assignment of Leases and Service Contracts

  
	
  Exhibit E

  	
  -

  	
  Form of Notice to
  Tenant

  
	
  Exhibit F

  	
  -

  	
  Rent Roll

  
	
  Exhibit G

  	
  -

  	
  Tenant Estoppel
  Certificate

  
	
  Exhibit H

  	
  -

  	
  Intentionally Deleted

  
	
  Exhibit I

  	
  -

  	
  Documents Requested For
  Due DiligenceExhibit
10.64

November 19, 2003

David E. Pertl, Senior
Vice President & Chief Financial Officer

Fresh Choice, Inc.

485 Cochrane Circle

Morgan Hill, Ca 95037

Dear David,

In response to your
recent request, Mid-Peninsula Bank, subject to your acceptance and acknowledgement,
hereby agrees to amend our Revolving Loan Agreement with Fresh Choice, Inc.
dated October 5, 2001 (as amended June 3, 2002 and subsequently amended as of
December 10, 2002, April 7, 2003, and August 13, 2003) as follows:

	
  •
	
  Section 4.7
	
  Net Worth Ratio.

	
   
	
  At all times, maintain a ratio of Debt to Tangible Net Worth of not greater
  than 1.00 to 1.00.

	
   
	
   

	
  •
	
  Section 4.8
	
  Other Ratio.

	
   
	
  Maintain a ratio, as of
  the end of each fiscal quarter of Borrower, as measured on a rolling four
  fiscal quarter basis, of (x) the amount of Borrower’s annual Net Income
  adjusted to exclude any non-cash income and to exclude expenses for interest,
  taxes, depreciation, amortization, asset impairment, and restaurant opening
  costs; less the amount of dividends and distributions paid to shareholders of
  Borrower, to (y) the amount of the current portion of long-term obligations
  as reflected on Borrower’s most recent balance sheet date plus the amount of
  the interest expense for the preceding four fiscal quarters, that is equal to
  or greater than 1.50 to 1.  Except as
  provided above, all computations made to determine compliance with the
  requirements contained in this paragraph shall be made in accordance with
  generally accepted accounting principles, applied on a consistent basis, and
  certified by Borrower as being true and correct. 

	
   
	
   

	
  •
	
  Section 4.9
	
  Capital Expenditures. 

	
   
	
  Not make Total Capital Expenditures in excess of $4,000,000.00 during the fiscal year
  ending December 28, 2003.

	
  •
	
  Section 4.10
	
  Total Shareholder Equity.

	
   
	
  Maintain at all times a Tangible Net Worth in excess of $15,000,000.00.

Please sign and return the acknowledgement copy to
this letter to me to confirm your acceptance of the above modifications on
behalf of Fresh Choice, Inc.  In addition,
your acknowledgement will confirm to Mid-Peninsula Bank that, except as
expressly changed by this agreement, the terms of the original obligations of
Fresh Choice, Inc. to Mid-Peninsula Bank, including all agreements evidencing
or securing the obligations, remain unchanged and in full force and effect. 

	
  Sincerely,
	
   

	
   
	
   

	
   
	
   

	
  /s/ Joe Stafford
	
   

	
  

  	
   

	
  Joe Stafford

  Senior Vice President
	
   

	
   
	
   

Acknowledged and Accepted by:

Fresh Choice, Inc.

By:

	
   
	
   

	
  /s/ David E. Pertl

  	
   

	
  

  	
   

	
  David E. Pertl, Senior Vice President & Chief Financial
  Officer

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