Document:

EXHIBIT 10.94

AGREEMENT
OF SALE AND PURCHASE

THIS AGREEMENT OF SALE
AND PURCHASE (“Agreement”)
made this 25th day of September, 2006 by and between PHELAN REALTY ASSOCIATES
L.P., a limited partnership organized under the laws of the State of California
(“Phelan Realty”), 795 FOLSOM
REALTY ASSOCIATES L.P., a limited partnership organized under the laws of the
State of California (“Folsom Realty;”)
each having an address c/o Mack-Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016 (Phelan Realty and Folsom Realty are sometimes
hereinafter collectively referred to as “Seller”)
and WESTCORE PROPERTIES AC, LLC, a limited liability company organized under
the laws of the State of Delaware having an address at 4445 Eastgate Mall,
Suite 210, San Diego, California 92121(“Purchaser”).

In consideration of the mutual promises, covenants,
and agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1            Definitions.  For purposes of this Agreement, the following
capitalized terms have the meanings set forth in this Section 1.1:

“Additional Earnest Money Deposit” has the meaning ascribed to such term in
Section 4.1(b).

“Additional Sale Consideration” has the meaning ascribed to such term in
Section 10.8.

“Additional Sale Consideration Agreement” has the meaning ascribed to such term
in Section 10.8 and shall be in the form attached hereto as Exhibit S.

“Assignment” has the
meaning ascribed to such term in Section 10.3(e) and shall be in the form
attached hereto as Exhibit A.

“Assignment of Leases”
has the meaning ascribed to such term in Section 10.3(c) and shall be in
the form attached hereto as Exhibit B.

“Authorities” means the
various federal, state and local governmental and quasi-governmental bodies or
agencies having jurisdiction over the Real Property and Improvements, or any
portion thereof.

“Bill of Sale” has the
meaning ascribed to such term in Section 10.3(b) and shall be in the form
attached hereto as Exhibit C.

“Business Day” means any
day other than a Saturday, Sunday or a day on which national banking
associations are authorized or required to close.

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“Certificate as to Foreign Status”
has the meaning ascribed to such term in Section 10.3(g) and shall be in
the form attached as Exhibit J.

“Certifying Person” has
the meaning ascribed to such term in Section 4.3(a).

“Closing” means the
consummation of the purchase and sale of the Property contemplated by this
Agreement, as provided for in Article X.

“Closing Date” means the
date on which the Closing of the transaction contemplated hereby actually
occurs.

“Closing Statement” has
the meaning ascribed to such term in Section 10.4(a).

“Closing Surviving Obligations”
means the rights, liabilities and obligations set forth in Sections 3.2, 5.3,
5.4, 8.2, 8.3, 9.1(b), 10.4, 10.6, 11.1, 11.2, 12.1, Article XIV, 16.1,
18.2 and 18.8, and any other provisions which pursuant to their terms survive
the Closing hereunder.

“Code” has the meaning
ascribed to such term in Section 4.3.

“Company California Employees”
has the meaning ascribed to such term in Section 7.3.

“Confidentiality
Agreement” means that certain Confidentiality Agreement
dated August 28, 2006 between Purchaser and Mack-Cali Realty Corporation, the
manager of the Real Property.

“Deed” has the meaning
ascribed to such term in Section 10.3(a).

“Delinquent Rental” has
the meaning ascribed to such term in Section 10.4(b).

“Documents” has the
meaning ascribed to such term in Section 5.2(a).

“Earnest Money Deposit”
has the meaning ascribed to such term in Section 4.1.

“Effective Date” means
the latest date on which this Agreement has been executed and delivered by
Seller or Purchaser.

“Environmental Laws”
means each and every federal, state, county and municipal statute, ordinance,
rule, regulation, code, order, requirement, directive, binding written
interpretation and binding written policy pertaining to Hazardous Substances
issued by any Authorities and in effect as of the date of this Agreement with
respect to or which otherwise pertains to or affects the Real Property or the
Improvements, or any portion thereof, the use, ownership, occupancy or
operation of the Real Property or the Improvements, or any portion thereof, or
Purchaser, and as same have been amended, modified or supplemented from time to
time prior to the Effective Date, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. § 9601 et seq.), the Hazardous Substances Transportation Act (49
U.S.C. § 1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §
6901 et seq.), as amended by the Hazardous and Solid Wastes

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Amendments of 1984, the Water Pollution Control Act
(33 U.S.C. § 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. § 300f et
seq.), the Clean Water Act (33 U.S.C. § 1321 et seq.), the Clean Air Act (42
U.S.C. § 7401 et seq.), the Solid Waste Disposal Act (42 U.S.C. § 6901 et
seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. § 11001
et seq.), the Radon Gas and Indoor Air Quality Research Act of 1986 (42 U.S.C.
§ 7401 et seq.), the National Environmental Policy Act (42 U.S.C. § 4321 et
seq.), the Superfund Amendment Reauthorization Act of 1986 (42 U.S.C. § 9601 et
seq.), the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.)
(collectively, the “Environmental Statutes”),
and any and all rules and regulations which have become effective prior to the
date of this Agreement under any and all of the Environmental Statutes.

“Escrow Agent” means
LandAmerica Commercial Services, having an address at One Market, Spear Tower,
Suite 1850, San Francisco, California, Attn: Carol Carozza.

“Existing Survey” means
Seller’s existing surveys of the Real Property as listed on Exhibit H.

“Extension Deposit”
has the meaning ascribed to such term in Section 10.1

“Evaluation Period” means
the period ending at 5:00 p.m. Eastern time on October 23, 2006.

“Governmental Regulations”
means all statutes, ordinances, rules and regulations of the Authorities
applicable to Seller or the use or operation of the Real Property or the
Improvements or any portion thereof.

“Hazardous Substances”
means (a) asbestos, radon gas, mold and urea formaldehyde foam insulation,
(b) any solid, liquid, gaseous or thermal contaminant, including smoke
vapor, soot, fumes, acids, alkalis, chemicals, petroleum products or
byproducts, polychlorinated biphenyls, phosphates, lead or other heavy metals
and chlorine, (c) any solid or liquid waste (including, without
limitation, hazardous waste), hazardous air pollutant, hazardous substance,
hazardous chemical substance and mixture, toxic substance, pollutant,
pollution, regulated substance and contaminant, and/or (d) any other
chemical, material or substance, the use or presence of which, or exposure to
the use or presence of which, is prohibited, limited or regulated by any
Environmental Laws.

“Improvements” means all
buildings, structures, fixtures, parking areas and other improvements located
on the Real Property.

“Intangible Property” means all of Seller’s right, title
and interest, to the extent assignable or transferable and to the extent not
otherwise specifically excluded pursuant to this Agreement, in and to all other
intangible rights, titles, interests, privileges and appurtenances owned by
Seller and exclusively related to or used exclusively in connection with the
ownership, use or operation of the Real Property or the Improvements,
including, without limitation, digital property management data, digital
operating statement and expense data, all rights, claims and causes of action
Seller may have against governmental authorities, present and former owners of
adjacent or neighboring land, former owners of the Property, present and former
tenants of the

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Property, contractors and material suppliers, and
architects, engineers and contractors in connection with the design or
construction of the Improvements, except to the extent that any such right,
claim and cause of action pertains to monies owed to Seller for the period
prior to closing and except for any right, claim and cause of action that
Seller may choose to assert, in its sole discretion, as a counterclaim against a
claim or cause of action asserted by or in connection with services provided by
any of the foregoing individuals or entities.

“Initial Earnest Money Deposit”
has the meaning ascribed to such term in Section 4.1(a).

“Kiosk
Lease” means all of the leases and other agreements with
Kiosk Tenants with respect to the use and occupancy of the Real Property at
Phelan.

“Kiosk
Tenants” means those Tenants in Phelan who occupy less
than 1,500 square feet of space in the building.

“Lease Schedule” means
Seller’s most current lease schedule, which is attached as Exhibit F.

“Leases” means all of the
leases and other agreements with Tenants with respect to the use and occupancy
of the Real Property, together with all renewals and modifications thereof, if
any, all guaranties thereof, if any, and any new leases and lease guaranties
entered into after the Effective Date.

“Licensee Parties” has
the meaning ascribed to such term in Section 5.1.

“Licenses and Permits”
means, collectively, all of Seller’s right, title and interest, to the extent
assignable, in and to licenses, permits, certificates of occupancy, approvals,
dedications, subdivision maps and entitlements now or hereafter issued,
approved or granted by the Authorities in connection with the Real Property and
the Improvements, together with all renewals and modifications thereof.

“Major Tenant” means any
Tenant leasing at least 25,000 square feet of space at the Property, in the
aggregate.

 “New
Tenant Costs” has the meaning ascribed to such term in
Section 10.4(e).

“Operating Expenses” has
the meaning ascribed to such term in Section 10.4(c).

“Permitted Exceptions”
has the meaning ascribed to such term in Section 6.2(a).

“Permitted Outside Parties”
has the meaning ascribed to such term in Section 5.2(b).

“Personal Property” means
all of Seller’s right, title and interest in and to all equipment, appliances,
tools, supplies, machinery, artwork, furnishings and other tangible personal
property attached to, appurtenant to, located, as of the Effective Date, in and
used in connection with the ownership or operation of the Improvements, and
Seller’s management offices at the Real Property and situated at the Property
at the time of Closing, but specifically excluding all

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personal property leased by or licensed to Seller or
owned by tenants or others and software and other personal property that is
proprietary or confidential in nature.

“Property” has the
meaning ascribed to such term in Section 2.1.

“Proration Items” has the
meaning ascribed to such term in Section 10.4(a).

“Purchase Price” has the
meaning ascribed to such term in Section 3.1.

“Purchaser’s Affiliates”
means any past, present or future: (i) shareholder, partner, member,
manager or owner of Purchaser; (ii) entity in which Purchaser or any past,
present or future shareholder, partner, member, manager or owner of Purchaser
has or had an interest; (iii) entity that, directly or indirectly,
controls, is controlled by or is under common control with Purchaser; and
(iv) the heirs, executors, administrators, personal or legal
representatives, successors and assigns of any or all of the foregoing.

“Purchaser’s Information”
has the meaning ascribed to such term in Section 5.3(c).

“Real Property” means
those certain parcels of real property located at 760 Market Street, San
Francisco, California (“Phelan”)
and 795 Folsom Street, San Francisco, California (“Folsom”), all as more particularly described in the legal
descriptions attached hereto and made a part hereof as Exhibit  D, together with all of Seller’s
right, title and interest, if any, in and to the appurtenances pertaining
thereto, including but not limited to Seller’s right, title and interest in and
to the adjacent streets, alleys and right-of-ways, and any easement rights, air
rights, subsurface development rights and water rights.

“Rental” has the meaning
ascribed to such term in Section 10.4(b), and same are “Delinquent” in
accordance with the meaning ascribed to such term in Section 10.4(b).

“Scheduled Closing Date”
means the thirtieth (30th) day after expiration of the Evaluation Period, but
subject to a thirty-day extension option pursuant to Section 10.1 below.

“Security Deposits” means
all security deposits held by Seller, as landlord, and not previously applied
to the obligations of a Tenant under its Lease, to the extent Purchaser
receives a credit therefor pursuant to Section 10.4 of this Agreement.

“Seller’s Affiliates”
means any past, present or future: (i) shareholder, partner, member,
manager or owner of Seller; (ii) entity in which Seller or any past,
present or future shareholder, partner, member, manager or owner of Seller has
or had an interest; (iii) entity that, directly or indirectly, controls,
is controlled by or is under common control with Seller and (iv) the
heirs, executors, administrators, personal or legal representatives, successors
and assigns of any or all of the foregoing.

“Seller’s Knowledge” means
the present actual (as opposed to constructive or imputed) knowledge solely of
Robert Drabkin (“Drabkin”), Regional Director, and
Diane Murphy, (“Murphy”), Director
of Property Management, Mack-Cali Realty Corporation (“MCRC”), the managing agent for
Seller, without any independent investigation or inquiry whatsoever; provided
that with respect to the representations and warranties set forth in Sections
8.1(a)

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through 8.1(f), inclusive, and 8.1(k) of this
Agreement, “Seller’s Knowledge” means the present actual (as opposed to
constructive or imputed) knowledge of Drabkin, Murphy, Mitchell E. Hersh,
President and Chief Executive Officer of MCRC, Roger W. Thomas, Executive Vice
President and General Counsel of MCRC and Daniel J. Wagner, Vice President and
Senior Associate General Counsel of MCRC, without any independent investigation
or inquiry whatsoever, but without any personal liability whatsoever.

“Service Contracts” means
all of Seller’s right, title and interest, to the extent assignable, in all
service agreements, maintenance contracts, equipment leasing agreements,
warranties, guarantees, bonds, open purchase orders and other contracts for the
provision of labor, services, materials or supplies relating solely to the Real
Property, Improvements or Personal Property and under which Seller is currently
paying for services rendered in connection with the Property, as listed and
described on Exhibit E attached hereto,
together with all renewals, supplements, amendments and modifications thereof,
and any new such agreements entered into after the Effective Date, to the
extent permitted by Section 7.1; provided however, “Service Contracts”
shall not include contracts with Seller’s affiliates, including, without
limitation, leasing, construction, management and development contracts with
Seller’s affiliates.

“Significant Portion”
means, for purposes of the casualty provisions set forth in Article XI
hereof, damage by fire or other casualty to the Real Property and the
Improvements or a portion thereof, the cost of which to repair would exceed
five percent (5%) of the Purchase Price in the aggregate.

“Survey Objection” has
the meaning ascribed to such term in Section 6.1.

“Tenants” means the
tenants or users of the Real Property and Improvements who are parties to the
Leases.

“Tenant Notice Letters”
has the meaning ascribed to such term in Section 10.2(e), and are to be
delivered by Purchaser to Tenants pursuant to Section 10.6.

“Termination Surviving Obligations”
means the rights, liabilities and obligations set forth in Sections 5.2, 5.3,
5.4, 12.1, Articles XIII and XIV, 16.1, 18.2 and 18.8, and any other provisions
which pursuant to their terms survive any termination of this Agreement.

“Title Commitment” has
the meaning ascribed to such term in Section 6.2(a).

“Title Company” means
Lawyers Title Insurance Corporation.

“Title Objections” has
the meaning ascribed to such term in Section 6.2(a).

“Title Policy” has the
meaning ascribed to such term in Section 6.2(a).

“Updated Survey” has the
meaning ascribed to such term in Section 6.1.

Section 1.2            References:
Exhibits and Schedules.  Except as otherwise specifically indicated,
all references in this Agreement to Articles or Sections refer to Articles or
Sections of this Agreement, and all references to Exhibits or Schedules refer
to Exhibits or Schedules

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attached hereto, all of which Exhibits and Schedules are incorporated
into, and made a part of, this Agreement by reference. The words “herein,” “hereof,”
“hereinafter” and words and phrases of similar import refer to this Agreement
as a whole and not to any particular Section or Article.

ARTICLE
II

AGREEMENT
OF PURCHASE AND SALE

Section 2.1            Agreement.  Seller hereby agrees to sell, convey and
assign to Purchaser, and Purchaser hereby agrees to purchase and accept from
Seller, on the Closing Date and subject to the terms and conditions of this
Agreement, all of the following (individually and collectively, the “Property”):

(a)           the
Real Property;

(b)           the
Improvements;

(c)           the
Personal Property;

(d)           the
Intangible Property;

(e)           all
of Seller’s right, title and interest as lessor in and to the Leases and,
subject to the terms of the respective applicable Leases, the Security
Deposits; and

(f)            to
the extent assignable, the Service Contracts and the Licenses and Permits.  All right, title and interest in and to the
names, trademarks and servicemarks of Seller and MCRC, including but not
limited to the right to use the name “Mack-Cali”, are excluded from the
Property.

Section 2.2            Indivisible
Economic Package. 
Purchaser has no right to purchase, and Seller has no obligation to
sell, less than all of the Property, it being the express agreement and
understanding of Purchaser and Seller that, as a material inducement to Seller
and Purchaser to enter into this Agreement, Purchaser has agreed to purchase,
and Seller has agreed to sell, all of the Property, subject to and in
accordance with the terms and conditions hereof.

ARTICLE
III

CONSIDERATION

Section 3.1            Purchase
Price.  The
purchase price for the Property (the “Purchase
Price”) shall be One Hundred Twenty-Six Million Dollars
($126,000,000) in lawful currency of the United States of America, payable as
provided in Section 3.3.  The
Purchase Price shall be allocated among the Real Property and Improvements in
accordance with the column identified as “Purchase Price Allocation” on Exhibit K.  No portion of the Purchase Price shall be
allocated to the Personal Property unless otherwise agreed by Seller and
Purchaser.

Section 3.2            Assumption
of Obligations; Additional Purchase Price Consideration.  As additional consideration for the purchase
and sale of the Property, at Closing Purchaser will (i) assume the covenants and
obligations of Seller pursuant to the Leases, Service Contracts and Licenses
and Permits, subject to certain limitations as more fully set forth in this
Agreement,

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including without limitation, the exhibits hereto and (ii) offer to
hire the Company California Employees at the same base salary and bonus
compensation (other than stock) as are in existence prior to Closing as more
fully set forth in Section 7.3 below.  In
addition, should Purchaser, its assigns or affiliates, initiate the conversion
of Phelan into a residential condominium at any time within the three (3) year
period following the Closing, then Purchaser or such assignee or affiliate, as
the case may be, shall pay to Seller as additional purchase price consideration
with respect to Phelan an amount equal to the lesser of ten percent (10%) of
the net profits realized as a result of such conversion and Five Million
Dollars ($5,000,000), as more fully set forth in Section 10.8 below.

Section 3.3            Method
of Payment of Purchase Price.  No later than 2:00 p.m. Eastern Time on the
Closing Date, Purchaser shall pay the Purchase Price (less the Earnest Money
Deposit), together with all other costs and amounts to be paid by Purchaser at
the Closing pursuant to the terms of this Agreement (“Purchaser’s Costs”), by Federal Reserve
wire transfer of immediately available funds to the account of Escrow
Agent.  Escrow Agent, following
authorization by the parties at Closing, shall, prior to 3:00 p.m. Eastern Time
(i) pay to Seller by Federal Reserve wire transfer of immediately
available funds to an account designated by Seller, the Purchase Price, less
any costs or other amounts to be paid by Seller at Closing pursuant to the
terms of the Closing Statement executed by Seller and Purchaser, (ii) pay
to the appropriate payees out of the proceeds of Closing payable to Seller all
costs and amounts to be paid by Seller at Closing pursuant to the terms of the
executed Closing Statement, and (iii) pay Purchaser’s Costs to the
appropriate payees at Closing pursuant to the terms of the executed Closing
Statement.

ARTICLE
IV

EARNEST
MONEY DEPOSIT

AND ESCROW INSTRUCTIONS

Section 4.1            The
Earnest Money Deposit and Independent Contract Consideration.

(a)           On
or before one (1) Business Day after the Effective Date, Purchaser shall
deposit with the Escrow Agent, by Federal Reserve wire transfer of immediately
available funds, the sum of Five Hundred Thousand Dollars ($500,000.00) as the
earnest money deposit on account of the Purchase Price (the “Initial Earnest Money Deposit”).  TIME IS OF THE ESSENCE with respect to the
deposit of the Initial Earnest Money Deposit. 
The Initial Earnest Money Deposit shall be held by the Escrow Agent in a
sole order escrow account in the Purchaser’s name as a deposit against the
Purchase Price in accordance with the terms and provisions of this
Agreement.  In furtherance of the foregoing, in the event Purchaser so instructs
Escrow Agent on or prior to the expiration of the Evaluation Period, Escrow
Agent agrees that it shall not be permitted to, and shall not, follow any
conflicting instructions given by Seller or any third party as to the
disposition of the Initial Earnest Money Deposit but shall instead follow only
the instructions of Purchaser in connection therewith.  Seller agrees in such instance not to deliver
any conflicting instructions to Escrow Agent for any reason.  If the Agreement is not terminated on or
prior to the expiration of the Evaluation Period, the Initial Earnest Money
Deposit shall be transferred by the Escrow Agent to a joint escrow account for
the benefit of Purchaser and Seller.

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(b)           If
Purchaser does not terminate this Agreement pursuant to Section 5.3(c) below,
then on or before one (1) Business Day after the expiration of the Evaluation
Period, Purchaser shall, in addition to the Earnest Money Deposit, deposit with
Escrow Agent, by Federal Reserve wire transfer of immediately available funds,
Two Million Dollars ($2,000,000.00) as an additional earnest money deposit on
account of the Purchase Price (the “Additional
Earnest Money Deposit”). 
TIME IS OF THE ESSENCE WITH RESPECT TO THE PAYMENT OF THE ADDITIONAL
EARNEST MONEY DEPOSIT.  The Initial
Earnest Money Deposit and Additional Earnest Money Deposit are hereinafter
referred to individually and collectively as the “Earnest
Money Deposit”.

Section 4.2            Escrow
Instructions. 
The Earnest Money Deposit shall be held in escrow by the Escrow Agent in
an interest-bearing account, in accordance with the provisions of Section 4.1
and Article XVII.  In the event this
Agreement is not terminated by Purchaser pursuant to the terms hereof by the
end of the Evaluation Period in accordance with the provisions of
Section 5.3(c) herein, the
Earnest Money Deposit and the interest earned thereon shall become
non-refundable to Purchaser except in those instances expressly set forth in
this Agreement.  In the event this
Agreement is terminated by Purchaser prior to the expiration of the Evaluation
Period, the Earnest Money Deposit, together with all interest earned thereon,
shall be refunded to Purchaser.

Section 4.3            Designation
of Certifying Person.  In order to assure compliance with the
requirements of Section 6045 of the Internal Revenue Code of 1986, as
amended (the “Code”), and
any related reporting requirements of the Code, the parties hereto agree as
follows:

(a)           Provided
the Escrow Agent shall execute a statement in writing (in form and substance
reasonably acceptable to the parties hereunder) pursuant to which it agrees to
assume all responsibilities for information reporting required under
Section 6045(e) of the Code, Seller and Purchaser shall designate the
Escrow Agent as the person to be responsible for all information reporting
under Section 6045(e) of the Code
(the “Certifying Person”).  If the Escrow Agent refuses to execute a
statement pursuant to which it agrees to be the Certifying Person, Seller and
Purchaser shall agree to appoint another third party as the Certifying Person.

(b)           Seller
and Purchaser each hereby agree:

(i)            to provide to the Certifying Person
all information and certifications regarding such party, as reasonably requested
by the Certifying Person or otherwise required to be provided by a party to the
transaction described herein under Section 6045 of
the Code; and

(ii)           to provide to the Certifying Person
such party’s taxpayer identification number and a statement (on Internal
Revenue Service Form W-9 or an acceptable substitute form, or on any other form
the applicable current or future Code sections and regulations might require
and/or any form requested by the Certifying Person), signed under penalties of
perjury, stating that the taxpayer identification number supplied by such party
to the Certifying Person is correct.

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ARTICLE V

INSPECTION
OF PROPERTY

Section 5.1            Inspection
Period. 
From and after the date of this Agreement, Purchaser and its authorized
agents and representatives (for purposes of this Article V, the “Licensee Parties”) shall have the
right, subject to the right of the Tenants, to enter upon the Real Property at
all reasonable times during normal business hours to perform an inspection of
the Property.  Purchaser will provide to
Seller notice of the intention of Purchaser or the other Licensee Parties to
enter the Real Property at least 24 hours prior to such intended entry and
specify the intended purpose therefor and the inspections and examinations contemplated
to be made and with whom any Licensee Party will communicate.  At Seller’s option, Seller may be present for
any such entry and inspection. Purchaser shall not communicate with or contact
any of the Tenants or any of the Authorities without the prior written consent
of Seller, not to be unreasonably withheld. 
Notwithstanding anything to the contrary contained herein, no physical
testing or sampling shall be conducted during any such entry by Purchaser or
any Licensee Party upon the Real Property without Seller’s specific prior
written consent, such consent not to be unreasonably withheld, conditioned or
delayed.  Notwithstanding the foregoing,
Purchaser shall have the right to communicate with the Authorities in order to
confirm the zoning requirements applicable to the Property and to verify
whether there are any violations of record with respect to the Property;
provided, however, that, without Seller’s consent, Purchaser shall not
authorize or request any inspection or make any inquiries that would require an
inspection of the Property by any of the Authorities.  TIME IS OF THE ESSENCE with respect to the
provisions of this Section 5.1.

Section 5.2            Document
Review.

(a)           During
the Evaluation Period, Purchaser and the Licensee Parties shall have the right
to review and inspect, at Purchaser’s sole cost and expense, copies of all of
the following to the extent that, to Seller’s Knowledge, such items are in
Seller’s possession or control (collectively, the “Documents”): all existing environmental and engineering
reports and studies prepared for Seller with respect to the Property, real
estate tax bills, together with assessments (special or otherwise), ad valorem
and personal property tax bills covering the period of Seller’s ownership of
the Property; current operating statements and historical operating information
related to the Property for the past three years confirming collected income,
operating expenses, capital expenditures, commissions and fees, together with
related correspondence, notices, existing audits, real estate and personal
property tax filings and real estate tax appeal files (which may be made
available by Seller for review at the offices of Seller’s tax appeal consultant
in California), contracts, and associated books and records; tenant ledgers,
year-to-date operating statements, operating and other expense reconciliations
and written communications with tenants regarding same; evidence of Seller’s
property insurance; documentation pertaining to the registration of storage
tanks and inventory records with respect to such tanks; an inventory list of
the Personal Property; the Leases, lease files, Service Contracts, Licenses and
Permits; assessment district information; any governmental or
quasi-governmental correspondence or other documentation and notices related to
use, zoning, building code or any other regulatory matter; construction plans
and specifications; and site plans and all associated drawings, modifications,
and additions for the Property; and copies of permits and soils reports,
hazardous materials permits, fire sprinkler ratings, and electrical ratings;
contracts and plans relating to the work described on Exhibit R and any other documents
reasonably requested by Purchaser to the extent in Seller’s possession or
control .  Such inspections shall occur
at a location or locations selected by Seller, which may be at Seller’s offices
in San Francisco, California, in MCRC’s office in Denver, Colorado, at the Real
Property or Purchaser’s

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office in San Diego, California to the extent Seller delivers any such
Documents to Purchaser physically or electronically, or a combination of the
foregoing locations.  Purchaser shall not
have the right to review or inspect materials not directly related to the
leasing, maintenance and/or management of the Property, including, without
limitation, all of Seller’s internal memoranda, financial projections, budgets,
appraisals, proposals for work not actually undertaken, accounting and tax
records and similar proprietary, elective or confidential information.

 

(b)           Purchaser
acknowledges that any and all of the Documents may be proprietary and
confidential in nature and have been provided to Purchaser solely to assist
Purchaser in determining the desirability of purchasing the Property.  Subject only to the provisions of
Article XII, Purchaser agrees not to disclose the contents of the
Documents or any of the provisions, terms or conditions contained therein to
any party outside of Purchaser’s organization other than its attorneys,
existing and prospective partners, accountants, existing and prospective
lenders, investors or the Licensee Parties (collectively, for purposes of this
Section 5.2(b), the “Permitted
Outside Parties”).  Purchaser further agrees that within its
organization, or as to the Permitted Outside Parties, the Documents will be
disclosed and exhibited only to those persons within Purchaser’s organization
or to those Permitted Outside Parties who are responsible for determining the
desirability of Purchaser’s acquisition of the Property.  Purchaser further acknowledges that the
Documents and other information relating to the leasing arrangements between
Seller and Tenants are proprietary and confidential in nature.  Purchaser agrees not to divulge the contents
of such Documents and other information except in strict accordance with the
confidentiality standards set forth in this Section 5.2 and
Article XII.  In permitting
Purchaser and the Permitted Outside Parties to review the Documents and other
information to assist Purchaser, Seller has not waived any privilege or claim
of confidentiality with respect thereto, and no third party benefits or
relationships of any kind, either express or implied, have been offered,
intended or created by Seller, and any such claims are expressly rejected by
Seller and waived by Purchaser and the Permitted Outside Parties, for whom, by
its execution of this Agreement, Purchaser is acting as an agent with regard to
such waiver.

(c)           Purchaser
acknowledges that some of the Documents may have been prepared by third parties
and may have been prepared prior to Seller’s ownership of the Property.   EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT OR THE DOCUMENTS REQUIRED TO BE DELIVERED
BY SELLER UNDER SECTION 10 HEREOF (THE “CLOSING DOCUMENTS”),  PURCHASER HEREBY ACKNOWLEDGES THAT SELLER HAS NOT MADE
AND DOES NOT MAKE ANY REPRESENTATION OR WARRANTY REGARDING THE TRUTH, ACCURACY
OR COMPLETENESS OF THE DOCUMENTS OR THE SOURCES THEREOF.  SELLER HAS NOT UNDERTAKEN ANY INDEPENDENT
INVESTIGATION AS TO THE TRUTH, ACCURACY OR COMPLETENESS OF THE DOCUMENTS AND IS
PROVIDING THE DOCUMENTS SOLELY AS AN ACCOMMODATION TO PURCHASER.

Section 5.3            Entry
and Inspection Obligations; Termination of Agreement.

(a)           Purchaser
agrees that in entering upon and inspecting or examining the Property,
Purchaser and the other Licensee Parties will not unreasonably disturb the
Tenants or interfere with the use of the Property pursuant to the Leases;
interfere with the operation and

 11
 

 

maintenance of the Real Property or Improvements; damage any part of
the Property or any personal property owned or held by Tenants or any other
person or entity; injure or otherwise cause bodily harm to Seller or any
Tenant, or to any of their respective agents, guests, invitees, contractors and
employees, or to any other person or entity; permit any liens to attach to the
Real Property by reason of the exercise of Purchaser’s rights under this
Article V; or reveal or disclose any information obtained concerning the
Property and the Documents to anyone outside Purchaser’s organization, except
in accordance with the confidentiality standards set forth in
Section 5.2(b) and Article XII. 
Purchaser will (i) maintain comprehensive general liability
(occurrence) insurance on terms and in amounts satisfactory to Seller and Workers’
Compensation insurance in statutory limits, and, if Purchaser or any Licensee
Party performs any physical inspection or sampling at the Real Property, in
accordance with Section 5.1, such Licensee Party performing such physical
inspection or sampling shall maintain errors and omissions insurance and
contractor’s pollution liability insurance on terms and in amounts acceptable
to Seller, and insuring Seller, Purchaser and such other parties as Seller
shall request, covering any accident or event arising in connection with the
presence of Purchaser or the other Licensee Parties on the Real Property or
Improvements, and deliver evidence of insurance verifying such coverage to
Seller prior to entry upon the Real Property or Improvements; (ii) promptly
pay when due the costs of all entry and inspections and examinations done with
regard to the Property; (iii) cause any inspection to be conducted in
accordance with standards customarily employed in the industry and in
compliance with all Governmental Regulations; (iv) at Seller’s request,
furnish to Seller any studies, reports or test results received by Purchaser
regarding the Property, promptly after such receipt, in connection with such
inspection; and (v) restore the Real Property and Improvements to the condition
in which the same were found before any such entry upon the Real Property and
inspection or examination was undertaken.

(b)           Purchaser
hereby indemnifies, defends and holds Seller and its partners, agents,
directors, officers, employees, successors and assigns harmless from and
against any and all liens, claims, causes of action, damages, liabilities,
demands, suits, and obligations to third parties, together with all losses,
penalties, costs and expenses relating to any of the foregoing (including but
not limited to court costs and reasonable attorneys’ fees) for personal injury,
wrongful acts, torts claims and property damage, arising out of Purchaser’s and
the other Licensee Parties’ entry onto the Property and/or any inspections,
investigations, examinations, sampling or tests conducted by Purchaser or any
of the Licensee Parties, whether prior to or after the date hereof, with
respect to the Property or arising out of any violation of the provisions of
this Article V; provided that the foregoing indemnity shall not relate to
any liability, cost, loss, damage or expense to the extent attributable to (i)
conditions in existence on or about the Property on the date of this Agreement,
except to the extent exacerbated by Purchaser (provided that Purchaser’s mere
discovery or legally required disclosure of a pre-existing condition on the
Property shall not be deemed to be an exacerbation of a pre-existing
condition), (ii) any acts or omissions of Seller or any of Seller’s agents,
contractors, or employees, or (iii) claims based on disclosures required
pursuant to Governmental Regulations.

(c)           In
the event that Purchaser determines, after its inspection of the Documents and
Real Property and Improvements, that it does not want to proceed with the
transaction as set forth in this Agreement, Purchaser shall have the right to
terminate this Agreement by providing written notice to Seller prior to the
expiration of the Evaluation Period, WITH TIME BEING OF THE ESSENCE WITH
RESPECT THERETO. In the event Purchaser

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terminates this Agreement in accordance with this Section 5.3(c),
Purchaser shall have the right to receive a refund of the Earnest Money
Deposit, together with all interest which has accrued thereon, and except with
respect to the Termination Surviving Obligations, this Agreement shall be null
and void and the parties shall have no further obligation to each other.  In the event this Agreement is terminated,
Purchaser shall return to Seller all Documents and copies Purchaser has made of
the Documents and all copies of any studies, reports or test results regarding
any part of the Property obtained by Purchaser, before or after the execution
of this Agreement (collectively, “Purchaser’s
Information”) promptly following the time this Agreement is
terminated for any reason.

Section 5.4            Sale
“As Is”  THE TRANSACTION CONTEMPLATED
BY THIS AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND PURCHASER. THIS
AGREEMENT REFLECTS THE MUTUAL AGREEMENT OF SELLER AND PURCHASER, AND PURCHASER
HAS THE RIGHT TO CONDUCT ITS OWN INDEPENDENT EXAMINATION OF THE PROPERTY. OTHER
THAN THE MATTERS EXPRESSLY REPRESENTED IN SECTION 8.1 HEREOF AND THE
CLOSING DOCUMENTS OR ANY ESTOPPEL DELIVERED BY SELLER TO PURCHASER, BY WHICH
ALL OF THE FOLLOWING PROVISIONS OF THIS SECTION 5.4 ARE LIMITED, PURCHASER
HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY
REPRESENTATION OR WARRANTY OF SELLER OR ANY OF SELLER’S AGENTS OR
REPRESENTATIVES, AND PURCHASER HEREBY ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS
OR WARRANTIES HAVE BEEN MADE.

SELLER SPECIFICALLY DISCLAIMS, AND NEITHER SELLER
NOR ANY OF SELLER’S AFFILIATES NOR ANY OTHER PERSON IS MAKING, ANY
REPRESENTATION, WARRANTY OR ASSURANCE WHATSOEVER TO PURCHASER, AND NO
WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EITHER EXPRESS OR
IMPLIED, ARE MADE BY SELLER OR RELIED UPON BY PURCHASER WITH RESPECT TO THE
STATUS OF TITLE TO OR THE MAINTENANCE, REPAIR, CONDITION, DESIGN, DEVELOPMENT
POTENTIAL OR MARKETABILITY OF THE PROPERTY, OR ANY PORTION THEREOF, INCLUDING
BUT NOT LIMITED TO (a) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY,
(b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE,
(c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS, (d) ANY RIGHTS OF PURCHASER UNDER APPROPRIATE STATUTES TO CLAIM
DIMINUTION OF CONSIDERATION, (e) ANY CLAIM BY PURCHASER FOR DAMAGES
BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, WITH RESPECT TO THE REAL
PROPERTY, IMPROVEMENTS OR PERSONAL PROPERTY, (f) THE FINANCIAL CONDITION
OR PROSPECTS OF THE PROPERTY OR ANY TENANT AND (g) THE COMPLIANCE OR LACK
THEREOF OF THE REAL PROPERTY OR THE IMPROVEMENTS WITH GOVERNMENTAL REGULATIONS,
INCLUDING WITHOUT LIMITATION ENVIRONMENTAL LAWS, NOW EXISTING OR HEREAFTER
ENACTED OR PROMULGATED, IT BEING THE EXPRESS INTENTION OF SELLER AND PURCHASER
THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PROPERTY WILL BE

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CONVEYED AND TRANSFERRED TO
PURCHASER IN ITS PRESENT CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS,”
WITH ALL FAULTS.  PURCHASER REPRESENTS
THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF REAL
ESTATE, AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF
PURCHASER’S CONSULTANTS IN PURCHASING THE PROPERTY.  PURCHASER HAS BEEN GIVEN A SUFFICIENT
OPPORTUNITY HEREIN TO CONDUCT AND HAS CONDUCTED OR WILL CONDUCT SUCH
INSPECTIONS, INVESTIGATIONS AND OTHER INDEPENDENT EXAMINATIONS OF THE PROPERTY
AND RELATED MATTERS AS PURCHASER DEEMS NECESSARY, INCLUDING BUT NOT LIMITED TO
THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AND WILL RELY UPON SAME AND
NOT UPON ANY STATEMENTS OF SELLER (EXCLUDING THE LIMITED MATTERS EXPRESSLY
REPRESENTED BY SELLER IN SECTION 8.1 HEREOF OR THE CLOSING DOCUMENTS) NOR
OF ANY PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF SELLER OR ITS
GENERAL PARTNER. PURCHASER ACKNOWLEDGES THAT ALL INFORMATION PROVIDED TO
PURCHASER WAS OBTAINED FROM A VARIETY OF SOURCES, AND SELLER WILL NOT BE DEEMED
TO HAVE REPRESENTED OR WARRANTED THE COMPLETENESS, TRUTH OR ACCURACY OF ANY OF
THE DOCUMENTS OR OTHER SUCH INFORMATION HERETOFORE OR HEREAFTER FURNISHED TO
PURCHASER.  UPON CLOSING, PURCHASER WILL
ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE
PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER’S
INSPECTIONS AND INVESTIGATIONS. PURCHASER ACKNOWLEDGES AND AGREES THAT, UPON
CLOSING, SELLER WILL SELL AND CONVEY TO PURCHASER, AND PURCHASER WILL ACCEPT
THE PROPERTY, “AS IS, WHERE IS,” WITH ALL FAULTS. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR
REPRESENTATIONS IN CONNECTION WITH THE PROPERTY BY SELLER, ANY AGENT OF SELLER
OR ANY THIRD PARTY. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR
WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY
FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE OR OTHER PERSON, UNLESS
THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO HEREIN. PURCHASER
ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE “AS IS, WHERE IS” NATURE OF
THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT
MAY BE ASSOCIATED WITH THE PROPERTY. 
PURCHASER, WITH PURCHASER’S COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS
AND WAIVERS SET FORTH IN THIS AGREEMENT AND UNDERSTANDS THEIR SIGNIFICANCE AND
AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH HEREIN ARE AN
INTEGRAL PART OF THIS AGREEMENT, AND THAT SELLER WOULD NOT HAVE AGREED TO SELL
THE PROPERTY TO PURCHASER FOR THE PURCHASE PRICE WITHOUT THE DISCLAIMERS AND
OTHER AGREEMENTS SET FORTH IN THIS AGREEMENT.

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PURCHASER AND PURCHASER’S AFFILIATES FURTHER
COVENANT AND AGREE NOT TO SUE SELLER AND SELLER’S AFFILIATES AND RELEASE SELLER
AND SELLER’S AFFILIATES OF AND FROM AND WAIVE ANY CLAIM OR CAUSE OF ACTION,
INCLUDING WITHOUT LIMITATION ANY STRICT LIABILITY OR CONTRIBUTION CLAIM OR
CAUSE OF ACTION, THAT PURCHASER OR PURCHASER’S AFFILIATES MAY HAVE AGAINST
SELLER OR SELLER’S AFFILIATES UNDER ANY ENVIRONMENTAL LAW, NOW EXISTING OR
HEREAFTER ENACTED OR PROMULGATED, RELATING TO ENVIRONMENTAL MATTERS OR
ENVIRONMENTAL CONDITIONS IN, ON, UNDER, ABOUT OR MIGRATING FROM OR ONTO THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT, OR BY VIRTUE OF ANY COMMON LAW RIGHT,
NOW EXISTING OR HEREAFTER CREATED, RELATED TO ENVIRONMENTAL CONDITIONS OR
ENVIRONMENTAL MATTERS IN, ON, UNDER, ABOUT OR MIGRATING FROM OR ONTO THE
PROPERTY. THE TERMS AND CONDITIONS OF THIS SECTION 5.4 WILL EXPRESSLY
SURVIVE THE TERMINATION OF THIS AGREEMENT OR THE CLOSING, AS THE CASE MAY BE,
AND WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND ARE HEREBY
DEEMED INCORPORATED INTO THE DEED AS FULLY AS IF SET FORTH AT LENGTH THEREIN.

“IN CONNECTION WITH THE
RELEASES HEREIN SET FORTH, PURCHASER EXPRESSLY WAIVES ALL RIGHTS UNDER
CALIFORNIA CIVIL CODE SECTION 1542, AS AMENDED OR MODIFIED, WHICH PROVIDES
THAT:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

Section 5.5            Natural Hazard Disclosure Requirement Compliance.  Purchaser and Seller acknowledge that Seller
may be required to disclose whether the Property lies within the following
natural hazard areas or zones:  (i) a
special flood hazard area designated by the Federal Emergency Management Agency
(California Government Code Section 8589.3); (ii) an area of potential flooding
(California Government Code Section 8589.4); (iii) a very high fire hazard
severity zone (California Government Code Section 51178 et seq.); (iv) a
wildland area that may contain substantial forest fire risks and hazards
(Public Resources Code Section 4136); (v) an earthquake fault zone (Public
Resources Code Section 2621.9); or (vi) a seismic hazard zone (Public Resources
Code Section 2694) (sometimes all of the preceding are herein collectively
called the “Natural Hazard Matters”). 
Seller has engaged or will cause the Title Company to engage the
services of a natural hazard disclosure expert (the “Natural Hazard Expert”),
to examine the maps and other information specifically made available to the
public by government agencies for the purposes of enabling Seller to fulfill
its disclosure obligations, if and to the extent such obligations exist, and to
report the result of its examination to Purchaser and Seller in writing.  The written report prepared by the Natural
Hazard Expert (the “Natural Hazard

 15
 

 

Report”) regarding the results of its examination will fully and
completely discharge Seller from its disclosure obligations referred to in this
Agreement or in the Natural Hazard Report, if and to the extent any such
obligations exist.  Purchaser acknowledges
that Seller has delivered to Purchaser the Commercial Property Owner’s Guide to
Earthquake Safety, published by the State of California Seismic Safety
Commission, which informs property owners generally of the risks attendant to
earthquakes and the effect earthquakes could have on the their property.  Purchaser agrees to provide Seller with a
written acknowledgment of its receipt of the Natural Hazard Report.  Purchaser’s failure to terminate this
Agreement pursuant to section 5.3(c) above shall be deemed to be Purchaser’s
acceptance of all Natural Hazard Matters.

Section 5.6            Pre 1975 Construction Disclosure.  Seller hereby informs Purchaser
that the Real Property may have been constructed during or prior to 1975, and
the construction method may have been that of pre-cast tilt-up concrete.  In accordance with California law, attached
hereto as Exhibit “T” is a copy of the Commercial Property Owner’s Guide to
Earthquake Safety published by the State of California Seismic Safety
Commission (the “Guide”).  In connection
with the Commercial Property Earthquake Weakness Disclosure Report (the “Disclosure
Report”) which is made a part of the Guide, Seller hereby notifies Purchaser
that with respect to Question Nos. 1 through 4 in such Disclosure Report,
Seller does not know the answers to such questions and that, by the execution
of this Agreement by Seller, Seller shall have been deemed to have executed and
delivered the Disclosure Report and shall be deemed to have checked the “Don’t
Know” box following each such questions.

ARTICLE
VI

TITLE
AND SURVEY MATTERS

Section
6.1            Survey.  Purchaser acknowledges receipt of the
Existing Survey.  Any modification,
update or recertification of the Existing Survey shall be at Purchaser’s
election and sole cost and expense.  The
Existing Survey together with any update Purchaser has elected to obtain, if
any, is herein referred to as the “Updated
Survey.”  Any matters that
are objected to by Purchaser in a written notice to Seller prior to the
expiration of the Evaluation Period shall constitute a “Survey Objection” under this Agreement.

Section
6.2            Title Commitment.

(a)           Purchaser acknowledges receipt of those certain title
insurance commitments issued by the Title Company under Commitment Nos.
NYN06-002152-L and NYN06-002151-L (the “Title
Commitment”), together with copies of the title exceptions
listed thereon.  Purchaser shall have
until the expiration of the Evaluation Period to provide written notice to
Seller of Purchaser’s objection to any exception or other matter set forth in
the Title Commitment that Purchaser deems unacceptable (a “Title Objection”).  Purchaser shall be deemed to have accepted
all exceptions and other matters in the Title Commitment not objected to in
writing by Purchaser prior to the expiration of the Evaluation Period.  By the date (the “New Objection Date”) which is five (5)
Business Days after Purchaser’s counsel receives notice of any new exception to
the title to the Real Property raised by the Title Company after the effective
date of the Title Commitment and prior to the Closing (or as promptly as
possible prior to the

 16
 

 

Closing if such notice is received with less
than five (5) Business Days prior to the Closing [but in no event less than one
(1) Business Day] and the Closing Date shall be extended to permit time for
Seller to respond to such objection), Purchaser shall provide Seller with
written notice of its objection to such new exception if Purchaser deems same
unacceptable (“New Title Objections”).  In the event Seller does not receive the New
Title Objections by the New Objection Date, Purchaser will be deemed to have
accepted the exceptions to title set forth on any updates to the Title
Commitment as Permitted Exceptions. 
Pursuant to the Title Commitment, the Title Company shall be committed
to issue to Purchaser at Closing, an ALTA Form, amended 10-17-70 (with no added
exception for creditors’ rights) extended coverage owner’s policy of title
insurance, dated as of each Property as of the date and time of recordation of
the Deed for such Property in the amount of the Purchase Price insuring
Purchaser’s fee simple title to the Real Property subject to the standard
preprinted exceptions except those that the Title Company agrees to omit or
modify during the Evaluation Period and with such endorsements as the Title
Company has agreed to issue on or before the expiration of the Evaluation
Period, subject only to the Permitted Exceptions (the “Title
Policy”).  “Permitted Exceptions” means the
following:  (1) the lien of any current
real estate taxes and assessments and subsequent periods, provided that the
same are prorated in accordance with this Agreement; and (2) such other matters
set forth in the Title Commitment or Survey which are approved or deemed
approved by Purchaser during the Evaluation Period or thereafter in accordance
with this Agreement.

(b)           All taxes, water rates or charges, sewer rents and
assessments, plus interest and penalties thereon, which on the Closing Date
shall have accrued and are liens against the Real Property will be credited
against the Purchase Price (subject to the provision for apportionment of
taxes, water rates and sewer rents herein contained).

(c)           If on the Closing Date the Real Property shall be affected
by any lien which, pursuant to the provisions of this Agreement, is required to
be discharged or satisfied by Seller, Seller shall not be required to discharge
or satisfy the same of record provided the money necessary to satisfy the lien
is retained by the Title Company at Closing or the Title Company receives an
indemnity from Seller satisfactory to the Title Company, and the Title Company
omits the lien as an exception from the Title Policy, and a credit is given to
Purchaser for the recording charges for a 
satisfaction or discharge of such lien.

(d)           No franchise, transfer, inheritance, income, corporate or
other tax open, levied or imposed against Seller or any former owner of the
Property, that may be a lien against the Property on the Closing Date, shall be
an objection to title if the Title Company insures against collection thereof
from or out of the Real Property and/or the Improvements, and provided further
that Seller deposits with the Title Company a sum reasonably sufficient to
secure a release of the Property from the lien thereof or the Title Company
receives an indemnity from Seller satisfactory to the Title Company, and, in
any event, any such tax is omitted as an exception  to the Title Policy.  If a search of title discloses judgments,
bankruptcies, or other returns against other persons having names the same as
or similar to that of Seller, Seller will deliver to the Title Company an
affidavit stating that such judgments, bankruptcies or other returns do not
apply to Seller, and such search results shall not be deemed Title Objections.

 17
 

 

Section
6.3            Title Defect.

(a)           In the event Seller receives any Survey Objection, Title
Objection or New Title Objection (collectively and individually, a “Title Defect”) within the time periods
required under Sections 6.1 and 6.2 above, Seller may elect (but shall not be
obligated) by written notice to Purchaser to attempt to remove, or cause to be
removed at its expense, any such Title Defect, and shall provide Purchaser with
written notice, within seven (7) days of its receipt of any such objection, of
its intention to attempt to cure any such Title Defect and/or extend the
Closing Date for such purpose.  If Seller
elects to attempt to cure any Title Defect, the Scheduled Closing Date shall be
extended, for a period not to exceed sixty (60) days, for the purpose of such
removal if Seller provides written notice to Purchaser of such extension at
least ten (10) Business Days prior to the Scheduled Closing Date.  If Seller elects to extend the Scheduled
Closing Date as aforesaid, but successfully effects such cure more than ten
(10) Business Days before the expiration of the extension period set forth in
Seller’s extension notice, then Seller may shorten the extension period by
sending Purchaser written notice at least ten (10) Business Days prior to the
new Scheduled Closing Date.  In the event
that (i) Seller elects not to attempt to cure any such Title Defect, or
(ii) Seller is unable to cure any such Title Defect for any period elected
by Seller but not to exceed sixty (60) days from the Scheduled Closing Date,
Seller shall so advise Purchaser and Purchaser shall have the right to
terminate this Agreement and receive a refund of the Earnest Money Deposit,
together with all interest which has accrued thereon, or to waive such Title
Defect and proceed to the Closing. 
Purchaser shall make such election within ten (10) days after receipt of
Seller’s notice.  If Purchaser elects to
proceed to the Closing, any Title Defects waived by Purchaser shall be deemed
Permitted Exceptions.  In any such event
of termination, Purchaser shall promptly return Purchaser’s Information to
Seller, after which neither party shall have any further obligation to the
other under this Agreement except for the Termination Surviving Obligations.

(b)           Notwithstanding any provision of this Article VI to
the contrary, Seller will be obligated to cure exceptions to title to the
Property, in the manner described in Section 6.2(c) above, relating to liens
and security interests securing any financings to Seller, and any mechanic’s
liens resulting from work at the Property directly contracted for by Seller,
provided that Seller shall remove other monetary liens created or permitted by
Seller, any new matters appearing after the date of the Agreement which were
voluntarily created by Seller and not consented to, approved or deemed approved
by Purchaser hereunder, delinquent property tax liens, any income tax lien or
any judgment lien as a result of Seller’s actions.

ARTICLE
VII

INTERIM
OPERATING COVENANTS, ESTOPPELS AND POST-CLOSING EMPLOYMENT

Section
7.1            Interim Operating
Covenants. 
Seller covenants to Purchaser that Seller will:

(a)           Operations.
From the Effective Date until Closing, continue to operate, manage and maintain
the Improvements in the ordinary course of Seller’s business and substantially
in accordance with Seller’s present practice, subject to ordinary wear and tear
and further subject to Article XI of this Agreement.  From the Effective Date through the
expiration of the Evaluation Period, Seller will consult with Purchaser
regarding any proposed new Leases or amendments or terminations to existing
Leases and provide copies thereof to Purchaser for

 18
 

 

review, including, without limitation,
disclose to Purchaser by written notice any and all material terms regarding
any proposed new Leases or amendments to or terminations of existing Leases,
including, without limitation, any New Tenant Costs associated with any
proposed new Leases or amendment to any existing Lease, and will consult with
Purchaser regarding the initiation or settlement of any real estate tax appeals
during such period; provided, however, that Seller shall not be required to
obtain Purchaser’s consent before entering into any new Leases or amendments to
or terminations of existing Leases and/or initiating or settling any tax
appeals.  After the expiration of the Evaluation
Period, Seller shall not amend any existing Lease, accept any termination of
any existing Lease or enter into any new Lease, or initiate or settle any tax
appeal, without Purchaser’s prior written consent in Purchaser’s sole and
absolute discretion; provided, however, in the event that Purchaser withholds
or conditions its consent to any amendment or termination of an existing Lease
or to any new Lease, then the provisions of Section 9.1(b) shall be null and
void and of no further force and effect and Purchaser shall assume the risk of
any and all loses of operation income at the Property between the expiration of
the Evaluation Period and Closing. Notwithstanding any provision contained herein or in that certain
Agreement of Sale and Purchase, dated August 3, 2006, as subsequently amended,
between Purchaser and Mack-Cali Realty, L.P., an Affiliate of Seller (the “Colorado Contract”), upon the closing of the Colorado Contract,
Purchaser shall make Robert Drabkin (“Drabkin”) available
as reasonably necessary to supervise the Company California Employees and
oversee the management, leasing and operation of the Property as directed by
Seller until the earlier to occur of Closing or termination of this Agreement
(such period is hereinafter referred to as the “Pending Closing Period”.) During the Pending Closing Period, Drabkin will oversee the Company
California Employees and manage the Property in such a manner to insure the
continued operation of the Property as required under this Article VII and
during this period consult with Seller on a periodic basis as may be reasonably
necessary or as reasonably requested by Seller. Drabkin shall provide the
foregoing services without fee to Seller, provided that Seller shall
promptly reimburse Purchaser for all expenses reasonably incurred by Drabkin in
connection therewith. Seller
will indemnify, defend and hold Purchaser and Drabkin harmless from and against
any and all costs and expenses, including reasonable legal fees and court
costs, relating to any claim, action or demand arising out of any action taken
or not taken by Drabkin during the Pending Closing Period in overseeing and
managing the Company California Employees as directed by Seller and without any
gross negligence or willful misconduct on the part of Drabkin, and Seller
shall name Purchaser’s affiliate that will be Drabkin’s employer and Drabkin as
additional insureds on Seller’s comprehensive general liability insurance
policy during the Pending Closing Period.

(b)           Service Contracts.
During the Evaluation Period, consult with Purchaser before entering into any
Service Contract unless such Service Contract is terminable on thirty (30) days
notice without payment of a termination penalty, fee or premium; provided,
however, that Seller shall be under no obligation to obtain Purchaser’s consent
prior to entering into any Service Contract. 
From the expiration of the Evaluation Period until Closing, not enter
into any Service Contracts, unless such Service Contracts are terminable on
thirty (30) days notice without paying any termination penalty, fee or premium
or unless Purchaser consents thereto in writing in Purchaser’s sole and
absolute discretion.  At Closing, Seller
shall terminate any property management agreements and any other agreements
with affiliates of Seller in connection with the Property.

 19

 

(c)           Notices.
To the extent (i) received or sent by Seller after the Effective Date and (ii)
affecting the Property, promptly deliver to Purchaser copies of written:
default notices, notices of violations, tax bills and assessment notices,
notices of a condemnation and material notices pertaining to any Lease,
easement or other agreement.

(d)           Restrictions on Seller.  From the expiration of the Evaluation Period
until Closing, not (i) seek or agree to any change or modification with respect
to zoning or development rights with respect to the Property without Purchaser’s
prior written consent, (ii) place any voluntary lien or encumbrance on the
Property without Purchaser’s prior written consent, which will not be
unreasonably withheld, conditioned or delayed, or (iii) commence, at Seller’s
sole cost and expense, material (i.e., in excess of one-tenth of one
percent (0.1%) of the Purchase Price), elective or optional alterations at the
Property without Purchaser’s prior written consent, which will not be unreasonably
withheld, conditioned or delayed.  At any
time prior to Closing, Seller shall have the right to commence, without
Purchaser’s consent, any alterations that the Seller is contractually obligated
to perform.

Section
7.2            Estoppels.  It will be a condition to Closing that Seller
obtain from each Major Tenant and a sufficient number of other Tenants at the
Property other than Kiosk Tenants in order to cover not less than 80% of the
total rented square footage of the buildings in the aggregate located at the
Property, not including total rented square footage leased to Kiosk Tenants
under Kiosk Leases, an executed estoppel certificate in the form attached
hereto as Exhibit “G” dated not more than forty-five (45) days prior to Closing
(unless the Scheduled Closing Date has been extended by Purchaser pursuant to
this Agreement), or in the form or limited to the substance prescribed by each
Major Tenant’s or, as applicable, other Tenant’s Lease.  Notwithstanding the foregoing, Seller agrees
to request that each Major Tenant and other Tenants in the buildings other than
Kiosk Tenants execute an estoppel certificate in the form attached hereto as Exhibit G, and to request that each
Kiosk Tenant execute an estoppel certificate in the form attached hereto as Exhibit G-1, and use good faith,
commercially reasonable efforts to obtain same. 
Seller shall not be in default of its obligations hereunder if any Major
Tenant or other Tenant fails to deliver an estoppel certificate, or delivers an
estoppel certificate which is not in accordance with this Agreement; provided,
however, that as more fully set forth in Section 9.1(f) below, such failure may
constitute the failure to satisfy a condition precedent to Purchaser’s
obligation to purchase the Property.  For
purposes of this subsection, an estoppel certificate will be not be treated as
having been received if it contains (i) any material adverse inconsistencies
with Seller’s representations or warranties set forth in this Agreement as
modified pursuant to Section 8.3 below, or (ii) any material adverse deviation
from the form or substance of estoppel required to be delivered by the Tenant
hereunder, and, if any estoppel certificate discloses any such material adverse
matter not cured or satisfied by Seller on or before the date which is three
(3) Business Days prior to the Scheduled Closing Date, then Purchaser shall
have the right to terminate this Agreement on or before the Scheduled Closing
Date.  Purchaser shall be entitled to
three (3) Business Days to review each such estoppel certificate and provide
reasonable objections thereto prior to Seller sending such estoppel certificate
to a Tenant.  For purposes of this
Section 7.3, an estoppel shall not be deemed to contain a material adverse
deviation from the required estoppel form, if (i) the Tenant limits assertions
in the estoppel “to Tenant’s Knowledge” or (ii) refuses to confirm whether its
Lease contains any extension, expansion, or termination options or rights,
storage or parking rights or rental or other concessions.

 20
 

 

In the event Seller is unable to obtain an executed
estoppel certificate from any Tenant (other than a Major Tenant), to the extent
required under the foregoing paragraph, Seller may, but is not obligated to,
elect to provide an estoppel certificate in the form prescribed by the Lease
for each such Tenant, which Purchaser agrees to accept as a valid and binding
estoppel certificate; provided that Seller shall not be permitted to provide
estoppel certificates for more than 50% of the remaining square footage of the
Property (i.e., not including Major Tenants).  In the event that the Tenant thereafter
delivers an estoppel certificate post-Closing, then Seller shall be
automatically released from liability under its estoppel certificate with respect
to all consistent matters set forth in the Tenant’s estoppel certificate.

Provided that Purchaser delivers to Seller Purchaser’s
requested form of Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) prior to the expiration of
the Evaluation Period, Seller will also request that the Major Tenants and
those Tenants whose Leases require a SNDA signed by a mortgage lender in order
for their Leases to be subordinate to the Lender’s Mortgage, execute a
reasonable form of SNDA requested by Purchaser concurrently with tendering the
estoppel certificates to the Tenants, and Seller will make good faith,
commercially reasonable efforts to obtain them.

Section
7.3            Post-Closing Employment.  For a period of thirty (30) days prior to the
Scheduled Closing Date, Purchaser’s affiliate, Westcore Management, LLC, a
Delaware limited liability company (“Westcore Management”),
shall extend offers to employ the four (4) existing employees of MCRC in
California who work on-site a the Properties and whose names are on Exhibit N (the “Company
California Employees”) for a period of one year after Closing on
the same base salary and bonus (other than stock) as shown on Exhibit N, pursuant to a standard form
Westcore Management employment agreement. 
With respect to such Company California Employees that accept such
offers for employment, the Westcore Management shall (a) for a period of one
(1) year following the Closing, cause any Company Employee that was covered
under a medical or dental plan, disability benefit plan, 401(k) plan or life
insurance plan of Seller or MCRC immediately prior to the Closing to receive
coverage that is comparable in the aggregate to such coverage provided to
similarly situated employees employed by Westcore Management, and (b) recognize
the service completed by the Company California Employees for purposes of
determining eligibility service and vesting service under any employee benefit
plan, program or arrangement maintained by Westcore Management for its
employees on or after the Closing Date to the same extent such service was
credited under any employee benefit plan, program or arrangement provided by
the Seller or MCRC immediately prior to the Closing Date.  The Company California Employees shall be
third party beneficiaries of this Section 7.3. 
Promptly after the Closing, Seller shall pay any and all compensation,
reimbursements and benefits due the Company California Employees that accrued
prior to the Closing Date.  The
provisions of this Section 7.3 shall survive the Closing for a period of one
year.  Upon employment by Westcore
Management, any such employee shall be released from any confidentiality
obligations or duties in favor of Seller or Seller’s affiliates with respect to
the Property.

 21
 

 

ARTICLE
VIII

REPRESENTATIONS
AND WARRANTIES

Section
8.1            Seller’s Representations
and Warranties. The following constitute the sole
representations and warranties of Seller, which representations and warranties
are made jointly and severally and shall be true in all material respects as of
the Effective Date and Closing Date except for such changes as are permitted
under this Agreement.  Subject to the
limitations set forth in Section 8.3 of this Agreement, Seller represents
and warrants to Purchaser the following:

(a)           Status.
Seller is a limited partnership, duly organized and validly existing under the
laws of the State of Delaware.

(b)           Authority.
The execution and delivery of this Agreement and the performance of Seller’s
obligations hereunder have been duly authorized by all necessary action on the
part of Seller, and this Agreement constitutes the legal, valid and binding
obligation of Seller.

(c)           Non-Contravention.  The execution and delivery of this Agreement
by Seller and the consummation by Seller of the transactions contemplated
hereby will not violate any judgment, order, injunction, decree, regulation or
ruling of any court or Authority or conflict with, result in a breach of, or
constitute a default under the organizational documents of Seller, any note or
other evidence of indebtedness, any mortgage, deed of trust or indenture, or
any lease or other material agreement or instrument to which Seller is a party
or by which it is bound.

(d)           Consents.
No consent, waiver, approval or authorization is required from any person or
entity (that has not already been obtained) in connection with the execution
and delivery of this Agreement by Seller or the performance by Seller of the
transactions contemplated hereby.

(e)           Suits and Proceedings.  Except as listed in Exhibit I, there are no legal actions,
suits or similar proceedings pending, served or settled in the three (3) years
prior to the date of this Agreement, or, to Seller’s Knowledge, threatened in
writing against Seller or the Property which (i) would materially and adversely
affect the Seller’s ability to consummate the transactions contemplated hereby,
or (ii) might have a material adverse effect on Purchaser’s use, ownership or
operation of the Property.

(f)            Non-Foreign Entity.  Seller is not a “foreign person” or “foreign
corporation” as those terms are defined in the Internal Revenue Code of 1986,
as amended, and the regulations promulgated thereunder.

(g)           Tenants.  As of the date of this Agreement, to Seller’s
Knowledge the only tenants of the Property are the tenants set forth in the
Lease Schedule attached as Exhibit F.  To Seller’s Knowledge, the Documents made
available to Purchaser pursuant to Section 5.2 hereof include true,
correct and complete copies of all of
the Leases listed on Exhibit F.  To Seller’s Knowledge, except as set forth of
Exhibit O annexed hereto and made a part hereof, no
tenant is in monetary or material nonmonetary default under any Lease, and Seller has not sent any notice of default by
any Tenant under the Leases that remains uncured.

(h)           Service Contracts.  To Seller’s Knowledge none of the service
providers listed on Exhibit E
is in material default under any Service Contract.  To Seller’s Knowledge,

 22
 

 

the Documents made available to Purchaser
pursuant to Section 5.2 hereof include true, correct and complete copies
of all Service Contracts listed on Exhibit
E under which Seller is currently paying for services rendered
in connection with the Property.  To
Seller’s Knowledge, there are no Service Contracts other than those listed on Exhibit E.

(i)            Environmental
Matters.  To Seller’s
Knowledge, except as set forth in the reports described in Exhibit M (the “Environmental Reports”), Seller has not
received written notice of any violations of Environmental Laws at or upon the
Properties.

(j)            Compliance.  To Seller’s Knowledge, in the two (2) years
prior to the Effective Date, Seller has received no written notice from any
Authorities to the effect that the Property is not in compliance with any
Governmental Regulations (a “Violation
Notice”), and the Seller has not received any Violation Notices
prior to such date that have not been cured.

(k)           Company California
Employees.  Attached
hereto as Exhibit N is a
true, correct and complete list of the Company California Employees together
with the salary and bonus payable to each such Company Employee as of the
Effective Date.

(l)            Leasing Commissions.  To Seller’s Knowledge, as of the Effective
Date, there are no potential leasing commissions for which Purchaser may be
liable post-Closing other than as may be set forth in the commission agreements
listed on Exhibit Q
annexed hereto and made a part hereof or in the Leases.  To Seller’s Knowledge, the Documents made
available to Purchaser pursuant to Section 5.2 hereof include true, correct and
complete copies of all of the commission agreements listed on Exhibit Q.

(m)          Management Fees.  At Closing, there shall be no unpaid
management fees with the respect to the Property.

(n)           Real Estate Tax
Appeals.  Attached hereto
as Exhibit P is a true,
correct and complete list of all pending real estate tax appeals with respect
to the Property.

(o)           OFAC.  Neither Seller, nor any officer, director,
shareholder, partner, investor or member of Seller is named by any Executive
Order of the United States Treasury Department as a terrorist, a “Specially
Designated National and Blocked Person,” or any other banned or blocked person,
entity, nation or transaction pursuant to any law, order, rule or regulation
that is enforced or administered by the Office of Foreign Assets Control
(collectively, an “Identified Terrorist”.)  Seller is not engaging in this transaction on
the behalf of, either directly or indirectly, any Identified Terrorist.

(p)           Historical Operating
Statements.  To Seller’s
Knowledge, the historical operating statements to be provided to Purchaser for
review pursuant to Section 5.2 above, shall accurately set forth, in all
material respects, the operating income and expenses of the Property for the
past three years.

Section
8.2            Purchaser’s
Representations and Warranties.  Purchaser represents and warrants to Seller
the following, which representations and warranties shall be true as of the
Effective Date and at Closing:

 23
 

 

(a)           Status.
Purchaser is a duly organized and validly existing limited liability company
under the laws of the State of Delaware.

(b)           Authority.
The execution and delivery of this Agreement and the performance of Purchaser’s
obligations hereunder have been duly authorized by all necessary action on the
part of Purchaser and this Agreement constitutes the legal, valid and binding
obligation of Purchaser.

(c)           Non-Contravention.  The execution and delivery of this Agreement
by Purchaser and the consummation by Purchaser of the transactions contemplated
hereby will not violate any judgment, order, injunction, decree, regulation or
ruling of any court or Authority or conflict with, result in a breach of or
constitute a default under the organizational documents of Purchaser, any note
or other evidence of indebtedness, any mortgage, deed of trust or indenture, or
any lease or other material agreement or instrument to which Purchaser is a
party or by which it is bound.

(d)           Consents.
No consent, waiver, approval or authorization is required from any person or
entity (that has not already been obtained) in connection with the execution
and delivery of this Agreement by Purchaser or the performance by Purchaser of
the transactions contemplated hereby.

(e)           OFAC.  Neither Purchaser, nor any officer, director,
shareholder, partner, investor or member of Purchaser is named by any Executive
Order of the United States Treasury Department as a terrorist, a “Specially
Designated National and Blocked Person,” or any other banned or blocked person,
entity, nation or transaction pursuant to any law, order, rule or regulation
that is enforced or administered by the Office of Foreign Assets Control
(collectively, an “Identified Terrorist”.)  Purchaser is not engaging in this transaction
on the behalf of, either directly or indirectly, any Identified Terrorist.

Section
8.3            Survival of
Representations, Warranties and Covenants.  The representations and warranties of Seller
set forth in Section 8.1, in the Seller Certificate delivered prior to the
expiration of the Evaluation Period and in any documents delivered at Closing
and the certifications contained in any Seller estoppels delivered under the
third paragraph of Section 7.2 will survive the Closing for a period of
ten (10) months, after which time they will merge into the Deed, and Purchaser
will have no right to assert a claim based thereon after the ten-month period.  During the ten-month period, Purchaser will
not have any right to bring any action against Seller as a result of any
untruth or inaccuracy of such representations, warranties or certifications, or
any such breach, unless and until the aggregate amount of all liability and
losses arising out of any such untruth or inaccuracy, or any such breach,
exceeds one-tenth of one percent (00.1%) of the Purchase Price; provided that
if the aggregate amount of all liability and losses exceeds such one-tenth on one
percent (00.1%) of the Purchase Price, Purchase shall be entitled to recover
all such amounts.  In addition, in no
event will Seller’s liability for all such untruths, inaccuracies or breaches
exceed, in the aggregate, the sum of One Million Dollars ($1,000,000);
provided, however, that this cap on liability shall not apply to Seller’s
liability resulting from any Seller estoppels delivered pursuant to Section 7.2
above.  Notwithstanding any other
provision of this Agreement, unless Purchaser can prove that Seller made an
intentionally false representation, warranty or certification as of the
Effective Date, as of the

 24
 

 

expiration of the Evaluation Period or as of
the Closing Date, the representations, warranties and certifications of Seller
are hereby modified to be made true to the extent that, as of the date hereof
with respect to the representations and warranties made herein, and as of the
Closing Date with respect to representations, warranties and certifications
made by Seller as of the Closing Date, (i) information contained in the
Documents made available to Purchaser or its Licensee Parties pursuant to
Section 5.2(a) makes the subject representation, warranty or certification not
true, or (ii) either Purchaser or the Licensee Parties has knowledge that the
subject representation, warranty or certification is untrue, or (iii) Seller
has delivered or made available to Purchaser or the Licensee Parties other
written information disclosing that the subject representation, warranty  or certification is not true.  The Closing Surviving Obligations and the
Termination Surviving Obligations will survive Closing without limitation
unless a specified period is otherwise provided in this Agreement.  All other representations, warranties,
covenants and agreements made or undertaken by Seller under this Agreement,
unless otherwise specifically provided herein, will not survive the Closing but
will be merged into the Deed and other Closing documents delivered at the
Closing.  Subject to the limitations or
liability set forth above in this Section 8.3, one (1) Business Day prior to
the expiration of the Evaluation Period, Seller shall deliver to Purchaser a
Seller Certificate updating as of such date, the representations, warranties
and certifications set forth in Section 8.1, subject to such modifications as
shall be permitted by virtue of (i) the operating covenants contained in
Section 7.1 above, (ii) facts raised during Purchaser’s due diligence process
or (iii) changes at the Property during the Evaluation Period.

ARTICLE
IX

CONDITIONS
PRECEDENT TO CLOSING

Section
9.1            Conditions Precedent to
Obligation of Purchaser.  The
obligation of Purchaser to consummate the transaction hereunder shall be
subject to the fulfillment on or before the Closing Date of all of the following
conditions, any or all of which may be waived by Purchaser in its sole
discretion:

(a)           Seller shall have delivered to Purchaser all of the items
required to be delivered to Purchaser pursuant to the terms of this Agreement,
including but not limited to, those provided for in Section 10.3.

(b)           Between the end of the Evaluation Period and the Scheduled
Closing Date, there shall have been no loss in the anticipated operating income
at the Property resulting from a loss of tenancies at a reasonably prudent
investor but not have reasonably anticipated the exercise of prudent due
diligence during the Evaluation Period, including but not limited to by
investigating financial conditions of the Tenant in a commercially reasonable
manner, and which results in a loss in the value of the Property in excess of
$1,000,000.00 (the “$1,000,000 Threshold”). 
For purposes of calculating the amount of any loss of anticipated
operating income and its effect on value, the parties shall compare the net
present value (on the Scheduled Closing Date) of the lost income stream using a
discount rate of 8% per annum to the net present value of a replacement income
stream commencing three months after the Scheduled Closing Date at market
rents.  For this purpose market rents
shall be the rents charged at comparable buildings in the same submarket and
which are set forth on Exhibit L
annexed hereto and made a part hereof. 
Any and all decreases in net present value shall be aggregated with any
and all increases in determining whether the $1,000,000 Threshold has been
exceeded.  In the event that the

 25
 

 

$1,000,000 Threshold has been exceeded,
Purchaser shall notify Seller in writing, which notice shall set forth
Purchaser’s determination of the excess amount and the calculations supporting
its determination.  In such event, Seller
shall have the right to elect to reduce the Purchase Price by all or a portion
of such excess.  Seller shall notify
Purchaser in writing of its election within five (5) Business Days after its
receipt of Purchaser’s notice.  If Seller
elects to reduce the Purchase Price by the entire excess or less than all of
the excess, then the Purchase Price shall be reduced accordingly and this
Agreement shall otherwise continue unmodified and in full force and
effect.  If Seller has elected to credit
less than all of the excess, Purchaser shall then have five (5) Business Days
to notify Seller whether it accepts or rejects Seller’s election.  If Purchaser accepts Seller’s election, then
the Purchase Price shall be reduced accordingly and this Agreement shall
otherwise continue unmodified and in full force and effect.  If Purchaser rejects Seller’s election or
Seller fails to make an election, this Agreement shall be deemed terminated and
null and void except for the Termination Surviving Obligations, and the Earnest
Money Deposit and all interest earned thereon shall be promptly returned to
Purchaser.  If Purchaser fails to respond
to Seller’s election within the five (5) Business Day period, it shall be
deemed to have accepted the Seller’s election. 
In the event that the Closing occurs at a reduced Purchase Price, (i) if
Purchaser subsequently receives or recovers all or some portion of the “lost”
income on which the Purchase Price reduction was based, Purchaser shall promptly
pay over to Seller the amount received or recovered by Purchaser and (ii)
Seller shall have the right to pursue collection of “lost” income
post-Closing.   The Schedule Closing Date
shall be extended to the date necessary to provide for the notices set forth in
this Section 9.1(b).

(c)           The representations and warranties of Seller contained in
Section 8.1 shall continue to be true and correct in all material respects on
the Closing Date except to reflect changes in accordance with Section 7.1 above
and for changes in the representations and warranties in Subsections 8.1(g),
(h), (i), (j) and (k) based on facts occurring (including but not limited to
notices received or sent) after the Effective Date.

(d)           To the extent that (i)
Purchaser has raised as a Title Objection pursuant to Section 6.2(a) above, the
need for estoppel certificates from any parties to any covenants, conditions
and restrictions, reciprocal easement agreement, development agreements or
ground leases affecting the Property (collectively, “Title Estoppels”), and (ii) Seller has agreed pursuant to Section
6.3 to attempt to cure such Title Defect, then Purchaser’s receipt of such
Title Estoppels, in form and substance reasonably satisfactory to Purchaser.

(e)           Title Company shall be irrevocably and unconditionally
committed to issue the Title Policy.

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

Section
9.2            Conditions Precedent to
Obligation to Seller.  The
obligation of Seller to consummate the transaction hereunder shall be subject
to the fulfillment on or before the date of Closing (or as otherwise provided)
of all of the following conditions, any or all of which may be waived by Seller
in it sole discretion:

 26
 

 

(a)           Seller shall have received the Purchase Price as adjusted
pursuant to, and payable in the manner provided for, in this Agreement.

(b)           Purchaser shall have delivered to Seller all of the items
required to be delivered to Seller pursuant to the terms of this Agreement,
including but not limited to, those provided for in Section 10.2.

(c)           [This Section intentionally omitted.]

(d)           The representations and warranties of Purchaser contained
in Section 8.2 shall continue to be true and correct in all material respects.

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

ARTICLE X

CLOSING

Section
10.1         Closing.
The consummation of the transaction contemplated by this Agreement by delivery
of documents and payments of money from escrow shall take place at 3:00 p.m.
Eastern Time on the Scheduled Closing Date at the offices of the Escrow Agent;
provided, however, that the closing documents that are intended to be recorded
in the land records in California shall be delivered by the parties to an
office in California designated by Escrow Agent.  Purchaser shall have an option to extend the
Scheduled Closing Date for a period of up to thirty-days by delivering written
notice to Seller at least five Business Days prior to the original Scheduled
Closing Date, together with the simultaneous deposit by Purchaser with the
Escrow Agent, by Federal Reserve wire transfer of immediately available funds,
of the amount of Five Hundred Thousand Dollars ($500,000) as an additional
earnest money deposit on account of the Purchase Price (the “Extension Deposit”). 
TIME SHALL BE OF THE ESSENCE WITH RESPECT TO PAYMENT OF THE EXTENSION
DEPOSIT.  Thereafter, all references in
this Agreement to the Earnest Money Deposit shall be deemed to also include the
Extension Deposit.  At Closing, the
events set forth in this Article X will occur, it being understood that
the performance or tender of performance of all matters set forth in this
Article X are mutually concurrent conditions which may be waived by the
party for whose benefit they are intended. 
The acceptance of the Deed by Purchaser shall be deemed to be full
performance and discharge of each and every agreement and obligation on the
part of Seller to be performed hereunder unless otherwise specifically provided
herein.

Section
10.2         Purchaser’s Closing
Obligations. On the Closing Date, Purchaser, at
its sole cost and expense, will deliver the following items to Seller at
Closing as provided herein:

(a)           The Purchase Price, after all adjustments are made as
herein provided, by Federal Reserve wire transfer of immediately available
funds, in accordance with the timing and other requirements of
Section 3.3;

(b)           A counterpart original of the Assignment of Leases, duly
executed by Purchaser;

 27
 

 

(c)           A counterpart original of the Additional Sale
Consideration Agreement, together with a memorandum thereof in recordable form,
duly executed by Purchaser;

(d)           A counterpart original of the Assignment, duly executed by
Purchaser;

(e)           Evidence reasonably satisfactory to Seller that the person
executing the Assignment of Leases, the Assignment, and the Tenant Notice
Letters on behalf of Purchaser has full right, power and authority to do so;

(f)            Form of written notice executed by Purchaser and to be
addressed and delivered to the Tenants by Purchaser in accordance with
Section 10.6 herein, (i) acknowledging the sale of the Property to
Purchaser, (ii) acknowledging that Purchaser has received and that
Purchaser is responsible for the Security Deposit (specifying the exact amount
of the Security Deposit) and (iii) indicating that rent should thereafter
be paid to Purchaser and giving instructions therefor (the “Tenant Notice Letters”);

(g)           A counterpart original of the Closing Statement, duly
executed by Purchaser;

(h)           A certificate, dated as of the date of Closing, stating
(i) that the representations and warranties of Purchaser contained in
Section 8.2 are true and correct in all material respects as of the
Closing Date; and

(i)            Such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transaction which is the subject
of this Agreement.

Section
10.3         Seller’s Closing
Obligations. 
At the Closing, each of Phelan Realty and Folsom Realty will deliver to
Purchaser the following documents:

(a)           A Grant Deed in the form annexed hereto as Exhibit U, (the “Deed”), duly executed and
acknowledged by Seller, conveying to Purchaser the Real Property and the
Improvements subject only to the Permitted Exceptions;

(b)            A blanket assignment and bill of sale in the form
attached hereto as Exhibit C
(the “Bill of Sale”), duly
executed by Seller, assigning and conveying to Purchaser, without
representation or warranty, title to the Personal Property;

(c)           A counterpart original of an assignment and assumption of
Seller’s interest, as lessor, in the Leases and Security Deposits in the form
attached hereto as Exhibit B
(the “Assignment of Leases”),
duly executed by Seller, conveying and assigning to Purchaser all of Seller’s
right, title and interest, as lessor, in the Leases and Security Deposits;

(d)           A counterpart original of the Additional Sale
Consideration Agreement, together with a memorandum thereof in recordable form,
duly executed by Seller;

(e)           A counterpart original of an assignment and assumption of
Seller’s interest in the Service Contracts and the Licenses and Permits
substantially in the form attached hereto as Exhibit A (the “Assignment”),
duly executed by Seller, conveying and assigning to Purchaser all

 28
 

 

of Seller’s assignable right, title, and
interest, if any, in the Service Contracts and the Licenses and Permits;

(f)            The Tenant Notice Letters, duly executed by Seller;

(g)           Evidence reasonably satisfactory to Purchaser and Title
Company that the person executing the documents delivered by Seller pursuant to
this Section 10.3 on behalf of Seller has full right, power, and authority
to do so;

(h)           A certificate in the form attached hereto as Exhibit J  (“Certificate as to Foreign Status”)
certifying that Seller is not a “foreign person” as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended;

(i)            All original Leases, Licenses and Permits and Service
Contracts to the extent in Seller’s possession or control;

(j)            A certificate (the “Seller
Certificate”), dated as of the date of Closing, stating that the
representations and warranties of Seller contained in Section 8.1 are true
and correct in all material respects as of the Closing Date (with appropriate
modifications to reflect any changes therein) or identifying any representation
or warranty which is not, or no longer is, true and correct and explaining the
state of facts giving rise to the change. 
In no event shall Seller be liable to Purchaser for, or be deemed to be
in default hereunder and it shall not constitute failure of a condition
precedent, if any representation or warranty is no longer true and correct in
all material respects unless Purchaser can prove that Seller made an
intentionally false representation, warranty or certification as of the
Effective Date, as of the expiration of the Evaluation Period or as of the
Closing Date; provided, however, that if: (i) such event constitutes
the non-fulfillment of the condition set forth in Section 9.1(b),
Purchaser shall have the right to terminate this Agreement or receive a
reduction in the Purchase Price in accordance with the provisions of Section
9.1(b), and (ii) such representation or warranty that is no longer true and
correct in all material respects is contained in Subsections 8.1(a) through
(d), (f), and (l) through (p), and such change is not in accordance with
Section 7.1, it shall constitute the failure of a condition precedent,
entitling Purchaser to terminate this Agreement by written notice to
Seller.  In such event, Purchaser shall
receive the prompt return of the Earnest Money Deposit and all interest earned
thereon, and except for the Termination Surviving Obligations, neither party
shall have any further liability under this Agreement.  The representations, warranties and
certifications of Seller contained in the Seller Certificate shall be subject
to the provision of Section 8.3 above;

(k)           The estoppel
certificates received by Seller pursuant to Section 7.2 above;

(l)            A California Franchise Tax Board
Form 590 (or 593, as applicable) certifying that Seller has a permanent place
of business in California, is qualified to do business in California, or is a
California resident, as applicable; and

(m)          Such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transaction which is the subject
of this Agreement, including but not limited to an affidavit of title in form
and substance reasonably satisfactory to Seller and the Title Company.

 29

 

Section
10.4         Prorations.

(a)           Seller and Purchaser agree to adjust, as of 11:59 p.m. on
the day preceding the Closing Date (the “Proration
Time”), the following (collectively, the “Proration Items”):

(i)            Rents,
in accordance with Section 10.4(b) below.

(ii)           Seller
shall credit Purchaser at Closing with all cash Security Deposits and any
prepaid rents, together with any interest to be paid to the Tenant thereon.

(iii)          Utility
charges payable by Seller, including, without limitation, electricity, water
charges and sewer charges.  If there are
meters on the Real Property, Seller will cause readings of all said meters to
be performed not more than five (5) days prior to the Closing Date, and a per
diem estimated adjustment shall be made for the days between the meter reading
date and the Closing Date based on the most recent meter reading.

(iv)          Amounts
payable under the Service Contracts.

(v)           All real estate and personal property
taxes and assessments, prorated for the period for which such taxes and
assessments are assessed, regardless of when payable, on the basis of the
number of days in such period the Property will have been owned by Seller and
Purchaser, respectively.  If the current
tax bill is not available at Closing, then the proration shall be made on the
basis of the most recent ascertainable tax bill.  Any taxes paid at or prior to Closing shall
be prorated based upon the amounts actually paid.  If taxes and assessments for the fiscal year
in which Closing occurs have been determined but have not been paid before
Closing, Seller shall be charged and Purchaser credited at Closing with an
amount equal to that portion of such taxes and assessments which relates to the
period before the date of Closing, and Purchaser shall pay the taxes and
assessments prior to the same becoming delinquent.   If, subsequent to the Closing Date, real
estate taxes (by reason of change in either assessment or rate or for any other
reason) for the Real Property should be determined to be higher or lower than
those that are apportioned, a new computation shall be made, and Seller agrees
to pay Purchaser any increase shown by such recomputation and vice versa.  Purchaser shall, at Closing, assume all
expenses incurred or to be incurred in connection with any real estate tax
appeals that are pending at the time of Closing.   Notwithstanding anything to
the contrary contained in this Agreement, Seller reserves the right to meet
with governmental officials and to continue to contest any reassessment or
assessment of the Property or any portion thereof as set forth on Exhibit P and to attempt to obtain a refund for
any taxes previously paid.  Seller shall
retain all rights with respect to any refund of taxes applicable to any period
prior to the Closing Date and Purchaser shall retain all rights with respect to
any refund of taxes applicable to any period on or after the Closing Date

(vi)          [This
section intentionally omitted.]

 30
 

 

(vii)        
Seller shall be responsible for all salary, bonus (including any stock bonus)
and benefits owed to the Company California Employees on account of employment
prior to the Closing. To the extent that any of Westcore Management’s employee
benefits impose a waiting period on new employees before such benefit will be
available, and Seller or MCRC has the ability to continue comparable benefits
post-Closing in favor of the Company California Employees, during all or a
portion of such waiting period, payment to Seller or MCRC of the costs of
continuing such benefits for such period.

Seller will be charged and credited for the amounts of
all of the Proration Items relating to the period up to and including the
Proration Time, and Purchaser will be charged and credited for all of the
Proration Items relating to the period after the Proration Time.  The estimated Closing prorations shall be set
forth on a preliminary closing statement to be prepared by Seller and submitted
to Purchaser prior to the Closing Date (the “Closing
Statement”).  The Closing
Statement, once agreed upon, shall be signed by Purchaser and Seller.  The proration shall be paid at Closing 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
increasing or reducing the cash to be delivered by Purchaser in payment of the
Purchase Price at the Closing.  If the
actual amounts of the Proration Items are not known as of the Closing Date, the
prorations will be made at Closing on the basis of the best evidence then available;
thereafter, when actual figures are received, re-prorations will be made on the
basis of the actual figures, and a final cash settlement will be made between
Seller and Purchaser.  No prorations will
be made in relation to insurance premiums, and Seller’s insurance policies will
not be assigned to Purchaser.  Final
readings and final billings for utilities will be made if possible as of the
Closing Date, in which event no proration will be made at the Closing with
respect to utility bills.  Seller will be
entitled to all deposits presently in effect with the utility providers, and
Purchaser will be obligated to make its own arrangements for any deposits with
the utility providers. The provisions of this Section 10.4(a) will survive
the Closing for twelve (12) months.

(b)           Purchaser will receive a credit on the Closing Statement
for the prorated amount (as of the Proration Time) of all Rental previously
paid to or collected by Seller and attributable to any period following the
Proration Time.  After the Closing,
Seller will cause to be paid or turned over to Purchaser all Rental, if any,
received by Seller after Closing and attributable to any period following the
Proration Time.  “Rental” as used herein includes
fixed monthly rentals, additional rentals, percentage rentals, escalation
rentals (which include each Tenant’s proration share of building operation and
maintenance costs and expenses as provided for under the Lease, to the extent
the same exceeds any expense stop specified in such Lease), retroactive
rentals, all administrative charges, utility charges, tenant or real property
association dues, storage rentals, special event proceeds, temporary rents,
telephone receipts, locker rentals, vending machine receipts and other sums and
charges payable by Tenants under the Leases or from other occupants or users of
the Property.  For purposes of this
Agreement, rental is “Delinquent”
when it was due prior to the Closing Date, and payment thereof has not been
made on or before the Proration Time. 
Delinquent Rental will not be prorated. 
Purchaser agrees to use good faith collection procedures with respect to
the collection of any Delinquent Rental, but Purchaser will have no liability
for the failure to collect any such amounts and will not be required to (i)
pursue legal action to enforce collection of any such amounts owed to Seller by
any Tenant, (ii) terminate the Lease with respect to any such Tenant, or (iii)
terminate any 

 31
 

 

Tenant’s right to possession under such
Lease.  After the Closing, if Purchaser
declines to pursue a collection action against a Tenant for Delinquent Rental,
then Seller shall have the right to do so; provided, however, that Seller shall
not (A) terminate any Lease or terminate or disturb Tenant’s right to
possession thereunder, or (B) commence any lawsuit until the earlier of one
year after the Closing Date or one month prior to the expiration of the statute
of limitations with respect to such claim. 
All sums collected by Purchaser from and after Closing from each Tenant
(excluding tenant specific billings for tenant work orders and other specific
services as described in and governed by Section 10.4(d) below) will be
applied first to the month in which the Closing occurs, then to current amounts
owned by such Tenant to Purchaser and then to delinquencies owed by such Tenant
to Seller.  Any sums due Seller will be
promptly remitted to Seller.

(c)           At the Closing, Seller shall deliver to Purchaser a list
of additional rent, however characterized, under each Lease, including without
limitation, real estate taxes, electrical charges, utility costs and operating
expenses (collectively, “Operating
Expenses”) billed to Tenants for the calendar year in which the
Closing occurs (both on a monthly basis and in the aggregate), the basis on
which the monthly amounts are being billed and the amounts incurred by Seller
on account of the components of Operating Expenses for such calendar year.  Upon the reconciliation by Purchaser of the
Operating Expenses billed to Tenants, and the amounts actually incurred for
such calendar year, Seller and Purchaser shall be liable for overpayments of
Operating Expenses, and shall be entitled to payments from Tenants, as the case
may be, on a pro-rata basis based upon each party’s period of
ownership during such calendar year. 
This Section 10.3(c) shall survive post-Closing until six (6) months
after reconciliation of the Operating Expenses.

(d)           With respect to specific tenant billings for work orders,
special items performed or provided at the request of a Tenant or other
specific services, which are collected by Purchaser after the Closing Date but
relate to the foregoing specific services rendered by Seller prior to the
Proration Time, then notwithstanding anything to the contrary contained herein,
Purchaser shall cause the first amounts collected from such Tenant to be paid
to Seller on account thereof; provided, however, with respect to specific
tenant billings for work orders, special items performed or provided at the
request of a Tenant or other specific services, which are collected by Purchaser
after the Closing Date and relate to the foregoing specific services rendered
by Purchaser after the Proration Time and Seller prior to the Proration Time,
then notwithstanding anything to the contrary contained herein, unless Tenant’s
intention for the application of the payment is expressly indicated by Tenant
(in which event, the Tenant’s indication shall control), Purchaser shall cause
the first amounts collected from such Tenant to be paid to Purchaser for such
services rendered after the Proration Time and then to Seller on account for
services rendered by Seller prior to the Proration Time.  Seller shall have the right to pursue
collection of the foregoing items post-Closing in the same manner and subject
to the same limitations as applied to the collection of Delinquent Rental as
more fully set forth in Section 10.4(b) above.

(e)           Notwithstanding any provision of this Section 10.4 to
the contrary, Purchaser will be solely responsible for its pro rata share of
any leasing commissions, tenant improvement costs or other expenditures (for
purposes of this Section 10.4(e), “New
Tenant Costs”) incurred or to be incurred in connection with any
new lease or Lease amendment, renewal or extension executed (or exercised in
the event of an option to extend, renew or expand

 32
 

 

an existing Lease) on or after the Effective
Date and which transaction was disclosed in writing to Purchaser in accordance
with Section 7.1(a), and Purchaser will pay to Seller at Closing as an addition
to the Purchase Price an amount equal to any of Purchaser’s pro rata share of
New Tenant Costs paid by Seller.  For
purposes of calculating Purchaser’s pro rata share of New Tenant Costs,
Purchaser shall be charged the same percentage of such costs as the percentage
of the Lease’s rent term that is scheduled to occur post-Closing.  Accordingly, by way of example, if one
hundred percent (100%) of the rent term is scheduled to occur post-Closing,
Purchaser’s pro rata share of New Tenant Costs for such Lease would be one
hundred percent (100%), whereas, if five percent (5%) of the rent term has
occurred prior to the Closing Date, Seller shall be responsible for five
percent (5%) of the New Tenant Costs and Purchaser shall be responsible for
ninety-five percent (95%). 
Notwithstanding any provision of this Section 10.4 to the contrary,
except as set forth on Exhibit R
annexed hereto and made a part hereof, Seller will be solely responsible for
any leasing commissions, tenant improvement costs or other expenditures
incurred or to be incurred in connection with any Lease executed before the
Effective Date except to the extent that a credit against the Purchase Price is
granted to Purchaser at Closing (in which event, Purchaser shall be responsible
to pay for such item).  Purchaser shall
solely be responsible for the payment or, to the extent previously paid by
Seller, the reimbursement to Seller, of the Lease expenses set forth on Exhibit R.  Seller shall deliver to Purchaser evidence of
the due payment of all of the Lease expenses set forth on Exhibit R
for which Seller is seeking reimbursement. 
Notwithstanding anything to contrary contained herein, Seller will be
solely responsible for the costs of any contracts with affiliates of Seller and
the compensation and benefits of the Company California Employees that accrue
before the Closing Date.

Section
10.5         Costs of Title Company and
Closing Costs. Costs of the Title Company and
other Closing costs incurred in connection with the Closing will be allocated
as follows:

(a)           Seller shall pay (i) Seller’s attorney’s fees;
(ii) one-half (1/2) of escrow fees, if any; (iii) the cost of
endorsements to cure any of Purchaser’s Title Objections with respect to the
Title Policy to the extent that Seller agreed to cure them pursuant to this
Agreement; (iv) any real property transfer taxes; and (v) the cost of recording
discharges of any liens and encumbrances.

(b)           Purchaser shall pay (i) the costs of recording the
Deed to the Property and all other documents other than discharges of liens and
encumbrances; (ii) all premiums for the Title Policy or endorsements or
deletions (other than the cost of endorsements to cure Purchaser’s Title
Objections to the extent that Seller agreed to cure them pursuant to this
Agreement), including, without limitation, the deletion of the survey
exception, to the Title Policy that are desired by Purchaser; (iii) all
premiums and other costs for any mortgagee policy of title insurance, if any,
including but not limited to any endorsements or deletions; (iv) Purchaser’s
attorney’s fees; (v) one-half (1/2) of escrow fees, if any and
(vi) the costs of the Updated Survey.

(c)           Any other costs and expenses of Closing not provided for
in this Section 10.5 shall be allocated between Purchaser and Seller in
accordance with the custom in the area in which the Property is located.

Section
10.6         Post-Closing Delivery of
Tenant Notice Letters.  Immediately following Closing, Purchaser will
deliver to each Tenant a Tenant Notice Letter, as described in
Section 10.2(e).

 33
 

 

Section
10.7         Like-Kind Exchange.  In the event that Seller and/or
Purchaser shall elect to effectuate the Closing as part of a “like-kind”
exchange under Section 1031 of the Code, each party agrees to cooperate
with and assist the other in all reasonable respects (at no cost other than
incidental attorneys’ fees) in order that the exchange so qualifies as a “like-kind”
exchange under Section 1031 of the Code and the Treasury Regulations
promulgated, or to be promulgated, thereunder. 
If either party, or any
member/shareholder of either party (the “Exchanging
Party”), so elects, the other party (the “Cooperating Party”) shall execute such documents identified at
least ten (10) days prior to the scheduled Closing Date and take such action as
may be reasonably necessary in order to effectuate this transaction as a
like-kind exchange; provided, however, that: 
(i) the Cooperating Party’s cooperation hereunder shall be without cost,
expense or liability to the Cooperating Party of any kind or character other
than attorneys’ fees, costs or expenses incurred in connection with the review
of customary documentation in order to effectuate such like-kind exchange, and
the Cooperating Party shall have no obligation to take title to any other real
property; (ii) the Exchanging Party shall assume all risks in connection with
the designation, selection and setting of terms of the purchase or sale of any
exchange property; (iii) except as set forth above, the Exchanging Party shall
bear all costs and expenses in connection with any such exchange transaction in
excess of the costs and expenses which would have otherwise been incurred in
acquiring or selling the Property by means of a straight purchase, so that the
net effect to the Cooperating Party shall be otherwise identical to that which
would have resulted had this Agreement closed on a purchase and sale; (iv)
there shall be no delay in the Scheduled Closing Date resulting from such
exchange by the Exchanging Party; (v) any documents to effectuate such exchange
transaction shall have no practical effect on terms and conditions contained in
this Agreement; and (vi) the Exchanging Party shall indemnify, defend and hold
the Cooperating Party harmless from any and all claims, demands, penalties,
loss, causes of action, suits, risks, liability, costs or expenses of any kind
or nature (including, without limitation, reasonable attorneys’ fees) which the
Cooperating Party may incur or sustain, directly or indirectly, related to or
in connection with, or arising out of, the consummation of this transaction as
a like-kind exchange as contemplated hereunder.

Section 10.8     Conversion
Of Phelan into Residential Condominium. 
Notwithstanding any provision contained or implied herein to the contrary,
Purchaser specifically
acknowledges and agrees with Seller that, as additional consideration to Seller
for entering into this Agreement and conveying the Property to Purchaser,
should Purchaser initiate the conversion of Phelan into a residential
condominium project within a three (3) year period commencing on the Closing
Date, then Purchaser shall pay to Seller as additional Purchase Price
consideration (the “Additional Sale
Consideration”) an amount equal to the lesser of ten percent (10%)
of the net profits earned by Purchaser as a result of such conversion and Five
Million Dollars ($5,000,000). In connection with the foregoing, at Closing
Purchaser and Seller will enter into and deliver an agreement to document and
evidence the continuing obligation of Purchaser in the form attached hereto as Exhibit S   (the “Additional Sale Consideration Agreement”).
The obligation of Purchaser to pay the Condo Conversion Participation
Consideration will run with the land and be binding upon any successors and
assigns of Purchaser. In connection with this obligation, at Closing Purchaser
and Seller will enter into, deliver and record against Phelan a memorandum of
the Additional Sale Consideration Agreement

 34
 

 

ARTICLE
XI

CONDEMNATION
AND CASUALTY

Section
11.1         Casualty.  If, prior to the Closing Date, (i) all or a
Significant Portion of the Real Property and Improvements is destroyed or
damaged by fire or other casualty, or (ii) if (a) a Major Tenant is permitted
to terminate its Lease with respect to a certain Property, or (b) the cost to
repair any certain Property exceeds
fifteen percent (15%) of the allocated Purchase Price for such Property set
forth on Exhibit
K, Seller will notify
Purchaser of such casualty.  With
respect to subsection (i) above, Purchaser shall have the option to terminate
this Agreement upon notice to Seller given not later than fifteen (15) days
after receipt of Seller’s notice.  With
respect to subsection (ii) above, Purchaser shall thereafter be entitled to
terminate this Agreement as to such Property and shall only be required to
purchase the remaining Property on the terms, conditions and provisions of this
Agreement as if this Agreement had never included the damaged Property, with
the Purchase Price to be reduced by the allocated Purchase Price for such Property. 
If this Agreement is terminated with respect to such damaged
Property, neither Seller nor Purchaser shall have any further obligations under
this Agreement with respect to such Property as to which the termination
applies other than the Termination Surviving Obligations with respect to such
Property.  If this Agreement is
terminated, the Earnest Money Deposit and all interest accrued thereon will be
returned to Purchaser and thereafter neither Seller nor Purchaser will have any
further rights or obligations to the other hereunder except with respect to the
Termination Surviving Obligations.  If
Purchaser does not elect to terminate this Agreement or does not have the right
to do so pursuant to the foregoing provisions of this Section 11.1, Seller will
not be obligated to repair such damage or destruction but (a) Seller will
assign and turn over to Purchaser the insurance proceeds net of reasonable
collection costs (or if such have not been awarded, all of its right, title and
interest therein) payable with respect to such fire or other casualty up to the
amount of the allocated Purchase Price and (b) the parties will proceed to
Closing pursuant to the terms hereof without abatement of the Purchase Price,
except that Purchaser will receive credit for the insurance deductible amount.  In the event Seller elects to perform any
repairs as a result of a casualty, Seller will be entitled to deduct its costs
and expenses from any amount to which Purchaser is entitled under this
Section 11.1, which right shall survive the Closing.

Section
11.2         Condemnation of Property.  In the event of (a) any condemnation or
sale in lieu of condemnation of all of the Property; or (b) any
condemnation or sale in lieu of condemnation of greater than twenty-five
percent (25%) of the fair market value of the Property prior to the Closing,
Purchaser will have the option, to be exercised within fifteen (15) days after
receipt of notice of such condemnation or sale, of terminating Purchaser’s
obligations under this Agreement.  In the
event that either (i) any condemnation or sale in lieu of condemnation of
the Property is for less than twenty-five percent (25%) of the fair market
value of the Property, or (ii) Purchaser does not terminate this Agreement
pursuant to the preceding sentence, Seller will assign to Purchaser any and all
claims for the proceeds of such condemnation or sale to the extent the same are
applicable to the Property, and Purchaser will take title to the Property with
the assignment of such proceeds and subject to such condemnation and without
reduction of the Purchase Price.  Should
Purchaser elect to terminate Purchaser’s obligations under this Agreement under
the provisions of this Section 11.2, the Earnest Money Deposit and any
interest thereon will be returned to Purchaser and neither Seller nor Purchaser
will have any further obligation under this Agreement, except for the
Termination Surviving Obligations. 
Notwithstanding anything to the contrary herein, if any eminent domain
or condemnation proceeding is instituted (or notice of same is given) solely
for the taking of any subsurface rights for utility easements or for any
right-of-way easement, and the surface may, after such taking, be

 35
 

 

used in substantially the same manner as
though such rights have not been taken, Purchaser will not be entitled to
terminate this Agreement, but any award resulting therefrom will be assigned to
Purchaser at Closing and will be the exclusive property of Purchaser upon
Closing.  Notwithstanding anything to the
contrary set forth herein, in the event of any condemnation or sale in lieu of
condemnation of any certain Property (i) exceeds fifteen percent (15%) of the
allocated Purchase Price of such Property (as set forth on Exhibit K) condemned or sold in lieu of condemnation,
(ii) permits a Major Tenant to terminate its Lease with respect to such
Property, or (iii) results in a loss of access to such Property, Seller shall
notify Purchaser of the same.  In
such event, Purchaser shall thereafter be entitled to terminate this Agreement
as to such Property and shall only be required to purchase the remaining
Property on the terms, conditions and provisions of this Agreement as if this
Agreement had never included the condemned Property, with the Purchase Price to
be reduced by the allocated Purchase Price of such Property as set forth on Exhibit K. 

ARTICLE
XII

CONFIDENTIALITY

Section
12.1         Confidentiality.
Seller and Purchaser each expressly acknowledge and agree that the transactions
contemplated by this Agreement and the terms, conditions, and negotiations
concerning the same will be held in the strictest confidence by each of them
and will not be disclosed by either of them except to their respective legal
counsel, accountants, consultants, officers, partners, and directors and any
other of Purchaser’s Permitted Outside Parties, and except and only to the
extent that such disclosure may be necessary for their respective performances
hereunder, and Purchaser shall indemnify and hold Seller harmless from and
against any breach by such individuals or entities of the confidentiality
provisions applicable to Purchaser under this Agreement.  Purchaser further acknowledges and agrees
that, unless and until the Closing occurs, all information obtained by
Purchaser in connection with the Property will not be disclosed by Purchaser to
any third persons without the prior written consent of Seller.  Nothing contained in this Article XII
will preclude or limit either party to this Agreement from disclosing or
accessing any information otherwise deemed confidential under this
Article XII response to lawful process or subpoena or other valid or
enforceable order of a court of competent jurisdiction or any filings with
governmental authorities required by reason of the transactions provided for
herein pursuant to advice of counsel. Nothing in this Article XII will
negate, supersede or otherwise affect the obligations of the parties under the
Confidentiality Agreement.  In addition,
after the Closing, any press release with respect to the transaction will be
made only in the form approved by Purchaser and Seller and their respective
counsel, which approval shall not be unreasonably withheld, conditioned or
delayed.  The provisions of this
Article XII will survive the Closing or any termination of this Agreement.

ARTICLE
XIII

REMEDIES

Section 13.1         Default
by Seller. 
In the event the Closing and the transactions contemplated hereby do not
occur as herein provided by reason of any default of Seller, Purchaser may, as
Purchaser’s sole and exclusive remedy, elect by notice to Seller within ten
(10) Business Days following the Scheduled Closing Date, either of the
following: (a) to terminate this Agreement, in which event Purchaser will
receive from the Escrow Agent the Earnest Money

 36
 

 

Deposit, together with all interest accrued thereon, whereupon Seller
and Purchaser will have no further rights or obligations under this Agreement,
except with respect to the Termination Surviving Obligations; or (b)   enforce specific performance of Seller’s
obligation to execute the documents required to convey the Property to
Purchaser, it being understood and agreed that the remedy of specific
performance shall not be available to enforce any other obligation of Seller
hereunder.  Except as expressly set forth
in this Section 13.1, Purchaser expressly waives its rights to seek damages in
the event of Seller’s default hereunder. 
Purchaser shall be deemed to have elected to terminate this Agreement
and receive back the Earnest Money Deposit if Purchaser fails to file suit for
specific performance against Seller in an appropriate court in the City and
County of San Francisco on or before forty-five (45) days following the
Scheduled Closing Date.  Notwithstanding
the foregoing, Seller and Purchaser agree that in the event that Purchaser is
unable to obtain specific performance, then in such event, Purchaser shall in
the alterative have the right to commence an action
against Seller for damages for Seller’s breach and default under this
Agreement; provided, however, (that in addition to Purchaser being entitled to
receive the prompt return of its Earnest Money Deposit with interest), Seller’s
liability for damages shall not exceed the amount of the Earnest Money Deposit
posted with Escrow Agent at such time.  Notwithstanding
the foregoing, nothing contained in this Section 13.1 will limit Purchaser’s
remedies at law, in equity or as herein provided in pursuing remedies of a
breach by Seller of any of the Termination Surviving Obligations.

Section
13.2         Default by Purchaser.  In the event the Closing and the consummation
of the transactions contemplated herein do not occur as provided herein by
reason of any default of Purchaser, Purchaser and Seller agree it would be
impractical and extremely difficult to establish with precision the damages
which Seller may suffer.  Purchaser and
Seller hereby agree that (a) an amount equal to the Earnest Money Deposit,
together with all interest accrued thereon, is a reasonable estimate of the
total net detriment Seller would suffer in the event Purchaser defaults and
fails to complete the purchase of the Property, and (b)     such amount will be the full, agreed and liquidated damages for
Purchaser’s default and failure to complete the purchase of the Property, and
will be Seller’s sole and exclusive remedy (whether at law or in equity) for
any default of Purchaser resulting in the failure of consummation of the
Closing, whereupon this Agreement will terminate and Seller and Purchaser will
have no further rights or obligations hereunder, except with respect to the
Termination Surviving Obligations.  The
payment of such amount as liquidated damages is not intended as a forfeiture or
penalty but is intended to constitute liquidated damages to Seller.
Notwithstanding the foregoing, nothing contained herein will limit Seller’s
remedies at law, in equity or as herein provided in the event of a breach by
Purchaser of any of the Termination Surviving Obligations.

ACKNOWLEDGEMENT OF PROVISIONS OF SECTION 13.2:

 

	
  SELLER’S INITIALS

  	
  /s/ MEH

  	
   

  	
  PURCHASER’S INITIALS

  	
  /s/ DA

  	
   

  

 

 37
 

 

ARTICLE XIV

NOTICES

Section
14.1         Notices.

(a)           All notices or other communications required or permitted
hereunder shall be in writing, and shall be given by any nationally recognized
overnight delivery service with proof of delivery, or by facsimile transmission
(provided that such facsimile is confirmed by the sender by overnight delivery
service in the manner previously described), sent to the intended addressee at
the address set forth below, or to such other address or to the attention of
such other person as the addressee will have designated by written notice sent
in accordance herewith. Unless changed in accordance with the preceding
sentence, the addresses for notices given pursuant to this Agreement will be as
follows:

	
  If to Purchaser:

  	
  Westcore Properties AC, LLC

  
	
   

  	
  4445 Eastgate Mall, Suite 210

  
	
   

  	
  San Diego, California 92121

  
	
   

  	
  Attn.: Mr. Don Ankeny

  
	
   

  	
  (858) 625 – 4100 (tele.)

  
	
   

  	
  (858) 678 – 0060 (fax)

  
	
   

  	
   

  
	
   

  	
   

  
	
  with a copy to :

  	
   

  
	
   

  	
   

  
	
   

  	
  Pircher, Nichols
  & Meeks

  
	
   

  	
  1925 Century
  Park East, Suite 1700

  
	
   

  	
  Los Angeles,
  California 90067

  
	
   

  	
  Attention: Real
  Estate Notices (MES/EBS/4422-48)

  
	
   

  	
  (310) 201-8900 (tele.)

  
	
   

  	
  (310) 201-8922 (fax)

  
	
   

  	
   

  
	
   

  	
   

  
	
  If Seller:

  	
  c/o Mack-Cali Realty Corporation

  
	
   

  	
  11 Commerce Drive

  
	
   

  	
  Cranford, New Jersey 07016

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  with separate
  notices to the attention of:

  
	
   

  	
   

  
	
   

  	
  Mr. Mitchell E.
  Hersh

  
	
   

  	
  (908) 272-8000 
  (tele.)

  
	
   

  	
  (908) 272-0214 (fax)

  
	
   

  	
   

  
	
   

  	
  and

  

 

 38
 

 

 

	
  

  	
  Roger W. Thomas,
  Esq.

  
	
   

  	
  (908) 272-2612 (tele.)

  
	
   

  	
  (908) 497-0485 (fax)

  
	
   

  	
   

  
	
  If Escrow Agent:

  	
  LandAmerica Financial Group, Inc.

  
	
   

  	
  Commercial Services

  
	
   

  	
  One Market,
  Spear Tower, Suite 1850

  
	
   

  	
  San Francisco, California 94105

  
	
   

  	
  Attn: Carol Carozza

  
	
   

  	
           Vice President & Sr. Commercial
  Closer

  
	
   

  	
  (415) 247-2421
  (tele.)

  
	
   

  	
  (415) 512-0146 (fax)

  

 

(b)           Notices given by (i) overnight delivery service as
aforesaid shall be deemed received and effective on the first business day
following such dispatch and (ii) facsimile transmission as aforesaid shall
be deemed given at the time and on the date of machine transmittal provided
same is sent and confirmation of receipt is received by the sender prior to
4:00 p.m. (EST) on a Business Day (if sent later or on a non-Business Day, then
notice shall be deemed given on the next Business Day).  Notices may be given by counsel for the
parties described above, and such notices shall be deemed given by said party,
for all purposes hereunder.

ARTICLE
XV

ASSIGNMENT
AND BINDING EFFECT

Section
15.1         Assignment: Binding Effect.  Purchaser will not have the right to assign
this Agreement, except to an affiliate or affiliates of Westcore Properties AC,
LLC.  In the event of such an assignment,
the Purchaser named herein shall continue to be liable for the performance of
Purchaser’s obligations hereunder.

ARTICLE
XVI

BROKERAGE

Section
16.1         Brokers.  Purchaser and Seller represent that they have
not dealt with any brokers, finders or salesmen, in connection with this
transaction, or, if either Purchaser or Seller has dealt with any such broker,
finder or salesman, such party agrees to pay any fee or commission in connection
therewith and agrees to indemnify, defend and hold other the party harmless
from and against any and all loss, cost, damage, liability or expense,
including reasonable attorneys’ fees, which either party may sustain, incur or
be exposed to by reason of any claim for fees or commissions made through the
other party.  The provisions of this
Article XVI will survive any Closing or termination of this Agreement.

 39
 

 

ARTICLE
XVII

ESCROW
AGENT

Section
17.1         Escrow.

(a)           Subject to the provisions of Section 4.1 above, Escrow
Agent will hold the Earnest Money Deposit in escrow in an interest-bearing
account of the type generally used by Escrow Agent for the holding of escrow
funds until the earlier of (i) the Closing, or (ii) the termination
of this Agreement in accordance with any right hereunder.  All interest earned on the Earnest Money
Deposit shall be paid to the party entitled to the Earnest Money Deposit.  In the event this Agreement is terminated
prior to the expiration of the Evaluation Period, the Earnest Money Deposit and
all interest accrued thereon will be returned by the Escrow Agent to
Purchaser.  In the event the Closing
occurs, the Earnest Money Deposit and all interest accrued thereon will be
released to Seller, and Purchaser shall receive a credit against the Purchase
Price in the amount of the Earnest Money Deposit, including the interest.  In all other instances, Escrow Agent shall
not release the Earnest Money Deposit to either party until Escrow Agent has
been requested by Seller or Purchaser to release the Earnest Money Deposit and
has given the other party five (5) Business Days to dispute, or consent to, the
release of the Earnest Money Deposit. 
Purchaser represents that its tax identification number, for purposes of
reporting the interest earnings, is 16-1632621. Seller represents that their
tax identification number, for purposes of reporting the interest earnings, is
94-3290210 for Phelan Realty, and 22-3654950 for Folsom Realty.

(b)           Escrow Agent shall not be liable to any party for any act
or omission, except for bad faith, negligence or willful misconduct, and the
parties agree to indemnify Escrow Agent and hold Escrow Agent harmless from any
and all claims, damages, losses or expenses arising in connection herewith.  The parties acknowledge that Escrow Agent is
acting solely as stakeholder for their mutual convenience.  In the event Escrow Agent receives written
notice of a dispute between the parties with respect to the Earnest Money
Deposit and the interest earned thereon (the “Escrowed
Funds”), Escrow Agent shall not be bound to release and deliver the
Escrowed Funds to either party but may either (i) continue to hold the
Escrowed Funds until otherwise directed in a writing signed by all parties
hereto or (ii) deposit the Escrowed Funds with the clerk of the Denver
District Court.  Upon such deposit,
Escrow Agent will be released from all duties and responsibilities
hereunder.  Escrow Agent shall have the
right to consult with separate counsel of its own choosing (if it deems such
consultation advisable) and shall not be liable for any action taken, suffered
or omitted by it in accordance with the advice of such counsel.

(c)           Escrow Agent shall not be required to defend any legal
proceeding which may be instituted against it with respect to the Escrowed
Funds, the Property or the subject matter of this Agreement unless requested to
do so by Purchaser or Seller and is indemnified to its satisfaction against the
cost and expense of such defense.  Escrow
Agent shall not be required to institute legal proceedings of any kind and
shall have no responsibility for the genuineness or validity of any document or
other item deposited with it or the collectibility of any check delivered in
connection with this Agreement.  Escrow
Agent shall be fully protected in acting in accordance with any written
instructions given to it hereunder and believed by it to have been signed by
the proper parties.

 40
 

 

ARTICLE
XVIII

MISCELLANEOUS

Section
18.1         Waivers.  No waiver of any breach of any covenant or
provisions contained herein will be deemed a waiver of any preceding or
succeeding breach thereof, or of any other covenant or provision contained
herein.  No extension of time for
performance of any obligation or act will be deemed an extension of the time
for performance of any other obligation or act.

Section
18.2         Recovery of Certain Fees.  In the event a party hereto files any action
or suit against another party hereto by reason of any breach of any of the
covenants, agreements or provisions contained in this Agreement, then in that
event the prevailing party will be entitled to have and recover certain fees
from the other party including all reasonable attorneys’ fees and costs resulting therefrom. For
purposes of this Agreement, the term “attorneys’ fees” or “attorneys’ fees and
costs” shall mean the fees and expenses of counsel to the parties hereto, which
may include printing, photocopying, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals and other persons not admitted
to the bar but performing services under the supervision of an attorney, and
the costs and fees incurred in connection with the enforcement or collection of
any judgment obtained in any such proceeding. 
The provisions of this Section 18.2 shall survive the entry of any
judgment, and shall not merge, or be deemed to have merged, into any judgment.

Section
18.3         Construction.  Headings at the beginning of each
Article and Section are solely for the convenience of the parties and
are not a part of this Agreement. 
Whenever required by the context of this Agreement, the singular will
include the plural and the masculine will include the feminine and vice
versa.  This Agreement will not be
construed as if it had been prepared by one of the parties, but rather as if
both parties had prepared the same.  All
exhibits and schedules referred to in this Agreement are attached and
incorporated by this reference, and any capitalized term used in any exhibit or
schedule which is not defined in such exhibit or schedule will have the meaning
attributable to such term in the body of this Agreement.  In the event the date on which Purchaser or
Seller is required to take any action under the terms of this Agreement is not
a Business Day, the action may be taken on the next succeeding Business Day.

Section
18.4         Counterparts.  This Agreement may be executed in multiple
counterparts, each of which, when assembled to include an original signature
for each party contemplated to sign this Agreement, will constitute a complete
and fully executed original.  All such
fully executed original counterparts will collectively constitute a single
agreement.  If a party to this Agreement
delivers via telecopier or pdf e-mail a copy of this Agreement executed by such
party, it shall have the same legal effect as the delivery of an original
executed counterpart of the Agreement.

Section
18.5         Severability.  If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
law or public policy, all of the other conditions and provisions of this
Agreement will nevertheless remain in full force and effect, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any adverse manner to either party. 
Upon such determination that any term or other provision is invalid,
illegal, or incapable of being enforced, the parties hereto will negotiate in
good faith to modify this Agreement so as to reflect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

 41
 

 

Section 18.6         Entire
Agreement. 
This Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof, and
supersedes all prior understandings with respect thereto.  This Agreement may not be modified, changed,
supplemented or terminated, nor may any obligations hereunder be waived, except
by written instrument, signed by the party to be charged or by its agent duly
authorized in writing, or as otherwise expressly permitted herein.

Section 18.7         Governing
Law.  THIS
AGREEMENT WILL BE CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE IN WHICH THE PROPERTY IS LOCATED. 
SELLER AND PURCHASER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF
THE APPROPRIATE COURT IN THE CITY AND COUNTY OF SAN FRANCISCO IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD
AND DETERMINED IN SUCH COURT.

Section 18.8         No
Recording. 
The parties hereto agree that neither this Agreement nor any affidavit
or memorandum concerning it will be recorded and any recording of this
Agreement or any such affidavit or memorandum by Purchaser will be deemed a
default by Purchaser hereunder.

Section 18.9         Further
Actions. The parties agree to execute such
instructions to the Title Company and such other instruments and to do such
further acts as may be reasonably necessary to carry out the provisions of this
Agreement.

Section 18.10       Exhibits.  The following sets forth a list of Exhibits
to the Agreement:

Exhibit A -             Assignment

Exhibit B -              Assignment of Leases

Exhibit C -              Bill of Sale

Exhibit D -              Legal Description of Real Property

Exhibit E -              Service Contracts

Exhibit F -              Lease Schedule

Exhibit G -              Form of Tenant Estoppel Certificate

Exhibit G-1-            Form of Kiosk Tenant Estoppel
Certificate

Exhibit H -              Existing Surveys

Exhibit I -               Suits and Proceedings

Exhibit J -               Certificate as to Foreign Status

Exhibit K -              Purchase Price Allocation

Exhibit L -              Market Rents

Exhibit M -             List of Environmental Reports

Exhibit N -              List of Company California
Employees

Exhibit O -                                         Arrearage
Schedule, Material Non-Monetary Defaults and Uncured Default Notices

Exhibit P -              Real Estate Tax Appeals

Exhibit Q -              Leasing Commission Agreements

Exhibit R -              Purchaser’s Tenant Expenses

 42
 

 

Exhibit S -              Additional Sale Consideration
Agreement

Exhibit T -              Commercial Property Owner’s Guide
to Earthquake Safety

Exhibit U -              Grant Deed

Section 18.11       No
Partnership. 
Notwithstanding anything to the contrary contained herein, this
Agreement shall not be deemed or construed to make the parties hereto partners
or joint venturers, it being the intention of the parties to merely create the
relationship of Seller and Purchaser with respect to the Property to be
conveyed as contemplated hereby.

Section 18.12       Limitations
on Benefits. 
It is the explicit intention of Purchaser and Seller that no person or
entity other than Purchaser, Seller, Seller’s Affiliates and the Company
California Employees with respect to Section 7.3 and their permitted successors
and assigns is or shall be entitled to bring any action to enforce any
provision of this Agreement against any of the parties hereto, and the
covenants, undertakings and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, Purchaser, Seller
and Seller’s Affiliates and the Company California Employees with respect to
Section 7.3 or their respective successors and assigns as permitted
hereunder.  Except as set forth in this
Section 18.12, nothing contained in this Agreement shall under any circumstances
whatsoever be deemed or construed, or be interpreted, as making any third party
(including, without limitation, any broker) a beneficiary of any term or
provision of this Agreement or any instrument or document delivered pursuant
hereto, and Purchaser and Seller expressly reject any such intent, construction
or interpretation of this Agreement.

Section 18.13       Discharge
of Obligations.   The
acceptance of the Deed by Purchaser shall be deemed to be a full performance
and discharge of every representation and warranty made by Seller herein and
every agreement and obligation on the part of Seller to be performed pursuant
to the provisions of this Agreement, except those which are herein specifically
stated to survive the Closing.

Section 18.14       Catastrophic Unavailability of Wire Transfers.  In the event that on the date on which a wire
transfer of monies is required under this Agreement the Federal Reserve wire
transfer system is not operating as a result of some catastrophic damage to the
system, then the period for tendering payment hereunder shall be extended for
two (2) Business Days, and Seller agrees that it shall accept another form of
legal tender of United States dollars at such time.

 43

IN WITNESS WHEREOF, Seller and
Purchaser have respectively executed this Agreement as of the Effective Date.

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  WESTCORE
  PROPERTIES AC, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Donald Ankeny

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Donald Ankeny

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  PHELAN REALTY
  ASSOCIATES L.P., a

  California limited partnership

  
	
   

  	
  By: Mack-Cali
  Sub VI, Inc., a Delaware

  corporation, as General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitchell E.
  Hersh

  	
   

  
	
   

  	
   

  	
  Mitchell E.
  Hersh

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  795 FOLSOM
  REALTY ASSOCIATES L.P., a

  California limited partnership

  
	
   

  	
  By: Mack-Cali
  Sub VI, Inc., a Delaware

  corporation, as General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitchell E.
  Hersh

  	
   

  
	
   

  	
   

  	
  Mitchell E.
  Hersh

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  As to Article XVII
  only:

  
	
   

  	
   

  
	
   

  	
  ESCROW
  AGENT:

  
	
   

  	
   

  
	
   

  	
  COMMONWEALTH
  LAND TITLE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Carol Carozza

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Carol Carozza

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice PresidentExhibit 10.1

LOCK-UP AGREEMENT

October
30, 2006

Osiris Therapeutics, Inc.

2001 Aliceanna Street

Baltimore, MD 21231

Gentlemen:

The
undersigned (Peter Friedli, Venturetec Inc. and US Venture 05, Inc.) agrees
that, without the prior written consent of Osiris Therapeutics Inc. (the “Company”),
the undersigned will not, directly or indirectly, offer, sell, contract to sell
(including any short sale), grant any option to purchase or otherwise dispose
of any shares of Common Stock, par value $0.001 per share, of the Company
(including, without limitation, shares of Common Stock of the Company which may
be deemed to be beneficially owned by the undersigned on the date hereof in
accordance with the rules and regulations of the Securities and Exchange
Commission, shares of Common Stock which may be issued upon exercise of a stock
option or warrant and any other security convertible into or exchangeable for
Common Stock) or enter into any Hedging Transaction (as defined below) relating
to the Common Stock (each of the foregoing referred to as a “Disposition”)
during the period specified in the following paragraph (the “Lock-Up Period”).  The foregoing restriction is expressly
intended to preclude the undersigned from engaging in any Hedging Transaction
or other transaction which is designed to or reasonably expected to lead to or
result in a Disposition during the Lock-Up Period even if the securities would
be disposed of by someone other than the undersigned.  “Hedging Transaction” means any short sale
(whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any
security (other than a broad-based market basket or index) that includes,
relates to or derives any significant part of its value from the Common Stock.

The
initial Lock-Up Period will commence on the date hereof and continue until, and
include, January 30, 2008.

Notwithstanding
the foregoing, the undersigned may transfer (a) shares of Common Stock acquired
in open market transactions by the undersigned after the completion by the
Company of the initial public offering of Common Stock, and (b) any or all of
the shares of Common Stock or other Company securities if the transfer is by
(i) gift, will or intestacy, or (ii) distribution to partners, members or
shareholders of the undersigned; provided, however, that in the
case of a transfer pursuant to clause (b) above, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee
is receiving and holding the securities subject to the provisions of this
Lock-Up Agreement.

 1
 

 

The undersigned agrees that the Company may, and that
the undersigned will, (i) with respect to any shares of Common Stock or other
Company securities for which the undersigned is the record holder, cause the
transfer agent for the Company to note stop transfer instructions with respect
to such securities on the transfer books and records of the Company and (ii)
with respect to any shares of Common Stock or other Company securities for
which the undersigned is the beneficial holder but not the record holder, cause
the record holder of such securities to cause the transfer agent for the
Company to note stop transfer instructions with respect to such securities on
the transfer books and records of the Company.

The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Lock-Up Agreement.

	
  

  	
   

  	
  Signature:

  	
   

  	
  /s/ Peter Friedli

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
  Peter Friedli, individually

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VENTURETEC, INC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Peter Friedli

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Peter Friedli

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  US VENTURE 05, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Peter Friedli

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Peter Friedli

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President

  

 

	
  Number
  of shares owned or 

  subject to warrants, options

  or convertible securities:

  	
   

  	
  Certificate numbers:

  
	
   

  	
   

  	
   

  
	
  7,807,274 Peter Friedli

  1,000,000 Peter Friedli

  3,600,000 Venturetec, Inc.

  1,000,000 US Venture 05

  	
   

  	
  #1011, 1012, 1013, 1014

  #CS-3 Warrant

  #1000, 1001

  #1004

  

 

 2

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