Document:

Exhibit
10.2

	
  LAND COURT SYSTEM

  	
   

  	
  REGULAR SYSTEM

  

 

After Recordation, Return By
Mail:

Andrew P. Romshek

Kutak Rock LLP

The Omaha Building

1650 Farnam Street

Omaha, NE 68102

 

Type Of Document:  Mortgage, Security Agreement, Assignment Of
Leases and Rents 

And Fixture Filing                                        (Total
Pages:  29 )

Parties To Document:

Mortgagee:  Bank of Hawaii  

Mortgagor:  Maui Land & Pineapple Company,
Inc.

 

Tax Map Key For
Property:

 

MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS

AND FIXTURE FILING

THIS
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
(herein “Instrument”), is made as of October 1, 2006, by the Mortgagor, MAUI LAND & PINEAPPLE COMPANY, INC.,
a Hawaii corporation, whose address is 120 Kane Street, Kahului, Hawaii
96733-6687 (herein “Borrower”), in favor of the Mortgagee, BANK OF HAWAII, a Hawaii corporation, whose
address is Commercial Real Estate Loan Division, 130 Merchant Street, 17th Floor, Honolulu, Hawaii 96813
(herein “Mortgagee”).

 

W I T
N E S S E T H :

THAT, WHEREAS, Borrower is justly indebted to
Mortgagee in the principal sum of $10,000,000.00, pursuant to a certain Loan
Agreement (Real Estate) of even date herewith, more particularly described below,

NOW, THEREFORE, in consideration of the indebtedness
herein recited, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower irrevocably gives,
grants, sells, conveys, warrants, assigns, sets over, and mortgages unto Mortgagee all of Borrower’s right, title and interest,
now owned or hereafter acquired, including any reversion or remainder interest,
in the real property located in the City of Kahului, County of Maui, State of
Hawaii, and more particularly described on Exhibit A attached hereto and
incorporated herein including all heretofore or hereafter vacated alleys and
streets abutting the property, and all easements, rights, appurtenances,
tenements, hereditaments, rents, royalties, mineral, oil and gas rights and
profits, water, water rights, and water stock appurtenant to the property
(collectively “Premises”);

TOGETHER with all of Borrower’s estate, right, title
and interest, now owned or hereafter acquired, in, under and to:

(a)           all buildings, structures,
improvements, parking areas, landscaping, equipment, fixtures and articles of
property now or hereafter erected on, attached to, or used or adapted for use
in the operation of the Premises; including but without being limited to, all heating,
air conditioning and incinerating apparatus and equipment; all boilers,
engines, motors, dynamos, generating equipment, piping and plumbing fixtures,
water heaters, ranges, cooking apparatus and mechanical kitchen equipment,
refrigerators, freezers, cooling, ventilating, sprinkling and vacuum cleaning
systems, fire extinguishing apparatus, gas and electric fixtures, carpeting,
floor coverings, underpadding, elevators, escalators, partitions, mantels,
built-in mirrors, window shades, blinds, draperies, screens, storm sash,
awnings, signs and shrubbery and plants, and including also all interest of any
owner of the Premises in any of such items hereafter at any time acquired under
conditional sale contract, chattel mortgage or other title retaining or
security instrument, all of which property mentioned in this clause (a)
shall be deemed part of the realty covered by this Instrument and not severable
wholly or in part without material injury to the freehold of the Premises (all
of the foregoing together with replacements and additions thereto are referred
to herein as “Improvements”); and

(b)           all compensation, awards, damages,
rights of action and proceeds, including interest thereon and/or the proceeds
of any policies of insurance therefor, arising out of or relating to (i) a
taking or damaging of the Premises or Improvements thereon by reason of any
public or private improvement, condemnation proceeding (including change of
grade), sale or transfer in lieu of condemnation, or fire, earthquake or other casualty,
or (ii) any injury to or decrease in the value of the Premises or the
Improvements for any reason whatsoever;

(c)           return premiums or other payments
upon any insurance any time provided with respect to the Premises,
Improvements, and other collateral described herein for the 

 2
 

 

benefit of or naming
Mortgagee, and refunds or rebates of taxes or assessments on the Premises;

(d)           all written and oral leases and
rental agreements (including extensions, renewals and subleases; all of the
foregoing shall be referred to collectively herein as the “Leases”) now or
hereafter affecting the Premises including, without limitation, all rents,
issues, income, profits and other revenues and income therefrom and from the
renting, leasing or bailment of Improvements and equipment (“Rents”), all
guaranties of tenants’ performance under the Leases, and all rights and claims
of any kind that Borrower may have against any tenant under the Leases or in
connection with the termination or rejection of the Leases in a bankruptcy or
insolvency proceeding;

(e)           plans, specifications, contracts and
agreements relating to the design or construction of the Improvements; Borrower’s
rights under any payment, performance, or other bond in connection with the
design or construction of the Improvements; all landscaping and construction
materials, supplies, and equipment used or to be used or consumed in connection
with construction of the Improvements, whether stored on the Premises or at
some other location; and contracts, agreements, and purchase orders with
contractors, subcontractors, suppliers, and materialmen incidental to the
design or construction of the Improvements;

(f)            to the extent all contracts,
deposits, deposit accounts, accounts, all rights, claims or causes of action
pertaining to or affecting the Premises or the Improvements, including, without
limitation, all supporting obligations and any and all proceeds thereof, all
options or contracts to acquire other property for use in connection with
operation or development of the Premises or Improvements, management contracts,
service or supply contracts, permits, licenses, franchises and certificates,
and all commitments or agreements, now or hereafter in existence, intended by
the obligor thereof to provide Borrower with proceeds to satisfy the loan
evidenced hereby or improve the Premises or Improvements, and the right to
receive all proceeds due under such commitments or agreements including
refundable deposits and fees;

(g)           all books, records, surveys, reports
and other documents related to the Premises, the Improvements, the Leases, or
other items of collateral described herein; and

(h)           all additions, accessions,
replacements, substitutions, proceeds and products of the real and personal
property, tangible and intangible, described herein, including but not limited
to lease and real-estate proceeds and other amounts relating to the use,
disposition, or sale of the collateral described herein which proceeds or other
amounts are characterized as general intangibles.

All of the foregoing described collateral is exclusive
of any goods, equipment, inventory, furniture, furnishings or trade fixtures
owned and supplied by tenants of the Premises. 
The Premises, the Improvements, the Leases and all of the rest of the
foregoing property are herein referred to as the “Property.”

 3
 

 

TO HAVE AND TO HOLD the Property and all parts,
rights, members and appurtenances thereof to the use and benefit of Mortgagee
and its successors and assigns in fee simple forever.

TO SECURE TO Mortgagee (a) the repayment of funds
advanced or to be advanced for the purpose of paying for the construction of
improvements on the Premises in whole or in part, in the principal amount of
$10,000,000.00 with interest thereon at the rate of 6.93% per annum as set
forth in the Loan Agreement (Real Estate) dated of even date herewith (the “Loan
Agreement”) between Borrower and Mortgagee and all renewals, extensions and
modifications thereof; (b)  the repayment of any future advances, with
interest thereon, made by Mortgagee to Borrower pursuant to Section 28
hereof (herein “Future Advances”); (c) the payment of all other sums, with
interest thereon, advanced in accordance herewith to protect the security of
this Instrument or to fulfill any of Borrower’s obligations hereunder or under
the other Loan Documents (as defined below), the amount of which together with
the Future Advances shall not exceed $20,000,000.00; (d) the performance
of the covenants and agreements of Borrower contained herein or in the other
Loan Documents; and (e) the repayment of all sums now or hereafter owing to
Mortgagee by Borrower pursuant to any instrument which recites that it is
secured hereby.  The indebtedness and
obligations described in clauses (a)-(e) above are collectively referred
to herein as the “Indebtedness.”  The
Loan Agreement, this Instrument, and all other documents evidencing, securing
or guaranteeing the Indebtedness (except the Environmental Indemnity Agreement
Regarding Hazardous Substances (“Indemnity”), as the same may be modified or
amended from time to time, are referred to herein as the “Loan Documents.”  The terms of the Loan Agreement may provide
that the interest rate or payment terms or balance due may be indexed,
adjusted, renewed, or renegotiated from time to time, and this Instrument shall
continue to secure the Indebtedness notwithstanding any such indexing,
adjustment, renewal or renegotiation.

PROVIDED, ALWAYS, that if Borrower shall pay unto
Mortgagee the Indebtedness and if Borrower shall duly, promptly and fully
perform, discharge, execute, effect, complete and comply with and abide by each
and every of the stipulations, agreements, conditions and covenants of the Loan
Agreement and this Instrument, then this Instrument and all assignments
contained herein and liens created hereby shall cease and be null and void;
otherwise to remain in full force and effect.

Borrower represents and warrants that Borrower has
good, marketable and insurable title to, and has the right to mortgage an
indefeasible fee simple estate in, the Premises, Improvements, Rents, and
Leases, and the right to convey the other Property, that the Property is
unencumbered except for the exceptions set forth in Exhibit B hereto (the “Permitted
Exceptions”), and that Borrower will warrant and forever defend the title to
the Property against all claims and demands, subject only to the Permitted
Exceptions.

Borrower represents, warrants, covenants and agrees
for the benefit of Mortgagee as follows:

1.             PAYMENT OF PRINCIPAL AND
INTEREST.  Borrower shall
promptly pay when due the principal of and interest on the Indebtedness, any
prepayment and other charges provided in the Loan Documents and all other sums
secured by this Instrument.

 4
 

 

2.             FUNDS FOR TAXES, INSURANCE
AND OTHER CHARGES.  Except as
is hereinafter provided with respect to the impounding of such payments by
Mortgagee following the occurrence and during the continuance of an Event of
Default, Borrower shall pay or cause to be paid when due, prior to delinquency,
all annual real estate taxes, insurance premiums, assessments, water and sewer
rates, ground rents and other charges (herein “Impositions”) payable with
respect to the Property.  Upon the
occurrence and during the continuance of an Event of Default (hereinafter
defined), and at Mortgagee’s sole option at any time thereafter, Borrower shall
pay in addition to each monthly payment on the Loan, one-twelfth of the annual
Impositions (as estimated by Mortgagee in its reasonable discretion), to be
held by Mortgagee without interest to Borrower, for the payment of such
Impositions (such payments being referred to herein as “Impounds”).

Annually during the term of this Instrument, Mortgagee
shall compare the Impounds collected to the Impositions paid or to be
paid.  If the amount of such Impounds
held by Mortgagee at such time shall exceed the amount deemed necessary by
Mortgagee to provide for the payment of Impositions as they fall due, if no
Event of Default shall have occurred and be continuing, such excess shall be at
Borrower’s option, either repaid to Borrower or credited to Borrower on the
next monthly installment or installments of Impounds due.  If at any time the amount of the Impounds
held by Mortgagee shall be less than the amount deemed necessary by Mortgagee
to pay Impositions as they fall due, Borrower shall pay to Mortgagee any amount
necessary to make up the deficiency within thirty (30) days after notice
from Mortgagee to Borrower requesting payment thereof.  Upon the occurrence of an Event of Default
hereunder, Mortgagee may apply, in any amount and in any order as Mortgagee
shall determine in Mortgagee’s sole discretion, any Impounds held by Mortgagee
at the time of application (i) to pay Impositions which are now or will
hereafter become due, or (ii) as a credit against sums secured by this
Instrument.  Upon payment in full of all
sums secured by this Instrument, Mortgagee shall refund to Borrower any
Impounds then held by Mortgagee.  If
requested by Mortgagee, Borrower shall promptly furnish to Mortgagee all
notices of Impositions which become due, and in the event Borrower shall make
payment directly, Borrower shall promptly furnish to Mortgagee receipts
evidencing such payments upon request.

3.             APPLICATION OF PAYMENTS.  Unless applicable law provides otherwise,
each complete installment payment received by Mortgagee from Borrower under the
Loan Agreement or this Instrument shall be applied by Mortgagee as set forth in
the Loan Agreement.  Upon the occurrence
of an Event of Default, Mortgagee may apply, in any amount and in any order as
Mortgagee shall determine in Mortgagee’s sole discretion, any payments received
by Mortgagee under the Loan Agreement or this Instrument.  Any partial payment received by Mortgagee
shall, at Mortgagee’s option, be held in a non-interest bearing account until Mortgagee
receives funds sufficient to equal a complete installment payment.

4.             CHARGES, LIENS.  Borrower shall promptly discharge or bond off
any lien which has, or may have, priority over or equality with, the lien of
this Instrument, and Borrower shall pay, when due, the claims of all persons
supplying labor or materials to or in connection with the Property.  Without Mortgagee’s prior written permission,
Borrower shall not allow any lien inferior to this Instrument to be perfected
against the Property.  If any lien
inferior to this Instrument is filed against the Property without Mortgagee’s
prior written permission and without the consent of Borrower, Borrower shall,
within thirty (30) days after receiving notice of 

 5
 

 

the filing of such lien, cause such lien to be
released of record or bonded off and deliver evidence of such release or
bonding to Mortgagee.  Borrower may
contest any lien by appropriate proceedings in good faith, timely filed,
provided that enforcement of such lien is stayed pending such contest.  Mortgagee may require that Borrower post
security for payment of such lien.

5.             INSURANCE.  Borrower shall obtain and maintain the types
of insurance required by the Loan Agreement.

BORROWER IS NOT REQUIRED TO OBTAIN INSURANCE FROM OR
THROUGH ANY PARTICULAR INSURER, AGENT OR BROKER AND IS FREE TO OBTAIN INSURANCE
THROUGH ANY INSURER, AGENT OR BROKER LICENSED TO DO BUSINESS IN THE STATE OF
HAWAII THAT MEETS THE REQUIREMENTS SET FORTH IN THE LOAN AGREEMENT.

6.             PRESERVATION AND
MAINTENANCE OF PROPERTY; LEASEHOLDS. 
Borrower (a) shall not commit waste or permit impairment or
deterioration of the Property other than the Designated Buildings (as defined
below), (b) shall not abandon the Property, (c) shall restore or
repair promptly and in a good and workmanlike manner all or any part of the
Property (other than the Designated Buildings) to the equivalent of its
original condition, or such other condition as Mortgagee may approve in
writing, in the event of any damage, injury or loss thereto, whether or not
insurance proceeds are available to cover in whole or in part the costs of such
restoration or repair, (d) shall keep the Property (other than the
Designated Buildings), including all Improvements thereon, in good repair and
shall replace fixtures, equipment, machinery and appliances on the Property
when necessary to keep such items in good repair, (e) shall comply with
all laws, ordinances, regulations and requirements of any governmental body
applicable to the Property, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect (as defined in the
Loan Agreement), (f) if all or part of the Property is for rent or lease,
then Mortgagee, at its option after the occurrence of an Event of Default, may
require Borrower to provide for professional management of the Property by a
property manager satisfactory to Mortgagee pursuant to a contract approved by
Mortgagee in writing, unless such requirement shall be waived by Mortgagee in
writing, and (g) shall give notice in writing to Mortgagee of and, unless
otherwise directed in writing by Mortgagee, appear in and defend any action or
proceeding purporting to affect the Property, the security of this Instrument
or the rights or powers of Mortgagee hereunder. 
Neither Borrower nor any tenant or other person shall remove, demolish
or alter any improvement now existing or hereafter erected on the Premises or
any fixture, equipment, machinery or appliance in or on the Property with a
market value in excess of $50,000 individually or $100,000 in the aggregate,
except when incident to the replacement of fixtures, equipment, machinery and
appliances with items of like kind. 
Notwithstanding any provision herein or in the Loan Agreement to the
contrary, Borrower shall not be required to repair, or otherwise keep in good
repair, the Designated Buildings and may demolish or otherwise remove the
Designated Buildings from the Property in an orderly and efficient manner.  “Designated Buildings” means all of the
buildings located on the Property other than the recently-renovated
approximately 259,691 square foot warehouse.

Borrower represents and warrants to Lender as of the
Closing Date (as defined in the Loan Agreement) and covenants that the Property
is and shall be in substantial compliance with 

 6
 

 

the Americans with Disabilities Act of 1990 and all of
the regulations promulgated thereunder, as the same may be amended from time to
time.

7.             USE OF PROPERTY.  Unless required by applicable law or unless
Mortgagee has otherwise agreed in writing, Borrower shall not allow changes in
the use for which all or any part of the Property was intended at the time this
Instrument was executed.  Borrower shall
not, without Mortgagee’s prior written consent, (i) initiate or acquiesce
in a change in the zoning classification (including any variance under any
existing zoning ordinance applicable to the Property), (ii) permit the use
of the Property to become a non-conforming use under applicable zoning
ordinances, (iii) file any subdivision or parcel map affecting the
Property, or (iv) amend, modify or consent to any easement or covenants,
conditions and restrictions pertaining to the Property.

8.             PROTECTION OF MORTGAGEE’S
SECURITY.  If an Event of
Default shall have occurred and be continuing, or if any action or proceeding
is commenced which affects the Property or title thereto or the interest of
Mortgagee therein, including, but not limited to, eminent domain, insolvency,
code enforcement, or arrangements or proceedings involving a bankrupt or
decedent, then Mortgagee at Mortgagee’s option may make such appearances,
disburse such sums and take such action as Mortgagee deems necessary, in its
sole discretion, to protect Mortgagee’s interest, including, but not limited
to, (i) disbursement of attorneys’ fees, (ii) entry upon the Property
to make repairs, and (iii) procurement of satisfactory insurance as
provided in Section 5 hereof.

Any amounts disbursed by Mortgagee pursuant to this Section 8,
with interest thereon, shall become additional Indebtedness of Borrower secured
by this Instrument.  Unless Borrower and
Mortgagee agree to other terms of payment, such amounts shall be immediately
due and payable and shall bear interest from the date of disbursement at the
lesser of 18% per annum or the highest rate permitted by law.  Borrower hereby covenants and agrees that
Mortgagee shall be subrogated to the lien of any mortgage or other lien
discharged, in whole or in part, by the Indebtedness.  Nothing contained in this Section 8
shall require Mortgagee to incur any expense or take any action hereunder.

Notwithstanding the foregoing, at Mortgagee’s option,
any additional advances made by Mortgagee (i) to protect or preserve the
Property or security interest created in the Property and (ii) to ensure the
full performance of all of the provisions, agreements, covenants and
obligations contained in the Loan Documents may be capitalized and consolidated
into the Loan and shall bear interest as provided therein.

9.             INSPECTION.  Mortgagee may make or cause to be made reasonable
entries upon the Property during Borrower’s normal business hours to inspect
the interior and exterior thereof. 
Except in case of emergency, such inspection shall be with reasonable
prior notice and shall in any case be with due regard to rights of tenants.

10.           [RESERVED.]

11.           CONDEMNATION.  If the Property, or any part thereof, shall
be condemned for any reason, including without limitation fire or earthquake
damage, or otherwise taken for public 

 7
 

 

or quasi-public use under the power of eminent domain,
Mortgagee shall apply all such proceeds thereof as set forth in the Loan
Agreement.

12.           BORROWER AND LIEN NOT
RELEASED.  From time to time,
Mortgagee may, at Mortgagee’s option, without giving notice to or obtaining the
consent of any junior lienholder or guarantors, without liability on Mortgagee’s
part and notwithstanding the occurrence of an Event of Default, extend the time
for payment of the Indebtedness or any part thereof, reduce the payments
thereon, release anyone liable on any of the Indebtedness (including but not
limited to any guarantor), accept an extension or modification or renewal note
or notes therefor, modify the terms and time of payment of the Indebtedness,
enter into a loan modification agreement with Borrower, release from the lien
of this Instrument any part of the Property, take or release other or
additional security, reconvey any part of the Property, consent to any map or
plan of the Property, consent to the granting of any easement, join in any
extension or subordination agreement, and agree in writing with Borrower to
modify the rate of interest or period of amortization of the Loan or change the
amount of the monthly installments payable thereunder.  Any actions taken by Mortgagee pursuant to
the terms of this Section 12 shall not affect the obligation of
Borrower or Borrower’s successors or assigns to pay the sums secured by this
Instrument and to observe the covenants of Borrower contained herein, shall not
affect the guaranty of any person, corporation, partnership or other entity for
payment of the Indebtedness, and shall not affect the lien or priority of the
lien hereof on the Property.  Borrower
shall pay Mortgagee a service charge (based on Mortgagee’s then-current fee
schedule for each matters), together with such title insurance premiums and
attorneys’ fees as may be incurred at Mortgagee’s option, for any such action
if taken at Borrower’s request or for other servicing requests, including but
not limited to name changes, prepayments of the Indebtedness, and loan pay off
statement requests.  Such service charge
is exclusive of any legal fees which may be incurred by Mortgagee in connection
with Borrower’s request..

13.           FORBEARANCE BY MORTGAGEE
NOT A WAIVER.  Any forbearance
by Mortgagee in exercising any right or remedy hereunder, or otherwise afforded
by applicable law, shall not be a waiver of or preclude the exercise of any
other right or remedy.  The acceptance by
Mortgagee of payment of any sum secured by this Instrument after the due date
of such payment shall not be a waiver of Mortgagee’s right to either require
prompt payment when due of all other sums so secured or to declare a default
for failure to make prompt payment.  The
procurement of insurance or the payment of taxes or other liens or charges by
Mortgagee shall not be a waiver of Mortgagee’s right to accelerate the maturity
of the Indebtedness secured by this Instrument, nor shall Mortgagee’s receipt
of any awards, proceeds or damages under Sections 5 and 11
hereof operate to cure or waive Borrower’s default in payment of sums secured
by this Instrument.

14.           UNIFORM COMMERCIAL CODE
SECURITY AGREEMENT.  This
Instrument is intended to be a security agreement pursuant to the Uniform
Commercial Code for any of the items specified above as part of the Property
which, under applicable law, may be subject to a security interest pursuant to
the Uniform Commercial Code, and Borrower hereby grants to Mortgagee a first
and prior security interest in all of the Property that constitutes personal
property (“Collateral”, for purposes of this Section 14), whether
now owned or hereafter acquired. 
Borrower agrees that Mortgagee may file this Instrument, or a
reproduction thereof, in the real estate records or other appropriate index, as
a financing statement for any of 

 8
 

 

the items specified above as part of the
Collateral.  Any reproduction of this
Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement.  In
addition, Mortgagee may submit for filing any financing statements, as well as
extensions, renewals and amendments thereof, and reproductions of this
Instrument in such form as Mortgagee may deem appropriate to perfect a security
interest with respect to the foregoing items. 
Borrower shall pay all costs of filing such financing statements and any
extensions, renewals, amendments and releases thereof, and shall pay all costs
and expenses of any record searches for financing statements Mortgagee may
reasonably require.

Borrower expressly
warrants and covenants:

(a)           Except for the Permitted Exceptions
and the security interest granted hereby and by the other Loan Documents,
Borrower is the owner of the Collateral free from any lien, security interest
or encumbrance.  Borrower understands
that any further encumbrance of the Collateral is prohibited.  Borrower shall defend the Collateral against
all claims and demands of all persons at any time claiming the same or any
interest therein.

(b)           The Collateral is used or bought
primarily for use in the business of Borrower and not for consumer purposes.

(c)           Borrower’s business address is as
stated above.  The Collateral is located
at or on or is used or owned for or in connection with the Premises and other
Property.

(d)           Borrower shall promptly notify
Mortgagee of any change in the location of the Collateral or any change in
Borrower’s principal place of business.

(e)           Borrower will not use the Collateral
in violation of any applicable statutes, regulations or ordinances.

(f)            Notwithstanding anything else
contained herein to the contrary, if any personal property for use on the
Property will be leased to Borrower, Mortgagee’s interest therein shall be
subordinate to lessor’s interest therein.

Until the occurrence of an Event of Default, Borrower
may have possession of the Collateral and use it in any lawful manner, and upon
the occurrence of an Event of Default Mortgagee shall have the immediate right
to the possession of the Collateral.

Upon the occurrence and during the continuance of an
Event of Default, Mortgagee shall have the remedies of a secured party under
the Uniform Commercial Code, and Mortgagee may also invoke the remedies
provided in Section 26 of this Instrument as to such items.  In exercising any of said remedies Mortgagee
may proceed against the items of real property and any items of Collateral
specified above separately or together and in any order whatsoever, without in
any way affecting the availability of Mortgagee’s remedies under the Uniform
Commercial Code or of the remedies provided in Section 26 of this
Instrument.  Within ten (10) days
following any request therefor by Mortgagee, Borrower shall prepare and deliver
to Mortgagee a written inventory specifically listing all of the Collateral
covered by the security 

 9
 

 

interest herein granted, which inventory shall be
certified by Borrower as being true, correct, and complete.

Addresses and Other Information for Fixture
Filing.  The following information is
provided in order that this Instrument shall comply with the requirements of
the Uniform Commercial Code, as enacted in the State of Hawaii, for instruments
to be filed as financing statements and with other requirements of applicable
law:

	
   

  	
  (a)

  	
  Name of Borrower (Debtor):

  	
  MAUI LAND & PINEAPPLE COMPANY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of
  Borrower:

  	
  120 Kane Street

  
	
   

  	
   

  	
   

  	
  Kahului, HI 96733-6687

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Name of Mortgagee

  	
   

  
	
   

  	
   

  	
  (Secured Party)

  	
  BANK OF HAWAII

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of
  Mortgagee:

  	
  Commercial Real Estate Loan Division

  
	
   

  	
   

  	
   

  	
  130 Merchant
  Street, 17th Floor

  
	
   

  	
   

  	
   

  	
  Honolulu, Hawaii
  96813

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Record Owner of Real Estate

  	
   

  
	
   

  	
   

  	
  Described on
  Exhibit A hereto

  	
  BORROWER

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Jurisdiction of Organization:

  	
  Hawaii

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Organizational ID No.:

  	
  756 D1

  

 

15.           LEASES OF THE PROPERTY.  Borrower shall comply with and observe Borrower’s
obligations as landlord under all Leases of the Property or any part
thereof.  All Leases now or hereafter
entered into will be in form and substance subject to the approval of
Mortgagee.  If Mortgagee fails to approve
or disapprove any Lease in writing within 10 business days of the receipt of a
written request from Borrower, which request includes a copy of the proposed
Lease, and Mortgagee receives a second written request from Borrower and fails
to respond within ten business days of the receipt thereof, Mortgagee shall be
deemed to have given approval for such Lease. 
Borrower shall pay all reasonable attorneys’ fees incurred by Mortgagee
in reviewing any Lease or proposed Lease. 
All Leases of the Property shall specifically provide that such Leases
are subordinate to this Instrument; that the tenant attorns to Mortgagee, such
attornment to be effective upon Mortgagee’s acquisition of title to the
Property; that the tenant agrees to execute such further evidences of
attornment as Mortgagee may from time to time request; that the attornment of
the tenant shall not be terminated by foreclosure; and that Mortgagee may, at
Mortgagee’s option, accept or reject such attornments (except as to third-party
credit tenants unrelated to Borrower, as to which Mortgagee shall grant a non-disturbance
provision).  Borrower shall not, without
Mortgagee’s written consent, request or consent to the subordination of any
Lease of all or any part of the Property to any lien subordinate to this
Instrument.  If Borrower becomes aware
that any tenant proposes to do, or is doing, any act or thing which may give
rise to any right of set-off against rent, Borrower shall (i) take such
steps as shall be reasonably calculated to prevent the accrual of any right to
a set-off against rent, (ii) immediately notify Mortgagee thereof in
writing and of the amount of said 

 10
 

 

set-offs, and (iii) within ten (10) days
after such accrual, reimburse the tenant who shall have acquired such right to
set-off or take such other steps as shall effectively discharge such setoff and
as shall assure that Rents thereafter due shall continue to be payable without
set-off or deduction.  Upon Mortgagee’s
receipt of notice of the occurrence of any default or violation by Borrower of
any of its obligations under the Leases beyond applicable periods for notice
and cure, Mortgagee shall have the immediate right, but not the duty or
obligation, without prior written notice to Borrower or to any third party (but
with due regard for rights of tenants under Leases), to enter upon the Property
and to take such actions as Mortgagee may deem necessary to cure the default or
violation by Borrower under the Leases. 
The costs incurred by Mortgagee in taking any such actions pursuant to
this paragraph shall become part of the Indebtedness, shall bear interest at
the rate provided in the Loan Agreement, and shall be payable by Borrower to
Mortgagee on demand.  Mortgagee shall
have no liability to Borrower or to any third party for any actions taken by
Mortgagee or not taken pursuant to this paragraph.

16.           REMEDIES CUMULATIVE.  Each remedy provided in this Instrument is
distinct and cumulative to all other rights or remedies under this Instrument
or afforded by law or equity, and may be exercised concurrently, independently,
or successively, in any order whatsoever.

17.           TRANSFERS OF THE PROPERTY;
SUBORDINATE FINANCING PROHIBITED. 
Mortgagee may, at its option, declare all sums secured by this
Instrument to be immediately due and payable, and Mortgagee may invoke any
remedies permitted by Section 26 of this Instrument, if title to
the Property is changed.  Any transfer of
any interest in the Property or in the income therefrom, by sale or lease
(except for Leases to tenants in the ordinary course of managing income
property which are approved by Mortgagee pursuant to Section 15 of
this Instrument) (including any such transfers as security for additional
financing of the Property), shall be considered a change of title.  Leasehold mortgages and collateral
assignments of any Lease of the Property given by tenants of the Property are
prohibited.

18.           NOTICE.  Except for any notice required under
applicable law to be given in another manner, any and all notices, elections,
demands, or requests permitted or required to be made under this Instrument or
under the Loan Agreement shall be in writing, signed by the party giving such
notice, election, demand or request, and shall be shall be (a) personally
delivered, (b) sent by first-class United States mail, or (c) sent by overnight
courier of national reputation, to the other party at the address stated above,
or to such other party and at such other address within the United States
of America as any party may designate in writing as provided herein.  The date of receipt of such notice, election,
demand or request shall be deemed to have been given on (a) the date
received if personally delivered, (b) when deposited in the mail if delivered
by mail, or (c) the date sent if sent by overnight courier.

19.           SUCCESSORS AND ASSIGNS
BOUND; AGENTS; CAPTIONS.  The
covenants and agreements herein contained shall bind, and the rights hereunder
shall inure to, the respective heirs, successors and assigns of Mortgagee and
Borrower, subject to the provisions of Section 17 hereof.  In exercising any rights hereunder or taking
any actions provided for herein, Mortgagee may act through its employees,
agents or independent contractors as authorized by Mortgagee.  The captions and headings of the sections of
this Instrument are for convenience only and are not to be used to interpret or
define the provisions hereof.

 11

 

20.           WAIVER OF STATUTE OF
LIMITATIONS.  Borrower hereby
waives the right to assert any statute of limitations as a bar to the
enforcement of the lien of this Instrument or to any action brought to enforce
the Loan Agreement or any other obligation secured by this Instrument.

21.           WAIVER OF MARSHALLING.  Notwithstanding the existence of any other
security interests in the Property held by Mortgagee or by any other party,
Mortgagee shall have the right to determine the order in which any or all of
the Property shall be subjected to the remedies provided herein.  Mortgagee shall have the right to determine
the order in which any or all portions of the Indebtedness secured hereby are
satisfied from the proceeds realized upon the exercise of the remedies provided
herein.  Borrower, any party who consents
to this Instrument and any party who now or hereafter acquires a security
interest in the Property and who has actual or constructive notice hereof
hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of the remedies permitted by applicable law
or provided herein.

22.           [RESERVED.]

23.           ADVANCES, COSTS AND
EXPENSES.  Borrower shall pay
within thirty (30) days after written demand from Mortgagee all sums
advanced by Mortgagee and all costs and expenses incurred by Mortgagee in
taking any actions pursuant to the Loan Documents including reasonable
attorneys’ fees and disbursements, accountants’ fees, appraisal and inspection
fees and the costs for title reports and guaranties, together with interest
thereon at the lesser of 18% per annum or the highest rate permitted by
law.  All such costs and expenses
incurred by Mortgagee, and advances made, shall constitute advances under this
Instrument to protect the Property and shall be secured by and have the same
priority as the lien of this Instrument. 
If Borrower fails to pay any such advances, costs and expenses and
interest thereon, Mortgagee may apply any undisbursed loan proceeds to pay the
same, and, without foreclosing the lien of this Instrument, may at its option
commence an independent action against Borrower for the recovery of the costs,
expenses and/or advances, with interest, together with costs of suit, costs of
title reports and guaranty of title, disbursements of counsel and reasonable
attorneys’ fees incurred therein or in any appeal therefrom.  If any check delivered by or on behalf of
Borrower in payment of any monthly installment due on the Indebtedness or any
other payment due hereunder shall be returned on account of insufficient funds,
or if Mortgagee is unable to debit Borrower’s account for such payment in
accordance with previously agreed automated funds withdrawal mechanism,
Borrower shall pay a service charge in accordance with Mortgagee’s current fee
schedule.

24.           ASSIGNMENT OF LEASES AND
RENTS.  Borrower, for good and
valuable consideration, the receipt of which is hereby acknowledged, to secure
the Indebtedness, does hereby absolutely and unconditionally grant, bargain,
sell, transfer, assign, convey, set over and deliver unto Mortgagee all right,
title and interest of Borrower in, to and under the Leases of the Property,
whether now in existence or hereafter entered into, and all guaranties,
amendments, extensions and renewals of said Leases and any of them, and all
Rents which may now or hereafter be or become due or owing under the Leases,
and any of them, or on account of the use of the Property.

 12
 

 

Borrower represents,
warrants, covenants and agrees with Mortgagee as follows:

(a)           The sole ownership of the entire
lessor’s interest in the Leases is vested in Borrower, and Borrower has not,
and shall not, perform any acts or execute any other instruments which might
prevent Mortgagee from fully exercising its rights with respect to the Leases
under any of the terms, covenants and conditions of this Instrument.

(b)           The Leases are and shall be valid and
enforceable in accordance with their terms and have not been and shall not be
altered, modified, amended, terminated, canceled, renewed or surrendered except
as approved in writing by Mortgagee, which approval shall not be unreasonably
withheld, subject to Mortgagee’s then-current underwriting criteria for
similar properties and transactions.  The
terms and conditions of the Leases have not been and shall not be waived in any
manner whatsoever except as approved in writing by Mortgagee.

(c)           Borrower shall not decrease the term
or the amount of rent payable under any Lease without prior written notice to
Mortgagee and Mortgagee’s consent.

(d)           There are currently no Leases of the
Property.

(e)           Borrower shall give prompt written
notice to Mortgagee of any notice received by Borrower claiming that a default
has occurred under any of the Leases on the part of Borrower, together with a
complete copy of any such notice.

(f)            Each of the Leases shall remain in
full force and effect irrespective of any merger of the interest of lessor and
any lessee under any of the Leases.

(g)           Borrower will not permit any Lease to
become subordinate to any lien other than the lien of this Instrument.

(h)           Borrower shall not permit the
assignment of the lessee’s interest under any Lease without Mortgagee’s prior
written consent.

The assignment made hereunder is an absolute, present
assignment from Borrower to Mortgagee, effective immediately, and is not merely
an assignment for security purposes but is irrevocable by Borrower so long as
the Indebtedness remains outstanding. 
Notwithstanding the foregoing, until a notice is sent to the Borrower in
writing that an Event of Default (as defined below) has occurred under the
terms and conditions of the Loan Agreement or any  instrument constituting  security for the Loan (which notice is
hereafter called a “Notice”), Borrower is granted a license to receive, collect
and enjoy the Rents accruing from the Property.

If an Event of Default shall occur, Mortgagee may, at
its option, after service of a Notice, receive and collect all such Rents as
they become due, from the Property. 
Mortgagee shall thereafter continue to receive and collect all such Rents,
until Mortgagee shall otherwise agree in writing.  All sums received by Borrower after service
of such Notice shall be deemed received in trust and shall be immediately
turned over to Mortgagee.

 13
 

 

Borrower hereby irrevocably appoints Mortgagee its true
and lawful attorney-in-fact with power of substitution and with
full power for Mortgagee in its own name and capacity or in the name and
capacity of Borrower, from and after 
service of Notice, to demand, collect, receive and give complete
acquittances for any and all Rents accruing from the Property, either in its
own name or in the name of Borrower or otherwise, which Mortgagee may deem
necessary or desirable in order to collect and enforce the payment of the Rents
and to demand, collect, receive, endorse, and deposit all checks, drafts, money
orders or notes given in payment of such Rents. 
Such appointment is coupled with an interest and is irrevocable.  Mortgagee shall not be liable for or
prejudiced by any loss of any note, checks, drafts, etc., unless such loss
shall have been found by a court of competent jurisdiction to have been due to
the gross negligence or willful misconduct of Mortgagee.

Mortgagee shall apply the Rents received from Borrower’s
lessees, to accrued interest and principal under the Loan Agreement.  If no Event of Default remains uncured,
amounts received in excess of the aggregate monthly payment due under the Loan
Agreement shall be remitted to Borrower in a timely manner.  Nothing contained herein shall be construed
to constitute Mortgagee as a mortgagee-in-possession in absence of
its physically taking possession of the Property.

Borrower also hereby irrevocably appoints Mortgagee
from and after service of notice as its true and lawful attorney-in-fact
to appear in any state or federal bankruptcy, insolvency, or reorganization
proceeding in any state or federal court involving any of the tenants of the
Leases.  Lessees of the Property are
hereby expressly authorized and directed, from and after service of a Notice to
pay any and all amounts due Borrower pursuant to the Leases to Mortgagee or
such nominee as Mortgagee may designate in writing delivered to and received by
such lessees who are expressly relieved of any and all duty, liability or
obligation to Borrower in respect of all payments so made.

If an Event of Default shall occur and continue,
Mortgagee is hereby vested with full power from and after service of a Notice
to use all measures, legal and equitable, deemed by it necessary or proper to
enforce the assignment granted hereunder and to collect the Rents assigned
hereunder, including the right of Mortgagee or its designee, to enter upon the
Property, or any part thereof, and take possession of all or any part of the
Property together with all personal property, fixtures, documents, books,
records, papers and accounts of Borrower relating thereto, and may exclude the
Borrower, its agents and servants, wholly therefrom.  Borrower hereby grants full power and
authority to Mortgagee to exercise all rights, privileges and powers herein
granted at any and all times after service of a Notice, with full power to use
and apply all of the Rents and other income herein assigned to the payment of
the costs of managing and operating the Property and of any indebtedness or
liability of Borrower to Mortgagee, including but not limited to the payment of
taxes, special assessments, insurance premiums, damage claims, the costs of
maintaining, repairing, rebuilding and restoring the Improvements on the
Premises or of making the same rentable, reasonable attorneys’ fees incurred in
connection with the enforcement of the assignment granted hereunder, and of
principal and interest payments due from Borrower to Mortgagee on the Loan
Agreement and this Instrument, all in such order as Mortgagee may
determine.  Mortgagee shall be under no
obligation to exercise or prosecute any of the rights or claims assigned to it
hereunder or to perform or carry out any of the obligations of the lessor under
any of the Leases and does not assume any of the liabilities in connection

 14
 

 

with or arising or growing out of the covenants and
agreements of Borrower in the Leases.  It
is further understood that the assignment granted hereunder shall not operate
to place responsibility for the control, care, management or repair of the
Property, or parts thereof, upon Mortgagee, nor shall it operate to make
Mortgagee liable for the performance of any of the terms and conditions of any
of the Leases, or for any waste of the Property by any lessee under any of the
Leases or any other person, or for any dangerous or defective condition of the
Property or for any negligence in the management, upkeep, repair or control of
the Property resulting in loss or injury or death to any lessee, licensee,
employee or stranger, unless the same shall have been found by a court of
competent jurisdiction to have been due to the gross negligence or willful
misconduct of Mortgagee.

25.           DEFAULT.  The following shall each constitute an event
of default (“Event of Default”):

(a)           The occurrence of an “Event of
Default” under the Loan Agreement.

(b)           The Property is transferred or any
agreement to transfer any part or interest in the Property in any manner
whatsoever is made or entered into, except as specifically allowed under this
Instrument, including without limitation creating or allowing any subordinate
liens on the Property or leasing any portion of the Property.

(c)           Any warranty, representation or
statement furnished to Mortgagee by or on behalf of Borrower under the Loan
Agreement, this Instrument, any of the other Loan Documents or the Indemnity,
shall prove to have been false or misleading in any material respect when made.

(d)           Failure of Borrower to observe or
perform any other covenant or condition contained herein and such default shall
continue for thirty (30) days after notice is given to Borrower specifying
the nature of the failure, or if the default cannot be cured within such
applicable cure period, Borrower fails within such time to commence and pursue
curative action with reasonable diligence or fails at any time after expiration
of such applicable cure period to continue with reasonable diligence all
necessary curative actions.

(e)           Borrower’s abandonment of the
Property.

26.           RIGHTS AND REMEDIES ON
DEFAULT.

26.1.        Remedies. 
Upon the occurrence of any Event of Default and at any time thereafter,
Mortgagee may exercise any one or more of the following rights and remedies:

(a)           Mortgagee may declare all sums secured by this Instrument
immediately due and payable.

(b)           Mortgagee shall have the right to
foreclose this Instrument in accordance with applicable law.

 15
 

 

(c)           In the event of any foreclosure, to
the extent permitted by applicable law, Mortgagee will be entitled to a
judgment which will provide that if the foreclosure sale proceeds are insufficient
to satisfy the judgment, execution may issue for any amount by which the unpaid
balance of the obligations secured by this Instrument exceeds the net sale
proceeds payable to Mortgagee.

(d)           With respect to all or any part of
the Property that constitutes personal property, Mortgagee shall have all
rights and remedies of secured party under the Uniform Commercial Code.

(e)           Mortgagee shall have the right to
have a receiver appointed to take possession of any or all of the Property,
with the power to protect and preserve the Property, to operate the Property
preceding foreclosure or sale, to collect all the Rents from the Property and
apply the proceeds, over and above cost of the receivership, against the sums
due under this Instrument, and to exercise all of the rights with respect to
the Property described in Section 24 above.  The receiver may serve without bond if
permitted by law.  To the extent
permitted by law, Mortgagee’s right to the appointment of a receiver shall
exist whether or not apparent value of the Property exceeds the sums due under
this Instrument by a substantial amount. 
Employment by Mortgagee shall not disqualify a person from serving as a
receiver.

(f)            In the event Borrower remains in
possession of the Property after the Property is sold as provided above or
Mortgagee otherwise becomes entitled to possession of the Property upon default
of Borrower, Borrower shall become a tenant at will of Mortgagee or the
purchaser of the Property and shall pay a reasonable rental for use of the
Property while in Borrower’s possession.

(g)           Mortgagee shall have any other right
or remedy provided in this Instrument, the Loan Agreement, or any other Loan
Document or instrument delivered by Borrower in connection therewith, or
available at law, in equity or otherwise.

(h)           Mortgagee shall have all the rights
and remedies set forth in Sections 23 and 24.

26.2.        Sale of the Property. 
In exercising its rights and remedies, Mortgagee may, at Mortgagee’s
sole discretion, cause all or any part of the Property to be sold as a whole or
in parcels, and certain portions of the Property may be sold without selling
other portions.  Mortgagee may bid at any
public sale on all or any portion of the Property.

26.3.        Notice of Sale. 
Mortgagee shall give Borrower reasonable notice of the time and place of
any public sale of any personal property or of the time after which any private
sale or other intended disposition of the personal property is to be made.  Reasonable notice shall mean notice given in
accordance with applicable law, including notices given in the manner and at
the times required for notices in a nonjudicial foreclosure.

26.4.        Waiver; Election of Remedies.  A waiver by either party of a breach of a
provision of this Instrument shall not constitute a waiver of or prejudice the
party’s right otherwise to demand strict compliance with that provision or any
other provision.  Election by

 16
 

 

Mortgagee to pursue any remedy shall not exclude
pursuit of any other remedy, and all remedies of Mortgagee under this Instrument
are cumulative and not exclusive.  An
election to make expenditures or take action to perform an obligation of
Borrower shall not affect Mortgagee’s right to declare a default and exercise
its remedies under this Instrument.

27.           SATISFACTION OF MORTGAGE.  Upon payment of all sums secured by this
Instrument, Mortgagee shall execute a satisfaction (or at Borrower’s option, an
assignment) of this Instrument and shall surrender this Instrument and all
notes evidencing Indebtedness secured by this Instrument to the person or
persons legally entitled thereto.  Such
person or persons shall pay Mortgagee’s costs incurred in connection with
satisfaction or assignment of this Instrument. 
Mortgagee will charge a service fee in accordance with its then-current schedule
or servicing fees if an assignment is requested.

28.           FUTURE ADVANCES.  Upon request of Borrower, Mortgagee, at
Mortgagee’s option so long as this Instrument secures Indebtedness held by
Mortgagee, may make Future Advances to Borrower.  Such Future Advances, with interest thereon,
shall be secured by this Instrument when evidenced by promissory notes stating
that said notes are secured hereby.

29.           USE OF PROPERTY.  The Property is not currently used for
agricultural, farming, timber or grazing purposes.  Borrower warrants that this Instrument is and
will at all times constitute a commercial mortgage, as defined under
appropriate state law.

30.           IMPOSITION OF TAX BY
STATE.

30.1.        State Taxes Covered. 
The following constitute state taxes to which this Section applies:

(a)           A specific tax upon mortgages or upon
all or any part of the indebtedness secured by a mortgage.

(b)           A specific tax on a mortgagor which
the taxpayer is authorized or required to deduct from payments on the
indebtedness secured by a mortgage.

(c)           A tax on a mortgage chargeable
against the mortgagee or the holder of the note secured.

(d)           A specific tax on all or any portion
of the indebtedness or on payments of principal and interest made by a
mortgagor.

30.2.        Remedies.  If any state tax to which this Section
applies is enacted subsequent to the date of this Instrument, this shall have
the same effect as an Event of Default, and Mortgagee may exercise any or all
of the remedies available to it unless the following conditions are met:

(a)           Borrower may lawfully pay the tax or
charge imposed by state tax, and

(b)           Borrower pays the tax or charge
within thirty (30) days after notice from Mortgagee that the tax has been
levied.

 17
 

 

31.           ATTORNEYS’ FEES.  In the event suit or action is instituted to
enforce or interpret any of the terms of this Instrument (including without
limitation efforts to modify or vacate any automatic stay or injunction), the
prevailing party shall be entitled to recover all expenses reasonably incurred
at, before and after trial and on appeal whether or not taxable as costs, or in
any bankruptcy proceeding including, without limitation, attorneys’ fees,
witness fees (expert and otherwise), deposition costs, copying charges and
other expenses.  Whether or not any court
action is involved, all reasonable expenses, including but not limited to the
costs of searching records, obtaining title reports, surveyor reports, and
title insurance, incurred by Mortgagee that are necessary at any time in
Mortgagee’s opinion for the protection of its interest or enforcement of its
rights shall become a part of the Indebtedness payable on demand and shall bear
interest from the date of expenditure until repaid at the interest rate as
provided in the Loan Agreement.  The term
“attorneys’ fees” as used in the Loan Documents shall be deemed to mean such
fees as are reasonable and are actually incurred.

32.           GOVERNING LAW;
SEVERABILITY.  This Instrument
shall be governed by the law of the State of Hawaii applicable to contracts
made and to be performed therein (excluding choice-of-law
principles).  In the event that any
provision or clause of this Instrument or the Loan Agreement conflicts with
applicable law, such conflict shall not affect other provisions of this
Instrument or the Loan Agreement which can be given effect without the
conflicting provision, and to this end the provisions of this Instrument and
the Loan Agreement are declared to be severable.

33.           TIME OF ESSENCE.  Time is of the essence of this Instrument.

34.           CHANGES IN WRITING.  This Instrument and any of its terms may only
be changed, waived, discharged or terminated by an instrument in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.  Any agreement
subsequently made by Borrower or Mortgagee relating to this Instrument shall be
superior to the rights of the holder of any intervening lien or encumbrance.

35.           NO OFFSET.  Borrower’s obligation to make payments and
perform all obligations, covenants and warranties under this Instrument and
under the Loan Agreement shall be absolute and unconditional and shall not be
affected by any circumstance, including without limitation any setoff,
counterclaim, abatement, suspension, recoupment, deduction, defense or other
right that Borrower or any guarantor may have or claim against Mortgagee or any
entity participating in making the loan secured hereby.  The foregoing provisions of this section,
however, do not constitute a waiver of any claim or demand which Borrower or
any guarantor may have in damages or otherwise against Mortgagee or any other
person, or preclude Borrower from maintaining a separate action thereon;
provided, however, that Borrower waives any right it may have at law or in
equity to consolidate such separate action with any action or proceeding
brought by Mortgagee.

36.           WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, BORROWER AND
MORTGAGEE HEREBY KNOWINGLY, VOLUNTARILY AND INTELLIGENTLY WAIVE ANY AND ALL
RIGHTS THAT EACH PARTY TO THIS INSTRUMENT MAY NOW OR HEREAFTER HAVE UNDER THE
LAWS OF THE UNITED STATES OF AMERICA OR THE STATE OF HAWAII, TO A TRIAL BY

 18
 

 

JURY OF ANY AND ALL ISSUES ARISING DIRECTLY OR
INDIRECTLY IN ANY ACTION OR PROCEEDING RELATING TO THIS INSTRUMENT, THE LOAN
DOCUMENTS OR ANY TRANSACTIONS CONTEMPLATED THEREBY OR RELATED THERETO.  IT IS INTENDED THAT THIS WAIVER SHALL APPLY
TO ANY AND ALL DEFENSES, RIGHTS, CLAIMS AND/OR COUNTERCLAIMS IN ANY SUCH ACTION
OR PROCEEDING.  BORROWER UNDERSTANDS THAT
THIS WAIVER IS A WAIVER OF A CONSTITUTIONAL SAFEGUARD, AND EACH PARTY
INDIVIDUALLY BELIEVES THAT THERE ARE SUFFICIENT ALTERNATE PROCEDURAL AND
SUBSTANTIVE SAFEGUARDS, INCLUDING, A TRIAL BY AN IMPARTIAL JUDGE, THAT
ADEQUATELY OFFSET THE WAIVER CONTAINED HEREIN.

37.           MAXIMUM INTEREST CHARGES.  Notwithstanding anything contained herein or
in any of the Loan Documents to the contrary, in no event shall Mortgagee be
entitled to receive interest on the Loan in amounts which, when added to all of
the other interest charged, paid to or received by Mortgagee on the Loan, causes
the rate of interest on the Loan to exceed the highest lawful rate.  Borrower and Mortgagee intend to comply with
the applicable law governing the highest lawful rate and the maximum amount of
interest payable on or in connection with the Loan.  If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Loan
Documents, or contracted for, charged, taken, reserved or received with respect
to the Loan, or if acceleration of the final maturity date of the Loan or if
any prepayment by Borrower results in Borrower having paid or demand having
been made on Borrower to pay, any interest in excess of the amount permitted by
applicable law, then all excess amounts theretofore collected by Mortgagee
shall be credited on the principal balance of the Loan (or, if the Loan has
been or would thereby be paid in full, such excess amounts shall be refunded to
Borrower), and the provisions of the Loan Agreement, this Instrument and any
demand on Borrower shall immediately be deemed reformed and the amounts
thereafter collectible thereunder and hereunder shall be reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for thereunder and hereunder. 
The right to accelerate the final maturity date of the Loan does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and Mortgagee does not intend to collect any
unearned interest in the event of acceleration. 
All sums paid or agreed to be paid to Mortgagee for the use, forbearance
or detention of the Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread through the full term of the Loan
until payment in full so that the rate or amount of interest on account of the
Loan does not exceed the applicable usury ceiling.  By execution of this Instrument, Borrower
acknowledges that it believes the Loan to be nonusurious and agrees that if, at
any time, Borrower should have reason to believe that the Loan is in fact
usurious, it will give Mortgagee written notice of its belief and the reasons
why Borrower believes the Loan to be usurious, and Borrower agrees that
Mortgagee shall have ninety (90) days following its receipt of such
written notice in which to make appropriate refund or other adjustment in order
to correct such condition if it in fact exists.

[REMAINDER OF PAGE
INTENTIONALLY BLANK;

EXECUTION PAGE FOLLOWS]

 19
 

 

IMPORTANT:  READ
BEFORE SIGNING.  THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE.  NO OTHER TERMS OR ORAL
PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.  YOU MAY CHANGE THE TERMS OF THIS AGREEMENT
ONLY BY ANOTHER WRITTEN AGREEMENT.

IN WITNESS WHEREOF, Borrower has executed this
Instrument or has caused the same to be executed under seal by its duly
authorized representative as of the day and year first written above.

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  MAUI LAND & PINEAPPLE COMPANY, INC.,

  
	
   

  	
  a Hawaii corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ FRED W. RICKERT

  	
   

  
	
   

  	
  Print:  Fred
  W. Rickert

  
	
   

  	
  Title:  Vice
  President/Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ ADELE H. SUMIDA

  	
   

  
	
   

  	
  Print:  Adele
  H. Sumida

  
	
   

  	
  Title:  Controller
  & Secretary

  
	
   

  	
   

  
	
   

  	
  [Seal]

  

 

 20EXHIBIT 10.91

AGREEMENT
OF SALE AND PURCHASE

THIS AGREEMENT OF SALE AND PURCHASE (“Agreement”) made this 9th day of August, 2006 by and between MACK-CALI
REALTY, L.P., a limited partnership organized under the laws of the State of
Delaware having an address c/o Mack-Cali Realty Corporation, 11 Commerce Drive,
Cranford, New Jersey 07016 (“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).

“Apex Agreements” means
that certain Agreement for the management of rooftop transmitting sites dated
July 6, 1998, between Mack-Cali Realty Corporation on behalf of Seller and
American Tower Corporation, successor-in-interest to SpectraSite Communications,
Inc., successor-in-interest to Apex Site Management, Inc., as amended, and that
certain Agreement for the management of telecommunications access sites dated
December 14, 1998, between Mack-Cali Realty Corporation on behalf of Seller and
American Tower Corporation, successor-in-interest to SpectraSite
Communications, Inc., successor-in-interest to Apex Site Management, Inc, as
amended.

“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 Ground Lease” has
the meaning ascribed to such term in Section 10.3(d).

“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.

“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.

“Confidentiality Agreement”
means that certain Confidentiality Agreement dated June 8, 2006 between
Westcore Properties and Mack-Cali Realty Corporation, the general partner of
Seller.

“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 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
First American Title Insurance Company of New York, having an address at 633
Third Avenue, 16th Floor, New York, New York 10017.

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

“Evaluation Period” means
the period ending at 5:00 p.m. Eastern time on September 6, 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, 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 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).

“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.

“Mt. Pyramid Project” has
the meaning ascribed to such term in Section 7.1(e).

“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 in and used exclusively in
connection with the ownership or operation of the Improvements, and Seller’s
management office 5975 S. Quebec Street, Centennial, Colorado, and situated at
the Property at the time of Closing, but specifically excluding all 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 67 Inverness Drive East and
9359 E. Nichols Avenue, Englewood, Arapahoe County, Colorado, 384 and 400
Inverness Parkway and 9777 Pyramid Court, Englewood, Douglas County, Colorado (“Mt. Pyramid”), 8415 Explorer/2375
Telstar Drive and 1975 Research Parkway, Colorado Springs, El Paso County,
Colorado, 5350 South Roslyn Street, Greenwood Village, Arapahoe County,
Colorado, 8181 East Tufts Avenue, Denver, Denver County, Colorado, and 400
South Colorado Boulevard (including Seller’s leasehold estate with respect to a
portion of the property), Denver, Arapahoe County, Colorado (“400 South Colorado”), 105 South
Technology Court, 303 South Technology Court A (also called Interlocken 1-A) and
303 South Technology Court B (also called Interlocken 1-B), Broomfield,
Broomfield County, Colorado, 1172 Century Drive (also called Centennial Valley
Business Park) and 285 Century Place, Louisville, Boulder Country, Colorado,
5975 South Quebec Street, Centennial, Arapahoe County, Colorado 141 Union
Boulevard (also called Plaza at One Union Square), Lakewood, Jefferson County,
Colorado, and part of Lot 3 Southpark Subdivision Filing No. 5 (at Hilltop
Business Park), Littleton, Arapahoe County, Colorado consisting of
approximately 7.10 acres, 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.

“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,
Mack-Cali Realty Corporation (“MCRC”),
the general partner of Seller, without any independent investigation or inquiry
whatsoever; provided that with respect to the representations and warranties
set forth in Sections 8.1(a) through 8.1(f), inclusive, 8.1(k) and 8.1(r) of
this Agreement, “Seller’s Knowledge” means the present actual (as opposed to
constructive or imputed) knowledge of Drabkin, 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
First American Title Insurance Company of New York.

 

“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 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 Ninety-Five Million Two Hundred
Ninety-Five Thousand Dollars

 

($195,295,000) 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 Exhibit K.  No portion of the Purchase Price shall be allocated
to the Personal Property.

Section 3.2            Assumption
of Obligations. 
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, including
without limitation, the exhibits hereto and (ii) offer to hire Seller’s or its
general partner’s existing employees in Colorado at the same base salary and
bonus as are in existence prior to Closing as more fully set forth in Section
7.3 below.

Section 3.3            Method
of Payment of Purchase Price.  No later than 2:00 p.m. Eastern Standard 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
Standard 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 One Million Dollars ($1,000,000.00) 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.

(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,
Four Million Dollars ($4,000,000.00) 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
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.

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.  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 such communications shall not cause any 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 Colorado), 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;
the Leases, lease files, Service Contracts, Licenses and Permits; all
construction and other contracts pertaining to the Mt. Pyramid Project,
together with invoices rendered pursuant to the contracts and proof of payment
thereof; 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.  Such inspections
shall occur at a location or locations selected by Seller, which may be at
Seller’s office in Denver, Colorado, at the Real Property or Purchaser’s 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,
partners, accountants, 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 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 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 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, 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 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.

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.

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. NCS243966C01, NCS243966C02, NCS243966C03,
NCS243966C04, NCS243966C05, NCS243966C06, NCS243966C07, NCS243966C08,
NCS243966C09, NCS243966C10, NCS243966C11, NCS243966C12, NCS243966C13,
NCS243966C14, NCS243966C15, NCS243966C16 and NCS243966C17 (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 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 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) and
shall not be deemed a Title Objection provided the Title Company either omits
the lien as an exception from the Title Commitment or insures all such items as
paid to the Closing.

(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 either omits
the lien as an exception from the title insurance commitment or insures against
collection thereof from out of the Real Property, 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.

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.  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 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.

(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.

(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.

(e)           Mt. Pyramid Parking Lot Expansion.  From the Effective Date until the Closing
Date, Seller shall continue to diligently pursue completion of the on-going
parking lot expansion project at Mt. Pyramid (the “Mt.
Pyramid Project”).  At or
prior to Closing, Seller shall pay all costs and expenses incurred through, but
not including, the Closing Date in connection with the Mt. Pyramid
Project.  At Closing, Purchaser shall
assume Seller’s obligations under the construction and other contracts entered
into by Seller in connection with the Mt. Pyramid Project, and Purchaser shall
receive a credit against the Purchase Price in the amount necessary to complete
the Mt. Pyramid Project, all as more fully set forth in Sections 10.2 and
10.4(a) below.

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 in order to cover not less than 80% of the total rented square footage
of the buildings in the aggregate located at the Property, 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 execute an estoppel certificate in the form attached
hereto as Exhibit “G”, 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.

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 all then existing employees of Seller and MCRC in
the State of Colorado (the “Company Employees”),
for a period of one year after Closing on the same terms and conditions (except
as set forth below in this Section 7.3), including but not limited to base
salary and bonus, under which the Company Employees are currently
employed.  With respect to such Company
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 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 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 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.

 

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 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. Except for the approval of
the Board of Directors of MCRC, which Seller shall seek to obtain within
fifteen (15) days after the Effective Date (the “Board of Directors Approval”), 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. Except for (i) the Board of
Directors Approval and (ii) the consent of the ground lessor with respect to
the leasehold estate of Seller at 400 South Colorado (the “Ground Lessor Consent”), 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, 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 Employees.  Attached hereto as Exhibit N is a true, correct and
complete list of the Company 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:

(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 Two Million Dollars ($2,000,000); 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 or as of the
expiration of the Evaluation Period, 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
$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(e), (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:

(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)           Seller
shall have received the Board of Directors Approval.

(d)           Seller
shall have received the Ground Lessor Consent.

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

(f)            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 Colorado shall be delivered by the parties to an office
in Colorado 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;

(c)           A
counterpart original of the Assignment of Ground Lease, 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,
including but not limited to Colorado Withholding Form 1083.

Section 10.3         Seller’s
Closing Obligations.  At the Closing, Seller will deliver to
Purchaser the following documents:

(a)           Special
warranty deeds with covenants against the grantor’s acts (the “Deed”), duly executed and
acknowledged by Seller, conveying to Purchaser the Real Property and the
Improvements subject only to the Permitted Exceptions.  With respect to the Real Property and
Improvements listed on Exhibit K
as being identified for 1031 exchanges, each

 

such Property shall be transferred pursuant to a single Deed listing
for recording purposes the Purchase Price allocation for such Real Property as
set forth on Exhibit K;
with respect to the balance of the Real Property and Improvements, they will be
transferred pursuant to a single Deed for all Real Property located within the
same county and the allocated Purchase Price for purposes of recording the Deed
relating thereto shall be the aggregate of the portions of the Purchase Price
allocated to such Real Property on Exhibit K;

(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 an assignment and assumption of Seller’s leasehold
estate at 400 South Colorado in form reasonably satisfactory to counsel for
both parties and which shall be agreed upon during the Evaluation Period (the “Assignment of Ground Lease”), duly
executed by Seller, conveying and assigning to Purchaser all of Seller’s right,
title and interest, in the Ground Lease;

(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 of Seller’s
assignable right, title, and interest, if any, in the Service Contracts, the
Licenses and Permits, the Apex Agreements (only to the extent the Apex
Agreements pertain to the Property) and the construction and other contracts in
connection with the Mt. Pyramid Project;

(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 or as of the
expiration of the Evaluation Period; 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; and

(l)            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 Colorado Withholding Form 1083 and an affidavit of
title in form and substance reasonably satisfactory to Seller and the Title
Company.

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 Apex
Agreements and Service Contracts.

(v)           Real estate taxes due and payable for
the calendar year.  If the Closing Date
shall occur before the tax rate is fixed, the apportionment of real

 

estate taxes
shall be upon the basis of the tax rate for the preceding year applied to the
latest assessed valuation.  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.

(vi)          The value of fuel stored at the Real
Property, at Seller’s most recent cost, including taxes, on the basis of a
reading made within ten (10) days prior to the Closing by Seller’s supplier.

(vii)         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 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.

(viii)        Any unpaid costs necessary to complete
the Mt. Pyramid Project will be credited to Purchaser.  If the parties cannot reasonably agree on
such costs, the amount in dispute will be held in escrow by the Escrow Agent
until completion of the project, at which time, any unpaid costs not occasioned
by (A) change orders agreed to by Purchaser post-Closing or (B) increases to
the cost of construction resulting from the actions of Purchaser, will be paid
from the escrow, and any excess monies will be paid to Seller.

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 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 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 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 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 the premium for the Title Policy (but only
as to base policy without endorsements or extended coverage), 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 and customary title searches; and (iv) 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
costs of any extended or additional coverage under 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).

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 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.

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.  Notwithstanding any provision contained herein
to the contrary, for purposes solely of this Section 11.1, Purchaser shall be
entitled, by written notice to Seller given not less than one (1) Business Day
prior to the expiration of the Evaluation Period, to increase or decrease
specific Purchase Price allocations for any Property set forth on Exhibit K provided (A) such
increase or decrease shall not exceed ten percent (10%) of the initial
allocation for such Property, (B) Purchaser shall not be entitled to amend the
allocations for those properties

 

designated on Exhibit K
as potential 1031 exchanges, and (C) any change to a Property allocation must
by offset by one or more similar changes such that the total allocations equals
but does not exceed the Purchase Price.

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 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. 
Notwithstanding any provision contained herein to the contrary, for
purposes solely of this Section 11.1, Purchaser shall be entitled, by written
notice to Seller given not less than one (1) Business Day prior to the
expiration of the Evaluation Period, to increase or decrease specific Purchase
Price allocations for any Property set forth on Exhibit K
provided (A) such increase or decrease shall not exceed ten percent (10%) of
the initial allocation for such Property, (B) Purchaser shall not be entitled
to amend the allocations for those properties designated on Exhibit K as potential 1031
exchanges, and (C) any change to a Property allocation must by offset by one or
more similar changes such that the total allocations equals but does not exceed
the Purchase Price.

 

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 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. 
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 Denver District Court 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.

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/4422.46)

  
	
   

  	
  (310) 201-8900 (tele.)

  
	
   

  	
  (310) 201-8977 (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

  
	
   

  	
   

  
	
   

  	
  Roger W. Thomas, Esq.

  
	
   

  	
  (908) 272-2612 (tele.)

  
	
   

  	
  (908) 497-0485 (fax)

  
	
   

  	
   

  
	
  With a copy to:

  	
  Brownstein, Hyatt, & Farber

  
	
   

  	
  410 17th Street,
  22nd Floor

  
	
   

  	
  Denver, CO
  80202-4437

  
	
   

  	
  Attn: Edward Barad, Esq.

  
	
   

  	
  (303) 223-1108 (tele.)

  
	
   

  	
  (303) 223-1111 (fax)

  
	
   

  	
   

  
	
  If Escrow Agent:

  	
  First American Title Insurance Company of New York

  
	
   

  	
  633 Third Avenue, 16th Floor

  
	
   

  	
  New York, New York 10017

  
	
   

  	
  Attn: Mr. Anthony Ruggeri

  
	
   

  	
  (212) 922-9700 (tele.)

  
	
   

  	
  (212) 331-1504 (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.

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
its tax identification number, for purposes of reporting the interest earnings,
is 22-3315804.

(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.

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.

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 DENVER DISTRICT COURT 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 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 Employees

  
	
  Exhibit O -

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

  
	
  Exhibit P -

  	
  Real Estate Tax Appeals

  
	
  Exhibit Q -

  	
  Leasing Commissions Agreements

  
	
  Exhibit R -

  	
  Purchaser’s Tenant Expenses

  

 

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
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 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.

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:

  
	
   

  	
   

  
	
   

  	
  MACK-CALI
  REALTY, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Mack-Cali Realty Corporation,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Mitchell E. Hersh

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Mitchell E. Hersh

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  As to
  Article XVII only:

  
	
   

  	
   

  
	
   

  	
  ESCROW
  AGENT:

  
	
   

  	
   

  
	
   

  	
  FIRST AMERICAN
  TITLE INSURANCE

  COMPANY OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Andrew D.
  Jaeger

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Andrew D. Jaeger

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice President

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