Common use of Permitted Exceptions Clause in Contracts

Permitted Exceptions. Subsidiary and Parent shall have reviewed and approved, in their sole discretion, the Permitted Exceptions described in the Disclosure Letter. In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effect.

Permitted Exceptions. Subsidiary and Parent shall have reviewed and approvedIf Purchaser is not satisfied, in their sole discretion, the Permitted Exceptions described in the Disclosure Letter. In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their its sole and absolute discretion, and without with the condition of title, then Purchaser may notify Seller of any liability or obligation to any Shareholder or Com-Net whatsoeverof the Title Evidence (each, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder an “Objection” and, collectively, “Objections”), which Objections must be in writing of any Condition(s) Precedent which have not been fulfilled and must be delivered to Seller on or prior to 10:00 a.m. Eastern Time the expiration of the Due Diligence Period. Seller will thereafter, at its election, have the right (but not the obligation) to use commercially reasonable efforts to cause any or all such Objections to be cured on or before Closing (provided that with respect to Existing Liens (as defined below) Seller shall be obligated to take all efforts necessary to cause Existing Liens to be cured). If, Seller elects to use commercially reasonable efforts to cause any or all such Objections to be cured, and after using commercially reasonable efforts to do so, Seller is unable to cure one or more Objections (other than Existing Liens), Seller shall provide written notice (an “Inability to Cure Notice”) to Purchaser no later than ten (10) days after receipt of the Closing DateObjections (the “Response Deadline”). If Subsidiary or Parent fails Seller does not timely provide an Inability to so notify each Shareholder within such time periodCure Notice to Purchaser, then Subsidiary and Parent will Seller shall be deemed to have fulfilled elected to not cure any Objections. If Seller delivers an Inability to Cure Notice to Purchaser or waived all Condition(sdoes not timely deliver an Inability to Cure Notice, Purchaser may elect, in its sole and absolute discretion, to (a) Precedentterminate this Agreement by providing written notice thereof to Seller on or before the date occurring five (5) days after (1) the receipt of an Inability to Cure Notice or (2) the Response Deadline, if Seller does not timely deliver an Inability to Cure Notice, or (b) accept title subject to any Objections for which Seller is unable to cure as identified in an Inability to Cure Notice, other than any Existing Liens. All items to which Purchaser does not timely object in the Title Evidence, and all rights items that Purchaser has been deemed to have accepted pursuant to clause (b) of Subsidiary the prior sentence shall be collectively referred to herein as the “Permitted Exceptions”; provided, however, that in any event none of the following shall be deemed Permitted Exceptions and Parent Seller shall in all cases be obligated to cure: (A) judgments against Seller or any affiliate of Seller, (B) mortgages, trust deeds, or other monetary liens (including, without limitation, any mechanics’, materialmen’s and/or vendors’ liens with respect to the Property, and any real estate tax liens other than liens for taxes and assessments not delinquent), (C) any matters affecting the Property created on or after the Effective Date that are not otherwise permitted pursuant to the terms of this Agreement, and/or (D) defects, obligations or exceptions of a definite and ascertainable amount that can be satisfied solely by the payment of cash (collectively, “Existing Liens”). If Purchaser does not timely provide Seller with a notice of title defects as provided above or does not terminate this Merger Agreement pursuant due to this Article VIII will Seller’s inability to cure such title defects, Purchaser shall be null deemed to have waived all objections and void and defects to any matters of no further force record title as of the Due Diligence Period Expiration Date, but not to any Existing Liens or effectnew matters that arise thereafter.

Permitted Exceptions. Subsidiary Buyer shall notify Seller of any objectionable matters in the title report or any supplemental report within the earlier of: (1) twenty (20) days after Mutual Acceptance of this Agreement; or (2) the expiration of the Feasibility Period. This Agreement shall terminate and Parent Buyer shall have reviewed and approvedreceive a refund of the ▇▇▇▇▇▇▇ money, less any costs advanced or committed for Buyer, unless within five (5) days of Buyer’s notice of such objections (1) Seller agrees, in their sole discretionwriting, to remove all objectionable provisions or (2) Buyer notifies Seller that Buyer waives any objections which Seller does not agree to remove. If any new title matters are disclosed in a supplemental title report, then the Permitted Exceptions described in preceding termination, objection and waiver provisions shall apply to the Disclosure Letter. In the event new title matters except that any ▇▇▇▇▇’s notice of objections must be delivered within five (5) days of delivery of the Subsidiary's supplemental report and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction Seller’s response or Buyer’s waiver must be delivered within two (2) days of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which Buyer’s notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilledof objections. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing closing date shall be extended to accommodate such effortsthe extent necessary to INITIALS: BUYER DATE: SELLER DATE: BUYER DATE: SELLER DATE: permit time for these notices. In Buyer shall not be required to object to any mortgage or deed of trust liens, or the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretionstatutory lien for real property taxes, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have the same shall not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled be Permitted Exceptions; provided, however, that the lien securing any financing which ▇▇▇▇▇ has agreed to assume shall be a Permitted Exception. Except for the foregoing, those provisions not objected to or for which Buyer waived all Condition(s) Precedentits objections shall be referred to collectively as the “Permitted Exceptions.” Seller shall cooperate with Buyer and the title company to clear objectionable title matters but shall not be required to incur any out-of-pocket expenses or liability other than payment of monetary encumbrances not assumed by ▇▇▇▇▇ and proration of real property taxes, and all rights Seller shall provide an owner's affidavit containing the information and reasonable covenants requested by the title company. The title policy shall contain no exceptions other than the General Exclusions and Exceptions common to such form of Subsidiary policy and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectthe Permitted Exceptions.

Permitted Exceptions. Subsidiary and Parent shall If Buyer disapproves of any title exception as described above, Seller will have reviewed and approved, in their sole discretion, the Permitted Exceptions described in the Disclosure Letter. In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) business days following their after receipt of written notice of the disapproved exception(s) to notify Buyer that Seller will attempt to have the disapproved exception(s) removed prior to Closing or insured over or that Seller will not cause the exception to be removed or insured over. Seller's failure to deliver such notice within which will be deemed to notify Subsidiary and Parent in writing mean that the Shareholders intend exception(s) will not be removed or insured over. If Seller elects, or is deemed to attempt have elected, not to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such noticehave any disapproved exception removed or insured over, the Shareholders shall Buyer will have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period business days from the receipt of Seller's notice either to (i) to have the disapproved exception removed or provide insured over, or (ii) to waive its disapproval of such exception(s) and agree to purchase the Real Property subject to the disapproved exception(s). Buyer's failure to have the exception removed or insured over or to deliver such notice within such three (3) day period but fail will be deemed an election of Buyer to cause such Condition(s) Precedent terminate this Agreement. All exceptions that Buyer has approved hereunder, either by Buyer's actual approval or actual waiver of a disapproval, will be termed the "Permitted Exceptions". If Seller elects, in its sole discretion, to have a disapproved exception removed or insured over to Buyer's reasonable satisfaction, Seller will be fulfilled obligated to use diligent, good faith efforts to have that exception removed or insured over to Buyer's reasonable satisfaction, and if Seller cannot have the satisfaction of exception removed or insured over to Buyer's reasonable satisfaction, by the Subsidiary Closing, Seller will so notify Buyer, and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent Buyer will have the rightright either to (a) terminate this Agreement, in their sole and absolute discretion(b) have the exception removed or insured over to Buyer's reasonable satisfaction, and without any liability proceed to the Closing, or obligation (c) waive its disapproval of that exception and purchase the Real Property subject to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectit.

Permitted Exceptions. Subsidiary Purchaser shall (i) confer with the Title Company and Parent Seller to attempt to agree on which (A) liens, encumbrances or other exceptions to title (the “Title Exceptions”), and (B) encroachments by improvements on adjoining properties onto or over the Land, any encroachments of the Improvements onto or over adjoining properties, setback lines or easements (to the extent in violation thereof) or other survey defects (the “Survey Defects”), shall have reviewed constitute “Permitted Exceptions” to title to the Real Property (the “Permitted Exceptions”), and approved(ii) obtain from the Title Company pro forma title insurance policies, including all endorsements thereto and all other insurance provisions required by Purchaser in their sole discretionsuch title insurance policies (the “Pro Forma Title Policies”), or enter into a side letter agreement with Seller setting forth which Title Exceptions and Survey Defects shall constitute the Permitted Exceptions described in (the Disclosure “Title and Survey Side Letter”). In If Purchaser shall have notified Seller and the event that any Title Company of all Title Exceptions and Survey Defects to which it objects on or prior to January 5, 2015 (the Subsidiary's “Title and Parent's Conditions Precedent shall Survey Objection Deadline)”, but is not have been fulfilled able to the satisfaction of Subsidiary obtain Pro Forma Title Policies or Title and ParentSurvey Side Letter acceptable to Purchaser, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their its sole and absolute discretion, prior to January 15, 2015 (the “Title and without any liability or obligation to any Shareholder or Com-Net whatsoeverSurvey Review Deadline”), Purchaser shall have the right to terminate this Merger Agreement, in which case the ▇▇▇▇▇▇▇ Money shall be refunded to Purchaser, and the Parties shall have no further rights or obligations under this Agreement, except those which expressly survive such termination. Subsidiary If Purchaser (i) does not notify Seller and Parent will notify each Shareholder in writing the Title Company of any Condition(s) Precedent all Title Exceptions and Survey Defects to which have not been fulfilled it objects on or prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary Title and Survey Objection Deadline or Parent fails (ii) does not obtain Pro Forma Title Policies or a Title and Survey Side Letter acceptable to so notify each Shareholder within such time periodPurchaser, then Subsidiary in its sole and Parent will absolute discretion, prior to the Title and Survey Review Deadline and does not terminate this Agreement pursuant to this Section 5.3(a), Purchaser shall be deemed to have fulfilled or waived all Condition(s) Precedentobjections to any Title Exceptions disclosed in the Title Commitments and Survey Defects disclosed in the Surveys, in which case such Title Exceptions and all rights of Subsidiary and Parent Survey Defects shall be deemed to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectPermitted Exceptions.

Permitted Exceptions. Subsidiary (a) Buyer and Parent Seller each shall have reviewed use good faith, due diligence and approved, in their sole discretion, reasonable efforts to cause the Permitted Exceptions described in the Disclosure Letter. In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled Title Company to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as deliver to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of Buyer within three (3) business days following their after the Effective Date, a current preliminary (title) report with respect to the Property (the “Title Report”) and (by hard copy or functional hyperlink) one legible copy of each underlying recorded document shown as an exception in such Title Report (said Title Report and said underlying documents being referred to herein as the “Title Documents”). Buyer's title to the Property shall be insured by the Title Company by means of the Title Policy (as defined in Section 8.2.6 below). (b) On or prior to expiration of the Review Period (said period commencing upon Buyer’s receipt of such notice within which the Title Documents and ending on expiration of the Review Period also being referred to herein as the “Title Review Period”), Buyer shall notify Subsidiary and Parent Seller in writing (the “Buyer Title Notice”) of those exceptions indicated on the Title Report that Buyer approves and those exceptions that Buyer disapproves. If Buyer fails to deliver a Buyer Title Notice to Seller within the Shareholders intend to attempt to cause Title Review Period identifying any exceptions indicated on the Title Report approved by Buyer, then all such Condition(s) Precedent to items shall be fulfilleddeemed approved by Buyer. In The Declaration of Covenants, Conditions and Restrictions for Palm Bluffs Corporate Center, as amended, and the event Declaration of Restrictions for Three Points at Palm Bluffs, as amended, shall be Permitted Exceptions, and Buyer will comply with the Shareholders provide Subsidiary provisions thereof and Parent all design guidelines associated with such noticedocuments following the Close of Escrow. Any exceptions indicated on the Title Report and approved by Buyer shall constitute permitted exceptions ("Permitted Exceptions") in connection with the issuance of the Title Policy. If Buyer disapproves any exceptions indicated on the Title Report (“Disapproved Exceptions”), the Shareholders then Seller shall have five (5) calendar days after receipt of a period of thirty (30) days within which Buyer Title Notice to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder advise Buyer in writing of any Condition(ssuch Disapproved Exceptions that Seller is unable or unwilling to remove at the close of Escrow (other than the lien of deeds of trust or other monetary obligations, which automatically shall be deemed Disapproved Exceptions and which Seller shall be required to remove at the close of Escrow) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date(“Seller’s Title Response”). If Subsidiary or Parent Seller fails to so notify each Shareholder deliver a written Seller’s Title Response within such time periodsaid five (5) calendar days, then Subsidiary and Parent will Seller shall be deemed to have fulfilled provided Buyer with a Seller’s Title Response that notifies Buyer that Seller is unable or unwilling to remove at the close of Escrow the Disapproved Exceptions. If Seller’s Title Response indicates (or is deemed to indicate) that there are Disapproved Exceptions that Seller is unable or unwilling to remove at the Closing, then, after receiving Seller’s Title Response up until the Outside Closing Date, Buyer shall either terminate this Agreement by written notice to Seller and the Title Company or waive Buyer’s objections to such Disapproved Exceptions. If Buyer fails to timely terminate this Agreement, then Buyer shall be deemed to have waived all Condition(s) Precedent, and all rights of Subsidiary and Parent its objections to the Disapproved Exceptions. If Buyer does timely elect to terminate this Merger Agreement, then the Deposit shall be returned to Buyer, and the parties shall thereafter have no obligations under this Agreement pursuant or additional liability to this Article VIII will be null and void and of no further force or effectone another except as expressly set forth herein.

Permitted Exceptions. Subsidiary Buyer shall notify Seller of any objectionable matters in the title report or any supplemental report within the earlier of: 20 days after receipt of the preliminary commitment for title insurance; or the Feasibility Contingency Date. This Agreement shall terminate and Parent Buyer shall have reviewed and approvedreceive a refund of the ▇▇▇▇▇▇▇ money, less any costs advanced or committed for Buyer, unless within five (5) days of Buyer’s notice of such objections Seller shall give notice, in their sole discretionwriting, the Permitted Exceptions described in the Disclosure Letterof its intent to remove all objectionable provisions before Closing. In the event If Seller fails to give timely notice that any it will clear all disapproved objections, this Agreement shall automatically terminate and Buyer shall receive a refund of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent▇▇▇▇▇▇▇ money, in their sole and absolute discretion less any costs advanced or waived in writing by Subsidiary and Parentcommitted for Buyer, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of unless Buyer notifies Seller within three (3) days following their that Buyer waives any objections which Seller does not agree to remove. If any new title matters are disclosed in a supplemental title report, then the preceding termination, objection and waiver provisions shall apply to the new title matters except that Buyer’s notice of objections must be delivered within three (3) days of receipt of such notice the supplemental report by ▇▇▇▇▇ and Seller’s response or Buyer’s waiver must be delivered within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty two (302) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the of Buyer’s notice of objections. The Closing Date shall be extended to accommodate such effortsthe extent necessary to permit time for these notices. In Buyer shall not be required to object to any mortgage or deed of trust liens, or the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretionstatutory lien for real property taxes, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have the same shall not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled be Permitted Exceptions; provided, however, that the lien securing any financing which ▇▇▇▇▇ has agreed to assume shall be a Permitted Exception. Except for the foregoing, those provisions not objected to or for which Buyer waived all Condition(s) Precedent, its objections shall be referred to collectively as the “Permitted Exceptions.” Seller shall reasonably cooperate with Buyer and all rights the title company to clear objectionable title matters and shall provide an affidavit containing the information and reasonable covenants requested by the title company. The title policy shall contain no exceptions other than the General Exclusions and Exceptions common to such form of Subsidiary policy and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectthe Permitted Exceptions.

Permitted Exceptions. Subsidiary (a) On or prior to the Effective Date, Seller shall request that the Title Company prepare and Parent deliver to Buyer a title commitment (the “Title Report”) together with copies of all underlying documents relating to title exceptions referred to therein (“Exception Instruments”). In addition, Buyer shall have reviewed the right to obtain an updated survey of the Property complying with the ALTA/NSPS 2016 standards (the “Survey”). Buyer shall provide a copy of the Survey, which shall be certified to the Title Company, Buyer and approvedSeller, in their sole discretionto Seller. Buyer shall pay the entire cost of the Survey. Buyer shall have the right to object to any matters shown on the Title Report or Survey, the Permitted Exceptions described or in the Disclosure LetterException Instruments, by notice to Seller at any time during the Contingency Period, which objections shall be deemed to be included within the Objections provided for in Section 4.2(b). Seller shall not be obligated to cure any such matters, except as may be otherwise provided in Section 4.2(c) or elsewhere in this Agreement or as may be agreed in writing by Seller. (b) Not later than (i) five (5) business days after Buyer’s receipt of the Title Report, Exception Instruments and Survey, or (ii) seven (7) days prior to the last day of the Contingency Period, whichever occurs first (the “Title Review Date”), Buyer shall furnish Seller with a written statement of objections, if any, to the title to the Property, including, without limitation, any objections to any matter shown on the Survey (collectively, “Objections”). In the event that the Title Company amends or updates the Title Report after the Effective Date (each, a “Title Report Update”), Buyer shall furnish Seller with a written statement of any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled Objections to the satisfaction of Subsidiary and Parent, any matter first raised in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of Title Report Update within three (3) days following their after its receipt of such notice within which Title Report Update (each, a “Title Update Review Period”). Should Buyer fail to notify Subsidiary and Parent Seller in writing that of any Objections to any matter first disclosed in a Title Report Update prior to the Shareholders intend Title Update Review Period, as applicable, Buyer shall be deemed to attempt to cause have approved such Condition(s) Precedent matters which shall be considered to be fulfilled“Permitted Exceptions” as defined in Section 4.3 below. (c) If Seller receives a timely Objection in accordance with Section 4.2(b) (“Buyer’s Notice”), Seller shall have the right, but not the obligation (except as hereafter provided), within three (3) days after receipt of Buyer’s Notice (“Seller’s Response Period”), to elect to cure any such matter upon written notice to Buyer (“Seller’s Response”), and may extend the Closing Date for up to fifteen (15) business days to allow such cure. If Seller does not give any Seller’s Response within such 3-day period, Seller shall be deemed to have elected not to cure any such matters. Notwithstanding the foregoing or the provisions of Section 4.2(d), or any other provision of this Agreement, to the contrary, Seller shall in any event be obligated (whether or not Buyer objects to same) to cure and satisfy at or before Closing all matters, items or requirements (collectively, “Liens”) (i) that are mortgage or deed of trust liens or security interests against the Property, in each case granted by Seller (and not tenants of the Property or other third parties); (ii) real estate tax liens, other than liens for taxes and assessments not yet delinquent, or (iii) that have been voluntarily placed against the Property by Seller, or that are any other monetary lien of a liquidated amount encumbering the Property created by Seller or resulting from any work performed at the direction of Seller (and not tenants of the Property or other third parties) and that are not otherwise permitted pursuant to the provisions hereof. Seller shall be entitled to apply the Purchase Price towards the payment or satisfaction of such liens at Closing, and may cure any Objection to a monetary lien by filing the appropriate bond (provided such bond enables the Title Company to remove such exception from the Title Policy or to insure against such matter) or causing the Title Company, at Seller’s sole cost and expense, to fully insure against such matters. (d) If Seller elects (or is deemed to have elected) not to cure any Objections (other than Liens) raised in any Buyer’s Notice timely delivered by Buyer to Seller pursuant to Section 4.2(b) or if Seller notifies Buyer that it elects to cure any such Objection (other than Liens) but then does not for any reason effect such cure on or before the Closing Date as it may be extended hereunder, then Buyer, as its sole and exclusive remedy, shall have the option to either (A) waive such Objection by delivering written notice thereof to Seller within three (3) days after (as applicable) (i) its receipt of Seller’s Response stating that Seller will not cure any such Objection or (ii) the expiration of Seller’s Response Period if Seller does not deliver a Seller’s Response or (iii) Seller’s failure to cure by the Closing Date (as it may be extended hereunder) any Objection which Seller has previously elected to cure pursuant to a Seller’s Response or (B) terminate this Agreement (if Buyer fails to deliver written notice waiving the objection within such 3-day period under clause (A) above, then Buyer shall be deemed to have elected to terminate this Agreement). In the event the Shareholders provide Subsidiary and Parent with of such noticea termination, the Shareholders Deposit shall be returned to Buyer, and neither party shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period any further rights or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Dateobligations hereunder except for those matters that survive termination as herein provided. If Subsidiary Seller receives notice by Buyer of waiver of such Objections hereunder (or Parent fails to so notify each Shareholder within Buyer actually consummates Closing without such time periodObjections having been cured), then Subsidiary and Parent will such Objections shall be deemed to have fulfilled waived and those waived Objections shall become “Permitted Exceptions” under Section 4.3. If the Closing is not consummated for any reason other than Seller’s default hereunder, Buyer shall be responsible for any title or waived escrow cancellation charges. (e) At the Closing, Seller shall convey title to the Property to Buyer by Special Warranty Deed in the form of Exhibit C attached hereto (the “Deed”). Subject to the terms and conditions contained elsewhere in this Agreement, by acceptance of the Deed and the Closing of the purchase and sale of the Property, (x) Buyer agrees it is assuming for the benefit of Seller all Condition(sof the obligations of Seller first accruing and arising from and after Closing with respect to the Property under the Permitted Exceptions; and (y) Precedent, and all rights Buyer agrees that Seller shall have conclusively satisfied its obligations with respect to title to the Property. The provisions of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectSection shall survive the Closing.

Permitted Exceptions. Subsidiary The Land, its appurtenances and Parent the Improvements shall be conveyed by Highwoods to GT Gateway free and clear of all liens, encumbrances, claims, rights-of-way, easements, leases, restrictions and restrictive covenants, except the following Permitted Exceptions: (i) Public utility easements and rights-of-way in customary form, so long as no Improvements are located thereon and they do not interfere with the use of the Property for office, warehouse and related commercial purposes permitted by the Lease or materially affect the value of the Property; (ii) Zoning and building laws or ordinances, provided they do not prohibit the use of the Property for office, warehouse and related commercial purposes permitted by the Lease and so long as the Property is in compliance with same; (iii) Ad valorem real estate taxes for any year in which they are not yet due and payable as of the date of Closing; and (iv) Those matters which GT Gateway has elected to accept; (v) Items shown on the Survey and not objected to by GT Gateway or waived by GT Gateway in accordance with Section 4(a) hereof. (vi) Those Permitted Exceptions listed on Exhibit D, so long as they to not interfere with the use of the Property for office, warehouse and related commercial purposes permitted by the Lease or materially affect the value of the Property. If, in the opinion of GT Gateway’s counsel, GT Gateway is not able to procure an owner’s title insurance commitment from the Title Company prior to Closing, complying with the requirements of this ▇▇▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇ shall have reviewed the option of taking title “as is” and approvedconsummating the Closing, in their sole discretionor terminating this Agreement. Notwithstanding any other provision contained herein to the contrary, if the title defect(s) which may include, without limitation, a Disapproved Exception, is a mortgage, lien, judgment, assessment, unpaid taxes or tax which can be cured by a monetary payment (and with respect to which affirmative title insurance coverage is not available at the Title Company’s standard rates) GT Gateway has, and shall have, the Permitted Exceptions described in absolute right of making such payment and reducing the Disclosure Letter. In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing Purchase Price by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectlike amount.

Permitted Exceptions. Subsidiary “Permitted Exceptions” shall mean and Parent refer to those exceptions set forth on Schedule 4 attached hereto. Notwithstanding the foregoing, Seller shall have reviewed remove at Seller’s sole cost and approvedexpense on or prior to the Closing Date (without Purchaser being required to object to same) and there shall not be treated as a Permitted Exception the following (the “Mandatory Removal Items”): (a) (i) all mortgages, in their sole discretionassignments of leases and rents, UCC-1 financing statements or other security interests encumbering the Property, including, without limitation, the Permitted Exceptions described in the Disclosure Letter. In the event that any lien of the Subsidiary's mortgages given by Seller for the benefit of Prudential Affordable Mortgage Company, LLC (the “Existing Financing”), (ii) delinquent installments of real estate taxes and Parent's Conditions Precedent assessments, (iii) mechanics or materialmans liens created by, through or under Seller and encumbering the Property and (iv) tax liens, judgement liens or any other liens or encumbrances against the Property credited by, through or under Seller and securing the payment of money of an ascertainable amount, that are not included in clauses (a)(i), (a)(ii) or (a)(iii) of this Section 3.3 and (b) any liens, exceptions or encumbrances which are voluntarily created by, under or through Seller after the Date of this Agreement without Purchaser’s consent. If Seller fails or is unable to cure the Mandatory Removal Items on or before Closing such failure shall not have been fulfilled to the satisfaction constitute a default of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled Seller hereunder and the Closing provisions of Section 9.2 hereof shall be extended apply, provided, however, at the option of Seller, amounts which Seller is obligated to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent pay in connection with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction Seller’s removal of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day periodMandatory Removal Items may be paid out of proceeds from the Purchase Price, Subsidiary and Parent will have the rightprovided, in their sole and absolute discretionfurther, and without that Title Company duly omits from Owner’s Title Policy any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectexceptions thereof.

Permitted Exceptions. Subsidiary With respect to each Contributed Property: (i) The Title Commitments are listed on Schedule 3.1(c) attached to this Agreement and Parent all of the exceptions to coverage shown thereon shall be deemed Permitted Encumbrances; provided, however, the Parties agree to use good faith efforts to cause the Title Company to remove the objections to title set forth on Schedule D attached to this Agreement. The provisions of this Section 3.1(c)(i) shall survive the Initial Closing. (ii) To the extent that ATA Holdings or ELRM obtains a new title commitment in connection with an Alternate Property, and such new title commitment contains any exception to coverage that (x) is not otherwise included in subsections (b), (c), (d) and (f) of the definition of Permitted Encumbrances and (y) would reasonably be expected to have reviewed and approveda Property Material Adverse Effect (a “Post-Policy Exception”), then ATA Holdings, in their its sole discretion, the Permitted Exceptions described may object to such Post-Policy Exception by giving notice thereof to ELRM in the Disclosure Letter. In the event that any writing, within ten (10) Business Days of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such new title commitment (the “Objection Notice”). Any Post-Policy Exceptions to which ATA Holdings does not timely object in the Objection Notice shall be deemed Permitted Encumbrances. ELRM shall not be required to satisfy any objections set forth in any Objection Notice, nor shall ELRM be required to incur any cost or expense to do so; provided, however, that if the Objection Notice is timely delivered to ELRM and ELRM intends to remove or cure any title defects or objections raised therein, ELRM shall deliver written notice (the “Title Response”) to ATA Holdings within which ten (10) Business Days after receipt of such Objection Notice identifying the Post-Policy Exceptions that ELRM intends to notify Subsidiary and Parent in writing remove or cure (it being acknowledged that the Shareholders intend delivery or failure to attempt deliver a Title Response shall not constitute an admission by the EL Parties as to whether or not any such exception constitutes a Post-Policy Exception as defined above). If ELRM fails to timely deliver the Title Response, or in its Title Response fails to commit to remove or cure any particular Post-Policy Exception raised in such Objection Notice or cause the Title Company to affirmatively insure over any such Condition(sPost-Policy Exception, then such failure shall constitute ELRM’s notice that it will not cure or remove such Post-Policy Exception. ATA Holdings shall have the right to elect by written notice to ELRM, on or before five (5) Precedent Business Days after receipt of the Title Response (or, if no Title Response is given, five (5) Business Days after expiration of the period for delivery thereof), to be fulfilled. In either (A) waive the objections that ELRM has not committed to remove or cure and accept such title as the Property Owner is able to convey, in which event the Shareholders provide Subsidiary and Parent with matters objected to shall become Permitted Exceptions; or (B) exclude such noticeAlternate Property from the Transactions by notifying ELRM in writing, the Shareholders shall have a period of thirty whereupon (30i) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing Alternate Property shall be extended an Excluded Property and (ii) the applicable Contribution Agreement, if any, shall terminate automatically without the need for further action by any party thereto. The failure of ATA Holdings to accommodate timely deliver such efforts. In a waiver or exclusion notice shall constitute ATA Holdings’ election to waive the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3objection as described in Subsection 3.1(c)(ii)(A) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectabove.

Permitted Exceptions. Subsidiary Buyer shall notify Seller of any objectionable matters in the title report or any supplemental report within the earlier of: (1) twenty (20) days after Mutual Acceptance of this Agreement; or (2) the expiration of the Feasibility Period. This Agreement shall terminate and Parent Buyer shall have reviewed and approvedreceive a refund of the ▇▇▇▇▇▇▇ money, less any costs advanced or committed for Buyer, unless within five (5) days of Buyer’s notice of such objections (1) Seller agrees, in their sole discretionwriting, to remove all objectionable provisions or (2) Buyer notifies Seller that Buyer waives any objections which Seller does not agree to remove. If any new title matters are disclosed in a supplemental title report, then the Permitted Exceptions described in preceding termination, objection and waiver provisions shall apply to the Disclosure Letter. In the event new title matters except that any Buyer’s notice of objections must be delivered within five (5) days of delivery of the Subsidiary's supplemental report and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction Seller’s response or Buyer’s waiver must be delivered within two (2) days of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which Buyer’s notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilledof objections. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing closing date shall be extended to accommodate such effortsthe extent necessary to permit time for these notices. In Buyer shall not be required to object to any mortgage or deed of trust liens, or the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretionstatutory lien for real property taxes, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have the same shall not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled be Permitted Exceptions; provided, however, that the lien securing any financing which Buyer has agreed to assume shall be a Permitted Exception. Except for the foregoing, those provisions not objected to or for which Buyer waived all Condition(s) Precedentits objections shall be referred to collectively as the “Permitted Exceptions.” Seller shall cooperate with Buyer and the title company to clear objectionable title matters but shall not be required to incur any out-of-pocket expenses or liability other than payment of monetary encumbrances not assumed by Buyer and proration of real property taxes, and all rights Seller shall provide an owner’s affidavit containing the information and reasonable covenants requested by the title company. The title policy shall contain no exceptions other than the General Exclusions and Exceptions common to such form of Subsidiary policy and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectthe Permitted Exceptions.

Permitted Exceptions. Subsidiary Attached as EXHIBIT "3" to this Agreement is a copy of a preliminary title report dated as of February 13, 2003 (the "Lot 3 Title Report") covering the Property, issued by Title Guaranty of Hawaii, Inc. Optionee acknowledges that, as provided in and Parent pursuant to the ▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ has received copies of all recorded documents and maps referenced in the Lot 3 Title Report, other than documents related to the Amfac Mortgages (as defined in Section 9(a)(ii) below). Attached as EXHIBIT "4" to this Agreement is a list of exceptions, reservations, easements, and other items which NB 3 proposes shall have reviewed be recited or referenced in the Deed as permitted encumbrances or exceptions to title and approvedexclusions from NB 3's limited warranty under the Deed. If Optionee disapproves of any items listed in Exhibit "4" or any other exceptions or defects discovered by Optionee through its investigation of the state of the title to the Property, in their sole Optionee may, at its discretion, inform NB 3 of such disapproval by delivering written notice (the Permitted Exceptions described "Title Notice") thereof to NB 3 no later than sixty calendar days prior to the Expiration Date (and in the Disclosure Letter. In the no event that any later than ten days prior to Optionee's delivery of the Subsidiary's Notice of Exercise). The Title Notice shall specify in detail the disapproved item(s), exception(s) and Parent's Conditions Precedent shall not have been fulfilled defect(s) (the "title defect"). Upon receipt of the Title Notice, NB 3 shall, at its option, notify Optionee in writing, delivered to Optionee no later than twenty calendar days prior to the satisfaction of Subsidiary and ParentExpiration Date, in their sole and absolute discretion either: (i) that NB 3 shall agree to cure or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify otherwise remove the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled title defect from title and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled Deed prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary ; or Parent fails to so notify each Shareholder within such time period(ii) that NB 3 shall not or cannot cure or otherwise remove the title defect, then Subsidiary and Parent will in which case, if Optionee delivers the Notice of Exercise, Optionee shall be deemed to have fulfilled or waived rescinded its disapproval of the title defect. Optionee agrees that NB 3 has no obligation to cure any title defect, except that NB 3 shall discharge from the Property the Amfac Mortgages and any other mortgages, deeds of trust, attachments and monetary liens (excepting, however, any mortgages and liens affecting the grantee's interest under the Grant of Lot 4 Access Easement (as defined in Section 10(c)(xx) below)) ("Monetary Liens"). Except for Monetary Liens, Optionee shall be deemed to have approved all Condition(s) Precedent, items listed in Exhibit "4" and all rights other exceptions and defects affecting or encumbering the title to the Property existing as of Subsidiary the date of Optionee's effective exercise of the Option and Parent not expressly and specifically disapproved in the manner provided above in this subsection 6(b). All such approved items are referred to terminate in this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectas the "Permitted Exceptions."

Permitted Exceptions. Subsidiary Purchaser acknowledges having received a preliminary title report dated as of February 14, 2003 (the "Lot 4 Title Report") covering the Property, issued by Title Guaranty of Hawaii, Inc. (the "title company"), a copy of which is attached hereto as EXHIBIT "6", and Parent a preliminary title report dated as of February 13, 2003 (the Lot 3 Title Report") covering Lot 3 (as defined in Section 18 below, and being the parcel of land within which the Lot 3 Access Easement (as defined in Section 3(e) below) is located), issued by the title company, a copy of which is attached hereto as EXHIBIT "22", together with copies of all recorded documents and maps referenced in the Lot 4 Title Report and the Lot 3 Title Report (other than documents related to Seller's Mortgages (as defined in Section 6(a)(ii) below), as delivered by Seller to Intrawest pursuant to the Terminated Agreement. Attached as EXHIBIT "7" to this Agreement is a list of exceptions, reservations, easements, and other items which shall have reviewed be recited or referenced in the Deed as permitted encumbrances or exceptions to title and approvedexclusions from Seller's limited warranty under the Deed. Except for Monetary Liens, Purchaser hereby approves all items listed in their sole discretionExhibit "7" and all other exceptions and defects affecting or encumbering the title to the Property, the Additional Property and the area to be encumbered by the Lot 3 Access Easement existing as of July 28, 2003. All such approved items are referred to in this Agreement as the "Permitted Exceptions." Prior to Closing, Seller agrees to take the following actions with respect to the Permitted Exceptions (and, to the extent expressly provide herein, the Permitted Exceptions described shall be modified accordingly): (i) Seller shall discharge (or cause to be discharged) from the Property Seller's Mortgages and any other mortgages, deeds of trust, attachments and monetary liens (excepting however the Purchase Money Note, the Purchase Money Mortgage and the UCC Financing Statement) ("Monetary Liens"). (ii) That certain Warranty Deed dated August 24, ▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇; Liber 16531, Page 635) referenced in the Disclosure Letter. In Lot 4 Title Report includes the event that any following provision: "RESERVING AND EXCEPTING to [Pioneer Mill Company, Limited ("PMCo")], its successors and assigns forever, as appurtenant to the lands of [PMCo] located in the District of the Subsidiary's Premises now owned or hereafter acquired and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary used by [PMCo], its successors and Parentassigns, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such noticeits sugar plantation operations, the Shareholders shall have a period perpetual right and easement over and upon the Premises to discharge, emit, or transmit surface water runoff, noise, smoke, soot, dust, lights, vapors, odors, and other substances and phenomena of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled every description, created by and resulting from the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary reasonable operations of [PMCo], its successors and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the rightassigns, in their sole burning sugar cane and absolute discretionbagasse, and without any liability or obligation to any Shareholder or Com-Net whatsoevermilling, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time periodgenerating power, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedenttrucking, hauling, and all rights other activities incidental to the operation of Subsidiary a sugar cane plantation or alternative energy projects; and Parent Grantee, its successors and assigns, do hereby waive any and all claims under any law whatsoever against [PMCo] arising therefrom." (Such reservation and exception is referred to terminate this Merger Agreement pursuant hereinbelow as the "Sugar Plantation Operations Easement".) Seller shall cause PMCo, Oahu MS Development Corp., a Hawaii corporation ("OMSD"), and Kaanapali Development Corp., a Hawaii corporation ("KDC") to execute and record at Closing a document (the "Partial Cancellation of Reserved Easement Rights"), in the form attached as EXHIBIT "8" to this Article VIII Agreement, by which PMCo, OMSD and KDC release and cancel their respective rights and interests in the Sugar Plantation Operations Easement as it affects the Property, to the extent the Sugar Plantation Operations Easement is broader than Section 14 of this Agreement. (iii) With respect to Item No. 12 of Schedule B to the Lot 4 Title Report (the "Unrecorded Leases Exception"), the Unrecorded Leases Exception shall not be recited in the Deed as an exception to title, and at Closing, Seller will provide the title company with written confirmation, in such form as has been previously provided to the title company by affiliates of Seller in similar transactions, as reasonably required by the title company for removal of the Unrecorded Leases Exception from the title policy (as defined below), if any. (iv) That certain Assignment and Assumption of Rights, Interests and Obligations and Reservation of Rights, Interests and Obligations dated December 21, ▇▇▇▇ (▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇; Document No. 2002-033760), and the related unrecorded "KDC Transfer Agreement", referenced in the Lot 4 Title Report, shall not be null and void and recited in the Deed as an encumbrance or exception to title. Seller will provide such materials, if any, reasonably required by the title company for removal of no further force or effectsuch items from the title policy, if any.

Permitted Exceptions. Subsidiary Buyer shall notify Seller of any objectionable matters in the Title Report (“Objectionable Title Matters”) within ten (10) days after Buyer’s receipt of the Title Report together with copies of all exception documents. Upon Buyer's receipt of the Title Report and Parent copies of all exception documents, Buyer shall have reviewed promptly provide (or cause the Title Company to provide) to Seller a copy of same. If Buyer fails to so notify Seller of any such Objectionable Title Matters, all exceptions and approved, other matters appearing in their sole discretion, the Title Commitment existing at the expiration of the Financing Contingency Period shall be deemed accepted by Buyer and included as Permitted Exceptions described in the Disclosure Letter(as defined below). In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder If Buyer timely notifies Seller in writing of any Condition(s) Precedent which such Objectionable Title Matters (such writing “Buyer’s Title Notice”), Seller, in Seller’s sole discretion, may, but shall have not been fulfilled no obligation to, remove or cure such Objectionable Title Matters on or prior to 10:00 a.m. Eastern Time on the Closing DateClosing. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will Seller shall be deemed to have fulfilled given notice to Buyer that Seller refuses to cure any such Objectionable Title Matters, which Seller may so do in its sole discretion, unless Seller, within four (4) days after receipt of Buyer’s Title Notice, shall notify Buyer in writing (the “Seller’s Title Notice”) that Seller will either attempt or refuse to cure such Objectionable Title Matters. If Seller’s Title Notice indicates that Seller refuses to cure said Objectionable Title Matters (or if Seller is deemed to refuse to cure said Objectionable Title Matters), Buyer may (a) terminate this Agreement prior to the expiration of the Financing Contingency Period, in which event the Nonrefundable Initial ▇▇▇▇▇▇▇ Money Portion shall be paid to the Seller and the Refundable Initial ▇▇▇▇▇▇▇ Money Portion shall be returned to Buyer and neither party shall have further rights or obligations pursuant to this Agreement, except as expressly provided herein, or (b) if Buyer fails to so terminate, Buyer shall be deemed to have waived such Objectionable Title Matters and accept that title to the Real Property is subject thereto, in which event there shall be no reduction in the Purchase Price. Notwithstanding the foregoing, Seller, at its cost, shall be obligated to cure or remove by Closing all Condition(smortgages and deeds of trust against the Real Property any other monetary liens, including mechanics’ liens and materialmen’s liens related to an act or omission of Seller, but excluding any liens for real property taxes not yet due and payable and matters created by Buyer or any of its affiliates and any judgement lien or attachment being contested by Seller in good faith. The Closing may be extended by Seller for a reasonable number of days (not to exceed sixty (60) Precedentdays) to accommodate Seller’s obligations under this Section 7. The following shall be deemed “Permitted Exceptions”: (i) the exceptions to title existing on the effective date of the Title Commitment and approved by Buyer in writing, or deemed approved by Buyer, as provided in this Section 7; (ii) real property taxes and assessments which are a lien but not yet payable; (iii) any title exceptions caused, consented to or preapproved by Buyer; (iv) all rights applicable building, zoning and use restrictions and/or regulations of Subsidiary any municipality, township, county or state; and Parent (v) defects that would be shown by an inspection or by a survey of the Real Property. If Buyer does not elect to terminate this Merger Agreement pursuant in accordance with the provisions of this Section 7, any Objectionable Title Matters which Seller refuses to cure shall be deemed “Permitted Exceptions”. Notwithstanding the foregoing provisions of this Article VIII will Section 7 or anything to the contrary contained in this Agreement, Seller shall be null required to cure and void satisfy, on or prior to the Closing Date, all Mandatory Cure Items which shall in no event be deemed Permitted Exceptions. The term “Mandatory Cure Items” shall mean, collectively, (y) all mortgages and deeds of no further force trust against the Property and (z) any mechanic’s, materialman’s or effectsupplier’s liens resulting from work performed at the Property by or on behalf of Seller, but excluding (1) any liens for real property taxes not yet due and payable, (2) matters created by Buyer or any of its affiliates, and (3) any judgment lien or attachment being contested by Seller in good faith.

Permitted Exceptions. Subsidiary Buyer shall notify Seller of any objectionable matters in the Title Report (“Objectionable Title Matters”) within ten (10) days after Buyer’s receipt of the Title Report together with copies of all exception documents. Upon Buyer's receipt of the Title Report and Parent copies of all exception documents, Buyer shall have reviewed promptly provide (or cause the Title Company to provide) to Seller a copy of same. If Buyer fails to so notify Seller of any such Objectionable Title Matters, all exceptions and approved, other matters appearing in their sole discretion, the Title Commitment existing at the expiration of the Financing Contingency Period shall be deemed accepted by Buyer and included as Permitted Exceptions described in the Disclosure Letter(as defined below). In the event that any of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder If Buyer timely notifies Seller in writing of any Condition(s) Precedent which such Objectionable Title Matters (such writing “Buyer’s Title Notice”), Seller, in Seller’s sole discretion, may, but shall have not been fulfilled no obligation to, remove or cure such Objectionable Title Matters on or prior to 10:00 a.m. Eastern Time on the Closing DateClosing. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will Seller shall be deemed to have fulfilled given notice to Buyer that Seller refuses to cure any such Objectionable Title Matters, which Seller may so do in its sole discretion, unless Seller, within four (4) days after receipt of Buyer’s Title Notice, shall notify Buyer in writing (the “Seller’s Title Notice”) that Seller will either attempt or waived all Condition(srefuse to cure such Objectionable Title Matters. If Seller’s Title Notice indicates that Seller refuses to cure said Objectionable Title Matters (or if Seller is deemed to refuse to cure said Objectionable Title Matters), Buyer may (a) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement prior to the expiration of the Financing Contingency Period, in which event the Nonrefundable Initial ▇▇▇▇▇▇▇ Money Portion shall be paid to the Seller and the Refundable Initial ▇▇▇▇▇▇▇ Money Portion shall be returned to Buyer and neither party shall have further rights or obligations pursuant to this Article VIII will Agreement, except as expressly provided herein, or (b) if Buyer fails to so terminate, Buyer shall be null deemed to have waived such Objectionable Title Matters and void accept that title to the Real Property is subject thereto, in which event there shall be no reduction in the Purchase Price. Notwithstanding the foregoing, Seller, at its cost, shall be obligated to cure or remove by Closing all mortgages and deeds of no further force trust against the Real Property any other monetary liens, including mechanics’ liens and materialmen’s liens related to an act or effectomission of Seller, but excluding any liens for real property taxes not yet due and payable and matters created by Buyer or any of its affiliates and any judgement lien or attachment being contested by Seller in good faith. The Closing may be extended by Seller for a reasonable number of days (not to exceed sixty (60) days) to accommodate Seller’s obligations under this Section 7.

Permitted Exceptions. Subsidiary Buyer shall notify Seller of any objectionable matters in the title report or any supplemental report within the earlier of: (a) days (20 days if not completed) after receipt of the preliminary commitment for title insurance; or (b) the Feasibility Contingency Date. This Agreement shall terminate and Parent Buyer shall have reviewed and approvedreceive a refund of the ▇▇▇▇▇▇▇ Money, less any costs advanced or committed for Buyer, unless within five (5) days of Buyer’s notice of such objections INITIALS: Buyer Date Seller Date Buyer Date Seller Date Seller shall give notice, in their sole discretionwriting, the Permitted Exceptions described in the Disclosure Letterof its intent to remove all objectionable provisions before Closing. In the event If Seller fails to give timely notice that any it will clear all disapproved objections, this Agreement shall automatically terminate and Buyer shall receive a refund of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent▇▇▇▇▇▇▇ Money, in their sole and absolute discretion less any costs advanced or waived in writing by Subsidiary and Parentcommitted for Buyer, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of unless Buyer notifies Seller within three (3) days following their that Buyer waives any objections which Seller does not agree to remove. If any new title matters are disclosed in a supplemental title report, then the preceding termination, objection and waiver provisions shall apply to the new title matters except that Buyer’s notice of objections must be delivered within three (3) days of receipt of such notice the supplemental report by ▇▇▇▇▇ and Seller’s response or Buyer’s waiver must be delivered within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty two (302) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the of Buyer’s notice of objections. The Closing Date shall be extended to accommodate such effortsthe extent necessary to permit time for these notices. In Buyer shall not be required to object to any mortgage or deed of trust liens, or the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretionstatutory lien for real property taxes, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have the same shall not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled be Permitted Exceptions; provided, however, that the lien securing any financing which ▇▇▇▇▇ has agreed to assume shall be a Permitted Exception. Except for the foregoing, those provisions not objected to or for which Buyer waived all Condition(s) Precedent, its objections shall be referred to collectively as the “Permitted Exceptions.” Seller shall reasonably cooperate with Buyer and all rights the title company to clear objectionable title matters and shall provide an affidavit containing the information and reasonable covenants requested by the title company. The title policy shall contain no exceptions other than the General Exclusions and Exceptions common to such form of Subsidiary policy and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectthe Permitted Exceptions.

Permitted Exceptions. Subsidiary The exceptions to title disclosed in the Title Commitment, including any standard printed exceptions that the Title Company will not omit, other than (a) those title exceptions to which Buyer has tendered an objection in a New Buyer Objection which are not subsequently cured or waived and Parent (b) any delinquent taxes or assessments, shall have reviewed and approvedbe the “Permitted Exceptions” hereunder. Furthermore, in their sole discretion, (A) the matters set forth on Schedule D shall constitute Permitted Exceptions described for all purposes hereunder and (B) Buyer agrees that Buyer shall not be permitted to deliver a New Buyer Objection to either that certain Easement contained in Deed Book 4201, Page 197 or that certain Right of Way in Deed Book 4900, Page 140. Notwithstanding anything to the Disclosure Letter. In contrary contained herein, Seller shall discharge and remove (i) Mandatory Cure Liens and (ii) any and all Other Liens affecting the event that any Property which secure an obligation to pay money (other than installments of real and personal property taxes and liens for special improvements not delinquent as of the Subsidiary's Closing), and Parent's Conditions Precedent such Mandatory Cure Liens and Other Liens shall not have been fulfilled be Permitted Exceptions (whether or not Buyer expressly objects thereto); provided, however, Seller shall not be obligated to expend more than $220,000.00 in connection with the satisfaction discharge and removal of Subsidiary and Parent, in their sole and absolute discretion the Other Liens (unless such Other Liens were caused by a breach of a covenant or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period representation of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilledSeller under this Agreement). In the event the Shareholders provide Subsidiary cost to discharge and Parent with remove the Other Liens would exceed $220,000.00 (and Seller, prior to Closing, does not agree to pay the entire cost to so discharge and remove such noticeOther Liens), the Shareholders Buyer shall have the right either to (A) waive such Other Liens and proceed to Closing with a period credit against the Purchase Price in the amount of thirty $220,000.00, in which event such Other Liens shall constitute Permitted Exceptions and Seller shall provide Buyer with a credit against the Purchase Price in the amount of $220,000.00, or (30B) days within terminate this Agreement (in addition to exercising any other remedies that Buyer may have under this Agreement if such Other Liens were caused by a breach of a covenant or representation of Seller under this Agreement), in which event, (a) Escrow Agent shall return the Deposit to attempt to cause such Condition(sBuyer, (b) Precedent to be fulfilled and the Closing Seller shall be extended to accommodate such efforts. In responsible for the event charges of Escrow Agent (except as otherwise set forth in the Shareholders fail to provide Subsidiary and Parent with such notice within such three Escrow Agreement), (3c) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to Buyer shall be fulfilled to responsible for the satisfaction charges of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretionTitle Company, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to (d) this Agreement shall terminate this Merger Agreement. Subsidiary automatically and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effecteffect and neither party shall have any further rights or obligations hereunder (other than pursuant to any provision hereof which expressly survives the termination of this Agreement). At or prior to Closing, Seller shall fulfill requirements 6, 14, 15 and 16 set forth in Schedule B – Section I of the Title Commitment.

Permitted Exceptions. Subsidiary “Permitted Exceptions” shall include and Parent shall have reviewed refer to: all matters set forth in the Title Report or any update thereto or to the Existing Survey or any update thereto that are approved or deemed approved by Purchaser pursuant to the terms of this Agreement; all matters shown on a Survey Update or update thereto (or derivative exceptions shown in the Title Report or any update thereto) other than (i) a material violation of zoning or building law, ordinance, map, resolution or regulation of a governmental authority having jurisdiction over the Property which violation materially and approvedadversely affects the Property and the use, improvement or enjoyment thereof, or (ii) an unpermitted encroachment of an Improvement over a permanent easement, setback, buffer or transitional use area or upon adjacent property, or a material violation by Seller of that certain Declaration of Rights, Restrictions and Easements recorded in Book 2647 Page 741 of the registry (as amended by that certain Amendment recorded as instrument number 2011015016 of the registry) or Stormwater Facility Agreement recorded in Book 6878 Page 708 of the registry, that is materially adverse to the Project, and, in their sole discretioneither case of (i) or (ii), for which affirmative coverage is not obtainable from the Permitted Exceptions described in Title Company for a reasonable cost (provided, however, that if such coverage is obtainable at a reasonable cost or at no cost to Seller from a national title company other than the Disclosure Letter. In the event that any of the Subsidiary's and Parent's Conditions Precedent Title Company, such matter shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and the Closing shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived be a Permitted Exception); all Condition(s) Precedentzoning and building laws, ordinances, maps, resolutions, and regulations of all rights governmental authorities having jurisdiction which affect the Property and the use, improvement or enjoyment thereof; the Leases; matters affecting title created by or with the consent of Subsidiary Purchaser; matters deemed to be permitted exceptions hereunder, including, but not limited to, the Condominium Conversion Agreement and Parent any exception the Title Company may take in respect of the Punch List Work, if any, to terminate this Merger Agreement pursuant be completed after closing in accordance with Paragraph 4.6; liens to this Article VIII will secure taxes and assessments not yet due and payable; and, other matters which do not materially and adversely affect the use, occupancy, development or value of the Property. Notwithstanding the foregoing, Seller shall remove at Seller’s sole cost and expense on or prior to the Closing Date and there shall not be null treated as Permitted Exceptions the lien of the deed of trust given by Seller for the benefit U.S. Bank, National Association, dated as of November 29, 2011 and void and recorded in the office of no further force or effectthe Register of Deeds of Durham County on November 30, 2011 as instrument number 2011036476.

Permitted Exceptions. Subsidiary and Parent shall have reviewed and approvedAttached hereto as Exhibit E is a copy of a preliminary report of title to the Real Property (the “Preliminary Report”) issued by the Title Company. Except as provided in the next sentence, in their sole discretion, the Permitted Exceptions all matters described in the Disclosure Letter. In Preliminary Report and in Section 3.7.5, together with all title conditions created by Buyer or resulting from the event that acts of Buyer or its agents or representatives, are referred to herein as the “Permitted Exceptions.” Permitted Exceptions do not include (i) any judgment lien, delinquent taxes, bonds or assessments which result solely from Seller’s actions or omissions; (ii) any deed of trust, and/or any other lien or encumbrance representing monies owed; (iii) any liens, encumbrances, or other claims and interests which have been placed upon or against the Property after the date of the Subsidiary's Preliminary Report voluntarily by Seller; (iv) any exception relating to Seller’s authority to enter into and/or perform this Agreement and/or the authority of any person or persons executing this Agreement on behalf of Seller or (v) Exceptions numbered 6, 8 and Parent's Conditions Precedent 9 on the Preliminary Report relating to prior leases at the Property or (vi) Exception number 12 on the Preliminary Report relating to a lien for personal property taxes. Seller shall cause all of the items described in the preceding sentence, to be eliminated or cured by endorsement (provided that such endorsement includes the agreement of the title company to issue the same coverage to subsequent owners and encumbrances of the Property without charge) at Seller’s expense on or before the Close of Escrow. The removal or elimination of any other title exception reflected in the Preliminary Report shall be a matter solely between Buyer and Title Company. Any references to property taxes, bonds and/or assessments shall be subject to, and shall not have been fulfilled relieve Seller from, Seller’s obligations under this Section and/or Seller’s obligation with respect to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing as to which Condition(s) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period of three (3) days following their receipt proration of such notice within which items at the Close of Escrow as provided in Section 3.12. After the expiration of the Due Diligence Period, except as provided in Section 3.7.5, Buyer has no right to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, the Shareholders shall have a period of thirty (30) days within which to attempt to cause such Condition(s) Precedent to be fulfilled and terminate or cancel this Agreement or delay the Closing shall be Date in order to obtain the title endorsements or elimination of exceptions that Buyer may desire. Buyer may elect to obtain an ALTA extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day periodcoverage owner’s title policy, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on so long as the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectis not delayed as a result.

Permitted Exceptions. Subsidiary On or before ten (10) business days after all of the Commitment, the Title Review Documents, and Parent the Survey have been delivered, Purchaser shall provide Seller with written notice of any objections which Purchaser has to exceptions shown on the Commitment or any condition of the Property as revealed by the Survey. All objections raised by Purchaser in the manner herein provided are hereafter called “Objections.” Seller shall have reviewed and approvedno obligation to cure or remove any Objections, but, Seller shall notify Purchaser in their sole discretion, the Permitted Exceptions described in the Disclosure Letter. In the event that any writing within ten (10) business days after receipt of the Subsidiary's and Parent's Conditions Precedent shall not have been fulfilled to the satisfaction of Subsidiary and Parent, in their sole and absolute discretion or waived in writing by Subsidiary and Parent, Subsidiary or Parent shall notify the Shareholders in writing Objections as to which Condition(sObjections Seller will cure. Purchaser may, on or before five (5) Precedent has not been fulfilled, which notice shall state with reasonable specificity the reason and basis for such Condition(s) Precedent not having been fulfilled. The Shareholders shall have a period business days after Seller’s delivery to Purchaser of three (3) days following their receipt of such notice within which to notify Subsidiary and Parent in writing that the Shareholders intend to attempt to cause such Condition(s) Precedent to be fulfilled. In the event the Shareholders provide Subsidiary and Parent with such notice, terminate this Agreement in its entirety by giving Seller written notice of termination. Thereafter, the Shareholders E▇▇▇▇▇▇ Money shall be returned to Purchaser except for the sum of $100 which will be delivered to Seller as independent consideration hereunder, and Seller and Purchaser shall be released and relieved of further obligations, liabilities and claims hereunder except for the Post Termination Obligations (defined below) which will survive such termination. If Purchaser fails to give written notice of termination within such five (5) business day period, all Objections that Seller refuses to cure shall be deemed waived. Seller shall cure all Objections Seller represents it will cure and in no event shall such Objections remain uncured five days prior to Closing. If Seller fails to cure such Objections within said five (5) day period, Closing shall be extended for thirty (30) days, and if such Objections remain uncured after such extension, Purchaser’s sole and exclusive remedy shall be either: A. to terminate this Agreement; have a period of the E▇▇▇▇▇▇ Money returned to it, less the independent consideration; and Seller shall be obligated to pay Purchaser within thirty (30) days within after such election is made by Purchaser the out of pocket costs and expenses incurred by Purchaser after the Effective Date for third party contractors, consultants and attorneys regarding the Property provided that Purchaser provides Seller reasonable documentation of such costs that are incurred after the Effective Date; or B. to enforce specific performance of Seller’s agreement to cure such Objections; or C. to proceed to Closing, in which to attempt to cause event such Condition(s) Precedent to be fulfilled and the Closing Objections shall be extended to accommodate such efforts. In the event the Shareholders fail to provide Subsidiary and Parent with such notice within such three (3) day period or provide such notice within such three (3) day period but fail to cause such Condition(s) Precedent to be fulfilled to the satisfaction of the Subsidiary and Parent in their sole and absolute discretion within such thirty (30) day period, Subsidiary and Parent will have the right, in their sole and absolute discretion, and without any liability or obligation to any Shareholder or Com-Net whatsoever, to terminate this Merger Agreement. Subsidiary and Parent will notify each Shareholder in writing of any Condition(s) Precedent which have not been fulfilled prior to 10:00 a.m. Eastern Time on the Closing Date. If Subsidiary or Parent fails to so notify each Shareholder within such time period, then Subsidiary and Parent will be deemed to have fulfilled or waived all Condition(s) Precedent, and all rights of Subsidiary and Parent to terminate this Merger Agreement pursuant to this Article VIII will be null and void and of no further force or effectwaived.