Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN

 

TUESDAY MORNING PARTNERS, LTD., Tuesday Morning, inc. and

FRIDAY MORNING, LLC

AS SELLER

 

AND

 

RIALTO REAL ESTATE FUND IV – PROPERTY, LP

AS PURCHASER

 

DATED: October 30, 2020

 

 

 

 

TABLE OF CONTENTS

 

Page No. 

Article 1
Basic Information 1.1 Certain Basic Terms 1 1.2 Closing Costs 2 1.3 Notice
Addresses: 3 Article 2
Property 2.1 Property 3 Article 3
Earnest Money 3.1 Deposit and Investment of Earnest Money 4 3.2 Independent
Consideration 5 3.3 Form; Failure to Deposit 5 3.4 Disposition of Earnest Money
5 Article 4
Due Diligence 4.1 Due Diligence Materials Delivered 5 4.2 Physical Due Diligence
6 4.3 Reports 7 4.4 Service Contracts 7 4.5 Proprietary Information;
Confidentiality 8 4.6 No Representation or Warranty by Seller 8 4.7 Purchaser’s
Responsibilities 8 4.8 Purchaser’s Agreement to Indemnify 9 Article 5
Title and Survey 5.1 Title Commitment 9 5.2 Intentionally Omitted 10 5.3
Delivery of Title Policy at Closing 10 Article 6
Operations and Risk of Loss 6.1 Ongoing Covenants and Operations 10 6.2 Damage
11 6.3 Condemnation 12 6.4 Leaseback 12 Article 7
Closing 7.1 Closing 13 7.2 Conditions to Parties’ Obligation to Close 13 7.3
Seller’s Deliveries in Escrow 14 7.4 Purchaser’s Deliveries in Escrow 15 7.5
Closing Statements 15 7.6 Purchase Price 15 7.7 Possession 15 7.8 Delivery of
Books and Records 16

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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Article 8
Prorations, Deposits, Commissions 8.1 Prorations 16 8.2 Closing Costs 16 8.3
Final Adjustment After Closing 16 8.4 Commissions 17 Article 9
Representations and Warranties 9.1 Seller’s Representations and Warranties 17
9.2 Purchaser’s Representations and Warranties 18 9.3 Survival of
Representations and Warranties 19 Article 10
Default and Remedies 10.1 Seller’s Remedies 20 10.2 Purchaser’s Remedies 20 10.3
Attorneys’ Fees 20 10.4 Other Expenses 21 Article 11
Disclaimers, Release and Indemnity 11.1 Disclaimers By Seller 21 11.2 Sale “As
Is, Where Is.” 22 11.3 Seller Released from Liability 23 11.4 “Hazardous
Materials” Defined 24 11.5 Survival 24 Article 12
Miscellaneous 12.1 Parties Bound; Assignment 24 12.2 Headings 25 12.3 Invalidity
and Waiver 25 12.4 Governing Law; Jurisdiction; Venue 25 12.5 Survival 25 12.6
Entirety and Amendments 25 12.7 Time 25 12.8 Confidentiality 25 12.9 Notices 26
12.10 Construction 26 12.11 Calculation of Time Periods; Business Day 26 12.12
Execution in Counterparts 26 12.13 No Recordation 26 12.14 Further Assurances 26
12.15 Discharge of Obligations 27 12.16 ERISA 27 12.17 No Third Party
Beneficiary 27 12.18 Reporting Person 27 12.19 Texas Real Estate License Act..
27 12.20 DTPA Waiver. 27

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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LIST OF DEFINED TERMS

 

Page No.

 

Agreement 1 Assignment 13 Broker 2 Business Day 24 Casualty Notice 10 CERCLA 21
Closing 11 Closing Date 2 Deed 13 Earnest Money 1 Effective Date 2 Escrow Agent
2 Hazardous Materials 22 Improvements 3 Independent Consideration 5 Intangible
Personal Property 4 Land 3 Material Damage 10 Materially Damaged 10 OFAC 16
Permitted Outside Parties 7 Property 3 Property Documents 5 Purchase Price 1
Purchaser 1 Real Property 3 Report 6 Reports 6 Seller 1 Seller's Representative
17 Service Contracts 6 Survival Period 17 Tangible Personal Property 4 Taxes 14
Title Company 1 Title Policy 9

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

iii 

 

 

PURCHASE AND SALE AGREEMENT

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

6250 LBJ Freeway, Dallas, Texas

 

This Purchase and Sale Agreement (this “Agreement”) is made and entered into by
and between Purchaser and Seller.

 

RECITALS

 

A.       Defined terms are indicated by initial capital letters. Defined terms
shall have the meaning set forth herein, whether or not such terms are used
before or after the definitions are set forth.

 

B.       Purchaser desires to purchase the Property and Seller desires to sell
the Property, all upon the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and
agreements set forth herein, as well as the sums to be paid by Purchaser to
Seller, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Purchaser and Seller agree as follows:

 

Article 1
Basic Information

 

1.1   Certain Basic Terms. The following defined terms shall have the meanings
set forth below:

 

  1.1.1 Seller: TUESDAY MORNING PARTNERS, LTD., a Texas limited partnership,
TUESDAY MORNING, INC., a Texas corporation, and FRIDAY MORNING, LLC, a Texas
limited liability company           1.1.2 Purchaser: rialto real estate fund iv
– property, lp, a Delaware limited partnership           1.1.3 Purchase Price:
$60,000,000.00           1.1.4 Earnest Money: $4,500,000.00 (the “Earnest
Money”), including interest thereon, to be deposited in accordance with Section 
3.1 below.           1.1.5 Title Company:

Chicago Title Insurance Company

2828 Routh Street, Suite 800

Dallas, Texas 75201

Attn: Holden Heil

E-Mail: Holden.Heil@ctt.com

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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  1.1.6 Escrow Agent:

Chicago Title Insurance Company

2828 Routh Street, Suite 800

Dallas, Texas 75201

Attn: Holden Heil

E-Mail: Holden.Heil@ctt.com

          1.1.7 Broker:

CBRE, Inc.

2100 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attn: Tim Vogds

          1.1.8 Effective Date: The date on which this Agreement is executed by
the latter to sign of Purchaser or Seller, as indicated on the signature page of
this Agreement.  If the execution date is left blank by either Purchaser or
Seller, the Effective Date shall be the execution date inserted by the other
party.           1.1.9 Closing Date: On or before three (3) Business Days
following the effective date of a Reorganization Plan (as defined herein)
confirmed by a Plan Confirmation Order (as defined herein). Notwithstanding the
foregoing, the Closing Date shall not occur later than December 31, 2020.

 

1.2   Closing Costs. Closing costs shall be allocated and paid as follows:

 

Cost Responsible Party Title Commitment required to be delivered pursuant to
Section  5.1 Seller Premium for standard form Title Policy required to be
delivered pursuant to Section 5.3 Seller Premium for any upgrade of Title Policy
for any amendments or endorsements to the Title Policy desired by Purchaser, and
the costs and expenses associated with any loan policy Purchaser Costs for
updates, recertifications or amendments to the Survey Purchaser Costs for UCC
Searches (if requested by Purchaser) Purchaser Costs of recording lien releases
with respect to Seller’s existing financing, if any Seller Cost of recording the
deed and any other documents required to be recorded by Purchaser Seller Any
escrow fee charged by Escrow Agent for holding the Earnest Money or conducting
the Closing

Purchaser ½

Seller ½

Real Estate Sales Commission to Broker Seller All other closing costs, expenses,
charges and fees As customary in Dallas County, Texas

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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1.3   Notice Addresses:

 

Seller:
6250 LBJ Freeway
Dallas, Texas 75240
Attention: Jim Spisak
Telephone: 972-934-7149
E-Mail: jspisak@tuesdaymorning.com &
legal@tuesdaymorning.com Copy to:
Haynes and Boone LLP
2323 Victory Avenue, Suite 700
Dallas, Texas 75219
Attention: Brack Bryant
Telephone: 214-651-5335
E-mail: brack.bryant@haynesboone.com    

Purchaser:

 

Rialto Real Estate Fund IV – Property, LP
c/o Rialto Capital Management, LLC
501 Santa Monica Blvd., Suite 501,
Santa Monica, California 90401
Attn: Mike Parker, Aaron Davis and Brady Scott
Email: mike.parker@rialtocapital.com,
aaron.davis@rialtocapital.com &
brady.scott@rialtocapital.com

Copy to:

 

Bilzin Sumberg Baena Price & Axelrod LLP
1450 Brickell Avenue, 23rd Floor
Miami, Florida 33131
Attn: Jay M. Sakalo
Email: jsakalo@bilzin.com

 

Article 2
Property

 

2.1   Property. Subject to the terms and conditions of this Agreement, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, the
following property (collectively, the “Property“):

 

2.1.1          Real Property. The parcels of land described in Exhibit A hereto
(individually or collectively, as the context may require, the “Land“), together
with (a) all improvements located thereon (“Improvements“), (b) all right, title
and interest of Seller, if any, in and to the rights, benefits, privileges,
easements, tenements, hereditaments, and appurtenances thereon or in anywise
appertaining thereto, and (c) all right, title, and interest of Seller, if any,
in and to all strips and gores and any land lying in the bed of any street, road
or alley, open or proposed, adjoining the Land, as well as all other rights,
privileges and appurtenances owned by Seller and in any way related to such land
and other rights and interests of Seller hereunder conveyed (collectively, the
“Real Property”). Seller and Purchaser acknowledge and agree that the Real
Property consists of six (6) separate tracts, as identified on Exhibit A hereto
(each, a “Tract”), and generally described as follows: (i) 4400-4404 South
Beltwood Parkway, Farmers Branch, Texas (the “4404 Property”); (ii) 14303 Inwood
Road, Farmers Branch, Texas (the “14303 Property”); (iii) 14621 Inwood Road,
Addison, Texas (the “14261 Property”); (iv) 14639-14645 Inwood Road, Addison,
Texas (the “14639 Property”); (v) 14601-14603 Inwood Road, Addison, Texas (the
“14601 Property”); and (vi) 6250 Lyndon B. Johnson Freeway, Dallas, Texas (the
“6250 LBJ Property”). The 4404 Property and 14621 Property are owned by Tuesday
Morning Partners, Ltd., a Texas limited partnership (the “Tuesday Morning
Partners Seller”), and the 14639 Property and 14601 Property are owned by Friday
Morning, LLC, a Texas limited liability company (the “Friday Morning Seller”).
The 14303 Property and 6250 LBJ Property are owned by Tuesday Morning, Inc., a
Texas corporation (the “Tuesday Morning Inc. Seller”). Wherever in this
Agreement a representation, warranty, covenant or agreement is made by Seller,
such representation, warranty, covenant or agreement shall be deemed to be made
by the Tuesday Morning Partners Seller, the Friday Morning Seller or the Tuesday
Morning Inc. Seller with respect to the Real Property actually owned by such
party, and in no event shall either the Tuesday Morning Seller, Friday Morning
Seller or Tuesday Morning Inc. Seller be deemed to make representation or
warranties, or undertake any agreement or obligation whatsoever, with respect to
any portion of the Real Property not owned by such party.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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2.1.2          Tangible Personal Property. Seller and Purchaser acknowledge and
agree that at Closing, the equipment, machinery, furniture, furnishings,
supplies and other tangible personal property, if any, owned by Seller and now
or hereafter located on the Land that (a) are not used in connection with the
operation, ownership and maintenance of the Land and Improvements (as opposed to
the operation or management of the particular business of Seller on the Land),
and (b) are used primarily in connection with the operation or management of the
particular business of Seller on the Land (collectively, the “Excluded Tangible
Personal Property”) shall not transfer to Purchaser, as all of such Excluded
Tangible Personal Property shall be retained by Seller for its continued
operations pursuant to the Leases (as hereinafter defined); provided however,
that all improvements, structures, building systems (such as heating, air
conditioning, and mechanical systems), parking facilities and fixtures now or
hereafter placed, constructed, installed or located at or on the Real Property
(including any and all apparatuses, equipment and appliances affixed to the Real
Property that cannot be removed without material harm to the Real Property) and
used in connection with the ownership, operation, management or occupancy of the
Real Property (as opposed to the operation or management of Seller’s particular
business on the Land), shall be deemed a component of the Improvements (the
“Tangible Personal Property”).

 

2.1.3          Intangible Personal Property. All of Seller’s right, title and
interest, if any, in the following intangible personal property related to the
Real Property and the Improvements: the plans and specifications and other
architectural and engineering drawings for the Improvements, if any, to the
extent assignable and in Seller’s possession as of the Effective Date and at no
cost to Seller; warranties, to the extent assignable and in Seller’s possession
as of the Effective Date and at no cost to Seller; governmental permits,
approvals and licenses, if any, to the extent assignable and in Seller’s
possession as of the Effective Date and at no cost to Seller; (all of the items
described in this Section 2.1.3 collectively referred to as the “Intangible
Personal Property”). Tangible Personal Property and Intangible Personal Property
shall not, in any event whatsoever, be deemed or constructed to include any
trade name, mark or other identifying material that includes the name “Tuesday
Morning”, its subsidiaries and affiliates, or any derivatives thereof.

 

Article 3
Earnest Money

 

3.1   Deposit and Investment of Earnest Money. No later than Friday, October 30,
2020, Purchaser shall deposit (or cause to be deposited) the Earnest Money with
Escrow Agent. Escrow Agent shall invest the Earnest Money in government insured
interest-bearing accounts satisfactory to Seller and Purchaser, shall not
commingle the Earnest Money with any funds of Escrow Agent or others, and shall
promptly provide Purchaser and Seller with confirmation of the investments made.
Such account shall have no penalty for early withdrawal, and Purchaser accepts
all risks with regard to such account. The Earnest Money shall become
non-refundable to Purchaser upon the expiration of the Due Diligence Period (as
defined below), except as expressly provided in this Agreement (including,
Sections 5.3, 6.2, 6.3 and 10.2), provided, however, the Earnest Money shall be
applied to the Purchase Price in the event Closing occurs. For purposes hereof,
the “Due Diligence Period” shall be the period commencing on the Effective Date
and expiring at 5:00pm Central Time on October 30, 2020.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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3.2   Independent Consideration. If this Agreement is terminated for any reason,
and Purchaser is entitled to receive a return of the Earnest Money pursuant to
the terms hereof, the Escrow Agent shall first disburse to Seller $100 as
independent consideration for Seller’s performance under this Agreement
(“Independent Consideration”), which shall be retained by Seller in all
instances other than in the case of a Seller default existing beyond applicable
grace, notice and cure period. Notwithstanding the foregoing, in the event this
Agreement is terminated due to an uncured Seller default, Purchaser shall be
entitled to a return of the entire Earnest Money, including the Independent
Consideration.

 

3.3   Form; Failure to Deposit. The Earnest Money shall be in the form of a
certified or cashier’s check or the wire transfer to Escrow Agent of immediately
available U.S. federal funds. If Purchaser fails to timely deposit any portion
of the Earnest Money within the time periods required herein, Seller may
terminate this Agreement by written notice to Purchaser delivered on or prior to
the deposit of such Earnest Money by Purchaser, in which event any Earnest Money
that has previously been deposited by Purchaser with Escrow Agent shall be
immediately returned to Purchaser, and thereafter the parties hereto shall have
no further rights or obligations hereunder, except for rights and obligations
which, by their terms, survive the termination hereof.

 

Article 4
Due Diligence

 

4.1   Due Diligence Materials Delivered. Seller shall make available to
Purchaser the following (the “Property Documents”) for each Property (provided
that it is acknowledged and agreed by Purchaser (i) that Seller was and is not
obligated to deliver (or create/prepare) the Property Documents to the extent
that the same are not currently available in digital format and in Seller’s
reasonable possession, custody or control as of the Effective Date, and (ii)
that Seller was and is not obligated to deliver any documents or information
that is subject to attorney-client privilege:

 

4.1.1          Environmental, soils, air quality (mold) and hazardous substance
reports, including, without limitation, Phase I Reports, Phase II Reports and
any additional substance reports, if any;

 

4.1.2          Property inspection reports, including those covering
engineering, structural/seismic, mechanical systems, building plans, and
insurance loss run reports;

 

4.1.3          Agreements, warranties, and guaranties with respect to the Real
Property;

 

4.1.4          Schedule of currently active building Service Contracts and
copies of all currently active Service Contracts and any licensing agreements
currently affecting the Property;

 

4.1.5          Leasing listing agreements and property management agreements
from the last three (3) calendar years;

 

4.1.6          List of facility-related expenses incurred at the 6250 LBJ
Property during the last twelve (12) months;

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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4.1.7          Utility bills (electricity, water, sewer, gas, fuel oil, trash
and telephone/security lines) for the shorter of the last three (3) calendar
years and the period of Seller’s ownership;

 

4.1.8          Real and personal property tax assessment notices and bills for
the Property; including supplementary notices and bills for the shorter of the
last three (3) calendar years and the period of Seller’s ownership;

 

4.1.9          Copies of Seller’s most current title policies for the Property
with the insured amount redacted; and

 

4.1.10      Schedule of capital improvements pertaining to the Property for the
preceding twenty-four (24) months.

 

Seller shall notify Purchaser of any material changes to or errors in the
Property Documents to the extent Seller obtains knowledge thereof and Seller
shall provide updated materials (if any) in such event.

 

4.2   Physical Due Diligence. Commencing on the Effective Date and continuing
until the Closing, Purchaser and its agents and representatives shall have
reasonable access to the Property at all reasonable times during normal business
hours, for the purpose of conducting reasonably necessary tests, including
surveys and architectural, engineering, geotechnical and environmental
inspections and tests, provided that (a) Purchaser must give Seller one (1) full
Business Day’s prior telephone or written notice of any such inspection or test,
and with respect to any intrusive inspection or test (i.e., core sampling) must
obtain Seller’s prior written consent (which consent may not be unreasonably
withheld), (b) prior to performing any inspection or test, Purchaser must
deliver a certificate of insurance to Seller evidencing that Purchaser and its
contractors, agents and representatives have in place (and Purchaser and its
contractors, agents and representatives shall maintain during the pendency of
this Agreement) (1) commercial general liability insurance with limits of at
least $2,000,000 for bodily or personal injury or death, (2) property damage
insurance in the amount of at least $1,000,000, and (3) workers’ compensation
insurance for its activities on the Property in accordance with applicable law,
all covering any accident arising in connection with the presence of Purchaser,
its contractors, agents and representatives on the Property, which insurance
shall (A) name as additional insureds thereunder Seller and such other parties
holding insurable interests as Seller may designate, and (B) be primary
non-contributory and be written by a reputable insurance company licensed to
issue policies in the State of Texas, and (c) all such tests shall be conducted
by Purchaser in compliance with Purchaser’s responsibilities set forth in
Sections 4.7 and 4.8 below. Notwithstanding the foregoing, Purchaser shall be
permitted to conduct a Phase II Environmental Site Assessment and any other
additional testing if recommended by Purchaser’s Phase I Environmental Site
Assessment. Purchaser shall bear the cost of all such inspections or tests,
which obligation shall survive the termination of this Agreement. Subject to the
provisions of Section 4.5 hereof, Purchaser or Purchaser’s representatives may
communicate with any governmental authority (aa) for the sole purpose of
gathering information in connection with the transaction contemplated by this
Agreement; provided, however, Purchaser must contact Seller at least two (2)
full Business Days in advance by telephone or in writing to inform Seller of
Purchaser’s intended communication with any governmental authority and to allow
Seller the opportunity to participate in such communication if Seller desires at
a mutually agreeable time between Purchaser and Seller, or (bb) to the extent
required by applicable laws. As used in this Section, “communicate” and
“communication” shall mean the initiation of, response to, or sharing or
exchange of information, knowledge or messages, whether by oral, written or
electronic methods or media, or by any other means for the purpose of knowingly
subverting the provisions of this Section regarding Purchaser’s obligations to
provide Seller with prior notice of such communication and Seller’s ability to
participate in such communication.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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4.3   Reports. As additional consideration for the transaction contemplated
herein, following termination of this Agreement for any reason other than Seller
default existing beyond applicable grace, notice and cure periods, Purchaser
shall provide to Seller promptly following Seller’s written request, copies of
any third party-prepared final environmental site assessments, property
condition reports, title reports, surveys, zoning reports and other final
studies and reports about the Real Property prepared by or for or otherwise
obtained by, Purchaser or Purchaser’s engineers, contractors and environmental
consultants in connection with Purchaser’s due diligence (collectively, the
“Reports” and, individually, a “Report”). Any such deliveries to Seller shall be
made at no cost to Purchaser and without any representation or warranty of any
kind, including, without limitation, as to the accuracy or completeness of any
such materials, and with no right of Seller to rely thereon without the consent
of the applicable third party. Seller acknowledges and agrees that Purchaser has
not made any representation or warranty in connection with the delivery of such
Reports or other materials and the delivery of such Reports shall not establish
a contractual relationship with Seller and no third-party benefits have been or
shall be expressly or impliedly established. Notwithstanding anything herein to
the contrary, Purchaser shall not be required to provide to Seller any (aa)
attorney-client privileged communications, or (bb) proprietary or confidential
work product and information (such as drafts, internal valuation studies,
internal memoranda, financial projections, budgets and internal appraisals), or
(cc) any other information that is not a final report or study obtained by
Purchaser from a third party; provided however, that if this Agreement
terminates or expires for any reason other than a Seller default beyond
applicable notice and cure periods, Purchaser shall, subject to Purchaser’s
document retention policies, destroy (and certify to Seller the destruction of)
such materials to the extent such materials contain or are based upon
confidential information. Purchaser’s obligation to deliver the Property
Documents and the Reports to Seller shall survive the termination of this
Agreement (not to exceed two (2) years) but shall not survive Closing.

 

4.4   Service Contracts. Purchaser and Seller acknowledge and agree that as a
result of the nature of this transaction as a sale and leaseback to Seller
pursuant to the terms of the Leases (as defined below), Seller will retain
certain contract rights related to the operation, ownership or management of the
Real Property, including maintenance, service, construction, supply, electric
utility service, and equipment rental contracts (collectively, the “Service
Contracts”), in its capacity as the tenant under the Leases, and such Service
Contracts will not be terminated by Seller, or assumed by Purchaser, on the
Closing Date. Any Service Contracts shall be held solely in the name of Seller
(and not binding upon Purchaser or the Real Property), as tenant under the
Leases, during the term of the Leases, and shall be terminated by Seller prior
to the expiration of the Leases; provided however, that such Service Contracts
shall be assigned, amended or terminated by Seller at Closing pursuant to the
terms and conditions of Section 7.9.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

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4.5   Proprietary Information; Confidentiality. Purchaser acknowledges that the
Property Documents are and shall remain proprietary and confidential and will be
delivered to Purchaser solely to assist Purchaser in evaluating the Property.
The term confidential or proprietary information does not include any
information that Purchaser can reasonably establish (i) at the time of
disclosure or thereafter is available to the public other than as a result of a
disclosure by Purchaser or its representatives, (ii) is already in Purchaser’s
possession or becomes available to Purchaser on a non-confidential basis from a
source other than Seller or its representatives, provided that, such source is
not known to Purchaser after reasonable inquiry to be bound by an obligation of
confidentiality to Seller or its affiliates or otherwise prohibited from
transmitting the information to Purchaser by a contractual, legal or fiduciary
obligation, or (iii) has been independently developed by Purchaser or its
representatives without reference to or reliance upon the confidential or
proprietary information and without otherwise violating your obligations
hereunder. Purchaser shall not disclose the contents to any person other than to
those persons who are responsible for evaluating Purchaser’s acquisition or
financing of the Property, including Purchaser’s investors, and those who have
agreed to preserve the confidentiality of such information as required hereby
(collectively, “Permitted Outside Parties”). Notwithstanding the foregoing,
Purchaser may disclose such contents as (a) expressly required under applicable
laws or (b) expressly required by appropriate written judicial order, subpoena
or demand issued by a court of competent jurisdiction (but will first give
Seller written notice of the requirement and will cooperate with Seller so that
Seller, at its expense, may seek an appropriate protective order and, in the
absence of a protective order, Purchaser may disclose only such content as may
be necessary to avoid any penalty, sanction, or other material adverse
consequence, and Purchaser will use reasonable efforts to secure confidential
treatment of any such content so disclosed). Purchaser shall not divulge the
contents of the Property Documents and other information except in strict
accordance with the standards set forth in this Section 4.5. In permitting
Purchaser to review the Property Documents or any other information, Seller has
not waived any privilege or claim of confidentiality with respect thereto, and
no third-party benefits or relationships of any kind, either express or implied,
have been offered, intended or created. Purchaser’s obligations under this
Section 4.5 shall survive the termination of this Agreement for a period of one
(1) year but shall not survive Closing. Notwithstanding anything in this
Agreement to the contrary, any confidentiality obligations or liabilities of
Purchaser to Seller, shall automatically terminate (and not survive) upon
Closing.

 

4.6   No Representation or Warranty by Seller. Purchaser acknowledges that,
except for the representations and warranties by Seller expressly set forth in
this Agreement and any document executed by Seller and delivered to Purchaser at
Closing (collectively, the “Seller Undertakings”), Seller has not made and does
not make any warranty or representation regarding the truth, accuracy or
completeness of the Property Documents or the source(s) thereof. Purchaser
further acknowledges that some if not all of the Property Documents were
prepared by third parties other than Seller. Subject to the Seller Undertakings,
Seller expressly disclaims any and all liability for representations or
warranties, express or implied, statements of fact and other matters contained
in such information, or for omissions from the Property Documents, or in any
other written or oral communications transmitted or made available to Purchaser.
Subject to the Seller Undertakings, Purchaser shall rely solely upon its own
investigation with respect to the Property, including, without limitation, the
Property’s physical, environmental or economic condition, compliance or lack of
compliance with any ordinance, order, permit or regulation or any other
attribute or matter relating thereto. Subject to the Seller Undertakings, Seller
has not undertaken any independent investigation as to the truth, accuracy or
completeness of the Property Documents and are providing the Property Documents
solely as an accommodation to Purchaser.

 

4.7   Purchaser’s Responsibilities. In conducting any inspections,
investigations or tests of the Property and/or Property Documents, Purchaser and
its agents and representatives shall: (a)  not interfere with the operation and
maintenance of the Property by Seller; (b) not damage any part of the Property
or any personal property owned by Seller; (c) not injure or otherwise cause
bodily harm to Seller or its agents, guests, tenants, invitees, contractors and
employees; (d) comply with all applicable laws; (e) promptly pay when due the
costs of all tests, investigations, and examinations done with regard to the
Property by Purchaser and its agents and representatives; (f) not permit any
liens to attach to the Real Property by reason of the exercise of its rights
hereunder; (g) repair any damage to the Real Property resulting directly from
any such inspection or tests; and (h) not reveal or disclose prior to Closing
any Property Documents to anyone other than the Permitted Outside Parties, in
accordance with the confidentiality standards set forth in Section 4.5 above.
Notwithstanding anything in this Agreement to the contrary, Purchaser shall have
no obligation to repair any damage to the extent caused by Seller’s negligence
or willful misconduct, or to remediate, contain, abate or control any materials
not placed on or introduced to the Property by Purchaser or its agents and
representatives (except to the extent any action of Purchaser or its
Representatives disturbs any such existing materials in a manner which causes
damage or contamination), or to repair or restore any latent condition
discovered by Purchaser or its consultants, except to the extent any action by
Purchaser or its Representatives exacerbates such condition. Purchaser’s
obligations under this Section 4.7 shall survive the termination of this
Agreement but shall not survive Closing, except and only to the extent such
damage caused by Purchaser materially and adversely affects Seller’s
post-Closing operations at the Property, in which case Purchaser shall perform
such work after Closing.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

8

 

 

4.8   Purchaser’s Agreement to Indemnify. PURCHASER SHALL INDEMNIFY, DEFEND AND
HOLD HARMLESS SELLER FROM ANY AND ALL LOSSES, COSTS, LIENS, CLAIMS, CAUSES OF
ACTION, LIABILITY, DAMAGES, EXPENSES AND LIABILITY (INCLUDING, WITHOUT
LIMITATION, COURT COSTS AND REASONABLE ATTORNEYS’ FEES) (collectively, “Losses”)
INCURRED BY SELLER, THAT ARISE FROM OR OUT of THE ACT OR OMISSION OF PURCHASER
OR ITS AGENTS OR REPRESENTATIVES IN CONNECTION WITH PURCHASER’S INSPECTIONS OR
TESTS PERMITTED UNDER THIS AGREEMENT OR ANY VIOLATION BY PURCHASER, ITS AGENTS,
REPRESENTATIVES, OF THE PROVISIONS OF SECTION 4.2 OR SECTION 4.7; PROVIDED,
HOWEVER, THE INDEMNITY SHALL NOT EXTEND TO PROTECT SELLER FROM LOSSES RESULTING
FROM (A) ANY PRE-EXISTING CONDITION MERELY DISCOVERED BY PURCHASER (I.E., LATENT
ENVIRONMENTAL CONTAMINATION), SO LONG AS PURCHASER’S ACTIONS DO NOT AGGRAVATE or
exacerbate ANY SUCH PRE-EXISTING CONDITION, OR (B) THE GROSS NEGLIGENCE OR
INTENTIONAL MISCONDUCT SELLER OR THEIR RESPECTIVE EMPLOYEES, AGENTS, OR
REPRESENTATIVES. THIS INDEMNITY PROVISION SHALL SURVIVE TERMINATION OR
EXPIRATION OF THIS AGREEMENT FOR A PERIOD OF TWO (2) YEARS.

 

Article 5
Title and Survey

 

5.1   Title Commitment and Survey. Seller will use reasonable diligence to cause
to be delivered to Purchaser within ten (10) days after the Effective Date (i)
Commitments for Title Insurance with hyperlinked copies of all recorded
instruments affecting each Tract and recited as exceptions in the Commitments
for Title Insurance (collectively, the “Commitments”) and (ii) a copy of the
most recent survey of each Tract in Seller's possession (the “Survey”). If
Purchaser or the Title Company requires a new survey of any Tract for any
reason, then Purchaser, at Purchaser's cost and within thirty (30) days after
the Effective Date, shall obtain a new survey (“New Survey”) of such Tracts made
on the ground by a registered professional land surveyor that conforms to the
requirements of an ALTA/ACSM minimum standard detail survey. If Purchaser has an
objection to items disclosed in any Commitment or Survey, then Purchaser may
give Seller written notice of its objections for a period of five (5) days after
receipt of the latter of all of the Commitments and Surveys, but in any event
prior to the expiration of the Due Diligence Period. If Purchaser gives timely
written notice of its objections, then Seller may, but has no obligation to,
cure those objections. Seller shall utilize reasonable diligence to cure any
errors in the Commitments, provided Seller has no obligation to expend any
money, to incur any contractual or other obligations, or to institute any
litigation in pursuing its efforts other than to remove at Closing: (a) liens
securing a mortgage, deed of trust or trust deed evidencing an indebtedness of
Seller; (b) judgment liens against Seller; (c) tax liens; (d) broker’s liens;
(e) mechanics liens arising by, through or under Seller; and (f) any other
monetary liens arising by, through or under Seller (collectively, “Seller
Mandatory Cure Items”). If any objection is not satisfied, then Purchaser may
elect on or before expiration of the Due Diligence Period, as its sole and
exclusive remedy to either: (i) terminate this Agreement, in which case the
Earnest Money shall be returned to Purchaser, and neither party will have any
further rights or obligations pursuant to this Agreement, other than as set
forth herein with respect to rights or obligations that survive termination; or
(ii) waive the unsatisfied objection (which shall thereupon become a Permitted
Exception) and proceed to Closing. Any exception to title not objected to by
Purchaser in the manner and within the time period specified in this Section 5.1
shall be deemed accepted by Purchaser. The phrase “Permitted Exceptions” means
those exceptions to title set forth in the Commitments or Surveys and that have
been accepted or deemed accepted by Purchaser, other than Seller Mandatory Cure
Items. The failure of Seller to deliver a Commitment or a Survey satisfying the
requirements of this Section 5.1 will not under any circumstances extend the
period for review of the Commitments or Surveys beyond the Due Diligence Period,
and Purchaser's sole and exclusive remedy for Seller's failure, if any, shall be
to terminate this Agreement before the expiration of the Due Diligence Period,
in which case the Earnest Money shall be returned to Purchaser. Purchaser shall
notify Seller in writing of any failure of any Commitment or Survey to satisfy
the requirements of this Section 5.1 within five (5) days after the Commitments
and Surveys are received by Purchaser, and if Purchaser fails to do so, then
they shall be deemed to satisfy these requirements. If Purchaser obtains a New
Survey and the New Survey shows exceptions not previously shown on the
applicable Survey, or if after the issuance of the Title Commitment, the Title
Company updates the Title Commitment to include a new exception (“New
Exceptions”), Seller shall be obligated to cure such New Exceptions to the
extent any constitute Seller Mandatory Cure Items, otherwise such New Exceptions
shall be deemed Permitted Exceptions unless they are a result of a Seller breach
under Section 6.1.3 hereof.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

9

 

 

5.2   Intentionally Omitted.

 

5.3   Delivery of Title Policy at Closing. In the event that the Title Company
does not unconditionally commit at Closing to issue to Purchaser an owner’s
title policy insuring Purchaser’s indefeasible fee simple title to the Real
Property in the amount of the Purchase Price, subject only to the Permitted
Exceptions (the “Title Policy“), then Purchaser shall have the right, as its
sole and exclusive remedy, to terminate this Agreement, in which case the
Earnest Money shall be immediately returned to Purchaser and the parties hereto
shall have no further rights or obligations, other than those that by their
terms survive the termination of this Agreement.

 

Article 6
Operations and Risk of Loss

 

6.1   Ongoing Covenants and Operations. From the Effective Date through Closing:

 

6.1.1          New Contracts. Seller will not amend any existing contract or
agreement or enter into any new contract or agreement that will be an obligation
of, or binding upon, Purchaser or the Property (as opposed to being binding upon
Seller only) subsequent to Closing. Seller may enter into any contracts desired
by Seller in the ordinary course of business that will not be binding upon
Purchaser or the Property after Closing. On or prior to Closing, Seller shall
either terminate or assign all contracts (including any Service Contracts) that
would be binding upon Purchaser or the Property pursuant to the terms and
conditions of Section 7.9, which terminations or assignments shall be effective
no later than Closing. Seller shall pay all termination costs, liquidated
damages, fees and/or expenses related thereto, it being understood and agreed
that Purchaser shall have no liability or obligations for any Service Contracts.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

10

 

 

6.1.2          Maintenance of Improvements; Tangible Personal Property. Subject
to Sections 6.2 and 6.3, Seller shall operate and manage the Property in
substantially the same manner consistent with the Seller’s maintenance of the
Improvements during Seller’s period of ownership, provided, that, Seller shall
not be obligated to make any capital repairs or replacements to the extent
Seller does not deem such repairs or replacements necessary in its discretion.
Seller makes no representation or warranty regarding the condition or state of
repair of any or all of the Improvements, the Tangible Personal Property, or the
Excluded Tangible Personal Property located at or on the Property and undertakes
no obligation regarding the security of the Excluded Tangible Personal Property
from and after the date of this Agreement, and Seller expressly disclaims any
obligation to repair or replace any of the Excluded Tangible Personal Property
following destruction or loss of any nature. Seller shall promptly (and in any
event prior to Closing), deliver any Post-Effective Date Citation (as
hereinafter defined) obtained by Seller. The parties acknowledge and agree that
the terms and conditions of this paragraph shall not modify the post-Closing
obligations of the parties as set forth in the Leases. Seller will not remove
any Tangible Personal Property except as may be required for necessary repair or
replacement (in Seller’s discretion), and replacement shall be of equal or
better quality as the removed item of Tangible Personal Property.

 

6.1.3          No Assignment or Disposition. Seller shall not sell, assign,
alienate, lien, encumber or otherwise transfer all or any part of the Property
or any interest therein. Without limitation of the foregoing, Seller shall not
grant any easement, right of way, restriction, covenant or other comparable
right affecting the Land or the Improvements without obtaining Purchaser’s prior
written consent (such consent not to be unreasonably withheld, condition or
delayed). Except for this Agreement, Seller shall not enter into any agreement,
arrangement or understanding for the sale of the Property, whether conditional
or otherwise. Seller shall not apply for or consent to any change or
modification with respect to the zoning development or use of any portion of the
Property without Purchaser’s prior written consent, which consent may be
withheld in Purchase’s sole and absolute discretion.

 

6.2   Damage. If, prior to Closing, the Property is damaged by fire or other
casualty, Seller shall, in consultation with its insurance adjuster or other
representative, reasonably estimate the cost to repair and the time required to
complete repairs and will provide Purchaser written notice of such estimation
(the “Casualty Notice”) as soon as reasonably possible after the occurrence of
the casualty.

 

6.2.1          Material. In the event of any Material Damage (as hereinafter
defined) to or destruction of the Property or any portion thereof prior to
Closing, either Seller or Purchaser may, at its option, terminate this Agreement
by delivering written notice to the other on or before the expiration of ten
(10) days after the date Seller delivers the Casualty Notice to Purchaser (and
if necessary, the Closing Date shall be extended to give the parties the full
ten (10) day period to make such election and to obtain insurance settlement
agreements with Seller’s insurers and agree upon repair and restoration of the
affected Property). Upon any such termination, the Earnest Money shall be
returned to Purchaser and the parties hereto shall have no further rights or
obligations hereunder, other than those that by their terms survive the
termination of this Agreement. If neither Seller nor Purchaser so terminates
this Agreement within said ten (10) day period, then the parties shall be deemed
to have waived the right to terminate under this Section 6.2.1 and the parties
shall proceed under this Agreement and close on schedule (subject to extension
of Closing as provided above), and as of Closing, to the extent permitted by the
terms of the applicable policies, Seller shall assign to Purchaser, without
representation or warranty by or recourse against Seller, all of Seller’s rights
in and to any resulting insurance proceeds (including any rent loss insurance
applicable to any period on and after the Closing Date) due Seller as a result
of such damage or destruction (or if such have not been awarded, all of Seller’s
right, title and interest to any claims and proceeds Seller has with respect to
any casualty insurance policies relating to the Property in question, to the
extent the same are assignable pursuant to the terms of the applicable policies;
provided, however, should Seller’s insurance policy prohibit the assignment of
such proceeds, Seller shall provide Buyer with a credit to the Purchase Price at
Closing in an amount equal to the proceeds.) and Purchaser shall assume full
responsibility for all needed repairs, and Purchaser shall receive a credit at
Closing for any deductible or self-insured amount under such insurance policies
(“Insurance Proceeds Assignment”). For the purposes of this Agreement, “Material
Damage” and “Materially Damaged” means damage that, in the opinion of an
architect or other third-party contractor selected by Seller and reasonably
approved by Purchaser, exceeds (or is estimated to exceed) $1,500,000.00 to
repair.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

11

 

 

6.2.2          Not Material. If a casualty occurs but the Real Property is not
Materially Damaged, then neither Purchaser nor Seller shall have the right to
terminate this Agreement pursuant to this Section 6.2 (a “Non-Material
Pre-Closing Casualty”), and subject to an Insurance Proceeds Assignment to
Purchaser, the parties shall proceed to Closing subject to the terms of this
Agreement, and such damage shall be restored by Purchaser post-Closing pursuant
to (but only to the extent required by) the terms and conditions of the Leases,
and Purchaser shall reasonably cooperate with Seller, in its capacity as tenant
under the Leases, regarding such restoration, pursuant to the terms and
conditions of the Leases. Notwithstanding the foregoing, if the insurance
proceeds to be assigned pursuant to the Insurance Proceeds Assignment are less
than the cost to repair the damage, in the opinion of an architect or other
third-party contractor selected by Seller and reasonably approved by Purchaser,
Purchaser shall receive a credit at Closing in the amount of such difference.
The provisions of this Section 6.2.2 shall survive Closing.

 

6.3   Condemnation. If proceedings in eminent domain are instituted with respect
to the Property or any portion thereof that would materially and adversely
interfere with the present use of the Real Property as currently utilized by
Seller, or if such proceedings are instituted with respect to any portion of the
Improvements, Purchaser may, at its option, by written notice to Seller given
within ten (10) days after Seller notifies Purchaser in writing of such
proceedings (and if necessary the Closing Date shall be automatically extended
to give Purchaser the full ten (10) day period to make such election), either:
(a) terminate this Agreement, in which case the Earnest Money shall be
immediately returned to Purchaser and the parties hereto shall have no further
rights or obligations, other than those that by their terms survive the
termination of this Agreement, or (b) proceed under this Agreement, in which
event Seller shall, at the Closing, assign to Purchaser its entire right, title
and interest in and to any condemnation award, and Purchaser shall have the sole
right after the Closing to negotiate and otherwise deal with the condemning
authority in respect of such matter. If Purchaser does not give Seller written
notice of its election within the time required above, then Purchaser shall be
deemed to have elected option (b) above.

 

6.4   Insurance Policies. Seller shall, at its sole cost and expense, use
commercially reasonably efforts to maintain Seller’s existing insurance coverage
with respect to the Property to the extent such policies remain available at
similar rates as of the date hereof.

 

6.5   Leaseback. Commencing on the Closing Date, Purchaser, as landlord, shall
lease to, as applicable, Tuesday Morning Partners, Ltd. and Tuesday Morning,
Inc. (collectively, “Tuesday Tenant”), as tenant, all of the Land and
Improvements pursuant to leases in substantially the form attached hereto as
Exhibits E-1 and E-2 (the “Leases”). In the event of any conflict or
inconsistency between the terms of this Agreement and the terms of either of the
Leases, the terms of the applicable Lease shall prevail. The parties acknowledge
and agree that the Leases attached hereto represent the final material monetary
terms of such Leases (including all provisions relating to lease term and rent
payable thereunder) but certain non-monetary provisions may be revised prior to
Closing to a de minimus extent.

 

6.6   Notices. Seller covenants and agrees with Purchaser from the date hereof
and until the Closing, to promptly notify Purchaser of all written notices
received or sent by Seller relating to (i) violations of laws, ordinances,
orders, directives, regulations or requirements issued by, filed by or served
by, any governmental authority against or affecting any of the Property; or (ii)
any default or violation under any of the Permitted Exceptions.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

12

 

 

Article 7
Closing

 

7.1   Closing. The consummation of the transaction contemplated herein
(“Closing”) shall occur on the Closing Date by mail at the offices of Escrow
Agent (or such other location as may be mutually agreed upon by Seller and
Purchaser). Funds shall be deposited into and held by Escrow Agent in a closing
escrow account with a bank satisfactory to Purchaser and Seller. Upon
satisfaction or completion of all closing conditions and deliveries, the parties
shall direct Escrow Agent to immediately record and deliver the closing
documents to the appropriate parties and make disbursements according to the
closing statements executed by Seller and Purchaser.

 

7.2   Conditions to Parties’ Obligation to Close. In addition to all other
conditions set forth herein, the obligation of Seller, on the one hand, and
Purchaser, on the other hand, to consummate the transactions contemplated
hereunder are conditioned upon the following:

 

7.2.1          Representations and Warranties and Covenants. The other party’s
representations and warranties contained herein shall be true and correct in all
material respects as of the Effective Date and the Closing Date as if
specifically remade at Closing.

 

7.2.2          Covenants and Deliveries. As of the Closing Date, the other party
shall have performed its obligations and covenants hereunder in all material
respects and tendered all deliveries to be made by such party at Closing.

 

7.2.3          Actions, Suits, etc. Other than in connection with the Bankruptcy
Proceeding, there shall exist no existing, pending or threatened in writing
actions, suits, arbitrations, claims, attachments, proceedings, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, against the other party that would materially and adversely affect
that party’s ability to perform its obligations under this Agreement.

 

7.2.4          Title Policy. As a condition benefitting Purchaser only, the
Title Company’s shall be unconditionally committed to issuing the Title Policy
pursuant to Section 5.3.

 

7.2.5          Bankruptcy Court Sale Approval. Seller and certain affiliates are
currently debtors and debtors-in-possession in Chapter 11 proceedings in The
United States Bankruptcy Court for the Northern District of Texas (the
“Bankruptcy Court”) under the consolidated case styled In re: Tuesday Morning
Corporation, et al., Case number 20-31476-HDH-11 (the “Bankruptcy Proceeding”).
Seller’s and Buyer’s obligations hereunder are subject to (i) no order or
determination being entered or withheld by the Bankruptcy Court that would
materially impede the Closing from occurring by the Closing Date (“Court
Intervention”); (ii) entry of a final, non-appealable order (a “Plan
Confirmation Order”) confirming a plan of reorganization proposed by the Seller
(the “Reorganization Plan”) and (iii) the effectiveness of the Reorganization
Plan.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

13

 

 

If any condition to a party’s obligation to proceed with the Closing hereunder
(such party, the “Performing Party”) has not been satisfied as of the Closing
Date (or such earlier date as is provided herein, and in the case of a Court
Intervention, the date of the occurrence of Court Intervention), subject to any
applicable notice and cure periods provided in Sections 10.1 and 10.2, such
party may, in its sole discretion, terminate this Agreement by delivering
written notice (a “Condition Failure Termination Notice”) to the other party
(the “Non-Performing Party”) on or before the Closing Date (or such earlier date
as is provided herein), or elect to close (or to permit any such earlier
termination deadline to pass) notwithstanding the non-satisfaction of such
condition, in which event the Performing Party shall be deemed to have waived
any such condition (provided that neither party may waive the condition set
forth in Section 7.2.5 hereof). In the event the Performing Party elects to
close (or to permit any such earlier termination deadline to pass),
notwithstanding the non-satisfaction of such condition, the Performing Party
shall be deemed to have waived said condition, and there shall be no liability
on the part of the Non-Performing Party for breaches of representations and
warranties of which the Performing Party had knowledge prior to Closing. The
failure of a condition precedent to Closing that has not been satisfied on or
prior to Closing through no act or omission of the Non-Performing Party in
violation of this Agreement shall not be a default hereunder but shall not limit
the right of the Performing Party to terminate this Agreement as a result
thereof. Further, should the Performing Party elect to terminate this Agreement
pursuant to this paragraph, the Performing Party shall be entitled to the
Earnest Money and Independent Consideration upon termination; provided, however,
if the conditions set forth in Section 7.2.5 are not satisfied and the Agreement
is terminated, Buyer shall be entitled to the Earnest Money and Independent
Consideration.

 

Notwithstanding the foregoing, in the event that, (a) prior to the Closing,
Purchaser obtains actual knowledge of information (from whatever source,
including, without limitation, as a result of Purchaser’s due diligence tests,
investigations and inspections of the Property, by disclosure from Seller or
Seller’s agents and employees or otherwise) that renders any of Seller’s
representations and warranties materially untrue or incorrect, and (b) Purchaser
promptly delivers a Condition Failure Termination Notice as a result thereof,
then Seller shall have seven (7) Business Days following receipt of such
Condition Failure Termination Notice (“Seller’s Cure Period”) in which to take
all steps necessary in Seller’s reasonable estimation to render such
representations and warranties materially true and correct; provided, however,
the Seller’s Cure Period shall automatically extend the Closing Date to the
extent such Condition Failure Termination Notice is sent less than seven (7)
Business Days prior to the scheduled Closing Date. If, prior to the expiration
of Seller’s Cure Period, Seller causes such representations to be materially
true and correct, then Purchaser’s Condition Failure Termination Notice shall be
deemed null and void. However, if, as of the expiration of Seller’s Cure Period,
Seller has not rendered such representation and warranty materially true and
correct, this Agreement shall terminate as set forth above and Purchaser shall
be entitled to the Earnest Money and Independent Consideration.

 

7.3   Seller’s Deliveries in Escrow. As of or prior to the Closing Date, Seller
shall deliver in escrow to Escrow Agent the following:

 

7.3.1          Deed. A special warranty deed (or, at Purchaser’s request,
multiple deeds) in the form of Exhibit B hereto, executed and acknowledged by
Seller, conveying to Purchaser Seller’s fee interest in the Real Property (the
“Deed”);

 

7.3.2          Bill of Sale and Assignment Agreement. A Bill of Sale and
Assignment Agreement in the form of Exhibit C hereto (the “Assignment”),
executed by Seller vesting in Purchaser Seller’s right, title and interest in
and to the property described therein free of any claims, except for the
Permitted Exceptions to the extent applicable;

 

7.3.3          FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
in the form of Exhibit D hereto executed by Seller;

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

14

 

 

7.3.4          Authority. Evidence of the existence, organization and authority
of Seller and of the authority of the persons executing documents on behalf of
Seller reasonably satisfactory to the underwriter for the Title Policy, it being
expressly agreed that Seller shall have no obligation to provide evidence of
authority to Purchaser;

 

7.3.5          Leases. The Leases, executed by Tuesday Morning Partners, Ltd.
and Tuesday Morning, Inc., as applicable; and

 

7.3.6          Owner’s Affidavit. An Owner’s Affidavit and a “gap” affidavit,
each, executed by Seller and in form and substance reasonably acceptable to the
Title Company and Seller, but sufficient to delete the standard exceptions to
the Title Policy, including, without limitation, the exceptions related to the
parties in possession (other than the Leases) and mechanic’s liens.

 

7.3.7          Additional Documents. Any additional documents that Escrow Agent
or the Title Company may reasonably require for the proper consummation of the
transactions contemplated by this Agreement (provided, however, no such
additional document shall expand any obligation, covenant, representation or
warranty of Seller or result in any new or additional obligation, covenant,
representation or warranty of Seller under this Agreement beyond those expressly
set forth in this Agreement).

 

7.4   Purchaser’s Deliveries in Escrow. As of or prior to the Closing Date,
Purchaser shall deliver in escrow to Escrow Agent the following:

 

7.4.1          Bill of Sale, Assignment and Assumption. The Assignment, executed
and acknowledged by Purchaser;

 

7.4.2          Leases. The Leases, each executed by Purchaser; and

 

7.4.3          Additional Documents. Any additional documents that Seller,
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement (provided,
however, no such additional document shall expand any obligation, covenant,
representation or warranty of Purchaser or result in any new or additional
obligation, covenant, representation or warranty of Purchaser under this
Agreement beyond those expressly set forth in this Agreement).

 

7.5   Closing Statements. As of or prior to the Closing Date, Seller and
Purchaser shall deposit with Escrow Agent executed closing statements consistent
with this Agreement in the form required by Escrow Agent.

 

7.6   Purchase Price. At or before 2:30 p.m. (local time at the Real Property)
on the Closing Date, Purchaser shall deliver to Escrow Agent the Purchase Price,
less the Earnest Money that is applied to the Purchase Price, plus or minus
applicable prorations, in immediate, same-day U.S. federal funds wired for
credit into Escrow Agent’s escrow account, which funds must be delivered in a
manner to permit Escrow Agent to deliver good funds to Seller or its designee on
the Closing Date (and, if requested by Seller, by wire transfer); in the event
that Escrow Agent is unable to deliver good funds to Seller or its designee on
the Closing Date, then the closing statements and related prorations will be
revised as necessary.

 

7.7   Possession. Seller shall deliver possession of the Property to Purchaser
at the Closing subject only to the Permitted Exceptions and the Leases.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

15

 

 

 

7.8   Delivery of Books and Records. On or prior to Closing, Seller shall
deliver to the offices of Purchaser’s property manager or to the Real Property
to the extent in Seller’s possession or control: copies of all maintenance
records; plans and specifications; licenses, permits and certificates of
occupancy; provided, however, the originals of the same shall not be delivered
until termination of the applicable Lease.

 

7.9 Termination or Assignment of Service Contracts. Seller shall deliver to
Purchaser termination agreements or other evidence reasonably satisfactory to
Purchaser that all Service Contracts that would be binding upon Purchaser or the
Property have either been (a) terminated effective upon the Closing Date and at
no cost to Purchaser or to the Property, or (b) assigned to Seller in its
capacity as tenant of the Property or amended to clarify that Seller is no
longer the owner of the Property, without any right of the applicable service
provider to make a claim against Purchaser or the Property.

 

Article 8
Prorations, Deposits, Commissions

 

8.1   Prorations. At Closing, the following items shall be prorated as of the
Closing Date on an accrual basis with all items of income and expense for the
Property (a) accruing prior to the Closing Date being borne by Seller, and (b)
accruing from and after (and including) the Closing Date being borne by
Purchaser: fees and assessments; real and personal ad valorem taxes (“Taxes”);
and any assessments by private covenant for the then-current calendar year of
Closing. Specifically, the following shall apply to such prorations:

 

8.1.1          Taxes. If Taxes for the year of Closing are not known or cannot
be reasonably estimated, Taxes shall be prorated based on Taxes for the year
prior to Closing and shall be promptly reprorated upon the issuance of final
bills therefor. Prior to or at Closing, Seller shall pay or have paid all Taxes
that are due and payable prior to or on the Closing Date.

 

8.1.2          Other Costs. As a result of the Leases, utilities, operating
expenses, and other such amounts attributable to the Improvements shall not be
prorated, and Seller shall remain liable for such amounts to the extent accruing
during the term of the Leases (or prior to Closing).

 

8.2   Closing Costs. Closing costs shall be allocated between Seller and
Purchaser in accordance with Section 1.2.

 

8.3   Final Adjustment After Closing. If final bills are not available or cannot
be issued prior to Closing for any item being prorated under Section 8.1, then
Purchaser and Seller agree to allocate such items on a fair and equitable basis
as soon as such bills are available, final adjustment to be made as soon as
reasonably possible after the Closing. Payments in connection with the final
adjustment shall be due within thirty (30) days of written notice. All such
rights and obligations shall survive the Closing.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

16

 

 

8.4   Commissions. Seller shall be responsible to the Broker for a real estate
sales commission at Closing (but only in the event of a Closing in strict
accordance with this Agreement) pursuant to a separate written agreement
(including any real estate sales commission applicable to the Leases, if any).
Purchaser shall be responsible to Lee & Associates for a real estate sales
commission at Closing pursuant to a separate written agreement. Under no
circumstances shall Seller owe a commission or other compensation directly to
any other broker, agent or person. Other than as stated above in this
Section 8.4, Seller and Purchaser each represent and warrant to the other that
no real estate brokerage commission is payable to any person or entity in
connection with the transaction contemplated hereby or the Leases, and each
agrees to and does hereby indemnify and hold the other harmless against the
payment of any commission to any other person or entity claiming by, through or
under Seller or Purchaser, as applicable. This indemnification shall extend to
any and all claims, liabilities, costs and expenses (including reasonable
attorneys’ fees and litigation costs) arising as a result of such claims and
shall survive the Closing.

 

Article 9
Representations and Warranties

 

9.1   Seller’s Representations and Warranties. Seller represents and warrants to
Purchaser as of the Effective Date and as of the Closing Date that:

 

9.1.1          Organization and Authority. Seller has been duly organized, is
validly existing, and is in good standing in the state in which it was formed.
Subject to entry of the Plan Confirmation Order and effectiveness of the
Reorganization Plan, this Agreement has been, and all of the documents to be
delivered by Seller at the Closing will be, authorized and executed and
constitute, or will constitute, as appropriate, the valid and binding obligation
of Seller, enforceable in accordance with their terms.

 

9.1.2          Conflicts and Pending Actions. To Seller’s knowledge, there is no
agreement to which Seller is a party or that is binding on Seller under which
Seller will be in default as a result of entering into or consummating this
Agreement. To Seller’s knowledge, other than in connection with the Bankruptcy
Proceeding there is no litigation, action or proceeding pending either (a)
against Seller, which challenges or impairs Seller’s ability to execute or
perform its obligations under this Agreement, or (b) relating to the Property by
reason of Seller’s ownership or operation of the Property or any portion
thereof. Except for those rights previously disclosed to Purchaser, no rights of
first offer or rights of first refusal regarding the Property exist under the
organizational documents of Seller or under any agreement by which Seller or the
Property is or may be bound or affected.

 

9.1.3          Condemnation. Except as may be reflected by the Property
Documents or otherwise disclosed in writing to Purchaser, Seller has received no
written notice from any governmental authority having jurisdiction over the Real
Property that it is presently the subject of any condemnation or similar
proceeding.

 

9.1.4          Prohibited Persons and Transactions. Seller represents and
warrants to Purchaser that Seller is currently in compliance with and shall at
all times during the term of this Agreement (including any extension thereof)
remain in compliance with the regulations of the Office of Foreign Asset Control
(“OFAC”) of the Department of the Treasury (including those named on OFAC’s
Specially Designated and Blocked Persons List) and any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action relating thereto.

 

9.1.5          Compliance With Laws. Seller has not received written notice from
any governmental or quasi-governmental authority of any violations of any laws
affecting or applicable to any or all of the Property which remain uncured.

 

9.1.6          Employees. There is no bargaining unit or union contract relating
to any employees of Seller.

 

9.1.7          Intentionally Omitted.  

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

17

 

 

9.1.8          ERISA. Neither the execution and delivery of this Agreement nor
any of the transactions contemplated thereunder involve any transaction that is
subject to the prohibitions of Section 406 of ERISA or in connection with which
a tax could be imposed pursuant to Section 4975(c) of the Code.

 

9.1.9          Property Documents. To Seller’s knowledge, the Property Documents
delivered to Purchaser pursuant to Section 4.1 are correct copies, in all
material respects, of the Property Documents in Seller’s possession and control.

 

9.1.10      Tax Appeals. Except as disclosed in the Property Documents, Seller
has not (a) submitted an application for the creation of any special taxing
district affecting the Property, or annexation thereby, or inclusion therein, or
(b) received written notice that any governmental or quasi-governmental agency
or authority intends to impose or increase any special or other assessment
against the Property, or any part thereof, including assessments attributable to
revaluations of the Property. Except as disclosed in the Property Documents,
there is no ongoing appeal with respect to taxes or special assessments on the
Property for any year, and any consultants engaged to perform work with respect
to appeals of taxes or special assessments on the Property have been paid in
full.

 

9.1.11      Leases. Other than the Permitted Exceptions and the Leases, there
are no leases, licenses or occupancy agreements binding upon the Property.

 

9.1.12      Hazardous Substances. Except as disclosed in the Property Documents,
to Seller’s knowledge, Seller has not received any written notice from any
governmental agency having jurisdiction over the Property advising Seller that
the Property is in violation of any Environmental Laws.

 

9.1.13      No Liens or Encumbrances. Seller's ownership of the Property does
not include any tenants-in-common ownership, undivided interest ownership nor
fractional ownership interest.

 

9.1.14      Service Contracts. To Seller’s knowledge, the Service Contracts
delivered to Purchaser as a part of the Property Documents are the only Service
Contracts currently affecting the Property. Seller has not received nor given
any written notice of material default under any Service Contract with respect
to a material default that remains uncured as of the date hereof. To Seller’s
knowledge, the list of Service Contracts is attached hereto as Exhibit F, is
true, correct and complete in all material respects as of the date of this
Agreement.

 

9.2   Purchaser’s Representations and Warranties. Purchaser represents and
warrants to Seller that:

 

9.2.1          Organization and Authority. Purchaser has been duly organized, is
validly existing, and is in good standing in jurisdiction in which it was
formed. Purchaser has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at the Closing will be,
authorized and properly executed and constitute, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.

 

9.2.2          Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is
in conflict with this Agreement. There is no action or proceeding pending or, to
Purchaser’s knowledge, threatened against Purchaser which challenges or impairs
Purchaser’s ability to execute or perform its obligations under this Agreement.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

18

 

 

9.2.3          Prohibited Persons and Transactions. Purchaser represents and
warrants to Seller that Purchaser is currently in compliance with and shall at
all times during the term of this Agreement (including any extension thereof)
remain in compliance with the regulations of OFAC (including those named on
OFAC’s Specially Designated and Blocked Persons List) and any statute, executive
order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action relating thereto.

 

9.3   Survival of Representations and Warranties. The representations and
warranties set forth in this Article 9 are made as of the Effective Date and are
remade as of the Closing Date and shall not be deemed to be merged into or
waived by the instruments of Closing, but shall survive the Closing for a period
of nine (9) months (the “Survival Period”). Terms such as “to Seller’s
knowledge,” “to the best of Seller’s knowledge” or like phrases mean the actual
present and conscious awareness or knowledge of Phillip D. Hixon, the Executive
Vice President of Store Operations for Seller, with oversight responsibility for
all material matters relating hereto (“Seller’s Representative”), without any
duty of inquiry or investigation; provided that so qualifying Seller’s knowledge
shall in no event give rise to any personal liability on the part of Seller’s
Representative, or any officer or employee of Seller, on account of any breach
of any representation or warranty made by Seller herein. Terms such as “to
Purchaser’s knowledge,” “to the best of Purchaser’s knowledge” or like phrases
mean the actual present and conscious awareness or knowledge of Brady Scott
(“Purchaser ‘s Representative”), without any duty of inquiry or investigation;
provided that so qualifying Purchaser’s knowledge shall in no event give rise to
any personal liability on the part of Purchaser’s Representative, or any officer
or employee of Purchaser, on account of any breach of any representation or
warranty made by Purchaser herein. Said terms do not include constructive
knowledge, imputed knowledge, or knowledge Seller or Purchaser, as applicable,
or such persons do not have but could have obtained through further
investigation or inquiry. Purchaser shall be deemed to have knowledge of all
matters contained in the Property Documents or any final third-party reports
obtained by Purchaser. No broker, agent, or party other than Seller is
authorized to make any representation or warranty for or on behalf of Seller.
Each party shall have the right to bring an action against the other on the
breach of a representation or warranty or covenant hereunder or in the documents
delivered by Seller at the Closing, but only on the following conditions:
(1) the party bringing the action for breach first learns of the breach after
and gives written notice of such breach to the other party before the end of the
Survival Period and files such action on or before the expiration of the
Survival Period, and (2) neither party shall have the right to bring a cause of
action for a breach of a representation or warranty or covenant unless the
damage to such party on account of such breach (individually or when combined
with damages from other breaches) equals or exceeds $50,000.00 (the “Floor”), in
which event the excess amount of such claims above the Floor shall be
actionable, subject to the limitations of Seller’s liability set forth in this
Section 9.3. Neither party shall have any liability after Closing for the breach
of a representation or warranty or covenant hereunder of which the other party
hereto had knowledge prior to Closing. Notwithstanding any other provision of
this Agreement, any agreement contemplated by this Agreement, or any rights
which Purchaser might otherwise have at law, equity, or by statute, whether
based on contract or some other claim, Purchaser agrees that any liability of
Seller to Purchaser will be limited to an amount equal to $750,000.00 (the
“Cap”). Purchaser agrees that, with respect to any alleged breach of
representations and warranties contained in Article 9 of this Agreement that is
not timely raised by Purchaser to Seller in a written notice prior to the
expiration of the Survival Period (in accordance with the terms of this Section
10.2), the maximum liability of Seller for all such alleged breaches is limited
to $100.00. Notwithstanding anything herein to the contrary, in no event shall
the Floor or the Cap apply to (i) Seller’s obligations under Article 8, (ii)
Seller’s obligations to turn over insurance proceeds, if any, post-Closing,
pursuant to Article 6, or (iii) liability of Seller for Seller’s fraud
(including fraudulent concealment) as finally determined by a court of competent
jurisdiction. Any breach of a representation or warranty or covenant that is
discovered prior to Closing shall be governed by Article 10.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

19

 

 

Article 10
Default and Remedies

 

10.1           Seller’s Remedies. If Purchaser fails to consummate the purchase
of the Property pursuant to this Agreement for any reason except failure by
Seller to perform hereunder, and in each case such default is not cured by the
earlier of the fifth (5th) day after written notice thereof from Seller or the
Closing Date (except no notice shall be required if Purchaser fails to close on
the Closing Date), then Seller shall be entitled, as its sole and exclusive
remedy, to terminate this Agreement and recover the Earnest Money as liquidated
damages and not as penalty, in full satisfaction of claims against Purchaser
hereunder. Seller and Purchaser agree that Seller’s damages resulting from
Purchaser’s default in its obligation to consummate the purchase of the Property
pursuant to the terms and conditions of this Agreement are difficult, if not
impossible, to determine and the Earnest Money is a fair estimate of those
damages which has been agreed to in an effort to cause the amount of such
damages to be certain. In all other events Seller’s remedies shall be limited to
those described in Sections 4.8, 8.4, 10.3 and 10.4 hereof, and nothing
contained herein shall be deemed to limit Purchaser’s indemnity or other
obligations which expressly survive termination of this Agreement.
Notwithstanding the foregoing, in the event Purchaser defaults in any of its
post-closing obligations or any obligations that survive Closing or a
termination of this Agreement, Seller shall have all of its remedies at law and
in equity on account of such default. IN NO EVENT SHALL PURCHASER'S DIRECT OR
INDIRECT PARTNERS, SHAREHOLDERS, MEMBERS, OWNERS OR AFFILIATES, ANY OFFICER,
DIRECTOR, MANAGER, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR
CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR
OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY,
WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.

 

10.2           Purchaser’s Remedies. If Seller fails to consummate the sale of
the Property pursuant to this Agreement or otherwise defaults on its obligations
hereunder at or prior to Closing for any reason except failure by Purchaser to
perform hereunder and in each case such default is not cured by the earlier of
the fifth (5th) day after written notice thereof from Purchaser or the Closing
Date (except no notice shall be required if Seller fails to close on the Closing
Date), Purchaser may elect, as its sole remedies, either to (a) terminate this
Agreement by giving Seller timely written notice of such election prior to or at
Closing and recover the Earnest Money and the Independent Consideration, in
which event Seller shall promptly reimburse Purchaser in an amount not to exceed
$100,000.00 for any and all reasonable, third party costs actually paid or
incurred by Purchaser to negotiate this Agreement, conduct its due diligence
investigations and otherwise pursue the transactions contemplated hereby
(including, attorneys’ fees, fees of environmental and other consultants, and
accountants’ fees incurred by Purchaser in connection with this Agreement and
any action hereunder or the Property), after receipt of invoices for such costs
(which obligation shall survive any termination of this Agreement), or (b) waive
said failure or breach and proceed to Closing without any reduction in the
Purchase Price.

 

10.3           Attorneys’ Fees. In the event either party hereto employs an
attorney in connection with claims by one party against the other arising from
the operation of this Agreement, the non-prevailing party shall pay the
prevailing party all reasonable fees and expenses, including attorneys’ fees,
incurred in connection with such claims.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

20

 

 

10.4           Other Expenses. If this Agreement is terminated due to the
default of a party, then the defaulting party shall pay any fees or charges due
to Escrow Agent for holding the Earnest Money as well as any escrow cancellation
fees or charges and any fees or charges due to the Title Company for preparation
and/or cancellation of the Title Commitment.

 

IN NO EVENT SHALL SELLER’S OR PURCHASER’S DIRECT OR INDIRECT PARTNERS,
SHAREHOLDERS, OWNERS OR AFFILIATES, OR ANY OFFICER, DIRECTOR, EMPLOYEE OR AGENT
OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF HAVE ANY
LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON CONTRACT, COMMON
LAW, STATUTE, EQUITY OR OTHERWISE.

 

Article 11
Disclaimers, Release and Indemnity

 

11.1           Disclaimers By Seller. it is understood and agreed that Seller
and Seller’s agents or employees have not at any time made and are not now
making, and they specifically disclaim, any other warranties, representations or
guaranties of any kind or character, express or implied, with respect to the
Property, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT
AND ANY DOCUMENT EXECUTED BY SELLER AND DELIVERED TO PURCHASER AT CLOSING,
including, but not limited to, warranties, representations or guaranties as to
(a) matters of title (other than Seller’s special warranty of title to be
contained in the Deed), (b) environmental matters relating to the Property or
any portion thereof, including, without limitation, the presence of Hazardous
Materials in, on, under or in the vicinity of the Property, (c) geological
conditions, including, without limitation, subsidence, subsurface conditions,
water table, underground water reservoirs, limitations regarding the withdrawal
of water, and geologic faults and the resulting damage of past and/or future
faulting, (d) whether, and to the extent to which the Property or any portion
thereof is affected by any stream (surface or underground), body of water,
wetlands, flood prone area, flood plain, floodway or special flood hazard,
(e) drainage, (f) soil conditions, including the existence of instability, past
soil repairs, soil additions or conditions of soil fill, or susceptibility to
landslides, or the sufficiency of any undershoring, (g) the presence of
endangered species or any environmentally sensitive or protected areas,
(h) zoning or building entitlements to which the Property or any portion thereof
may be subject, (i) the availability of any utilities to the Property or any
portion thereof including, without limitation, water, sewage, gas and electric,
(j) usages of adjoining property, (k) access to the Property or any portion
thereof, (l) the value, compliance with the plans and specifications, size,
location, age, use, design, quality, description, suitability, structural
integrity, operation, title to, or physical or financial condition of the
Property or any portion thereof, or any income, expenses, charges, liens,
encumbrances, rights or claims on or affecting or pertaining to the Property or
any part thereof, (m) the condition or use of the Property or compliance of the
Property with any or all past, present or future federal, state or local
ordinances, rules, regulations or laws, building, fire or zoning ordinances,
codes or other similar laws, (n) the existence or non-existence of underground
storage tanks, surface impoundments, or landfills, (o) any other matter
affecting the stability and integrity of the Property, (p) the potential for
further development of the Property, (q) the merchantability of the Property or
fitness of the Property for any particular purpose, (r) the truth, accuracy or
completeness of the Property Documents, (s) tax consequences, or (t) any other
matter or thing with respect to the Property.

 

Purchaser’s signature and acknowledgement of the terms and provisions of this
Section 11.1

  

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

21

 

  

11.2           Sale “As Is, Where Is.” Purchaser acknowledges and agrees that
upon Closing, Seller shall sell and convey to Purchaser and Purchaser shall
accept the Property “AS IS, WHERE IS, WITH ALL FAULTS,” except to the extent
expressly provided otherwise in this Agreement and any document executed by
Seller and delivered to Purchaser at Closing. Further, Purchaser acknowledges
and agrees that Seller shall have no obligation whatsoever to remove, repair or
otherwise account for any Tangible Personal Property located on or at the
Property. Except as expressly set forth in this Agreement, including, without
limitation seller’s representations and warranties set forth herein, and any
document executed by Seller and delivered to Purchaser at Closing, Purchaser has
not relied and will not rely on, and Seller has not made and is not liable for
or bound by, any OTHER express or implied warranties, guarantees, statements,
representations or information pertaining to the Property or relating thereto
(including specifically, without limitation, Property Documents packages
distributed with respect to the Property) made or furnished by Seller, or any
property manager, real estate broker, agent or third party representing or
purporting to represent Seller, to whomever made or given, directly or
indirectly, orally or in writing. Except with respect to any representation or
warranty of seller made hereunder, Purchaser ACKNOWLEDGES that it is relying
solely on its own expertise and that of Purchaser’s consultants in purchasing
the Property and shall make an independent verification of the accuracy of any
documents and information provided by Seller. Purchaser will conduct such
inspections and investigations of the Property as Purchaser deems necessary,
including, but not limited to, the physical and environmental conditions
thereof, and shall rely upon same. Purchaser acknowledges that Seller has
afforded Purchaser a full opportunity to conduct such investigations of the
Property as Purchaser deemed necessary to satisfy itself as to the condition of
the Property and the existence or non-existence or curative action to be taken
with respect to any Hazardous Materials on or discharged from the Property, and
will rely solely upon same and not upon any information provided by or on behalf
of Seller or its agents or employees with respect thereto, other than such
representations, warranties and covenants of Seller as are expressly set forth
in this Agreement and any document executed by Seller and delivered to Purchaser
at Closing. Except with respect to any representation or warranties of seller or
any fraudulent concealment on seller’s part, Upon Closing, Purchaser shall
assume the risk that adverse matters, including, but not limited to, adverse
physical or construction defects or adverse environmental, health or safety
conditions, may not have been revealed by Purchaser’s inspections and
investigations. Purchaser waives any and all rights or remedies it may have or
be entitled to, deriving from disparity in size or from any significant
disparate bargaining position in relation to Seller.

 

  Purchaser’s signature and acknowledgement of the terms and provisions of this
Section 11.2

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

22

 

   

11.3           Seller Released from Liability. Purchaser acknowledges that it
will and has had the opportunity to inspect the Property prior to Closing,
observe its physical characteristics and existing conditions and the opportunity
to conduct such investigation and study on and of the Property and adjacent
areas as Purchaser deems necessary, and Purchaser hereby FOREVER RELEASES AND
DISCHARGES Seller from all responsibility and liability, whether arising before
or after the Effective Date, and liabilities under the Comprehensive
Environmental Response, Compensation and Liability Act Of 1980 (42 U.S.C.
Sections 9601 et seq.), as amended (“CERCLA”), regarding the condition,
valuation, salability or utility of the Property, or its suitability for any
purpose whatsoever (including, but not limited to, with respect to the presence
in the soil, air, structures and surface and subsurface waters, of Hazardous
Materials or other materials or substances that have been or may in the future
be determined to be toxic, hazardous, undesirable or subject to regulation and
that may need to be specially treated, handled and/or removed from the Property
under current or future federal, state and local laws, regulations or guidelines
(collectively, “Environmental Laws”), and any structural and geologic
conditions, subsurface soil and water conditions and solid and hazardous waste
and Hazardous Materials on, under, adjacent to or otherwise affecting the
Property); provided however, that the terms of this sentence (and this
paragraph) shall not apply to Seller’s duties, liabilities and obligations,
solely as tenant under the Leases, accruing from and after Closing pursuant to
the Leases. Purchaser further hereby WAIVES (and by Closing this transaction
will be deemed to have WAIVED) any and all objections and complaints (including,
but not limited to, federal, state and local statutory and common law based
actions, and any private right of action under any federal, state or local laws,
regulations or guidelines to which the Property is or may be subject, including,
but not limited to, CERCLA) concerning the physical characteristics and any
existing conditions of the Property, whether arising before or after the
Effective Date; provided however, that the terms of this sentence (and this
paragraph) shall not apply to Seller’s duties, liabilities and obligations,
solely as tenant under the Leases, accruing from and after Closing pursuant to
the Leases. Purchaser further hereby assumes the risk of changes in applicable
laws and regulations relating to past, present and future environmental
conditions on the Property and the risk that adverse physical characteristics
and conditions, including, without limitation, the presence of Hazardous
Materials or other contaminants, may not have been revealed by its
investigation; provided however, that the terms of this sentence (and this
paragraph) shall not apply to Seller’s duties, liabilities and obligations,
solely as tenant under the Leases, accruing from and after Closing pursuant to
the Leases. Notwithstanding anything in this Agreement to the contrary, (a) if
Purchaser is named as a party in any litigation or investigation brought by a
third party (including a governmental or quasi-governmental entity) unrelated to
Purchaser and Seller is not so named, then Purchaser may, to the extent
permitted by law, interplead or implead Seller in such action so long as no
claim of contribution or monetary relief is made by Purchaser against Seller;
provided, however, that prior to the expiration of the Survival Period,
Purchaser may bring claims in accordance with Section 9.3 hereof, (b) the
release described in this paragraph above applies to Purchaser and its
successors and assigns only, and does not bind any third party; and (c) the
terms of this paragraph shall not preclude Purchaser from raising in defense of
any third party claims made against the Property or Purchaser after Closing
which relate to conditions first existing, or actions taken, during the period
of Seller’s ownership of the Property, the fact that Purchaser was not the owner
of the Property at the time such third party claim arose so long as no claim of
contribution or monetary relief is made by Purchaser against Seller; provided
however, that in no event shall this sentence (or this paragraph) be construed
to waive, modify or limit any of (i) Purchaser’s rights and remedies under the
Leases with respect to matters arising from or after Closing, or (ii) Seller’s
duties, liabilities and obligations, under the Leases to the extent accruing
from and after Closing. Notwithstanding any provision contained in this section
to the contrary, this Section 11.3 shall not apply to any representation or
warranty of Seller made in this Agreement or any other document executed and
delivered by Seller at Closing.

  

  Purchaser’s signature and acknowledgement of the terms and provisions of this
Section 11.3

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

23

 

  

11.4           “Hazardous Materials” Defined. For purposes hereof, “Hazardous
Materials” means “Hazardous Material,” “Hazardous Substance,” “Pollutant or
Contaminant,” and “Petroleum” and “Natural Gas Liquids,” as those terms are
defined or used in Section 101 of CERCLA, and any other substances regulated
because of their effect or potential effect on public health and the
environment, including, without limitation, PCBs, lead paint, asbestos, urea
formaldehyde, radioactive materials, putrescible materials, and infectious
materials.

 

11.5           Survival. The terms and conditions of this Article 11 shall
expressly survive the Closing and shall not merge with the provisions of any
closing documents.

 

Purchaser acknowledges and agrees that the disclaimers and other agreements set
forth herein are an integral part of this Agreement and that Seller would not
have agreed to sell the Property to Purchaser for the Purchase Price without the
disclaimers and other agreements set forth above.

 

Article 12
Miscellaneous

 

12.1           Parties Bound; Assignment. This Agreement, and the terms,
covenants, and conditions herein contained, shall inure to the benefit of and be
binding upon the heirs, personal representatives, successors, and assigns of
each of the parties hereto. Purchaser may assign its rights under this Agreement
without the consent of Seller upon the following conditions: (a) the assignee of
Purchaser must be (i) an entity controlling, controlled by, or under common
control with Purchaser (a “Purchaser Control Entity”), or (ii) any entity in
which one or more Purchaser Controlled Entities directly or indirectly is the
general partner (or similar managing partner, member or manager) or owns more
than 50% of the economic interests of such entity, (b) all of the Earnest Money
must have been delivered in accordance herewith, (c) the assignee of Purchaser
shall assume all obligations of Purchaser hereunder, but Purchaser shall remain
primarily liable for the performance of Purchaser’s obligations, and (d) a copy
of the fully executed written assignment and assumption agreement shall be
delivered to Seller at Closing.

 

12.2           Headings. The article, section, subsection, paragraph and/or
other headings of this Agreement are for convenience only and in no way limit or
enlarge the scope or meaning of the language hereof.

 

12.3           Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative. The failure by either party to enforce
against the other any term or provision of this Agreement shall not be deemed to
be a waiver of such party’s right to enforce against the other party the same or
any other such term or provision in the future.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

24

 

 

12.4           Governing Law; Jurisdiction; Venue. This Agreement shall, in all
respects, be governed, construed, applied, and enforced in accordance with the
law of the state in which the Real Property is located. EACH OF PURCHASER AND
SELLER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS, AND IRREVOCABLY
AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER DOCUMENTS TO BE DELIVERED BY PURCHASER AND SELLER
HEREUNDER SHALL BE LITIGATED EXCLUSIVELY IN SUCH COURTS. EACH OF PURCHASER AND
SELLER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS OR ANY OTHER SIMILAR
DEFENSE TO THE JURISDICTION OR VENUE OF SAID COURTS.

 

12.5           Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing (other than any unfulfilled closing conditions which
have been waived or deemed waived by the other party) shall survive the Closing
and shall not be deemed to be merged into or waived by the instruments of
Closing.

 

12.6           Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all other prior agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought. All Exhibits hereto are incorporated herein by this
reference for all purposes.

 

12.7           Time. Time is of the essence in the performance of this
Agreement.

 

12.8           Confidentiality; Press Releases. Purchaser shall make no public
announcement or disclosure of any information related to this Agreement to
outside brokers or third parties, prior to Closing, without the prior written
specific consent of Seller; provided, however, that Purchaser may, subject to
the provisions of Section 4.6, make disclosure of this Agreement to its
Permitted Outside Parties as necessary to perform its obligations hereunder and
as may be required under laws or regulations applicable to Purchaser. It is
understood and agreed that money damages may not be a sufficient remedy for any
breach of this Section and that the Seller shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach. Purchaser further agrees not to raise, as a defense or objection to the
request or granting of such relief, that any breach of this Section is or would
be compensable by an award of money damages, and Purchaser agrees to waive any
requirement for the security or posting of any bond in connection with such
remedy.  Such remedy shall not be deemed to be the exclusive remedy for breach
of this Section but shall be in addition to all other remedies available at law
or equity to Seller.  Purchaser also agrees to reimburse Seller and its
representatives for all costs incurred by Seller and its representatives in
connection with the enforcement of this Section (including, without limitation,
legal fees in connection with any such litigation, including any appeals
therefrom). The provisions of this Section shall survive Closing for a period of
twelve (12) months.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

25

 

 

12.9           Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Section 1.3. Any such notices shall, unless otherwise provided herein, be given
or served (a) by depositing the same in the United States mail, postage paid,
certified and addressed to the party to be notified, with return receipt
requested, (b) by overnight delivery using a nationally recognized overnight
courier, (c) by personal delivery, or (d) by electronic mail. Notices shall be
deemed properly delivered and received: (i) the same day when personally
delivered; or (ii) one day after deposit with a nationally recognized overnight
courier; or (iii) the same day when sent by email. A party’s address may be
changed by written notice to the other party. Copies of notices are for
informational purposes only, and a failure to give or receive copies of any
notice shall not be deemed a failure to give notice. Notices given by counsel to
the Purchaser shall be deemed given by Purchaser and notices given by counsel to
the Seller shall be deemed given by Seller.

 

12.10        Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and agree that the normal rule
of construction - to the effect that any ambiguities are to be resolved against
the drafting party - shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.

 

12.11        Calculation of Time Periods; Business Day. Unless otherwise
specified, in computing any period of time described herein, the day of the act
or event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is not a Business Day, in which event the period shall run until
the end of the next day which is a Business Day. The last day of any period of
time described herein shall be deemed to end at 5:00 p.m. local time at the Real
Property. As used herein, the term “Business Day“ means any day that is not a
Saturday, Sunday or legal holiday for national banks in the city in which the
Real Property is located.

 

12.12        Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute and exchange by email electronic
counterparts (i.e., PDF counterparts) of the signature pages.

 

12.13        No Recordation. Without the prior written consent of Seller, there
shall be no recordation of either this Agreement or any memorandum hereof, or
any affidavit pertaining hereto, and any such recordation of this Agreement or
memorandum or affidavit by Purchaser without the prior written consent of Seller
shall constitute a default hereunder by Purchaser, whereupon Seller shall have
the remedies set forth in Section 10.1 hereof. In addition to any such remedies,
Purchaser shall be obligated to execute an instrument in recordable form
releasing this Agreement or memorandum or affidavit, and Purchaser’s obligations
pursuant to this Section 12.13 shall survive any termination of this Agreement
as a surviving obligation.

 

12.14        Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, but without
any obligation to incur any additional liability or expense, on or after the
Closing any further deliveries and assurances as may be reasonably necessary to
consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

26

 

 

12.15        ERISA. Under no circumstances shall Purchaser have the right to
assign this Agreement to any person or entity owned or controlled by an employee
benefit plan if Seller’s sale of the Property to such person or entity would, in
the reasonable opinion of Seller’s ERISA advisors or consultants, create or
otherwise cause a “prohibited transaction” under ERISA. In the event Purchaser
assigns this Agreement or transfers any ownership interest in Purchaser, and
such assignment or transfer would make the consummation of the transaction
hereunder a “prohibited transaction” under ERISA and necessitate the termination
of this Agreement then, notwithstanding any contrary provision which may be
contained herein, Seller shall have the right to terminate this Agreement.

 

12.16        No Third Party Beneficiary. The provisions of this Agreement and of
the documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing.

 

12.17        Reporting Person. Purchaser and Seller hereby designate the Title
Company as the “reporting person” pursuant to the provisions of Section 6045(e)
of the Internal Revenue Code of 1986, as amended.

 

12.18        Texas Real Estate License Act. The Texas Real Estate License Act
requires written notice to Purchaser from any licensed real estate broker or
salesman who is to receive a commission that Purchaser should have an attorney
of its own selection examine an abstract of title to the property being acquired
or that Purchaser should be furnished with or should obtain a title insurance
policy. Notice to that effect is, therefore, hereby given to Purchaser on behalf
of the broker(s) identified in this Agreement, if any.

 

12.19        DTPA Waiver. IT IS THE INTENT OF SELLER AND PURCHASER THAT THE
RIGHTS AND REMEDIES WITH RESPECT TO THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT SHALL BE GOVERNED BY LEGAL PRINCIPLES OTHER THAN THE TEXAS DECEPTIVE
TRADE PRACTICES-CONSUMER PROTECTION ACT. ACCORDINGLY, TO THE MAXIMUM EXTENT
APPLICABLE AND PERMITTED BY LAW (AND WITHOUT ADMITTING SUCH APPLICABILITY),
PURCHASER HEREBY WAIVES THE PROVISIONS OF THE TEXAS DECEPTIVE TRADE
PRACTICES-CONSUMER PROTECTION ACT, CHAPTER 17, SUBCHAPTER 3 (OTHER THAN SECTION
17.555, WHICH IS NOT WAIVED), TEXAS BUSINESS AND COMMERCE CODE, A LAW THAT GIVES
CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. FOR PURPOSES OF THE WAIVERS SET FORTH
IN THIS AGREEMENT, PURCHASER HEREBY WARRANTS AND REPRESENTS UNTO SELLER THAT (A)
PURCHASER HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT
ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED UNDER
THIS AGREEMENT, (B) PURCHASER IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION WITH SELLER REGARDING THE TRANSACTIONS CONTEMPLATED UNDER THIS
AGREEMENT, (C) PURCHASER IS REPRESENTED BY LEGAL COUNSEL THAT IS SEPARATE AND
INDEPENDENT OF SELLER AND SELLER’S LEGAL COUNSEL AND (D) PURCHASER HAS CONSULTED
WITH PURCHASER’S LEGAL COUNSEL REGARDING THIS AGREEMENT PRIOR TO PURCHASER’S
EXECUTION OF THIS AGREEMENT AND VOLUNTARILY CONSENTS TO THIS WAIVER.

 

[SIGNATURE PAGES AND EXHIBITS TO FOLLOW]

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

27

 

 

SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
Tuesday Morning Partners, Ltd., Tuesday Morning, Inc., and Friday Morning, LLC.
AND
Rialto Real Estate Fund IV – Property, LP

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year written below.

 

  SELLER:       Tuesday morning partners, ltd.,   a Texas limited partnership  
    By: Days of the Week, Inc.,     a Delaware corporation     its General
Partner

 

Date executed by Seller   By: /s/ Steven R. Becker     Name: Steven R. Becker
_____________, 2020   Title: Chief Executive Officer

 

  FRIDAY MORNING, LLC,   a Texas limited liability company       By: Tuesday
Morning, Inc.,     its Member

 

 

Date executed by Seller   By: /s/ Steven R. Becker     Name: Steven R. Becker
_____________, 2020   Title: Chief Executive Officer

 

  TUESDAY MORNING, INC.,   a Texas corporation

 

Date executed by Seller   By: /s/ Steven R. Becker     Name: Steven R. Becker
_____________, 2020   Title: Chief Executive Officer

  

[Signatures Continue on Following Page]

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

28

 

 

  PURCHASER:       RIALTO REAL ESTATE FUND IV – PROPERTY, LP,   a Delaware
limited partnership       By: Rialto Partners GP IV – Property, LLC, a Delaware
limited liability company, its General Partner

 

Date executed by Purchaser By: /s/ Sorana Georgescu   Name: Sorana Georgescu
_____________, 2020 Title: Secretary

  

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

29

 

 

JOINDER BY ESCROW AGENT

 

Escrow Agent has executed this Agreement in order to confirm that Escrow Agent
has received and shall hold the Earnest Money required to be deposited under
this Agreement and the interest earned thereto, in escrow, and shall disburse
the Earnest Money, and the interest earned thereon, pursuant to the provisions
of this Agreement.

 

  CHICAGO TITLE INSURANCE COMPANY

 

Date executed by Escrow Agent By: /s/ Pamela Medlin   Name: Pamela Medlin
___________________ Title: Escrow Officer

  

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

1

 

 

LIST OF EXHIBITS

 

A  -  Legal Description of Land         B  -  Special Warranty Deed         C 
-  Bill of Sale and Assignment Agreement         D  -  FIRPTA Certificate      
  E-1  -  Distribution Center Lease         E-2  -  Office Lease         F  - 
Service Contracts

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

2

 

 

Exhibit A

 

LEGAL DESCRIPTION OF LAND

 

4400-4404 South Beltwood Parkway, Farmers Branch, Texas; 14621 Inwood Road,
Addison, Texas; 14639-14645 Inwood Road, Addison, TEXAS; AND 14601-14603 Inwood
Road, Addison, Texas:

 

TRACT I: FEE SIMPLE

 

BEING a 1.556 acre (67,759 square foot) tract of land situated in the Josiah
Pancoast Survey, Abstract No. 1146, Dallas County, Texas and being part of Lot 1
and part of Lot 2 of Inwood Park North, an addition to the Town of Addison,
Dallas County, Texas, according to the plat recorded in Volume 79234, Page 1
Deed Records, Dallas County, Texas, and being more particularly described as
follows:

 

BEGINNING at a 1/2 inch iron rod with orange plastic cap stamped "P&C 100871"
set for corner in the southwesterly line of Inwood Road (a 60 foot public
right-of-way), said rod being South 16°49'00" East, a distance of 26.09 feet
from the northeast corner of said Lot 1 and the southeast corner of Lot 3 of
said Inwood Park North Addition;

 

THENCE South 16°49'00" East, along said southwesterly line of Inwood Road and
the northeasterly line of said Lot 1, for a distance of 319.14 feet to a 1/2
inch iron rod with orange plastic cap stamped "P&C 100871" set for corner, said
rod being the southeast corner of said Lot 1 and in the north line of a Texas
Utilities Electric Company right-of-way;

 

THENCE South 89°49'46" West, departing said southwesterly line of Inwood Road
and along the south line of said Lot 1 and said north line of Texas Utilities
Electric Company right-of-way, passing the southwest corner of said Lot 1 and
the southeast corner of aforementioned Lot 2 at a distance of 200.40 feet,
continuing for a total distance of 223.15 feet to a 1/2 inch iron rod with
orange plastic cap stamped "P&C 100871" set for corner;

 

THENCE North 16°49'00" West, departing the south line of said Lot 2 and
traveling over and across said Lot 2, for a distance of 216.00 feet to an "x"
cut in concrete set for corner;

 

THENCE South 89°49'46" West for a distance of 10.00 feet to an "x" cut in
concrete set for corner;

 

THENCE North 00°10'14" West for a distance of 98.81 feet to a 1/2 inch iron rod
found for a corner in the south line of a 50 foot access, utility and drainage
easement as shown on aforementioned plat of Inwood Park North Addition;

 

THENCE North 89°49'46" East, along said south line of 50 foot access, utility
and drainage easement, for a distance of 203.61 feet to the POINT OF BEGINNING
and containing 1.556 acres, or 67,759 square feet of land, more or less.

 

TRACT II: FEE SIMPLE

 

BEING a 1.631 acre (71,041 square foot) tract of land situated in the Josiah
Pancoast Survey, Abstract No. 1146, Dallas County, Texas and being part of Lot 3
of Inwood Park North, an addition to the Town of Addison, Dallas County, Texas,
according to the plat recorded in Volume 79234, Page 1 Deed Records, Dallas
County, Texas, and being more particularly described as follows:

 

BEGINNING at a 1/2 inch iron rod with orange plastic cap stamped "P&C 100871"
set for corner in the southwesterly line of Inwood Road (a 60 foot public
right-of-way), said rod being the northeast corner of said Lot 3 and the
southeast corner of Lot 2, Block A of Inwood Auto/Beverage Addition, an addition
to the Town of Addison, Dallas County, Texas, according to the plat recorded in
Instrument No. 200600248924 Official Public Records, Dallas County, Texas;

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-1

 

 

THENCE South 16°49'00" East, along said southwesterly line of Inwood Road and
the northeasterly line of said Lot 3, for a distance of 351.14 feet to an "x"
cut in concrete set for corner, said "x" being the northeast corner of a 50 foot
access, utility and drainage easement as shown on aforementioned plat of Inwood
ParkNorth Addition, said "x" also being North 16°49'00" West, a distance of
26.09 feet from the southeast corner of said Lot 3 and the northeast corner of
Lot 1 of said Inwood Park North Addition;

 

THENCE South 89°49'46" West, departing said southwesterly line of Inwood Road
and along the north line of said 50 foot access, utility and drainage easement,
over and across said Lot 3 and parallel with the south line of said Lot 3, for a
distance of 224.48 feet to a 1/2 inch iron rod found for corner;

 

THENCE North 16°49'00" West, departing said northerly line of 50 foot access,
utility and drainage easement, for a distance of 216.67 feet to a 1/2 inch iron
rod found for corner;

 

THENCE North 09°15'00" West for a distance of 97.87 feet to a 1/2 inch iron rod
with yellow plastic cap stamped "KADLECK 3952" found for corner in the northerly
line of said Lot 3 and the southerly line of aforementioned Lot 2 of Inwood
Auto/Beverage Addition;

 

THENCE North 80°45'00" East, along said northerly line of Lot 3, and the
southerly line of said Lot 2 of Inwood Auto/Beverage Addition, for a distance of
203.96 feet to the POINT OF BEGINNING and containing 1.631 acres, or 71,041
square feet of land, more or less.

 

NOTE: COMPANY DOES NOT REPRESENT THAT THE ABOVE ACREAGE AND/OR SQUARE FOOTAGE
CALCULATIONS ARE CORRECT.

 

TRACT III: FEE SIMPLE

 

BEING all of Lot 1, Block A of Tuesday Morning Beltwood Addition, an addition to
the City of Farmers Branch, Dallas County, Texas according to the plat recorded
in Instrument No. 200600276647 Official Public Records, Dallas County, Texas and
being part of Lots 1, 2 and 3 of Inwood Park North, an addition to the City of
Addison, according to the plat recorded in Volume 79234, Page 1 Deed Records,
Dallas County, Texas (D.R.D.C.T.) and being more particularly described as
follows:

 

BEGINNING at a 1/2 iron rod with orange cap stamped "P&C 100871" set for corner
in the East line of said Tuesday Morning Addition at the Northwest corner of
said Inwood Addition and the Southwest corner of Lot 1, Miniwood Addition, an
addition to the Town of Addison according to the plat recorded in Volume 82194,
Page 2965 D.R.D.C.T.;

 

THENCE North 80°45'00" East, with the common line between said Inwood Addition
and Miniwood Addition, a distance of 570.00 feet to 1/2 inch iron rod with
yellow plastic cap stamped "KADLECK 3952" found for corner at the Northwest
corner of a tract of land described by deed as Tract II to Friday Morning Inc as
recorded in Volume 91213, Page 2336 D.R.D.C.T.;

 

THENCE along said Friday Morning Tract II the following calls:

 

South 09°15'00" East, a distance of 97.87 feet to a 1/2 inch iron rod found for
corner;

 

South 16°49'00" East, a distance of 216.67 feet to a 1/2 inch iron rod found for
corner in the North line of a 50 foot Access, Utility and Drainage Easement;

 

North 89°49'46" East, with the North line of said Easement, a distance of 224.48
feet to an "x" cut in concrete set for corner in the West line of Inwood Road (a
60-foot public right-of-way);

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-2

 

 

THENCE South 16°49'00" East, with said West line of Inwood Road, a distance of
52.19 feet to a 1/2 iron rod with orange cap stamped "P&C 100871" set for corner
in said West line of Inwood Road, said rod being the Northeast corner of Tract I
of said Friday Morning tract;

 

THENCE along said Friday Morning Tract II the following calls:

 

South 89°49'46" West, with the South line of said Easement a distance of 203.61
feet to a 1/2 inch iron rod found for corner;

 

South 00°10'14" East. departing said South line a distance of 98.81 feet to an
"x" cut in concrete set for corner;

 

North 89°49'46" East, a distance of 10.00 feet to an "x" cut in concrete set for
corner;

 

South 16°49'00" East, a distance of 216.00 feet to a 1/2 iron rod with orange
cap stamped "P&C 100871" set for corner in the South line of said Inwood
Addition and the North line of a Texas Utilities Electric Co tract;

 

THENCE South 89°49'46" West with the South line of said Inwood Addition and the
North line of said Texas Utilities tract, a distance of 748.22 feet to a 1/2
iron rod with orange cap stamped "P&C 100871" set for corner, said corner being
the Southwest corner of said Inwood Addition and the Southeast corner of
aforementioned Tuesday Morning Addition;

 

THENCE along said Tuesday Morning Addition the following calls:

 

North 87°15'17" West, a distance of 800.81 feet to a 1/2 iron rod with orange
cap stamped "P&C 100871" set for corner in the East line of Gillis Road (a 60
foot public right-of-way);

 

North 00°09'17" West, with said East line, a distance of 335.45 feet to a 1/2
iron rod with orange cap stamped "P&C 100871" set for corner;

 

North 46°17'43" East, a distance of 20.67 feet to a 1/2 iron rod with orange cap
stamped "P&C 100871" set for corner in the South line of Beltwood Parkway South
(a 60 foot public right-of-way);

 

South 87°15'17" East, a distance of 380.22 feet to a 1/2 iron rod with orange
cap stamped "P&C 100871" set for corner and the beginning of a curve to the left
with a radius of 100.00 feet and a chord which bears North 46°17'23" East for
144.97 feet;

 

Along said curve to the left through a central angle of 92°54'39" and an arc
length of 162.16 feet to a 1/2 iron rod with orange cap stamped "P&C 100871" set
for corner in the East line of Beltway Parkway East (a 60 foot public
right-of-way);

 

North 00°09'17" West, with said East line, a distance of 394.80 feet to a 1/2
iron rod with orange cap stamped "P&C 100871" set for corner, said rod being the
Southwest corner of Lot 2, Block A of Dallas Semiconductor Business Park II an
addition to the City of Farmers Branch recorded in Volume 2004084, Page 51
D.R.D.C.T.;

 

South 89°57'34" East, a distance of 300.00 feet to a 1/2 iron rod with orange
cap stamped "P&C 100871" set for corner, said rod being the Southeast corner of
said Semiconductor Addition;

 

South 00°09'17" East, for a distance of 294.59 to the POINT OF BEGINNING and
containing 19.512 acres, or 849,826 square feet of land, more or less.

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-3

 

 

Tuesday Morning Beltwood Addition, Lot 1, Block A, a portion of Block E,
Beltwood Business Park, Second Installment, an addition to the City of Farmers
Branch, Dallas County, Texas, according to the plat thereof recorded under
Clerk's File No. 2006-276647, Plat Records, Dallas County, Texas.

 

TRACT IV: EASEMENT ESTATE

 

EASEMENT ESTATE created in Easement and Right of Way filed April 1, 1983,
recorded in Volume 83066, Page 3869, Real Property Records, Dallas County,
Texas.

 

BEING a tract of land situated in the Josiah Pancoast Survey, Abstract No. 1146
and said tract also being part of Lots 1 and 2 of Inwood Park North, an addition
to the City of Addison, according to the plat thereof filed in Volume 79234 at
Page 1, Deed Records, Dallas County, Texas and being more particularly described
as follows:

 

BEGINNING at the Southeast corner of Inwood Park North Addition, said corner
also being in the West line of Inwood Road;

 

THENCE South 89°49'46" West, along the South line of said addition, a distance
of 223.15 feet to a point for corner;

 

THENCE North 16°49'00" West, a distance of 20.87 feet to a point for corner;

 

THENCE North 89°49'46" East, a distance of 223.15 feet to a point for corner in
the West line of Inwood Road;

 

THENCE South 16°49'00" East, along the West line of Inwood Road, a distance of
20.87 feet to the POINT OF BEGINNING.

 

TRACT V: EASEMENT ESTATE

 

EASEMENT ESTATE created in Maintenance Easement filed April 1, 1983, recorded in
Volume 83066, Page 3875, Real Property Records, Dallas County, Texas.

 

BEING a tract of land situated in the Josiah Pancoast Survey, Abstract No. 1146,
said tract also being part of Lot 3 of Inwood Park North, an addition to the
City of Addison, according to the plat thereof filed in Volume 79234 at Page 1,
Deed Records, Dallas County, Texas and being more particularly described as
follows:

 

BEGINNING at a point in the North line of Lot 3, said point being South
80°45'00" West, a distance of 193.96 feet from the Northeast corner of Inwood
Park North Addition;

 

THENCE South 09°15'00" East, a distance of 173.16 feet to a point for corner;

 

THENCE North 16°49'00" West, a distance of 75.94 feet to a point for corner;

 

THENCE North 09°15'00" West, a distance of 97.88 feet to a point for corner in
the North line of Lot 3;

 

THENCE North 80°45'00" East, with said North line a distance of 10.00 feet to
the POINT OF BEGINNING.

 

TRACT VI: EASEMENT ESTATE

 

EASEMENT ESTATE created in Maintenance Easement filed April 1, 1983, recorded in
Volume 83066, Page 3881, Real Property Records, Dallas County, Texas.

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-4

 

 

BEING a tract of land situated in the Josiah Pancoast Survey, Abstract No. 1146,
said tract also being part of Lot 2 of Inwood Park North, an addition to the
City of Addison, according to the plat thereof filed in Volume 79234, Page 1,
Deed Records, Dallas County, Texas and being more particularly described as
follows:

 

BEGINNING at a point in the South line of said Lot 2 said point being South
89°49'46" West, a distance of 212.71 feet from the Southeast corner of Inwood
Park North Addition;

 

THENCE South 89°49'46" West, with the South line of Lot 3, a distance of 10.44
feet to a point for corner;

 

THENCE North 16°49'00" West, a distance of 216.00 feet to a point for corner;

 

THENCE North 89°49'46" East, a distance of 10.44 feet to a point for corner;

 

THENCE South 16°49'00" East, a distance of 216.00 to the POINT OF BEGINNING.

 

TRACT VII: EASEMENT ESTATE

 

EASEMENT ESTATE created in Underground Gas Easement filed April 1, 1983,
recorded in Volume 83066, Page 3887, Real Property Records, Dallas County,
Texas.

 

BEING a tract of land situated in the Josiah Pancoast Survey, Abstract No. 1146
and being part of Lot 2 of Inwood Park North, an addition to the City of
Addison, according to the plat thereof recorded in Volume 79234, Page 1, Deed
Records, Dallas County, Texas and being 5 feet right and 5 feet left of the
following described centerline:

 

COMMENCING at the Southeast corner of said Inwood Park North, thence South
89°49'46" West, a distance of 223.15 feet to a point;

 

THENCE North 16°49'00" West, a distance of 208.00 feet to the POINT OF BEGINNING
of the herein described center;

 

THENCE North 73°11'00" East, a distance of 21.80 feet to a point on the East
line of said Lot 2 and the terminus of said centerline.

 

TRACT VIII: EASEMENT ESTATE

 

EASEMENT ESTATE created in Sign Easement filed April 1, 1983, recorded in Volume
83066, Page 3893, Real Property Records, Dallas County, Texas.

 

BEING a tract of land situated in the Josiah Pancoast Survey, Abstract No. 1146,
said tract also being part of Lot 1 Inwood Park North, an addition to the City
of Addison, according to the plat thereof filed in Volume 79234, Page 1, Deed
Records, Dallas County, Texas and being more particularly described as follows:

 

BEGINNING at a point in the South line of a 50 foot Access, Utility and Drainage
Easement said point being South 89°49'46" W, a distance of 17.00 feet from the
West line of Inwood Road;

 

THENCE South 00°10'14" East, a distance of 4.00 feet to a point for corner;

 

THENCE South 81°05'00" West, a distance of 13.15 feet to a point for corner;

 

THENCE North 00°10'14" West, a distance of 6.00 feet to a point for corner in
the South line of the aforementioned 50 foot easement;

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-5

 

 

THENCE North 89°49'46" East, along said South line, a distance of 13.00 feet to
the POINT OF BEGINNING.

 

TRACT VIIII: EASEMENT ESTATE

 

EASEMENT ESTATE created in Sign Easement filed April 1, 1983, recorded in Volume
83066, Page 3900, Real Property Records, Dallas County, Texas.

 

BEING a tract of land situated in the Josiah Pancoast Survey, Abstract No. 1146,
said tract also being part of Lot 1 Inwood Park North, an addition to the City
of Addison, according to the plat thereof filed in Volume 79234, Page 1, Deed
Records, Dallas County, Texas and being more particularly described as follows:

 

BEGINNING at a point in the North line of a 50 foot Access, Utility and Drainage
Easement said point being S 89°49'46" W, a distance of 13.00 feet from the West
line of Inwood Road;

 

THENCE South 89°49'46" West, along the North line of said easement, a distance
of 13.00 feet to a point for corner;

 

THENCE North 00°10'14" West, a distance of 4.00 feet to a point for corner;

 

THENCE North 81°05'00" East, a distance of 13.15 feet to a point for corner;

 

THENCE South 00°10'14" East, a distance of 6.00 feet to the POINT OF BEGINNING.

 

14303 Inwood Road, Farmers Branch, Texas:

 

Lot 1 in Block A of Tuesday Morning Addition, an addition to the City of Farmers
Branch, Dallas County, Texas, according to the Replat thereof recorded in Volume
2003011, Page 312, Plat Records, Dallas County, Texas.

 

6250 Lyndon B. Johnson Freeway, Dallas, Texas:

 

BEING 4.895 acres of land, located in BLOCK 7443 in the City of Dallas, and
being a portion of the McKinney & Williams Survey, Abstract No. 1032, and the
Thomas Dykes Survey, Abstract No. 405, Dallas County, Texas, and being a portion
of the tract of land conveyed to E-Systems, Inc., by the deed recorded in Volume
76062, Page 1507, Deed Records, Dallas County, Texas, said 4.895 acres being
more particularly described as follows:

 

BEGINNING at a cross cut in a Texas Highway Department concrete right-of-way
monument, at the intersection of the South right-of-way line of Lyndon B.
Johnson Freeway, Interstate Highway No. 635 (a variable width right-of-way) with
the West right-of-way line of Hughes Lane (a 60 foot right-of-way);

 

THENCE along the East boundary line of said E-Systems tract and the West
right-of-way line of said Hughes Lane as follows:

 

South 308.77 feet, to an "X" cut in concrete found;

 

S 00° 23' 32" W, 174.17 feet to a 1" iron pipe found at the Southeast corner of
said E-Systems tract, being the intersection of the North boundary line of a 15
foot wide alley, as dedicated by the plat of Huffines Hill Addition to the City
of Dallas, Dallas County, Texas, according to the plat recorded in Volume 20,
Page 213, Map Records, Dallas County, Texas;

 

THENCE S 89° 46' 20"W, 578.75 feet along the South boundary of said E-Systems
tract and the North boundary line of said 15 foot wide alley to a 1/2" iron rod
found at the most Southerly Southeast corner of Lot 1, Block A/7443, 6200 L. B.
J. Office Park, an addition to the City of Dallas, Dallas County, Texas
according to the plat recorded in Volume 84234, Page 1926, Plat Records, Dallas
County, Texas;

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-6

 

 

THENCE severing the original said E-Systems tract and running along the East
boundary line of said Lot 1, Block A/7443, 6200 L. B. J. Office Park Addition,
as follows:

 

N 00° 19' 49" E, 136.96 feet to a 1/2" iron rod found;

 

S 89° 53' 46" E, 172.29 feet to a 1 1/2" iron pipe found at the most Easterly
Southeast corner of said Lot 1, Block A/7443;

 

N 00° 02' 11" W, 314.84 feet to a 1/2" iron rod found at the Northeast corner of
said Lot 1, Block A/7443, lying in the South right-of-way line of aforesaid
Lyndon B. Johnson Freeway;

 

THENCE along the original North boundary line of said E-Systems tract, being the
South right-of-way line of said Lyndon B. Johnson Freeway as follows:

 

N 88° 06' 13" E, 23.21 feet to a Texas Highway Department concrete right-of-way
monument found;

 

N 85° 05' 23" E, 385.28 feet to the Place of Beginning, containing 4.895 acres
(213,210 square feet) of land, more or less.

 

SAVE AND EXCEPT all that certain land conveyed to the State of Texas by Deed
recorded May 2, 2006 as Clerk's File No. 200600159784, Real Property Records,
Dallas County, Texas.

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

A-7

 

 

Exhibit B

 

SPECIAL WARRANTY DEED

 

[exhibit follows on next page]

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

B-1

 

 

SPECIAL WARRANTY DEED

 

Prepared by:

Haynes and Boone LLP

2323 Victory Avenue, Ste. 700

Dallas, Texas 75219

Attn: Brack Bryant

 

After Recording Return to:

[____________________]

[____________________]

[____________________]

  NOTICE OF CONFIDENTIALITY RIGHTS: If you are a natural person, you may remove
or strike any or all of the following information from any instrument that
transfers an interest in real property before it is filed for record in the
public records: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

 

SPECIAL WARRANTY DEED

 

THE STATE OF TEXAS  §      § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DALLAS  §
 

 

                                                  , a
                                (“Grantor”), whose address is
_____________________, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, has GRANTED, BARGAINED, SOLD, and
CONVEYED and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto RIALTO
REAL ESTATE FUND IV – PROPERTY, LP, a Delaware limited partnership (“Grantee”)
whose address is c/o Rialto Capital Management, LLC, 501 Santa Monica Blvd.,
Suite 501, Santa Monica, California 90401, the tract or parcel of land in
Tarrant County, Texas, described in Exhibit A, together with all improvements
thereon and all rights, titles, and interests appurtenant thereto including,
without limitation, Grantor’s interest, if any, in any and all adjacent streets,
alleys, rights of way and any adjacent strips and gores, together with all of
Grantor’s right, title and interest, if any, in and to any and all minerals and
mineral rights, oil, gas, and oil and gas rights, other hydrocarbon substances
and rights, development rights, air rights, water and water rights, wells, well
rights and well permits, water and sewer taps (or their equivalents), and
sanitary or storm sewer capacity appertaining to or otherwise benefiting or used
in connection with said real property (such land and interests are hereinafter
collectively referred to as the “Property”).

 

This Special Warranty Deed and the conveyance hereinabove set forth is executed
by Grantor and accepted by Grantee subject to the Permitted Exceptions listed on
Exhibit B attached hereto (collectively, the “Permitted Exceptions”).

 

TO HAVE AND TO HOLD the Property, together with all and singular the rights and
appurtenances thereunto in anywise belonging, unto Grantee, its successors and
assigns forever, and Grantor does hereby bind itself, its successors and
assigns, to WARRANT AND FOREVER DEFEND all and singular the title to the
Property unto the said Grantee, its successors and assigns against every person
whomsoever lawfully claiming or to claim the same or any part thereof by,
through, or under Grantor but not otherwise, subject to the Permitted
Exceptions.

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

B-2

 

 

[SIGNATURE PAGE FOLLOWS]

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

B-3

 

 

EXECUTED as of _____________________, 2020, to be effective as of
________________.

 

  ,   a             By:          Name:     Title:  

 

THE STATE OF __________ §   § COUNTY OF ____________ §

 

This instrument was acknowledged before me on ____________, 2020, by
________________, ______________ of                                      , a
                                , on behalf of said corporation .

 

      Notary Public, State of ___________

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

B-4

 

 

EXHIBIT A

 

[Description of the Property]

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

B-5

 

 

EXHIBIT B

 

[Permitted Exceptions]

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

B-6

 

 

Exhibit C

 

 BILL OF SALE AND ASSIGNMENT
 

[EXHIBIT FOLLOWS ON NEXT PAGE]

 

Purchase and Sale Agreement

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

C-1

 

 

 

BILL OF SALE AND ASSIGNMENT

 

THIS BILL OF SALE AND ASSIGNMENT (this “Bill of Sale”) is made as of the _____
day of __________________, 2020, by and between , a (“Assignor”), and RIALTO
REAL ESTATE FUND IV – PROPERTY, LP, a Delaware limited partnership (“Assignee”).

 

W I T N E S S E T H:

 

For good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee hereby agree as follows:

 

1.                   Assignor hereby sells, transfers and conveys to Assignee
all of Assignor’s right, title and interest, if any, in and to the following, in
each case to the extent located on that certain land and improvements commonly
known as (i) 4400-4404 South Beltwood Parkway, Farmers Branch, Texas, (ii) 14621
Inwood Road, Addison, Texas, (iii) 14639 Inwood Road, Addison, Texas, (iv) 14601
Inwood Road, Addison, Texas, (v) 14303 Inwood Road, Farmers Branch, Texas, and
(vi) 6250 Lyndon B. Johnson Freeway, Dallas, Texas (collectively, “Real
Property”), as more particularly described in the Purchase Agreement (as
hereinafter defined):

 

(a)    all tangible personal property furniture, fixtures and equipment attached
to or used in connection with the ownership, maintenance, or operation of the
Real Property (the “Personalty”); provided however, that the Personalty does not
include the Excluded Tangible Personal Property (as defined in the Purchase
Agreement);

 

(b)    the plans and specifications and other architectural and engineering
drawings for the improvements located on the Real Property, if any (to the
extent in Assignor’s possession and assignable without any cost to Assignor);
warranties (to the extent in Assignor’s possession and assignable without any
cost to Assignor); governmental permits, approvals and licenses, if any (to the
extent in Assignor’s possession and assignable without any cost to Assignor);
and

 

(c)    notwithstanding anything contained herein to the contrary, in no event
shall any of Assignor’s trade names, marks, signage, branding, and other
identifying marks related to “Tuesday Morning” or its subsidiaries or
affiliates, be included within the Personalty or otherwise be deemed or
construed to have been transferred by this Bill of Sale, all of which are
expressly reserved to, and retained by, Assignor.

 

2.                   This Bill of Sale is given pursuant to that certain
Purchase and Sale Agreement (as amended, the “Purchase Agreement”) dated as of
____________________, between Assignor and Assignee, providing for, among other
things, the conveyance of the Personalty.

 

3.                   As set forth in Article 11 of the Purchase Agreement, which
is hereby incorporated by reference as if herein set out in full and except as
set forth herein, except as expressly set forth in the Purchase Agreement, the
property conveyed hereunder is conveyed by Assignor and accepted by Assignee AS
IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR
IMPLIED, IT BEING THE INTENTION OF ASSIGNOR AND ASSIGNEE EXPRESSLY TO NEGATE AND
EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES CREATED BY
ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF THE PROPERTY
CONVEYED HEREUNDER,

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

C-2

 

 

OR BY ANY SAMPLE OR MODEL THEREOF, AND ALL OTHER WARRANTIES WHATSOEVER CONTAINED
IN OR CREATED BY THE TEXAS UNIFORM COMMERCIAL CODE.

 

4.                   This Bill of Sale may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

C-3

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale as of the
date first above written.

 

 ASSIGNOR:               ,   a                  

 

  By:     Name:     Title:  

 

  ASSIGNEE:       RIALTO REAL ESTATE FUND IV – PROPERTY, LP,
a Delaware limited partnership       By: Rialto Partners GP IV – Property, LLC,
a Delaware limited liability company, its General Partner

 

  By:     Name:     Title:  

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas,
Texas 4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

C-4

 

 

Exhibit D

 

FIRPTA CERTIFICATE

 

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign person.
For U.S. tax purposes (including Section 1445), the owner of a disregarded
entity (which has legal title to a U.S. real property interest under local law)
will be the transferor of the property and not the disregarded entity. To inform
_____________ (“Transferee”) that withholding of tax is not required upon the
disposition of a U.S. real property interest by , a (“Transferor”), the
undersigned, in his capacity as _____________ of _____________, but not
individually, hereby certifies to Transferee the following on behalf of
Transferor:

 

1.       Transferor is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);

 

2.       Transferor is not a disregarded entity as defined in
Section 1.1445-2(b)(2)(iii);

 

3.       Transferor’s U.S. employer identification number is ___________; and

 

4.       Transferor’s office address is ___________________________.

 

Transferor understands that this certification may be disclosed to the Internal
Revenue Service by Transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.

 

Under penalties of perjury I declare that I have examined this certification and
to the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this document on behalf of
Transferor.

 

Dated as of __________, 2020.

 

      a                

 

  By:     Name:     Title:  

 

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas,
Texas 4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

D-1

 

 

EXHIBIT E-1

 

DISTRIBUTION CENTER LEASE

 

[EXHIBIT FOLLOWS ON NEXT PAGE]

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas,
Texas 4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

E-1

 

 

LEASE AGREEMENT

 

This SHORT TERM LEASE (this “Lease”) is entered into as of the ___ day of
______________________, 2020, by and between RIALTO REAL ESTATE FUND IV –
PROPERTY, LP, a Delaware limited partnership (“Landlord”) and TUESDAY MORNING
PARTNERS, LTD., a Texas limited partnership (“Tenant”).

 

1.Lease Grant and Term. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, the real property as described in the
legal description attached hereto as Exhibit A (together with any improvements
thereon) located at (i) 4400-4404 South Beltwood Parkway, Farmers Branch, Texas;
(ii) 14303 Inwood Road, Farmers Branch, Texas; (iii) 14621 Inwood Road, Addison,
Texas; (iv) 14639-14645 Inwood Road, Addison, Texas; and (v) 14601-14603 Inwood
Road, Addison, Texas (each of the foregoing, individually, a “Property” and,
collectively, the “Premises”). The term of this Lease (the “Term”) shall
commence on the date first set forth above (the “Commencement Date”) and shall
continue until 5:00 p.m. (Central Standard Time) on the date that is thirty (30)
months following the Commencement Date (“Termination Date”).

 

Tenant may also extend the Term on one (1) occasion for a period of twelve (12)
months by delivering in writing an extension notice to Landlord not later than
six (6) months prior to the then scheduled expiration date of the Term, in which
event this Lease shall be so extended as shall the Termination Date.

 

2.Permitted Use; Operation. Tenant shall use the Premises as a warehouse and
distribution center, together with any incidental purposes thereto, and for no
other purpose. Tenant will ensure that Tenant’s use of the Premises complies
with all laws, ordinances, rules and regulations of governmental authorities,
and all matters of record affecting the Premises, now or hereafter in effect.

 

3.Rent Payments. During the Term, Tenant agrees to pay to Landlord a monthly sum
equal to $351,207.79 (the “Fixed Rental”). All Fixed Rental payments shall be
due and payable, in advance, on or before the first day of each succeeding
calendar month during the Term. Fixed Rental for any fractional month during the
Term shall be prorated based on the current Fixed Rental for each day of the
partial month this Lease is in effect. For the avoidance of doubt, Tenant has no
monetary obligations to Landlord under this Lease unless expressly provided
otherwise in this Lease. Tenant may (i) send Fixed Rental Payments to the
following address c/o Rialto Capital Management, LLC, 501 Santa Monica Blvd.,
Suite 501, Santa Monica, California 90401, or (ii) elect to wire Fixed Rental
Payments (or pay via Automated Clearing House), in which case Landlord shall
provide wiring instructions to Tenant. Commencing on the first (1st) anniversary
of the Commencement Date and continuing each anniversary date thereafter during
the Term (including any extension thereof), the Fixed Rental amount shall be
increased by three percent (3.0%) over the prior year’s Fixed Rental amount.
Notwithstanding anything contained in this Lease to the contrary, this Lease is
an absolute net lease. It is the intention of Landlord and Tenant that the Fixed
Rental and other sums and charges provided herein shall be absolutely net to
Landlord and that such amounts shall be paid without setoff, abatement,
deduction, reduction, except as otherwise expressly permitted by this Lease.

 

2

 

 

4.Late Fees; Interest. In the event that a Fixed Rental payment is not received
by Landlord within five (5) days of the date it is due, Tenant may be assessed a
late fee by Landlord of 2.5% of the amount due; provided, however, no such late
fee shall be owed unless such late payment continues for a period of five
(5) days after written notice to Tenant (but Tenant shall only be entitled to
one such notice in any calendar year, and thereafter during such calendar year
any such payment not paid within five (5) days of its due date shall trigger
such late payment without the requirement of additional notice).

 

5.Security Deposit. None.

 

6.Maintenance, Repair, and Replacement; Surrender. Excluding damage by casualty
or condemnation, which are governed elsewhere in this Lease, Tenant, at its sole
cost and expense, shall maintain and repair in their current condition,
reasonable wear and tear excepted, the Premises (including the roof, foundation,
exterior walls and other structural elements) and equipment and systems within
the Premises (including generators, lighting, electrical, plumbing, hydraulics,
mechanical, heating, ventilating and air conditioning), all driveways, parking
areas, landscaping, and other improvements located on the Premises, which
maintenance and repair shall be in Tenant’s reasonable discretion, and may
include replacement of such equipment, systems, or structural elements of the
Property if replacement is required in Tenant’s reasonable discretion. During
the Term of this Lease, Landlord shall have no obligations with respect to the
maintenance or repair (including replacement) of the Premises, all of such
obligations being assumed by Tenant, except as otherwise expressly provided
herein. Landlord may make any repairs to the Premises upon thirty (30) days
advance written notice to Tenant (or such shorter period of time if Landlord
reasonably determines the failure to immediately repair will result in material
long-term damage to the Premises (or any part thereof), or would cause injury or
harm to human health, in Landlord’s reasonable judgment), so long as Landlord
uses commercially reasonable efforts to minimize interference with Tenant’s
business operating in exercising its rights hereunder. In the event that
Landlord is required to make any repairs to the Premises to correct a condition
or state of facts which if not corrected would result in long-term material
damage to the Premises (or any material part thereof), or would cause injury or
harm to human health, in Landlord’s reasonable judgment and Tenant fails to
commence and diligently pursue such repair within ten (10) days’ of receipt of
notice thereof (or with respect to an emergency condition, within five (5) days’
of receipt of notice thereof), Tenant shall reimburse Landlord for all of
Landlord’s out-of-pocket costs in making such repair within ten (10) days
following Landlord’s invoice therefor. Landlord shall indemnify and hold
harmless Tenant for any actual, out-of-pocket costs, expenses or losses which
Tenant incurs due to Landlord’s, its agents or contractors’ negligence or
willful misconduct in connection with any repairs done by Landlord or on behalf
of Landlord at the Premises. Notwithstanding anything to the contrary, at the
expiration or earlier termination of this Lease, Tenant shall surrender the
Premises to Landlord in the then-existing condition of the Premises. Tenant and
Landlord shall schedule a walk-through inspection of the Premises at least
thirty (30) days in advance of the expiration date of the Premises. Landlord
shall have the right to identify which furniture and any other tangible personal
property on the Premises that Landlord requires Tenant to remove at the time
Tenant vacates the Premises (provided, that, Landlord agrees that Tenant shall
in no event be obligated to remove, nor incur any costs or expenses related to
removal or disposal of, any shelving, sorting and/or conveyer system(s) located
at or in any of the Properties, either prior to or after expiration of the Term,
and Landlord shall be entitled to any salvage value attributable to such
shelving, sorting and/or conveyer system(s)). In the event that Tenant fails to
remove such identified property by the expiration or termination of this Lease,
then such property shall be considered abandoned and, at Landlord’s election, be
deemed the property of Landlord (except for any tangible personal property
utilized by Tenant pursuant to easements, leases, or licenses, provided that if
such property is not removed by the expiration of the Lease Term, Landlord shall
have the right to remove the same at Tenant’s reasonable expense), and Landlord
shall have the option to remove and dispose of the same, and Tenant shall pay
the reasonable, out-of-pocket costs of such removal to Landlord upon demand.
Tenant shall execute an “as is” Bill of Sale conveying Tenant’s interest in
property that Landlord has elected to assume at the expiration of the Term, and
any other reasonable documentation necessary to transfer ownership thereof.

 

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7.Alterations. Tenant shall not make or suffer or allow to be made any
alterations, additions or improvements in or to the Premises (collectively,
“Alterations”) without first obtaining Landlord’s written consent based on plans
and specifications (which may be preliminary) submitted by Tenant, which consent
shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, without prior consent from Landlord, Tenant shall be permitted to
make interior, non-structural Alterations to a Property (but not structural or
exterior portions of the improvements) that do not adversely affect the roof, or
the heating, ventilating, air-conditioning, mechanical, electrical, plumbing or
life safety systems of such Property, provided that the total cost to acquire
and install the proposed Alterations at any individual Property is no more than
(i) $250,000 in any one instance and (ii) $500,000 in the aggregate with respect
to such Property during any calendar year.

 

8.Signs.

 

a.Tenant shall not affix any signs or other advertising materials to the
Premises without the prior written consent of the Landlord, which may be
withheld in Landlord’s reasonable discretion. Existing signage is hereby
approved.

 

b.Landlord shall not affix any signs or other advertising materials to the
Premises, except that Landlord shall have the right to place a “For Lease” sign
on the Premises during the last (six) 6 months of the Term or a “For Sale” sign
on the Premises if Landlord desires to sell the Premises.

 

9.Utilities, Telephone, and Generator. Tenant is currently in possession of the
Premises and acknowledges that the utilities currently serving the Premises are
sufficient for Tenant’s use. Tenant shall pay directly to the utility provider
when due for the consumption of all utilities used in the Premises during the
Term. Tenant shall at all times have the right to access and utilize any
generators that service the Premises. In the event any utility shall become
unavailable at the Premises, Landlord shall reasonably cooperate with Tenant to
get such utility restored as soon as reasonably practicable.

 

10.Insurance. Tenant shall maintain the insurance policies set forth on
Exhibit B hereto. Landlord will maintain: (i) commercial general liability
insurance with limits of $1,000,000 per occurrence and $2,000,000 in the
aggregate, and (ii) causes of loss-special form property insurance on the
Premises with customary exclusions in the amount of the full replacement cost
thereof, including business interruption insurance or rent loss insurance in
amount reasonably determined by Landlord (“Landlord’s Insurance”). Landlord
shall add Tenant as named additional insured on the policies Landlord is
required to carry hereunder. All liability insurance policies must delete the
contractual liability exclusion with respect to personal injury or damage to
property. All property insurance policies must waive subrogation against the
Tenant and Tenant related parties. Any insurance carried by Landlord may be in
the form of one or more blanket insurance policy(ies) covering multiple
properties. For each month during the Term, Tenant shall make a payment to
Landlord (an “Insurance Payment”) in an amount equal to one-twelfth (1/12) of
the Insurance Expenses (as hereinafter defined) for the calendar year in
question as reasonably estimated by Landlord. The Insurance Payments are
intended to reimburse Landlord for the actual Insurance Expenses accruing during
the Term for the Premises. For purposes herein, “Insurance Expenses” shall mean
the premiums, commercially reasonable deductibles of not more than $50,000 per
occurrence, and other expenses incurred by Landlord for Landlord’s Insurance,
but in no event shall Tenant be required to reimburse Landlord, and Insurance
Expenses shall exclude, environmental coverage, mold coverage, terrorism
coverage, pollution coverage and all other special coverages and/or endorsements
that Landlord, in Landlord’s reasonable discretion, may from time to time
consider appropriate in connection with Landlord’s ownership, management or
operation of the Premises. When the actual amount of Insurance Expenses for an
applicable calendar year are determined by Landlord, Landlord or Tenant, as
applicable, will pay to the other such amounts as may be appropriate to
reconcile Tenant’s payment of estimated Insurance Expenses based on actual
Insurance Expenses, within thirty (30) days after written demand together with
commercially reasonable evidence of the final amounts demanded. In the event
Landlord shall fail to carry any of the policies required by this Lease, or
fails to carry such policies in the form required hereunder, Tenant may purchase
such policies on behalf of Landlord and Tenant shall not be responsible for
payment of any Insurance Expenses related to such policies for so long as Tenant
shall maintain such policies on behalf of Landlord.

 

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11.Taxes. During the Term, Tenant shall pay prior to delinquency all real
property taxes and assessments assessed against the Premises; provided, however,
(i) upon prior written notice to Landlord, Tenant shall have the right to
contest such taxes and assessments as long as in no event shall Tenant permit
the commencement of foreclosure proceedings against the Premises, and
(ii) Tenant may pay any assessments over the longest period of time allowed by
applicable law prior to delinquency. Landlord shall reasonably cooperate with
Tenant in connection with any tax contest. Real property taxes and assessments
with respect to the Premises for a billing period during which Tenant’s
obligations pursuant to this Lease expire or terminate as to the Premises shall
be adjusted and prorated on a daily basis between Landlord and Tenant, whether
or not such tax or assessment is imposed before or after such expiration or
termination of this Lease. Within thirty (30) days after the expiration of the
Term, Landlord shall reimburse Tenant for all real property taxes and
assessments paid by Tenant for the remainder of that calendar year (it being
agreed that Tenant may pay all taxes for such year, subject to the aforesaid
reimbursement). This obligation shall survive the expiration of this Lease.
Landlord shall have the right, at Landlord’s expense (y) to seek a reduction in
the valuation of the Premises and/or any portion or part thereof assessed for
tax purposes if, within thirty (30) days after delivery of written notice by
Landlord to Tenant, Tenant fails to commence a proceeding to secure such
reduction; and/or (z) to participate in any such proceeding commenced by Tenant.
Tenant agrees to indemnify and hold Landlord, its OFFICERS, DIRECTORS, PARTNERS,
EMPLOYEES, AGENTS and the Landlord Parties harmless from and against any costs
or expenses (including reasonable attorneys’ fees) or liabilities in connection
with any such tax contest proceeding if such proceeding has been requested or
initiated by Tenant. The foregoing indemnity by Tenant shall not be applicable
if Landlord voluntarily elects to participate in such proceeding. The foregoing
indemnity shall expressly survive the expiration or sooner termination of this
Lease. Landlord and Tenant shall use commercially reasonable efforts to have the
tax assessor send tax bills directly to Tenant and Tenant shall provide a copy
thereof within ten (10) days after receipt. In the event the parties are unable
to transfer receipt of the tax bill to Tenant, then within ten (10) days after
Landlord’s receipt thereof, Landlord shall deliver to Tenant copies of any tax
or assessment statements that it receives with respect to the Premises, and if
Landlord fails to provide any such statement and, as a result of such failure,
Tenant does not timely pay taxes, then Landlord shall be responsible for any
fees, penalties, or similar charges with respect to the associated taxes or
assessments. Otherwise, Tenant shall be responsible for any fees, penalties, or
similar charges with respect to the associated taxes or assessments.

 

12.WAIVER OF SUBROGATION. RELEASE FROM OWN NEGLIGENCE (BUT NOT GROSS NEGLIGENCE
OR INTENTIONAL MISCONDUCT): ANYTHING TO THE CONTRARY IN THIS LEASE
NOTWITHSTANDING, NEITHER PARTY, NOR ITS OFFICERS, DIRECTORS, PARTNERS,
EMPLOYEES, AGENTS OR INVITEES (EACH, A "RELEASED PARTY") SHALL BE LIABLE TO THE
OTHER PARTY OR TO ANY INSURANCE COMPANY (BY WAY OF SUBROGATION OR OTHERWISE)
INSURING THE OTHER PARTY FOR ANY LOSS OR DAMAGE TO ANY BUILDING STRUCTURE OR
OTHER TANGIBLE PROPERTY (INCLUDING, WITHOUT LIMITATION, EQUIPMENT) ON THE
PROPERTY, OR LOSS OF BUSINESS OR RENTAL INCOME IN CONNECTION WITH THE PROPERTY,
EVEN THOUGH SUCH LOSS OR DAMAGE MIGHT HAVE BEEN OCCASIONED BY THE NEGLIGENCE OF
ANY RELEASED PARTY (THIS CLAUSE SHALL NOT APPLY, HOWEVER, TO ANY DAMAGE CAUSED
BY THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF THE RELEASED PARTY). EACH
PARTY REPRESENTS AND COVENANTS THAT IT SHALL OBTAIN APPROPRIATE WAIVERS OF
SUBROGATION IN ITS PROPERTY INSURANCE POLICIES THAT IT MAY ELECT TO CARRY. THIS
SECTION RELEASES A PARTY FOR THE CONSEQUENCES OF ITS OWN NEGLIGENCE (EXCLUSIVE
OF GROSS NEGLIGENCE). PARTIES NAMED HEREIN NOT SIGNING THIS LEASE ARE EXPRESS
AND INTENDED THIRD PARTY BENEFICIARIES OF THIS WAIVER OF SUBROGATION.

 

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13.Assignment & Subletting. Except as provided herein, Tenant shall not assign
or in any manner transfer this Lease or any estate or interest hereunder and
shall not sublease the Premises or any part thereof without the prior written
consent of Landlord, which shall not be unreasonably withheld, conditioned, or
delayed. As part of Tenant’s request for, and as a condition to, Landlord’s
consent to such assignment or sublease, Tenant shall provide Landlord with
financial statements for the proposed transferee and such other information as
Landlord may reasonably request. Tenant shall not be entitled to receive
monetary damages based upon a claim that Landlord unreasonably withheld its
consent to a proposed transfer to a third party and Tenant’s sole remedy shall
be an action to enforce any such provision through specific performance or
declaratory judgment. Tenant shall reimburse Landlord for its actual reasonable
costs and expenses incurred in connection with such assignment or sublease
request.

 

Notwithstanding anything in this Lease to the contrary, so long as Tenant is not
in default under this Lease beyond applicable notice and cure periods, the
consent of the Landlord need not be obtained if the assignment of the Lease is
to a: (i) parent, subsidiary or affiliate of Tenant; (ii) company with which
Tenant may merge or consolidate; (iii) corporation that acquires all or
substantially all of the shares of stock or assets of Tenant; or (iv) to any
corporation which is the successor corporation in the event of a corporate
reorganization (a “Related Entity”); provided, however, that (i) such Related
Entity does not use the Premises for any other use than the use permitted by
this Lease, and (ii) with respect to an assignment to a Related Entity described
in subsections (ii) and (iii), such Related Entity has a tangible net worth
equal to or greater than $10,000,000.00. Landlord agrees that Tenant shall have
the right, without Landlord’s consent, to sublease or license a portion of the
Premises to a Related Entity described in subsection (i) above, provided that
such Related Entity does not use the Premises for any other use than the use
permitted by this Lease. Tenant shall give Landlord written notice at least ten
(10) days prior to the effective date of the proposed transfer, along with all
applicable documentation and other information necessary for Landlord to
determine that the requirements of this Section 13 have been satisfied,
including if applicable, the qualification of such proposed transferee as an
affiliate of Tenant or a Related Entity.

 

14.Events of Default & Remedies. Each of the following occurrences shall
constitute an “Event of Default”: (a) Tenant’s failure to pay Fixed Rental, or
any other sums due from Tenant to Landlord under this Lease (provided, however,
no such Event of Default shall occur under this subparagraph (a) unless Tenant
fails to pay any such sum within five (5) Business Days after receipt of a
written notice of default from Landlord; provided, however, that such notice
shall not be required more than two (2) times in a given calendar year);
(b) Tenant’s failure to perform, comply with, or observe any other agreement or
obligation of Tenant under this Lease, which failure is not cured within thirty
(30) days of written notice from Landlord (provided, however, if Tenant
commences such cure within such 30-day period and diligently pursues such cure,
Tenant may have such additional time as may be reasonably necessary to effect
such cure); (c) Tenant’s failure to perform any of the obligations of Tenant in
the manner set forth in Section 10, and such failure continues for more than ten
(10) days following Tenant’s receipt of Landlord’s written notice to Tenant of
the same; or (d) the admission by Tenant in writing that it cannot meet its
obligations as they become due or the making by Tenant of an assignment for the
benefit of its creditors. Any Event of Default shall be considered a breach of
this Lease by Tenant. In addition to any and all other rights or remedies
Landlord may have in connection with this Lease, as provided by law or equity,
Landlord shall have the following rights and remedies upon the occurrence of any
Event of Default: (a) without terminating this Lease, to change the locks on the
doors to the Premises and to exclude Tenant therefrom; (b) terminate this Lease
and take possession of the Premises and to re-let the Premises for the
Landlord’s account (no termination of this Lease shall relieve the Tenant of the
obligation to pay any Fixed Rental or any other amounts due under the terms of
this Lease prior to termination) and recover the Landlord’s Liquidated Damages
(as defined below); and (c) Landlord may terminate Tenant’s right to possession
of the Premises without terminating this Lease, reenter and take possession of
the Premises and remove all persons and property therefrom with or without
process of law, without being deemed guilty of any manner of trespass and
without prejudice to any remedies for arrears of the Fixed Rental or other
amounts due hereunder or existing breaches hereof, and lease, manage, and
operate the Premises and collect the rents, issues, and profits therefrom all
for the account of Tenant, and credit to the satisfaction of Tenant’s
obligations under this Lease the net rental received (after deducting therefrom
all reasonable costs and expenses of repossessing, leasing, managing, and
operating the Premises). The term “Landlord’s Liquidated Damages” for purposes
of this Section means the worth at the time of award by the court having
jurisdiction thereof of (i) the unpaid Fixed Rental and other charges and
adjustments called for under the Lease which had been earned at the time of
termination, (ii) the amount by which the unpaid Fixed Rental and other charges
and adjustments called for under the Lease which would have been earned after
termination until the time of award exceeds the amount of such Fixed Rental loss
for the same period which the Tenant proves could have been reasonably avoided,
and (iii) the amount by which the unpaid Fixed Rental and other charges and
adjustments called for under this Lease for the balance of the term after the
time of such award exceeds the amount of such Fixed Rental loss for the same
period that Tenant proves could be reasonably avoided. The worth at the time of
award of the sums referred to in subsections (i) and (ii) above, is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). In addition to the
foregoing remedies, Tenant shall be required to pay all expenses reasonably
incurred by Landlord in enforcing its rights and remedies under this Lease,
including attorneys’ fees, court costs and interest at the lesser of ten percent
(10%) or the maximum rate of interest allowed by applicable law, and shall pay
to Landlord the commercially reasonable costs, losses and expenses incurred by
Landlord in reletting all or any portion of the Premises, including the cost of
removing and storing Tenant’s personal property and other property, repairing
the Premises, removing and/or replacing Tenant’s signage, and making the
Premises ready for a new tenant, including the cost of leasehold improvements.
Upon any re-letting of the Premises by Landlord, all rent received by Landlord
shall be applied (i) first to the payment of any indebtedness other than rent or
other charges due under this Lease from Tenant, (ii) second to the payment of
any reasonable and related costs and expenses of such re-letting (including
brokerage fees and attorney’s fees and costs of alterations and repairs), and
(iii) third to the payment of all Fixed Rental and other charges due and unpaid
under this Lease. In no event shall the Tenant be entitled to receive any
surplus of any sums received by Landlord on re-letting the Premises, in excess
of the rent and other charges payable under this Lease. In no event shall Tenant
be liable for consequential, punitive, exemplary or other damages (other than
actual damages only) in connection with this Lease. Landlord shall use
commercially reasonable efforts to mitigate damages.

 

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15.Landlord’s Default. If Landlord defaults under this Lease, Tenant will give
Landlord written notice specifying such default with particularity, and Landlord
shall thereupon have thirty (30) days in which to cure any such default;
provided, however, if Landlord commences such cure within such 30-day period and
diligently pursues such cure, Landlord may have such additional time as may be
reasonably necessary to effect such cure. Unless and until Landlord fails to so
cure any default after such notice, Tenant shall not have any remedy or cause of
action by reason thereof; provided, however, in the event of a bona fide
emergency to person or property, Tenant may cure such default and receive
reimbursement for Tenant’s reasonable third-party costs in affecting such cure
within thirty (30) days after invoice. All obligations of Landlord hereunder
will be construed as covenants, not conditions. In no event shall Landlord be
liable for consequential, punitive, exemplary or other damages (other than
actual damages only) in connection with this Lease. Tenant shall use
commercially reasonable efforts to mitigate damages. Landlord’s liability for
failure to perform any of its obligations hereunder is hereby expressly limited
to Landlord’s interest in and to the Premises. Should Landlord fail to pay any
sum required to be paid by Landlord hereunder, or fail to perform any obligation
required to be performed by Landlord hereunder, any judicial proceedings brought
by Tenant against Landlord shall be limited to proceeding against Landlord’s
rights and interest in and to the Premises, and no attachment, execution, or
other writ or process shall be sought, issued, or levied upon any assets,
properties, or funds of Landlord, other than against Landlord’s interest in and
to the Premises. Tenant hereby waives its statutory lien under Section 91.004 of
the Texas Property Code. Notwithstanding anything contained in this Lease to the
contrary, the obligations of Landlord under this Lease (including any actual or
alleged breach or default by Landlord) do not constitute personal obligations of
Landlord or the individual partners, directors, officers, members or
shareholders of Landlord or against Landlord’s partners or any other persons or
entities having any interest in Landlord, or any of their personal assets for
satisfaction of any liability with respect to this Lease.

 

16.Mechanics’ Liens. Tenant shall fully and promptly pay all sums necessary for
the costs or repairs, alterations, improvements, charges or other work done by
Tenant on the Premises. Tenant shall indemnify and hold Landlord harmless from
and against any and all such costs and liabilities incurred by Tenant, and
against any and all mechanics’, materialmen’s, or laborers’ liens arising out of
or from such work or the cost thereof which may be asserted, claimed or charged
against the Premises. This obligation shall survive the termination of this
Lease.

 

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17.Holding Over. If Tenant fails to vacate the Premises at the Termination Date,
then Tenant shall be a tenant at sufferance and Tenant shall pay as a daily
Fixed Rental an amount equal to 1.2 times the daily Fixed Rental payable during
the last month of the Term. In no event shall Tenant be liable for damages in
connection with any holdover unless such holdover continues for a period of more
than sixty (60) days. If Landlord is unable to deliver possession of the
Premises to a new tenant, or to perform improvements for a new tenant, as a
result of Tenant’s holdover and Tenant fails to vacate the Premises within sixty
(60) days after Landlord notifies Tenant of Landlord’s inability to deliver
possession, or perform improvements, Tenant shall be liable to Landlord for all
reasonable damages that Landlord suffers from the holdover.

 

18.Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and deemed to be delivered, whether actually
received or not, (a) if hand delivered or post marked by the U.S. Postal
Service, postage prepaid, registered or certified mail, return receipt
requested, upon deposit with the carrier, (b) if sent by courier or express mail
where evidence of delivery is retained, upon deposit, or (c) sent via electronic
mail as long as such notice is also simultaneously sent by one of the other
methods approved hereunder. Any notice executed and delivered by either party’s
legal counsel (or any other authorized agent of such party) shall be fully
effective as if the same had been executed and delivered by such party. Landlord
and Tenant may execute this Lease by electronic counterparts or PDF counterparts
delivered electronically, each of which shall be deemed an original for all
purposes.

 

19.Indemnification.

 

a.Subject to Section 12 above, Tenant shall indemnify, defend and hold Landlord
harmless from any claim for injury to person or damage to property accruing
during the Term of this Lease and occurring within, on or about the Premises or
arising from the negligence or intentional misconduct of Tenant, its agents,
officers, employees, or contractors. For the avoidance of doubt, this
Section 19(a) does not cover an environmental claim.

 

b.Tenant agrees that Tenant shall not knowingly receive, accept, store, dispose
or release any hazardous or toxic substances on or in the Premises in violation
of environmental laws, or transport any hazardous or toxic substances to or from
the Premises in violation of environmental laws, except materials used in
Tenant’s ordinary course of business, and any such materials will be stored,
used, and disposed of in compliance with all environmental laws. Tenant shall
indemnify, defend and hold Landlord harmless from any claim relating to the
environmental condition of the Premises accruing during the Term of this Lease
and caused by Tenant or its agents, employees, contractors, or invitees (each, a
“Tenant Party”). For the avoidance of doubt, Tenant shall have no liability to
Landlord for any environmental condition of the Premises (or a related claim)
that (a) was not caused by a Tenant Party, or (b) existed or accrued prior to
the Commencement Date, even if caused by a Tenant Party, except to the extent a
Tenant Party exacerbates such pre-existing condition.

 

8

 

 

These indemnity obligations shall survive the termination of this Lease as to
claims that accrued during the Term of this Lease. For Landlord’s
indemnification rights to remain effective, Landlord must notify Tenant in
writing within sixty (60) days of receiving notice of the claim.

 

20.Casualty. In the event of a casualty involving the Premises that will take
more than ninety (90) days to repair, as reasonably estimated by Landlord (the
“Landlord’s Rebuild Estimate”), then Landlord or Tenant may terminate this Lease
within thirty (30) days after delivery of Landlord’s Rebuild Estimate. Landlord
shall provide Landlord’s Rebuild Estimate within thirty (30) days of the date of
the applicable casualty. If neither party elects to terminate this Lease as
provided above or if neither party has the right to terminate this Lease as
provided above, then Landlord shall promptly commence to restore the Premises to
substantially the same condition that existed prior to the fire or other
casualty (“Landlord’s Repair Obligation”), exclusive of any Alterations,
additions, improvements, fixtures and equipment installed by or on behalf of
Tenant (whether before or after the Commencement Date). Notwithstanding the
foregoing, Landlord shall not be required to fulfill its Landlord’s Repair
Obligations to the extent that any lender requires that Landlord’s insurance
proceeds be applied to the payment of the mortgage debt or if the casualty is
not a claim covered by insurance or if Landlord’s insurance proceeds are
insufficient to satisfy the cost of the repair work, and in such event Landlord
shall have the right to terminate this Lease upon notice to Tenant.
Notwithstanding the foregoing, if Landlord’s Repair Obligation has not been
substantially completed within forty-five (45) days after the estimated
restoration date set forth in Landlord’s Rebuild Estimate (the last day of such
45-day period being the “Casualty Termination Date”), Tenant shall have the
right to terminate this Lease effective upon thirty (30) days’ prior written
notice to Landlord delivered within sixty (60) days after the Casualty
Termination Date; provided, however, that such termination shall be null and
void if Landlord completes the Landlord’s Repair Obligations prior to the
expiration of such sixty (60) day period. In the event that this Lease is
terminated as set forth herein, the Fixed Rental shall be apportioned as of the
date of the damage and, provided Tenant is not in default, Tenant shall be
entitled to a refund from Landlord of amounts for the Fixed Rental or other
charges prepaid by Tenant to Landlord for the period arising after the date of
the casualty. Tenant will have no claim to insurance proceeds with respect to
insurance policies maintained by Landlord, condemnation award or proceeds in
lieu of condemnation; provided that in the event of a casualty, Tenant shall be
permitted to retain any insurance proceeds payable under any policy carried by
Tenant. In the event the Premises are untenantable in whole or in part and
neither party terminates as provided herein, then Fixed Rental shall be
equitably abated to reflect the portion of the Premises not tenantable.

 

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21.Condemnation. In the event that Landlord or Tenant receives notice of any
pending or threatened condemnation or any public or quasi-public taking, use
under law, eminent domain or private purchase in lieu thereof (a “Taking”) of
any portion of the industrial building(s) located on the Premises, then such
party shall promptly notify the other in writing. If (i) any portion of the
industrial building(s) location on the Premises or (ii) ten percent (10%) or
more of the Premises will be taken during the Term of this Lease, then Landlord
or Tenant shall have the right, exercisable by delivery of written notice to the
other, to terminate this Lease (or any portion hereof). All compensation awarded
for a Taking shall be the property of Landlord. The right to receive
compensation or proceeds is expressly waived by Tenant; provided, however,
Tenant may file a separate claim for Tenant’s furniture, fixtures, equipment and
other personal property, loss of goodwill and Tenant’s reasonable relocation
expenses, to the extent it will not reduce Landlord’s award. Tenant hereby
waives any right it may have pursuant to any applicable Laws and agrees that the
provisions hereof shall govern the parties’ rights in the event of any Taking.

 

22.Miscellaneous.

 

a.Nothing herein contained shall be deemed or construed by the parties hereto,
nor by any third party, as creating the relationship of principal and agent or
of partnership or of joint venture between Landlord and Tenant, it being
understood and agreed that neither the method of computation of Fixed Rental,
nor any other provisions contained herein, nor any acts of the parties hereto,
shall be deemed to create any relationship between the parties hereto other than
the relationship of landlord and tenant.

 

b.Within thirty (30) days after the request of the other, at any time and from
time to time, both Landlord and Tenant agree to execute, acknowledge and deliver
an estoppel certificate certifying that (i) this Lease is in full force and
effect, (ii) the date through which Fixed Rental and other charges due hereunder
have been paid and (iii) to such party’s knowledge, that no default by Landlord
or Tenant, as appropriate, has occurred hereunder or specifying the nature of
any such default.

 

c.Each of the parties represents and warrants that there are no unpaid claims
for brokerage commission or finder’s fees in connection with the execution of
this Lease, and each agrees to indemnify the other against, and hold it harmless
from, all liabilities arising from any such claim (including without limitation,
the cost of legal fees in connection therewith). This obligation shall survive
the termination of this Lease.

 

d.The laws of the state in which the Premises is located shall govern the
interpretation, validity, performance and enforcement of this Lease (without
reference to choice of law principles).

 

e.Each provision of this Lease shall be construed in such manner as to give such
provision the fullest legal force and effect possible. To the extent any
provision herein (or part of such provision) is held to be unenforceable or
invalid when applied to a particular set of facts, or otherwise, the
unenforceability or invalidity of such provision (or part thereof) shall not
affect the enforceability or validity of the remaining provisions hereof (or of
the remaining parts of such provision), which shall remain in full force and
effect, nor shall such unenforceability or invalidity render such provision (or
part thereof) would be held legally enforceable and/or valid.

 

10

 

 

f.Notwithstanding anything to the contrary, in no event shall Landlord or Tenant
be liable for consequential, punitive, exemplary or other damages (above and
beyond actual damages only) in connection with this Lease.

 

g.In the event of litigation hereunder, the prevailing party shall be entitled
to an award of its reasonable attorney’s fees. Landlord and Tenant agree that
should any suit, action or proceeding arising out of this Lease be instituted by
any party hereto, such suit, action or proceeding shall be instituted only in a
state or federal court in the county in which the Premises are located or, if no
such court is located in that county, then in the state or federal court that is
closest to the Premises (the “Approved Jurisdiction”). Landlord and Tenant each
consent to the in personam jurisdiction of any state or federal court in the
Approved Jurisdiction, and waive any objection to the venue of any such suit,
action or proceeding. This Section 22(h) shall survive the expiration or
termination of this Lease.

 

23.Delivery of the Premises. Tenant acknowledges and agrees the Premises are
delivered by Landlord and accepted by Tenant in its present “AS IS, WHERE IS,
WITH ALL FAULTS” condition as of the Commencement Date. Tenant acknowledges that
it has been provided access and ample opportunity to inspect the Premises and
its existing condition, improvements and systems and, except as expressly
provided otherwise in this Lease, is not relying upon any warranty or
representation of Landlord or its agents regarding the condition, adequacy or
suitability of the same for Tenant’s intended purpose, LANDLORD HEREBY EXPRESSLY
DISCLAIMING ANY SUCH WARRANTY. Landlord shall have no liability or obligation to
any Tenant Party for any pre-existing environmental condition existing as of the
Effective Date, except to the extent Landlord, its affiliates, agents or
contractors exacerbate such condition.

 

24.No Contractual or Statutory Lien. Landlord hereby waives any contractual or
statutory lien on the goods, wares, or equipment of Tenant located at the
Premises.

 

25.Attornment. Tenant shall, in the event any proceedings are brought for the
foreclosure of, or in the event of the exercise of the power of sale under any
mortgagee made by Landlord covering any part of the Premises, attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as
Landlord under this Lease.

 

26.Priority of Lease. Upon written request of Landlord or the holder or of a
proposed holder of any mortgage now or hereafter covering or to cover any part
of the Premises, Tenant will subordinate its rights under this Lease to the lien
of such mortgage and to all advances made or to be made upon the security
thereof, and Tenant shall, within ten (10) business days after written demand
therefor, execute, acknowledge, and deliver an instrument, in the form
customarily used by such encumbrance holder, and reasonably satisfactory to
Tenant, effecting such subordination; provided, however, as a condition to such
subordination, Landlord shall cause such lienholder to sign a commercially
reasonable subordination and non-disturbance agreement.

 

11

 

 

27.OFAC. Landlord hereby represents and warrants to Tenant that Landlord is not
acting, directly or indirectly for, or on behalf of, any person, group, entity
or nation named by any Executive Order of the President of the United States of
America (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) or the United States Treasury Department, as a terrorist, “Specially
Designated National and Blocked Person,” or other banned or blocked person,
entity, or nation pursuant to any law that is enforced or administered by the
United States Office of Foreign Assets Control, and is not engaging in this
transaction, directly or indirectly, on behalf of, or instigating or
facilitating this transaction, directly or indirectly, on behalf of, any such
person, group, entity or nation.

 

[Remainder of Page Intentionally Blank]

 

12

 

 

EXECUTED on the dates set forth below to be effective as of the date first above
written.

 

  TENANT:        TUESDAY MORNING PARTNERS, LTD., a Texas limited partnership    
  By: Days of the Week, Inc., a Delaware corporation, its General Partner      
  By:       Name:       Title:                               Date signed:

 

Address:

 

Tuesday Morning Corporation 

6250 Lyndon B. Johnson Freeway

Dallas, Texas 75240
Attn.: General Counsel
Email: bzeterberg@tuesdaymorning.com and legal@tuesdaymorning.com

 

With a copy to:

 

Haynes and Boone, LLP Haynes and Boone, LLP 2323 Victory Avenue 1050 17th Street
Suite 700 Suite 1800 Dallas, TX 75219 Denver, CO 80265 Attn: Tom D. Harris and
Ian T. Peck Attn:     Daniel P. Malone, Jr. Email: Tom.Harris@haynesboone.com
Email:    Dan.Malone@haynesboone.com Ian.Peck@haynesboone.com  

 

Signature Page to
Lease

 

 

 

 

  LANDLORD:       RIALTO REAL ESTATE FUND IV – PROPERTY, LP, a Delaware limited
partnership       By: Rialto Partners GP IV – Property, LLC, a Delaware limited
liability company        
By:                                                                                                                         
    Name:     Title:     Date signed:       Address:       Rialto Real Estate
Fund IV-Property, LP   c/o Rialto Capital Management, LLC   501 Santa Monica
Blvd., Suite 501,   Santa Monica, California 90401   Attn:  Mike Parker    
Aaron Davis     Brady Scott   Email:  mike.parker@rialtocapital.com    
aaron.davis@rialtocapital.com     brady.scott@rialtocapital.com       With a
copy to:       Bilzin Sumberg Baena Price & Axelrod LLP   1450 Brickell Avenue,
Suite 2300   Miami, FL 33131   Attn: Jay M. Sakalo   Email:  jsakalo@bilzin.com

 

Signature Page to
Lease

 

 

 

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

Attached.

 

Ex. A-1

 

 

EXHIBIT B

 

TENANT INSURANCE REQUIREMENTS

 

Tenant, at its sole cost and expense, shall procure and maintain throughout the
Term of the Lease the following policies of insurance (which may be part of
umbrella policies):

 

(a)            property insurance causing Tenant's leasehold improvements and
business personal property (sometimes also referred to as "fixtures and
contents") at the Premises to be insured under the broadest available special
form of property coverage, sometimes referred to as "all-risk" coverage (such as
the form identified as CP 10 30, and any successor form, published by Insurance
Services Office, Inc.), such insurance coverage (i) to be in the full amount of
the replacement cost of all insured property, (ii) to include coverage for the
loss of business income, in an amount deemed reasonable by Tenant, (iii) to
contain no deductible or self-insured retention in excess of $100,000.00,
(iv) to contain no coinsurance penalty clause, and (v) to include a waiver of
subrogation in favor of Landlord; and

 

(b)            combination of commercial general liability and umbrella
insurance insuring both Landlord and Tenant against all claims, demands or
actions for bodily injury, property damage, personal and advertising injury
arising out of or in connection with Tenant's use or occupancy of the Premises,
or by the condition of the Premises, with a limit of not less than $10,000,000
per occurrence and aggregate (and no offset for occurrences on property other
than the Premises), and with coverage for contractual liability naming Landlord
as Additional Insured, and to include a waiver subrogation in favor of the
Landlord; and

 

(c)            worker's compensation insurance insuring against and satisfying
Tenant's obligations and liabilities under the worker's compensation laws of the
state where the Premises is located, together with employer's liability
insurance in an amount not less than $1,000,000.00 each accident, $1,000,000.00
disease policy limit, and $1,000,000.00 disease each employee; the full limits
of insurance are to apply per location, and include a waiver of subrogation in
favor of Landlord; and

 

(d)            automobile liability insurance covering all owned, non-owned, and
hired vehicles with a $1,000,000 per accident limit for bodily injury and
property damage; and

 

(e)            during any period when construction work is being done in or on
the Premises, such additional insurance as Landlord may reasonably require; and

 

(f)            business interruption insurance in the unallocated amount of at
least $10,000,000; and

 

(g)            All policies must be written by insurance companies whose rating
in the most recent Best’s Rating Guide, is not less than A(-): VII; and

 

(h)            Certificates of Insurance evidencing the required coverages must
be delivered to the Landlord prior to the commencement of the Lease.

 

 

 

EXHIBIT E-2

 

OFFICE LEASE

 

[EXHIBIT FOLLOWS ON NEXT PAGE]

 

Purchase and Sale Agreement
6250 Lyndon B. Johnson Freeway, Dallas, Texas
4404 South Beltwood Parkway, Farmers Branch, Texas
14621, 14639 and 14601 Inwood Road, Addison, Texas
14303 Inwood Road, Farmers Branch, Texas

 

E-2

 

 

 

LEASE AGREEMENT

 

This SHORT TERM LEASE (this “Lease”) is entered into as of the ___ day of
__________, 2020, by and between RIALTO REAL ESTATE FUND IV – PROPERTY, LP, a
Delaware limited partnership (“Landlord”) and TUESDAY MORNING, INC., a Texas
corporation (“Tenant”).

 

28.Lease Grant and Term. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, the real property as described in the
legal description attached hereto as Exhibit A (together with any improvements
thereon) located at 6250 LBJ Freeway, Dallas, Texas (the “Premises” or the
“Property”). The term of this Lease (the “Term”) shall commence on the date
first set forth above (the “Commencement Date”) and shall continue until
5:00 p.m. (Central Standard Time) on the date that is one hundred twenty (120)
months following the Commencement Date (“Termination Date”).

 

29.Permitted Use; Operation. Tenant shall use the Premises for general office
use, together with any incidental purposes thereto, and for no other purpose.
Tenant will ensure that Tenant’s use of the Premises complies with all laws,
ordinances, rules and regulations of governmental authorities and all matters of
record affecting the Premises, now or hereafter in effect.

 

  30.Rent Payments. During the Term, Tenant agrees to pay to Landlord a monthly
sum equal to $67,761.67 (the “Fixed Rental”). All Fixed Rental payments shall be
due and payable, in advance, on or before the first day of each succeeding
calendar month during the Term. Fixed Rental for any fractional month during the
Term shall be prorated based on the current Fixed Rental for each day of the
partial month this Lease is in effect. For the avoidance of doubt, Tenant has no
monetary obligations to Landlord under this Lease unless expressly provided
otherwise in this Lease. Tenant may (i) send Fixed Rental Payments to the
following address: c/o Rialto Capital Management, LLC, 501 Santa Monica Blvd.,
Suite 501, Santa Monica, California 90401, or (ii) elect to wire Fixed Rental
Payments (or pay via Automated Clearing House), in which case Landlord shall
provide wiring instructions to Tenant. Commencing on the first (1st) anniversary
of the Commencement Date and continuing each anniversary date thereafter during
the Term, the Fixed Rental amount shall be increased by two percent (2.0%) over
the prior year’s Fixed Rental amount. Notwithstanding anything to the contrary
contained herein, this Lease is an absolute net lease. It is the intention of
Landlord and Tenant that the Fixed Rental and other sums and charges provided
herein shall be absolutely net to Landlord and that such amounts shall be paid
without setoff, abatement, deduction, reduction, except as otherwise expressly
permitted by this Lease.

 

31.Late Fees; Interest. In the event that a Fixed Rental payment is not received
by Landlord within five (5) days of the date it is due, Tenant may be assessed a
late fee by Landlord of 2.5% of the amount due; provided, however, no such late
fee shall be owed unless such late payment continues for a period of five
(5) days after written notice to Tenant (but Tenant shall only be entitled to
one such notice in any calendar year, and thereafter during such calendar year
any such payment not paid within five (5) days of its due date shall trigger
such late payment without the requirement of additional notice).

 

1 

 

 

32.Intentionally Deleted.

 

33.Maintenance, Repair, and Replacement; Surrender. Excluding damage by casualty
or condemnation, which are governed elsewhere in this Lease, Tenant, at its sole
cost and expense, shall maintain and repair in their current condition,
reasonable wear and tear excepted, the Premises (including the roof, foundation,
exterior walls and other structural elements) and equipment and systems within
the Premises (including generators, lighting, electrical, plumbing, hydraulics,
mechanical, heating, ventilating and air conditioning), all driveways, parking
areas, landscaping, and other improvements located on the Premises, which
maintenance and repair shall be in Tenant’s reasonable discretion, and may
include replacement of such equipment, systems, or structural elements of the
Property if replacement is required in Tenant’s reasonable discretion. During
the Term of this Lease, Landlord shall have no obligations with respect to the
maintenance or repair (including replacement) of the Premises, all of such
obligations being assumed by Tenant, except as otherwise expressly provided
herein. Landlord may make any repairs to the Premises upon thirty (30) days
advance written notice to Tenant (or such shorter period of time if Landlord
reasonably determines the failure to immediately repair will result in material
long-term damage to the Premises (or any part thereof), or would cause injury or
harm to human health, in Landlord’s reasonable judgment), so long as Landlord
uses commercially reasonable efforts to minimize interference with Tenant’s
business operating in exercising its rights hereunder. In the event that
Landlord is required to make any repairs to the Premises to correct a condition
or state of facts which if not corrected would result in long-term material
damage to the Premises (or any material part thereof), or would cause injury or
harm to human health, in Landlord’s reasonable judgment and Tenant fails to
commence and diligently pursue such repair within ten (10) days’ of receipt of
notice thereof (or with respect to an emergency condition, within five (5) days’
of receipt of notice thereof), Tenant shall reimburse Landlord for all of
Landlord’s out-of-pocket costs in making such repair within ten (10) days
following Landlord’s invoice therefor. Landlord shall indemnify and hold
harmless Tenant for any actual, out-of-pocket costs, expenses or losses which
Tenant incurs due to Landlord’s, its agents or contractors’ negligence or
willful misconduct in connection with any repairs done by Landlord or on behalf
of Landlord at the Premises. Notwithstanding anything to the contrary, at the
expiration or earlier termination of this Lease, Tenant shall surrender the
Premises to Landlord in the then-existing condition of the Premises. Tenant and
Landlord shall schedule a walk-through inspection of the Premises at least
thirty (30) days in advance of the expiration date of the Premises. Landlord
shall have the right to identify which furniture and any other tangible personal
property on the Premises that Landlord requires Tenant to remove at the time
Tenant vacates the Premises. In the event that Tenant fails to remove such
identified property by the expiration or termination of this Lease, then such
property shall be considered abandoned and, at Landlord’s election, be deemed
the property of Landlord (except for any tangible personal property utilized by
Tenant pursuant to easements, leases, or licenses, provided that if such
property is not removed by the expiration of the Lease Term, Landlord shall have
the right to remove the same at Tenant’s reasonable expense), and Landlord shall
have the option to remove and dispose of the same, and Tenant shall pay the
reasonable, out-of-pocket costs of such removal to Landlord upon demand. Tenant
shall execute an “as is” Bill of Sale conveying Tenant’s interest in property
that Landlord has elected to assume at the expiration of the Term, and any other
reasonable documentation necessary to transfer ownership thereof.

 

2 

 

 

34.Alterations. Tenant shall not make or suffer or allow to be made any
alterations, additions or improvements in or to the Premises (collectively,
“Alterations”) without first obtaining Landlord’s written consent based on plans
and specifications (which may be preliminary) submitted by Tenant, which consent
shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, without prior consent from Landlord, Tenant shall be permitted to
make interior, non-structural Alterations to the Premises (but not structural or
exterior portions of the improvements) that do not adversely affect the roof, or
the heating, ventilating, air-conditioning, mechanical, electrical, plumbing or
life safety systems of the Premises, provided that the total cost to acquire and
install the proposed Alterations is no more than (i) $100,000 in any one
instance and (ii) $250,000 in the aggregate during any calendar year.

 

35.Signs.

 

a.Tenant shall not affix any signs or other advertising materials to the
Premises without the prior written consent of the Landlord, which may be
withheld in Landlord’s reasonable discretion. Existing signage is hereby
approved.

 

b.Landlord shall not affix any signs or other advertising materials to the
Premises, except that Landlord shall have the right to place a “For Lease” sign
on the Premises during the last (six) 6 months of the Term or a “For Sale” sign
on the Premises if Landlord desires to sell the Premises.

 

36.Utilities, Telephone, and Generator. Tenant is currently in possession of the
Premises and acknowledges that the utilities currently serving the Premises are
sufficient for Tenant’s use. Tenant shall pay directly to the utility provider
when due for the consumption of all utilities used in the Premises during the
Term. Tenant shall at all times have the right to access and utilize any
generators that service the Premises. In the event any utility shall become
unavailable at the Premises, Landlord shall reasonably cooperate with Tenant to
get such utility restored as soon as reasonably practicable.

 

3 

 

 

37.Insurance. Tenant shall maintain the insurance policies set forth on
Exhibit B hereto. Landlord will maintain: (i) commercial general liability
insurance with limits of $1,000,000 per occurrence and $2,000,000 in the
aggregate, and (ii) causes of loss-special form property insurance on the
Premises with customary exclusions in the amount of the full replacement cost
thereof, including business interruption insurance or rent loss insurance in
amount reasonably determined by Landlord (“Landlord’s Insurance”). Landlord
shall add Tenant as named additional insured on the policies Landlord is
required to carry hereunder. All liability insurance policies must delete the
contractual liability exclusion with respect to personal injury or damage to
property. All property insurance policies must waive subrogation against the
Tenant and Tenant related parties. Any insurance carried by Landlord may be in
the form of one or more blanket insurance policy(ies) covering multiple
properties. For each month during the Term, Tenant shall make a payment to
Landlord (an “Insurance Payment”) in an amount equal to one-twelfth (1/12) of
the Insurance Expenses (as hereinafter defined) for the calendar year in
question as reasonably estimated by Landlord. The Insurance Payments are
intended to reimburse Landlord for the actual Insurance Expenses accruing during
the Term for the Premises. For purposes herein, “Insurance Expenses” shall mean
the premiums, commercially reasonable deductibles of not more than $50,000 per
occurrence, and other expenses incurred by Landlord for Landlord’s Insurance,
but in no event shall Tenant be required to reimburse Landlord, and Insurance
Expenses shall exclude, environmental coverage, mold coverage, terrorism
coverage, pollution coverage and all other special coverages and/or endorsements
that Landlord, in Landlord’s reasonable discretion, may from time to time
consider appropriate in connection with Landlord’s ownership, management or
operation of the Premises. When the actual amount of Insurance Expenses for an
applicable calendar year are determined by Landlord, Landlord or Tenant, as
applicable, will pay to the other such amounts as may be appropriate to
reconcile Tenant’s payment of estimated Insurance Expenses based on actual
Insurance Expenses, within thirty (30) days after written demand together with
commercially reasonable evidence of the final amounts demanded. In the event
Landlord shall fail to carry any of the policies required by this Lease, or
fails to carry such policies in the form required hereunder, Tenant may purchase
such policies on behalf of Landlord and Tenant shall not be responsible for
payment of any Insurance Expenses related to such policies for so long as Tenant
shall maintain such policies on behalf of Landlord.

  

38.Taxes. During the Term, Tenant shall pay prior to delinquency all real
property taxes and assessments assessed against the Premises; provided, however,
(i) upon prior written notice to Landlord, Tenant shall have the right to
contest such taxes and assessments as long as in no event shall Tenant permit
the commencement of foreclosure proceedings against the Premises, and
(ii) Tenant may pay any assessments over the longest period of time allowed by
applicable law prior to delinquency. Landlord shall reasonably cooperate with
Tenant in connection with any tax contest. Real property taxes and assessments
with respect to the Premises for a billing period during which Tenant’s
obligations pursuant to this Lease expire or terminate as to the Premises shall
be adjusted and prorated on a daily basis between Landlord and Tenant, whether
or not such tax or assessment is imposed before or after such expiration or
termination of this Lease. Within thirty (30) days after the expiration of the
Term, Landlord shall reimburse Tenant for all real property taxes and
assessments paid by Tenant for the remainder of that calendar year (it being
agreed that Tenant may pay all taxes for such year, subject to the aforesaid
reimbursement). This obligation shall survive the expiration of this Lease.
Landlord shall have the right, at Landlord’s expense (y) to seek a reduction in
the valuation of the Premises and/or any portion or part thereof assessed for
tax purposes if, within thirty (30) days after delivery of written notice by
Landlord to Tenant, Tenant fails to commence a proceeding to secure such
reduction; and/or (z) to participate in any such proceeding commenced by Tenant.
Tenant agrees to indemnify and hold Landlord, its OFFICERS, DIRECTORS, PARTNERS,
EMPLOYEES, AGENTS and the Landlord Parties harmless from and against any costs
or expenses (including reasonable attorneys’ fees) or liabilities in connection
with any such tax contest proceeding if such proceeding has been requested or
initiated by Tenant. The foregoing indemnity by Tenant shall not be applicable
if Landlord voluntarily elects to participate in such proceeding. The foregoing
indemnity shall expressly survive the expiration or sooner termination of this
Lease. Landlord and Tenant shall use commercially reasonable efforts to have the
tax assessor send tax bills directly to Tenant and Tenant shall provide a copy
thereof within ten (10) days after receipt. In the event the parties are unable
to transfer receipt of the tax bill to Tenant, then within ten (10) days after
Landlord’s receipt thereof, Landlord shall deliver to Tenant copies of any tax
or assessment statements that it receives with respect to the Premises, and if
Landlord fails to provide any such statement and, as a result of such failure,
Tenant does not timely pay taxes, then Landlord shall be responsible for any
fees, penalties, or similar charges with respect to the associated taxes or
assessments. Otherwise, Tenant shall be responsible for any fees, penalties, or
similar charges with respect to the associated taxes or assessments.

 

4 

 

 

39.WAIVER OF SUBROGATION. RELEASE FROM OWN NEGLIGENCE (BUT NOT GROSS NEGLIGENCE
OR INTENTIONAL MISCONDUCT): ANYTHING TO THE CONTRARY IN THIS LEASE
NOTWITHSTANDING, NEITHER PARTY, NOR ITS OFFICERS, DIRECTORS, PARTNERS,
EMPLOYEES, AGENTS OR INVITEES (EACH, A "RELEASED PARTY") SHALL BE LIABLE TO THE
OTHER PARTY OR TO ANY INSURANCE COMPANY (BY WAY OF SUBROGATION OR OTHERWISE)
INSURING THE OTHER PARTY FOR ANY LOSS OR DAMAGE TO ANY BUILDING STRUCTURE OR
OTHER TANGIBLE PROPERTY (INCLUDING, WITHOUT LIMITATION, EQUIPMENT) ON THE
PROPERTY, OR LOSS OF BUSINESS OR RENTAL INCOME IN CONNECTION WITH THE PROPERTY,
EVEN THOUGH SUCH LOSS OR DAMAGE MIGHT HAVE BEEN OCCASIONED BY THE NEGLIGENCE OF
ANY RELEASED PARTY (THIS CLAUSE SHALL NOT APPLY, HOWEVER, TO ANY DAMAGE CAUSED
BY THE GROSS NEGLIGENCE OR THE INTENTIONAL MISCONDUCT OF THE RELEASED PARTY).
EACH PARTY REPRESENTS AND COVENANTS THAT IT SHALL OBTAIN APPROPRIATE WAIVERS OF
SUBROGATION IN ITS PROPERTY INSURANCE POLICIES THAT IT MAY ELECT TO CARRY. THIS
SECTION RELEASES A PARTY FOR THE CONSEQUENCES OF ITS OWN NEGLIGENCE (EXCLUSIVE
OF GROSS NEGLIGENCE). PARTIES NAMED HEREIN NOT SIGNING THIS LEASE ARE EXPRESS
AND INTENDED THIRD PARTY BENEFICIARIES OF THIS WAIVER OF SUBROGATION.

 

40.Assignment & Subletting. Except as provided herein, Tenant shall not assign
or in any manner transfer this Lease or any estate or interest hereunder and
shall not sublease the Premises or any part thereof without the prior written
consent of Landlord, which shall not be unreasonably withheld, conditioned, or
delayed. As part of Tenant’s request for, and as a condition to, Landlord’s
consent to such assignment or sublease, Tenant shall provide Landlord with
financial statements for the proposed transferee and such other information as
Landlord may reasonably request. Tenant shall not be entitled to receive
monetary damages based upon a claim that Landlord unreasonably withheld its
consent to a proposed transfer to a third party and Tenant’s sole remedy shall
be an action to enforce any such provision through specific performance or
declaratory judgment. Tenant shall reimburse Landlord for its actual reasonable
costs and expenses incurred in connection with such assignment or sublease
request.

 

5 

 

 

Notwithstanding anything in this Lease to the contrary, so long as Tenant is not
in default under this Lease beyond applicable notice and cure periods, the
consent of the Landlord need not be obtained if the assignment of the Lease is
to a: (i) parent, subsidiary or affiliate of Tenant; (ii) company with which
Tenant may merge or consolidate; (iii) corporation that acquires all or
substantially all of the shares of stock or assets of Tenant; or (iv) to any
corporation which is the successor corporation in the event of a corporate
reorganization (a “Related Entity”); provided, however, that (i) such Related
Entity does not use the Premises for any other use than the use permitted by
this Lease, and (ii) with respect to an assignment to a Related Entity described
in subsections (ii) and (iii), such Related Entity has a tangible net worth
equal to or greater than $10,000,000.00. Landlord agrees that Tenant shall have
the right, without Landlord’s consent, to sublease or license a portion of the
Premises to a Related Entity described in subsection (i) above, provided that
such Related Entity does not use the Premises for any other use than the use
permitted by this Lease. Tenant shall give Landlord written notice at least ten
(10) days prior to the effective date of the proposed transfer, along with all
applicable documentation and other information necessary for Landlord to
determine that the requirements of this Section 13 have been satisfied,
including if applicable, the qualification of such proposed transferee as an
affiliate of Tenant or a Related Entity.

 

6 

 

 

41.Events of Default & Remedies. Each of the following occurrences shall
constitute an “Event of Default”: (a) Tenant’s failure to pay Fixed Rental, or
any other sums due from Tenant to Landlord under this Lease (provided, however,
no such Event of Default shall occur under this subparagraph (a) unless Tenant
fails to pay any such sum within five (5) Business Days after receipt of a
written notice of default from Landlord; provided, however, that such notice
shall not be required more than two (2) times in a given calendar year);
(b) Tenant’s failure to perform, comply with, or observe any other agreement or
obligation of Tenant under this Lease, which failure is not cured within thirty
(30) days of written notice from Landlord (provided, however, if Tenant
commences such cure within such 30-day period and diligently pursues such cure,
Tenant may have such additional time as may be reasonably necessary to effect
such cure); (c) Tenant’s failure to perform any of the obligations of Tenant in
the manner set forth in Section 10, and such failure continues for more than ten
(10) days following Tenant’s receipt of Landlord’s written notice to Tenant of
the same; or (d) the admission by Tenant in writing that it cannot meet its
obligations as they become due or the making by Tenant of an assignment for the
benefit of its creditors. Any Event of Default shall be considered a breach of
this Lease by Tenant. In addition to any and all other rights or remedies
Landlord may have in connection with this Lease, as provided by law or equity,
Landlord shall have the following rights and remedies upon the occurrence of any
Event of Default: (a) without terminating this Lease, to change the locks on the
doors to the Premises and to exclude Tenant therefrom; (b) terminate this Lease
and take possession of the Premises and to re-let the Premises for the
Landlord’s account (no termination of this Lease shall relieve the Tenant of the
obligation to pay any Fixed Rental or any other amounts due under the terms of
this Lease prior to termination) and recover the Landlord’s Liquidated Damages
(as defined below); and (c) Landlord may terminate Tenant’s right to possession
of the Premises without terminating this Lease, reenter and take possession of
the Premises and remove all persons and property therefrom with or without
process of law, without being deemed guilty of any manner of trespass and
without prejudice to any remedies for arrears of the Fixed Rental or other
amounts due hereunder or existing breaches hereof, and lease, manage, and
operate the Premises and collect the rents, issues, and profits therefrom all
for the account of Tenant, and credit to the satisfaction of Tenant’s
obligations under this Lease the net rental received (after deducting therefrom
all reasonable costs and expenses of repossessing, leasing, managing, and
operating the Premises). The term “Landlord’s Liquidated Damages” for purposes
of this Section means the worth at the time of award by the court having
jurisdiction thereof of (i) the unpaid Fixed Rental and other charges and
adjustments called for under the Lease which had been earned at the time of
termination, (ii) the amount by which the unpaid Fixed Rental and other charges
and adjustments called for under the Lease which would have been earned after
termination until the time of award exceeds the amount of such Fixed Rental loss
for the same period which the Tenant proves could have been reasonably avoided,
and (iii) the amount by which the unpaid Fixed Rental and other charges and
adjustments called for under this Lease for the balance of the term after the
time of such award exceeds the amount of such Fixed Rental loss for the same
period that Tenant proves could be reasonably avoided. The worth at the time of
award of the sums referred to in subsections (i) and (ii) above, is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%). In addition to the
foregoing remedies, Tenant shall be required to pay all expenses reasonably
incurred by Landlord in enforcing its rights and remedies under this Lease,
including attorneys’ fees, court costs and interest at the lesser of ten percent
(10%) or the maximum rate of interest allowed by applicable law, and shall pay
to Landlord the commercially reasonable costs, losses and expenses incurred by
Landlord in reletting all or any portion of the Premises, including the cost of
removing and storing Tenant’s personal property and other property, repairing
the Premises, removing and/or replacing Tenant’s signage, and making the
Premises ready for a new tenant, including the cost of leasehold improvements.
Upon any re-letting of the Premises by Landlord, all rent received by Landlord
shall be applied (i) first to the payment of any indebtedness other than rent or
other charges due under this Lease from Tenant, (ii) second to the payment of
any reasonable and related costs and expenses of such re-letting (including
brokerage fees and attorney’s fees and costs of alterations and repairs), and
(iii) third to the payment of all Fixed Rental and other charges due and unpaid
under this Lease. In no event shall the Tenant be entitled to receive any
surplus of any sums received by Landlord on re-letting the Premises, in excess
of the rent and other charges payable under this Lease. In no event shall Tenant
be liable for consequential, punitive, exemplary or other damages (other than
actual damages only) in connection with this Lease. Landlord shall use
commercially reasonable efforts to mitigate damages.

 

7 

 

 

42.Landlord’s Default. If Landlord defaults under this Lease, Tenant will give
Landlord written notice specifying such default with particularity, and Landlord
shall thereupon have thirty (30) days in which to cure any such default;
provided, however, if Landlord commences such cure within such 30-day period and
diligently pursues such cure, Landlord may have such additional time as may be
reasonably necessary to effect such cure. Unless and until Landlord fails to so
cure any default after such notice, Tenant shall not have any remedy or cause of
action by reason thereof; provided, however, in the event of a bona fide
emergency to person or property, Tenant may cure such default and receive
reimbursement for Tenant’s reasonable third-party costs in affecting such cure
within thirty (30) days after invoice. All obligations of Landlord hereunder
will be construed as covenants, not conditions. In no event shall Landlord be
liable for consequential, punitive, exemplary or other damages (other than
actual damages only) in connection with this Lease. Tenant shall use
commercially reasonable efforts to mitigate damages. Landlord’s liability for
failure to perform any of its obligations hereunder is hereby expressly limited
to Landlord’s interest in and to the Premises. Should Landlord fail to pay any
sum required to be paid by Landlord hereunder, or fail to perform any obligation
required to be performed by Landlord hereunder, any judicial proceedings brought
by Tenant against Landlord shall be limited to proceeding against Landlord’s
rights and interest in and to the Premises, and no attachment, execution, or
other writ or process shall be sought, issued, or levied upon any assets,
properties, or funds of Landlord, other than against Landlord’s interest in and
to the Premises. Tenant hereby waives its statutory lien under Section 91.004 of
the Texas Property Code. Notwithstanding anything contained in this Lease to the
contrary, the obligations of Landlord under this Lease (including any actual or
alleged breach or default by Landlord) do not constitute personal obligations of
Landlord or the individual partners, directors, officers, members or
shareholders of Landlord or against Landlord’s partners or any other persons or
entities having any interest in Landlord, or any of their personal assets for
satisfaction of any liability with respect to this Lease

 

43.Mechanics’ Liens. Tenant shall fully and promptly pay all sums necessary for
the costs or repairs, alterations, improvements, charges or other work done by
Tenant on the Premises. Tenant shall indemnify and hold Landlord harmless from
and against any and all such costs and liabilities incurred by Tenant, and
against any and all mechanics’, materialmen’s, or laborers’ liens arising out of
or from such work or the cost thereof which may be asserted, claimed or charged
against the Premises. This obligation shall survive the termination of this
Lease.

 

44.Holding Over. If Tenant fails to vacate the Premises at the Termination Date,
then Tenant shall be a tenant at sufferance and Tenant shall pay as a daily
Fixed Rental an amount equal to 1.2 times the daily Fixed Rental payable during
the last month of the Term. In no event shall Tenant be liable for damages in
connection with any holdover unless such holdover continues for a period of more
than sixty (60) days. If Landlord is unable to deliver possession of the
Premises to a new tenant, or to perform improvements for a new tenant, as a
result of Tenant’s holdover and Tenant fails to vacate the Premises within sixty
(60) days after Landlord notifies Tenant of Landlord’s inability to deliver
possession, or perform improvements, Tenant shall be liable to Landlord for all
reasonable damages that Landlord suffers from the holdover.

 

8 

 

 

45.Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and deemed to be delivered, whether actually
received or not, (a) if hand delivered or post marked by the U.S. Postal
Service, postage prepaid, registered or certified mail, return receipt
requested, upon deposit with the carrier, (b) if sent by courier or express mail
where evidence of delivery is retained, upon deposit, or (c) sent via electronic
mail as long as such notice is also simultaneously sent by one of the other
methods approved hereunder. Any notice executed and delivered by either party’s
legal counsel (or any other authorized agent of such party) shall be fully
effective as if the same had been executed and delivered by such party. Landlord
and Tenant may execute this Lease by electronic counterparts or PDF counterparts
delivered electronically, each of which shall be deemed an original for all
purposes.

 

46.Indemnification.

 

a.Subject to Section 12 above, Tenant shall indemnify, defend and hold Landlord
harmless from any claim for injury to person or damage to property accruing
during the Term of this Lease and occurring within, on or about the Premises or
arising from the negligence or intentional misconduct of Tenant, its agents,
officers, employees, or contractors. For the avoidance of doubt, this
Section 19(a) does not cover an environmental claim.

 

b.Tenant agrees that Tenant shall not knowingly receive, accept, store, dispose
or release any hazardous or toxic substances on or in the Premises in violation
of environmental laws, or transport any hazardous or toxic substances to or from
the Premises in violation of environmental laws, except materials used in
Tenant’s ordinary course of business, and any such materials will be stored,
used, and disposed of in compliance with all environmental laws. Tenant shall
indemnify, defend and hold Landlord harmless from any claim relating to the
environmental condition of the Premises accruing during the Term of this Lease
and caused by Tenant or its agents, employees, contractors, or invitees (each, a
“Tenant Party”). For the avoidance of doubt, Tenant shall have no liability to
Landlord for any environmental condition of the Premises (or a related claim)
that (a) was not caused by a Tenant Party, or (b) existed or accrued prior to
the Commencement Date, even if caused by a Tenant Party, except to the extent a
Tenant Party exacerbates such pre-existing condition.

 

These indemnity obligations shall survive the termination of this Lease as to
claims that accrued during the Term of this Lease. For Landlord’s
indemnification rights to remain effective, Landlord must notify Tenant in
writing within sixty (60) days of receiving notice of the claim.

 

9 

 

 

47.Casualty and Condemnation. If (a) (i) more than fifty percent (50%) of the
square footage of the Premises cannot be used for the purposes contemplated by
this Lease because of casualty, or (ii) more than fifty percent (50%) of the
square footage of the building located on the Premises cannot be used for the
purposes contemplated by this Lease because of condemnation or purchase in lieu
of condemnation, and (b) Landlord reasonably estimates (“Landlord’s Rebuild
Estimate”) that such damage cannot be restored within two hundred seventy (270)
days from the occurrence of such event, then Landlord or Tenant may elect to
terminate this Lease by providing written notification to the other on or before
sixty (60) days after delivery of Landlord’s Rebuild Estimate. Landlord shall
deliver Landlord’s Rebuild Estimate no later than thirty (30) days following the
date of such casualty. Notwithstanding the foregoing, either party may terminate
this Lease (effective as of the date of the applicable event) if the Premises
are damaged by casualty during the last twelve (12) months of the Term and
Landlord’s Rebuild Estimate indicates that it will require more than one hundred
fifty (150) days from the occurrence of such event to restore the Premises. If
neither party elects to terminate this Lease as provided above or if neither
party has the right to terminate this Lease as provided above, then Landlord
shall promptly commence to restore the Premises to substantially the same
condition that existed prior to the fire or other casualty (“Landlord’s Repair
Obligation”), exclusive of any Alterations, additions, improvements, fixtures
and equipment installed by or on behalf of Tenant (whether before or after the
Commencement Date). Notwithstanding the foregoing, Landlord shall not be
required to fulfill its Landlord’s Repair Obligations to the extent that any
lender requires that Landlord’s insurance proceeds be applied to the payment of
the mortgage debt or if the casualty is not a claim covered by insurance.
Notwithstanding anything to the contrary contained herein, if Landlord’s Repair
Obligation has not been substantially completed within forty-five (45) days
after the estimated restoration date set forth in Landlord’s Rebuild Estimate
(the last day of such 45-day period being the “Casualty Termination Date”),
Tenant shall have the right to terminate this Lease effective upon thirty (30)
days’ prior written notice to Landlord delivered within sixty (60) days after
the Casualty Termination Date; provided, however, that such termination shall be
null and void if Landlord completes the Landlord’s Repair Obligations prior to
the expiration of such sixty (60) day period. If a casualty renders all or part
of the Premises untenantable, Rent shall proportionately abate commencing on the
date of the casualty and ending when the Premises are delivered to Tenant with
Landlord’s Repair Obligation substantially complete. The extent of the abatement
shall be based upon the portion of the Premises rendered untenantable,
inaccessible or unfit for use in a reasonable business manner for the purposes
stated in this Lease. Tenant shall not be entitled to such abatement if the fire
or other casualty was caused by the intentional wrongful action of Tenant, its
employees, agents, or contractors. In the event that this Lease is terminated as
set forth herein, the Fixed Rental shall be apportioned as of the date of the
damage and, provided Tenant is not in default, Tenant shall be entitled to a
refund from Landlord of amounts for the Fixed Rental or other charges prepaid by
Tenant to Landlord for the period arising after the date of the casualty. Tenant
will have no claim to insurance proceeds with respect to insurance policies
maintained by Landlord, condemnation award or proceeds in lieu of condemnation;
provided that in the event of a casualty, Tenant shall be permitted to retain
any insurance proceeds payable under any policy carried by Tenant. Tenant may
separately pursue a claim (to the extent it will not reduce Landlord’s award or
prohibit Landlord from claiming any award otherwise available to Landlord,
including loss of lease value) against the condemnor for the value of Tenant’s
personal property taken, loss of leasehold interest, moving costs and loss of
business.

 

10 

 

 

48.Miscellaneous.

 

a.Nothing herein contained shall be deemed or construed by the parties hereto,
nor by any third party, as creating the relationship of principal and agent or
of partnership or of joint venture between Landlord and Tenant, it being
understood and agreed that neither the method of computation of Fixed Rental,
nor any other provisions contained herein, nor any acts of the parties hereto,
shall be deemed to create any relationship between the parties hereto other than
the relationship of landlord and tenant.

 

b.Within thirty (30) days after the request of the other, at any time and from
time to time, both Landlord and Tenant agree to execute, acknowledge and deliver
an estoppel certificate certifying that (i) this Lease is in full force and
effect, (ii) the date through which Fixed Rental and other charges due hereunder
have been paid and (iii) to such party’s knowledge, that no default by Landlord
or Tenant, as appropriate, has occurred hereunder or specifying the nature of
any such default.

 

c.Each of the parties represents and warrants that there are no unpaid claims
for brokerage commission or finder’s fees in connection with the execution of
this Lease, and each agrees to indemnify the other against, and hold it harmless
from, all liabilities arising from any such claim (including without limitation,
the cost of legal fees in connection therewith). This obligation shall survive
the termination of this Lease.

 

d.The laws of the state in which the Premises is located shall govern the
interpretation, validity, performance and enforcement of this Lease (without
reference to choice of law principles).

 

e.Each provision of this Lease shall be construed in such manner as to give such
provision the fullest legal force and effect possible. To the extent any
provision herein (or part of such provision) is held to be unenforceable or
invalid when applied to a particular set of facts, or otherwise, the
unenforceability or invalidity of such provision (or part thereof) shall not
affect the enforceability or validity of the remaining provisions hereof (or of
the remaining parts of such provision), which shall remain in full force and
effect, nor shall such unenforceability or invalidity render such provision (or
part thereof) would be held legally enforceable and/or valid.

 

f.Notwithstanding anything to the contrary, in no event shall Landlord or Tenant
be liable for consequential, punitive, exemplary or other damages (above and
beyond actual damages only) in connection with this Lease.

 

11 

 

 

g.In the event of litigation hereunder, the prevailing party shall be entitled
to an award of its reasonable attorney’s fees. Landlord and Tenant agree that
should any suit, action or proceeding arising out of this Lease be instituted by
any party hereto, such suit, action or proceeding shall be instituted only in a
state or federal court in the county in which the Premises are located or, if no
such court is located in that county, then in the state or federal court that is
closest to the Premises (the “Approved Jurisdiction”). Landlord and Tenant each
consent to the in personam jurisdiction of any state or federal court in the
Approved Jurisdiction, and waive any objection to the venue of any such suit,
action or proceeding. This Section 22(h) shall survive the expiration or
termination of this Lease.

 

49.Delivery of the Premises. Tenant acknowledges and agrees the Premises are
delivered by Landlord and accepted by Tenant in its present “AS IS, WHERE IS,
WITH ALL FAULTS” condition as of the Commencement Date. Tenant acknowledges that
it has been provided access and ample opportunity to inspect the Premises and
its existing condition, improvements and systems and, except as expressly
provided otherwise in this Lease, is not relying upon any warranty or
representation of Landlord or its agents regarding the condition, adequacy or
suitability of the same for Tenant’s intended purpose, LANDLORD HEREBY EXPRESSLY
DISCLAIMING ANY SUCH WARRANTY. Landlord shall have no liability or obligation to
any Tenant Party for any pre-existing environmental condition existing as of the
Effective Date, except to the extent Landlord, its affiliates, agents or
contractors exacerbate such condition.

 

50.No Contractual or Statutory Lien. Landlord hereby waives any contractual or
statutory lien on the goods, wares, or equipment of Tenant located at the
Premises.

 

51.Attornment. Tenant shall, in the event any proceedings are brought for the
foreclosure of, or in the event of the exercise of the power of sale under any
mortgagee made by Landlord covering any part of the Premises, attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as
Landlord under this Lease.

 

52.Priority of Lease. Upon written request of Landlord or the holder or of a
proposed holder of any mortgage now or hereafter covering or to cover any part
of the Premises, Tenant will subordinate its rights under this Lease to the lien
of such mortgage and to all advances made or to be made upon the security
thereof, and Tenant shall, within ten (10) business days after written demand
therefor, execute, acknowledge, and deliver an instrument, in the form
customarily used by such encumbrance holder, and reasonably satisfactory to
Tenant, effecting such subordination; provided, however, as a condition to such
subordination, Landlord shall cause such lienholder to sign a commercially
reasonable subordination and non-disturbance agreement.

 

53.OFAC. Landlord hereby represents and warrants to Tenant that Landlord is not
acting, directly or indirectly for, or on behalf of, any person, group, entity
or nation named by any Executive Order of the President of the United States of
America (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism) or the United States Treasury Department, as a terrorist, “Specially
Designated National and Blocked Person,” or other banned or blocked person,
entity, or nation pursuant to any law that is enforced or administered by the
United States Office of Foreign Assets Control, and is not engaging in this
transaction, directly or indirectly, on behalf of, or instigating or
facilitating this transaction, directly or indirectly, on behalf of, any such
person, group, entity or nation.

 

[Remainder of Page Intentionally Blank]

 

12 

 

 

EXECUTED on the dates set forth below to be effective as of the date first above
written.

 

  TENANT:        TUESDAY MORNING, INC., a Texas corporation       By:
                                                          Name:     Title:     
Date signed:       Address:       Tuesday Morning Corporation    6250 Lyndon B.
Johnson Freeway   Dallas, Texas 75240
Attn.: General Counsel
Email: bzeterberg@tuesdaymorning.com and legal@tuesdaymorning.com       With a
copy to:       Haynes and Boone, LLP
2323 Victory Avenue
Suite 700
Dallas, TX 75219
Attn: Tom D. Harris and Ian T. Peck    Email: Tom.Harris@haynesboone.com   
Ian.Peck@haynesboone.com       Haynes and Boone, LLP
1050 17th Street
Suite 1800
Denver, CO 80265
Attn:       Daniel P. Malone, Jr.   Email:     Dan.Malone@haynesboone.com

 

Signature Page to
Lease

 

 

 

 

LANDLORD:

 

  RIALTO REAL ESTATE FUND IV – PROPERTY, LP, a Delaware limited partnership

 

By:Rialto Partners GP IV – Property, LLC,
a Delaware limited liability company

 

    By:                Name:      Title:      Date signed:

 

  Address:       Rialto Real Estate Fund IV-Property, LP    c/o Rialto Capital
Management, LLC    501 Santa Monica Blvd., Suite 501,    Santa Monica,
California 90401   Attn: Mike Parker      Aaron Davis      Brady Scott    Email:
mike.parker@rialtocapital.com      aaron.davis@rialtocapital.com     
brady.scott@rialtocapital.com

 

  With a copy to:       Bilzin Sumberg Baena Price & Axelrod LLP    1450
Brickell Avenue, Suite 2300    Miami, FL 33131    Attn: Jay M. Sakalo    Email:
jsakalo@bilzin.com

 

Signature Page to
Lease

 

 

 

  

EXHIBIT A

 

LEGAL DESCRIPTION

 

Attached.

 

Ex. A-1

 

 

EXHIBIT B

 

TENANT INSURANCE REQUIREMENTS

 

Tenant, at its sole cost and expense, shall procure and maintain throughout the
Term of the Lease the following policies of insurance (which may be part of
umbrella policies):

 

(i)            property insurance causing Tenant's leasehold improvements and
business personal property (sometimes also referred to as "fixtures and
contents") at the Premises to be insured under the broadest available special
form of property coverage, sometimes referred to as "all-risk" coverage (such as
the form identified as CP 10 30, and any successor form, published by Insurance
Services Office, Inc.), such insurance coverage (i) to be in the full amount of
the replacement cost of all insured property, (ii) to include coverage for the
loss of business income, in an amount deemed reasonable by Tenant, (iii) to
contain no deductible or self-insured retention in excess of $100,000.00,
(iv) to contain no coinsurance penalty clause, and (v) to include a waiver or
subrogation in favor of Landlord; and

 

(j)            combination of commercial general liability and umbrella
insurance insuring both Landlord and Tenant against all claims, demands or
actions for bodily injury, property damage, personal and advertising injury
arising out of or in connection with Tenant's use or occupancy of the Premises,
or by the condition of the Premises, with a limit of not less than $10,000,000
per occurrence and aggregate (and no offset for occurrences on property other
than the Premises), and with coverage for contractual liability naming Landlord
as Additional Insured and to include a waiver of subrogation in favor of the
Landlord; and

 

(k)            worker's compensation insurance insuring against and satisfying
Tenant's obligations and liabilities under the worker's compensation laws of the
state where the Premises is located, together with employer's liability
insurance in an amount not less than $1,000,000.00 each accident, $1,000,000.00
disease policy limit, and $1,000,000.00 disease each employee; the full limits
of insurance are to apply per location, and include a waiver of subrogation in
favor of Landlord; and

 

(l)            automobile liability insurance covering all owned, non-owned, and
hired vehicles with a $1,000,000 per accident limit for bodily injury and
property damage;

 

(m)          during any period when construction work is being done in or on the
Premises, such additional insurance as Landlord may reasonably require; and

 

(n)          business interruption insurance in the unallocated amount of at
least $10,000,000; and

 

(o)          All policies must be written by insurance companies whose rating in
the most recent Best’s Rating Guide, is not less than A(-): VII; and

 

(p)          Certificates of Insurance evidencing the required coverages must be
delivered to the Landlord prior to the commencement of the Lease.

 

Ex. B-1

 

 

Exhibit F

 

SERVICE CONTRACTS

 

[To be attached.]

 

Purchase and Sale Agreement 

6250 Lyndon B. Johnson Freeway, Dallas, Texas

4404 South Beltwood Parkway, Farmers Branch, Texas 

14621, 14639 and 14601 Inwood Road, Addison, Texas

14303 Inwood Road, Farmers Branch, Texas

 

F-1