Document:

Exhibit

Exhibit 10.7

REAL ESTATE PROPERTY CO-MANAGEMENT AGREEMENT

This Real Estate Property Co-Management Agreement (“Agreement”) is made as of June 18, 2016, between KBSGI 421 SW 6th AVENUE, LLC, a Delaware limited liability company (“Owner”) acting through KBS CAPITAL ADVISORS, LLC, a Delaware limited liability company (“Owner’s Representative”) and KBS MANAGEMENT GROUP, LLC, a Delaware limited liability company (“Co-Manager”) with reference to the following facts:
A.Owner is the owner of, or is contemplating the acquisition of, the land and improvements commonly known as the Commonwealth Building located at 421 SW 6th Avenue, Portland, Oregon 97204 (the “Premises”).  Owner has retained CBRE, Inc. to provide certain property management and operational services for the Premises, however, for the benefit of the Premises, Owner requires certain additional management services which CBRE, Inc. either does not provide, charges additional fees to provide, or is in conflict with providing.  
B.    Co-Manager represents that it is in the business of providing the management services described herein to the Premises and possesses the skills and experience necessary for the efficient first class management of the Premises.
Now, Therefore, Owner and Co-Manager agree as follows:
ARTICLE I
BASIC TERMS
1.1    Effective Date:  Co-Manager’s appointment under Article III shall become effective as of July 1, 2016, the (“Effective Date”), except that if this Agreement is executed by Owner in anticipation of acquiring the Premises, the Effective Date shall be the date of such acquisition, and Owner shall be under no obligation to Co-Manager unless Owner acquires the Premises.
1.2    Term:  The term of this Agreement (“Term”) is one (1) year from the Effective Date, and shall be deemed renewed for successive periods of one (1) year, subject at all times to the rights of termination set forth in Section 9.1.
1.3    Role of Owner’s Representative:  Owner’s Representative is the duly authorized representative of Owner for the purpose of this Agreement and all powers and rights of Owner under this Agreement shall be exercised by Owner’s Representative and all communications, remittances and things of any kind required to be delivered to Owner shall be delivered to Owner’s Representative.
1.4    Co-Manager’s Bond or Commercial Crime Insurance Policy.  Owner has approved the following bond or Commercial Crime Insurance Policy furnished by Co-Manager pursuant to Section 4.9.

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Insurance Company: Federal Insurance Company
Term:    2/15/16 – 2/15/17
Amount: $5,000,000
Form:    Discovery

1.5    Address of Owner’s Representative.  Unless changed by notice to Co-Manager, the address of Owner’s Representative for notices under Section 11.2 shall be:
KBS Capital Advisors, LLC
800 Newport Center Drive, Suite 700
Newport Beach, California  92660
Attention:    Clint Copulos, Vice President

1.6    Address of Co-Manager.  Unless changed by notice to Owner, the address of Co-Manager for notices under Section 11.2 shall be:
KBS Management Group, LLC
800 Newport Center Drive, Suite 700
Newport Beach, California  92660
Attention: Kim Smith, Senior Vice President

1.7    Co-Management Fee.  Subject to Article IX, the co-management fee payable to Co-Manager for its Services under this Agreement (“Co-Management Fee”) shall be an amount per month equal to one and one quarter percent (1.25%) of the rent from the Premises, as defined in Section 8.1, payable and actually collected for the month, subject to the limitations contained in Article IX. 
1.8    ERISA Requirements.  If Owner is an employee benefit plan or a trust formed as a part of an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 check the following space: _____.  If the space is checked, the provisions of Exhibit B attached to this Agreement are made a part of this Agreement by this reference.  If the space is not checked Exhibit B shall not be applicable.
ARTICLE II
      
INDEX OF DEFINED TERMS AND EXHIBITS
	
		
	Term
	Where Defined

	 
	 

	Effective Date
	Section 1.1

	Term
	Section 1.2

	 
	 

	Co-Management Fee
	Sections 1.7

	Co-Manager
	Introductory paragraph

	Owner
	Introductory paragraph

	Owner’s Representative
	Introductory paragraph

	Premises
	Recital A

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	Term
	Where Defined

	 
	 

	Services
	Section 4.1

	
			
	Exhibit
	Title
	Reference

	 
	 
	 

	A
	Duties of Co-Manager
	Section 4.1

	B
	ERISA Requirements
	Section 1.8

ARTICLE III
      
APPOINTMENT
Owner hereby appoints Co-Manager as the co-manager for the Premises as of the Effective Date, and hereby authorizes Co-Manager to exercise such powers with respect to the Premises as may be necessary for the performance of Co-Manager’s obligations under Article IV.  Co-Manager hereby accepts such appointment on the terms and conditions hereinafter set forth for the Term specified in Section 1.2.  Co-Manager shall have no right or authority, express or implied, to commit or otherwise obligate Owner in any manner whatsoever, except to the extent expressly provided in this Agreement.  Co-Manager agrees to cooperate in good faith with Manager to ensure the efficient delivery of the Services under this Agreement. 
ARTICLE IV
      
DUTIES OF CO-MANAGER
4.1    General Duties.
(a)    Co-Manager, on behalf of Owner, shall use its best efforts in the co-management  of the Premises and shall comply with Owner’s instructions as set forth herein or as may from time to time be provided by Owner to Co-Manager.  Co-Manager shall perform its duties in a first-class, professional, diligent, careful and vigilant manner and shall co-manage the Premises as a first-class facility.  In connection therewith, Co-Manager shall implement, or cause to be implemented, the Owner’s decisions relating to this Agreement.  Co-Manager shall at all times conform to the policies and programs established by Owner and the scope of Co-Manager’s authority shall be limited thereby.  Co-Manager shall afford Owner the full benefit of the judgment, experience and advice of Co-Manager and Co-Manager’s organization with respect to the policies to be addressed pursuant to this Agreement, and the execution of its responsibilities in a diligent, careful and vigilant manner.  In particular, Co-Manager shall have the duties and obligations set forth hereafter in this Article V and as further described in Exhibit A attached hereto (the “Services”).
4.2    Utility and Service Contracts.  Co-Manager may negotiate contracts on behalf of Owner for utilities and other services as are currently being furnished to the Premises for terms of not greater than one (1) year, unless otherwise approved by Owner in writing.  All such service contracts shall be in the name of Owner, signed by Co-Manager as Owner’s authorized agent, 

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and shall be terminable on thirty (30) days notice or less.  Notwithstanding the foregoing, Owner or Owner’s consultants shall have the right to negotiate a master agreement for any and/or all utilities at the Premises.
4.3    Employment of Personnel.  All persons employed by  Co-Manager in connection with providing Services under this Agreement shall either be employees of Co-Manager or independent contractors and shall not be employees of Owner.  Subject to reimbursement pursuant to Section 8.2, Co-Manager shall select, employ, pay, supervise, direct and discharge all employees necessary for the operation and maintenance of the Premises, and use reasonable care in the selection and supervision of such employees.  Co-Manager shall be responsible for complying with all laws, regulations and collective bargaining agreements affecting such employment.  Co-Manager will be and will continue throughout the term of this Agreement to be an Equal Opportunity Employer.
(a)    Co-Manager shall require that all contractors and consultants engaged by Co-Manager on behalf of Owner and brought onto the Premises have insurance coverage at the contractors’ or consultants’ expense, in the following minimum amounts:
	
			
	(i)
	Worker’s Compensation:
	Statutory Amount

	(ii)
	Employer’s Liability:
	$1,000,000 minimum

	(iii)
	Commercial General Liability:
	$1,000,000 per Occurrence and $2,000,000 Aggregate for Bodily Injury and Property Damage.

	(iv)
	Comprehensive Automobile:
	$1,000,000 each occurrence Liability Insurance combined single limit for bodily injury and property damage.  Evidence should indicate that liability coverage evidenced extends to both owned and non-owned vehicles.

(b)    With respect to items (i) through (iii) noted above in Section 4.3(a), all contractors and subcontractors performing work at/on the Premises shall name Owner as an additional insured to the Commercial General Liability insurance.  Further, a waiver of subrogation endorsement to both the Commercial General Liability insurance policy and Workers Compensation insurance policy should be furnished in favor of Owner and Co-Manager.  All certificates obtained by Co-Manager and furnished to Owner should evidence these items.
(c)    Co-Manager shall obtain all necessary receipts, releases, waivers, discharges and assurances necessary to keep the Premises free of any mechanics’, laborers’, materials suppliers’ or vendors’ liens in connection with the Services related to this Agreement.  All such documentation shall be in such form as required by Owner.

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4.4    Contracts with Third Parties.
(a)    Co-Manager shall directly supervise and be responsible for all contractors and consultants hired by Co-Manager for the Premises.  Excluding service agreements referenced in an annual budget approved by Owner, all of such contractors shall be subject to Owner’s prior written approval.  Co-Manager shall assure that any contractor or consultant performing work on the Premises maintains insurance satisfactory to Owner, including, but not limited to, Workers’ Compensation Insurance (and, when required by law, compulsory Non-Occupational Disability Insurance) and insurance against liability for injury to persons and property arising out of all such contractor’s operations naming Co-Manager, Owner and Owner’s Representative as additional insureds.  Co-Manager shall obtain certificates of insurance for all such insurance before the work begins. Co-Manager shall furnish copies of the certificates to Owner if requested by Owner. 
4.5    Complaints and Notices.
(a)    Co-Manager shall notify Owner promptly of: (i) any notice received by Co-Manager or known to Co-Manager of violation of any governmental requirements (and make recommendations regarding compliance therewith); (ii) any defect or unsafe condition in the Premises known to Co-Manager; (iii) any notice received by Co-Manager or known to Co-Manager of violation of covenants, conditions and restrictions affecting the Premises or noncompliance with loan documents affecting the Premises, if any; (iv) any fire, accident or other casualty or damage to the Premises; (v) any condemnation proceedings, rezoning or other governmental order, lawsuit or threat thereof involving the Premises; (vi) any violations relative to the leasing, use, repair and maintenance of the Premises under governmental laws, rules, regulations, ordinances or like provisions; (vii) defaults under any leases or other agreements affecting the Premises; or (viii) any violation of any insurance requirement.  Co-Manager shall promptly deliver to Owner copies of any documentation in its possession relating to such matters.  Co-Manager shall keep Owner reasonably informed of the status of the particular matter through the final resolution thereof.  In the case of any fire or other damage to the Premises or violation or alleged violation of laws respecting Hazardous Wastes, Co-Manager shall immediately give telephonic notice thereof to Owner.  Co-Manager shall retain in the records it maintains for the Premises copies of all supporting documentation with reference to such notices.
(b)    Co-Manager shall promptly notify Owner and any insurance agent Owner may designate of any personal injury or property damage occurring to or claimed by any tenant or third party on or with respect to the Premises.  Co-Manager shall promptly forward to Owner with copies to any insurance agent Owner may designate any summons, subpoena or other legal document served upon Co-Manager relating to the actual or alleged potential liability of Owner, of Co-Manager or of the Premises.  
(c)    Should any claim, demand, suit or other legal proceeding be made or instituted by any third party against Owner which arises out of any matters relating to the Premises, this Agreement or Co-Manager’s performance hereunder, Co-Manager shall 

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give Owner all pertinent information, and reasonable assistance, in the defense or other disposition thereof. 
4.6    Compliance with Laws and Other Requirements.
(a)    To the extent Co-Manager becomes aware of the Premises being in non-compliance (or is suspected to be in non-compliance) with any laws, ordinances, rules or regulations relating to the Premises, then Co-Manager shall promptly notify Owner in writing of such non-compliance or suspected non-compliance.
(b)    To the extent Co-Manager becomes aware of the Premises being in non-compliance (or is suspected to be in non-compliance) with any insurance policy or insurance policies insuring Owner in relation to the Premises, then Co-Manager shall promptly notify Owner in writing of such non-compliance or suspected non-compliance.
4.7    Property Review, Tax Review and Other Programs.  
(a)    Co-Manager shall participate in Owner’s property review programs to the extent reasonably requested by Owner.  Such review shall include asset, investment, financial and strategy profiles in form and substance satisfactory to Owner and such assistance as Owner may request in connection with appraisals of the Premises.  Co-Manager shall respond, within ten (10) days, to Owner’s management evaluation reports concerning actions to be taken by Co-Manager to correct or modify its management standards for the operations or financial services provided for the Premises.
(b)    Co-Manager shall participate in Owner’s tax review program.  Co-Manager shall check tax assessments and assist Owner, when requested by Owner, in efforts to reduce such taxes.  Co-Manager shall promptly furnish Owner with copies of all assessment notices and receipted tax bills.
(c)    Co-Manager shall comply with Owner’s energy conservation and Hazardous Materials policies, as communicated by Owner to Co-Manager, and submit energy consumption and Hazardous Materials reports for the Premises in accordance with Owner’s program for energy and Hazardous Materials audits and reviews.
4.8    Confidentiality.  Subject to applicable law or governmental regulation, Co-Manager and all persons retained or employed by Co-Manager in performing its Services shall hold in confidence and not use or disclose to others any confidential or proprietary information of Owner heretofore or hereafter disclosed to Co-Manager, including, but not limited to, any data, information, plans, programs, processes, costs, operations or tenants which may become known to Co-Manager in the performance of, or as a result of, its Services, except where Owner specifically authorizes Co-Manager to disclose any of the foregoing to others or such disclosure reasonably results from the performance of Co-Manager’s duties hereunder.  Notwithstanding anything to the contrary set forth above, the foregoing shall not apply if such information (a) is disclosed upon Owner’s written request, (b) is available to the general public or known within the real estate industry, or (c) is required to be disclosed pursuant to law, court order or subpoena.

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4.9    Co-Manager’s Bond and Insurance.
(a)    Co-Manager shall bond all of its employees who may handle or be responsible for monies or other property of Owner or shall obtain a Commercial Crime Insurance Policy covering the activities of such employees.  Co-Manager shall maintain the bond or Commercial Crime Insurance Policy in such amount or in an amount equal to three times the monthly rent roll for the Premises, including the projected rent for vacant space, whichever is greater.  Such bond or Commercial Crime Insurance Policy shall contain a loss payee endorsement in favor of Owner as it relates to the Premises.  Co-Manager shall furnish a copy of an insurance certificate evidencing such bond or Commercial Crime Insurance Policy with loss payee endorsement in favor of Owner to Owner prior to the Effective Date and thereafter immediately upon renewing or replacing such bond or Commercial Crime Insurance Policy. 
(b)    Co-Manager shall maintain the following insurance in Co-Manager’s name applicable to Co-Manager’s activities under this Agreement:
(i)    Commercial General Liability Insurance, in an amount equal to $1,000,000 per occurrence and $2,000,000 aggregate, covering all Premises operations, products and completed operations.
(ii)    Automobile Liability Insurance, covering both owned and non-owned vehicles, in an amount equal to $1,000,000, combined single limit.
(iii)    Workers Compensation Insurance, as required by law covering all Co-Manager’s employees (and, when required by law, compulsory Non-Occupational Disability Insurance).  A waiver of subrogation in favor of Landlord shall be included.
(iv)    Excess Liability in an amount of $5,000,000 per occurrence, and $5,000,000 aggregate over general liability and auto liability.
(v)    Professional Liability in the amount of $5,000,000 per occurrence in the aggregate.
(vi)    Employment Practices Liability in the amount of $2,000,000 per occurrence, and $2,000,000 aggregate.  Coverage shall include wrongful termination, sexual harassment and violations of the Americans with Disabilities Act of 1990, as amended (defense costs coverage only).  Coverage should also include: (1) third party claims, (2) wage and hour law coverage, and (3) punitive damages where legally allowed and to the extent of coverage under the policy.
With respect to items (i) through (vi) of Section 4.9 above, Co-Manager’s insurance should also provide a waiver of subrogation endorsement to both the Commercial General Liability insurance policy and Workers Compensation insurance policies in favor of Owner.  All certificates provided by Co-Manager and furnished to Owner should evidence this.  Owner shall be named as an additional insured on the Commercial General Liability and Excess Liability insurance policies.  All the above policies will be primary and noncontributing with any other 

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insurance maintained by Co-Manager.  Such insurance shall be underwritten by reputable, financially sound companies with a minimum A.M. Best Ratings of A:VII.  Co-Manager shall furnish Owner with certificates of insurance evidencing such insurance prior to the Effective Date and thereafter upon renewing or replacing such insurance.
4.10    Hazardous Materials.
(a)    Co-Manager shall not place, cause or knowingly permit to be placed on the Premises, other than in the ordinary course of performing its obligations under this Agreement and in compliance with applicable law, any hazardous or toxic materials or substances, as such terms are defined by federal, state or municipal statutes or regulations promulgated thereunder (collectively, “Hazardous Materials”).   If Co-Manager discovers the existence of any Hazardous Materials on the Premises, Co-Manager shall immediately notify Owner.  If such Hazardous Materials were placed or knowingly permitted to be placed on the Premises by Co-Manager, Co-Manager shall, at its cost, diligently arrange for and complete the immediate removal thereof in accordance with applicable laws and Owner’s directions.  Except as expressly provided herein to the contrary, Co-Manager shall not be responsible for any Hazardous Materials present on the Premises prior to the Effective Date hereof, unless deposited thereon by Co-Manager, nor shall Co-Manager be responsible for any Hazardous Materials brought onto the Premises by a person other than Co-Manager, its agents or employees.  Co-Manager shall immediately notify Owner of any notice received by Co-Manager from any governmental authority of any actual or threatened violation of any applicable laws, regulations or ordinances governing the use, storage or disposal of any Hazardous Materials and shall cooperate with Owner in responding to such notice and correcting or contesting any alleged violation at Owner’s expense. 
(b)    Co-Manager shall provide its employees, agents, consultants, governmental entities and the public with any notices or disclosures concerning Hazardous Materials associated with the Premises required to be delivered by Owner or Co-Manager under any applicable laws, including without limitation, any notices or disclosures concerning Hazardous Materials which Co-Manager has received from Owner.  Owner shall have the right to review such notices and disclosures before their distribution or submission by Co-Manager and shall have the right, but not the obligation, to prescribe the form and content of any such notices or disclosures as long as the form and content prescribed by Owner comply with all applicable laws relating to such notices or disclosures.  Owner shall provide Co-Manager with any notices or disclosures concerning Hazardous Materials associated with the Premises required to be delivered by Owner under any applicable laws. 
(c)    Without limiting any other indemnification obligations provided by law or specified in this Agreement, Co-Manager shall indemnify, defend (at Co-Manager’s sole cost and expense and with legal counsel approved by Owner which approval shall not be unreasonably withheld) and hold harmless Owner, its agents, employees, lenders and contractors from and against any and all claims, demands, losses, damage, disbursements, liabilities, obligations, fines, penalties, actions, causes of action, suits, costs and expenses, including without limitation, reasonable attorneys’ fees and costs, and all other 

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professionals’ or consultants’ expenses incurred in investigating, preparing for, serving as a witness in, or defending any action or proceeding, whether actually commenced or threatened, or in removing or remediating any Hazardous Materials on, under, from or about the Premises, arising out of or relating to, directly or indirectly, Co-Manager’s breach of any of the terms of this Section 4.10.  This indemnity shall survive termination of this Agreement. 
4.11    Owner’s Insurance Coverage.  Owner shall maintain all-risk form of property damage insurance including without limitation coverage against allied perils, vandalism, malicious mischief, sprinkler leakage and plate glass, in the amount of full replacement cost without coinsurance and containing such additional coverages, if any, as are customarily obtained in connection with the ownership and management of property similar to the Premises  but in no event in an amount or containing coverages less than or of lesser quality or extent than that required by the terms of any mortgage or trust deed encumbering the Premises.  In addition, Owner agrees to carry commercial general liability insurance on an occurrence form with a minimum limit of at least $1,000,000 per occurrence, $2,000,000 per location aggregate and at least $5,000,000 umbrella coverage, including contractual liability, elevator liability, steamboiler and such other insurance as may be necessary or appropriate for the protection of the interests of Owner and Co-Manager.  The public liability, elevator liability, and contractual liability insurance must contain a severability of interest clause and coverage for Personal Injury Insurance.  Each of Owner’s insurance policies shall be written with an insurance company or companies licensed to do business in the state where the Premises is located and who have a minimum Best Key rating of no less than A-VIII.  Owner agrees to designate Co-Manager as an additional insured with Owner on the Commercial General and Umbrella Liability policies.  This insurance shall be primary for Owner and Co-Manager with respect to the Premises.  A certificate of each policy issued by the carrier shall be delivered by Owner to Co-Manager concurrently with Owner’s execution and delivery of this Agreement.  Owner shall use commercially reasonable efforts to have each policy provide that it will not be canceled or materially modified without at least ten (10) days prior written notice from the insurer to Owner in the event of cancellation for non-payment, and at least thirty (30) days prior written notice from the insurer to Owner in any other event.  Each policy for fire or extended coverage insurance and all other forms of property damage insurance covering the Premises or personal property, fixtures or equipment located thereon shall contain an appropriate clause or endorsement whereby the insurer waives subrogation or consents to a waiver of the right of recovery against Co-Manager, and Owner hereby agrees that it will not make any claim against Co-Manager for any loss or damage to property of the type covered by such insurance.
ARTICLE V
      
RECORDS
5.1    Records.  Co-Manager agrees to keep proper records with respect to the Services to be provided under this Agreement relating to the Premises, and to retain those records for periods as specified by Owner. 

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ARTICLE VI
      
INDEMNIFICATION
6.1    Co-Manager’s Indemnification.  Without limiting any indemnity provided elsewhere in this Agreement, Co-Manager shall indemnify, defend, protect and hold harmless Owner and Owner’s Representative and their officers, directors, partners, members and employees from and against all claims, losses and liabilities (including all expenses and attorneys’ fees and including, but not limited to, damage to the property of Owner) which arise out of the negligence, recklessness, willful misconduct, fraud or criminal acts of Co-Manager, or its employees, officers, agents, or representatives.
6.2    Owner’s Indemnification.  Owner shall indemnify, defend, protect and hold harmless Co-Manager and its officers, directors and employees from and against all claims, losses and liabilities (including all expenses and attorneys’ fees) which arise out of the performance by Co-Manager of its obligations and duties hereunder unless the claim, loss or liability arises from the negligence, recklessness, willful misconduct, fraud or criminal acts of Co-Manager or its employees, officers, agents, or representatives.  Owner shall defend any claim covered by the foregoing indemnity by Owner, and not covered by insurance, through counsel of Owner’s choice, notwithstanding any allegation of negligence by the claimant against Co-Manager or any of its employees, officers, agents or representatives, unless Owner determines, in good faith, that Co-Manager or any of its employees, officers, agents or representatives has been negligent.  In no event shall Owner be obligated to provide any defense against any allegation of recklessness, willful misconduct, fraud or criminal acts.  Co-Manager shall reimburse Owner for all such reasonable costs of defense if it is determined by a final judgment of a court of competent jurisdiction that Co-Manager or any of its employees, officers, agents or representatives has been negligent or reckless or has engaged in willful misconduct, fraud or criminal acts.  If Co-Manager is required to provide its own defense against any allegation of negligence or recklessness, willful misconduct, fraud or criminal acts arising out of the performance by Co-Manager of its obligations and duties hereunder, and if a final judgment of a court of competent jurisdiction, with regard to such defense, determines that neither Co-Manager nor any of its employees, officers, agents or representatives was negligent, reckless or engaged in willful misconduct, fraud or criminal acts, Owner shall reimburse Co-Manager for its reasonable costs of defense.
Nothing in this Article shall be deemed to affect any party’s rights under any insurance policy procured by such party or under which such party is an additional insured.
6.3    Survival.  All indemnities contained in this Agreement shall survive the expiration or termination of this Agreement.
6.4    Business Interruption.  Notwithstanding anything to the contrary contained herein, Owner shall not be liable to Co-Manager for any lost or prospective profits or any other indirect, consequential, special, incidental, punitive or other exemplary losses or damages, whether in tort, contract or otherwise, regardless of the foreseeability or the cause thereof.

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ARTICLE VII
      
COSTS AND EXPENSES
7.1    Costs and Expenses of Co-Manager.  Except as otherwise expressly provided herein, all costs and expenses incurred by or on behalf of Co-Manager in performing its obligations hereunder shall be borne solely by Co-Manager, including, without limitation, the following expenses or costs in connection with the operation and management of the Premises: 
(a)    Cost of gross salary and wages, payroll taxes, insurance, worker’s compensation, pension benefits and any other benefits of Co-Manager’s off-site supervisory and home and regional office personnel; 
(b)    Cost of forms, stationery, ledgers and other supplies and equipment used in Co-Manager’s home office or regional home office; 
(c)    Cost or pro rata cost of telephone and general office expenses incurred on the Premises by Co-Manager for the operation and management of properties other than the Premises; 
(d)    Cost or pro rata cost of data-processing equipment located at Co-Manager’s home or regional office; 
(e)    Cost or pro rata cost of data processing provided by computer service companies;
(f)    Cost of all bonuses, incentive compensation, profit sharing or any pay advances to employees employed by Co-Manager in connection with the operation and management of the Premises, except for payments to individuals specifically approved in writing by Owner; 
(g)    Cost of automobile purchases and/or rentals, unless the automobile is being provided by Owner; 
(h)    Costs attributable to claims, losses and liabilities arising from (i) any material breach of this Agreement by Co-Manager, or (ii) the negligence, willful misconduct, fraud or criminal acts of Co-Manager’s employees or agents, only to the extent such costs are (1) not covered by any insurance (including any insurance deductibles) actually in effect (or required on the part of Owner under this Agreement), (2) not covered by the indemnity in Section 6.2 of this Agreement, or (3) not recoverable from leases or licenses of space in the Premises;
(i)    Cost of comprehensive crime insurance purchased by Co-Manager for its own account;
(j)    Costs for meals, travel and hotel accommodations for Co-Manager’s home or regional office personnel who travel to and from the Premises, unless expressly authorized by Owner; and

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(k)    Cost of obtaining and maintaining such licenses, permits, consents and authorizations as are required by this Agreement.
7.2    Reimbursement by Owner.  Owner shall reimburse Co-Manager monthly the management fee payable as provided under Section 1.7 and other reasonable costs and expenses being incurred by Co-Manager in connection with providing the Services under this Agreement. 
7.3    Nonpayment.  If Co-Manager fails to make any payment when required or fails to perform any act required under this Agreement, then Owner, after ten (10) days’ written notice to Co-Manager (or, in the case of any emergency, without notice) and without waiving or releasing Co-Manager from any of its obligations hereunder, may (but shall not be required to) make such payment or perform such act.  Owner shall have (in addition to any other right or remedy) the right to offset all costs and expenses incurred in exercising its rights under this Section 7.3 against any sums due or to become due to Co-Manager, including, without limitation, the Co-Management Fee and any costs and expenses reimbursable by Owner pursuant to Section 7.2.
ARTICLE VIII
     
COMPENSATION
8.1    Co-Management Fee.  Owner shall pay Co-Manager as compensation for the co-management services rendered hereunder a Co-Management Fee at the rate specified in Section 1.7.  Such Co-Management Fee shall be payable monthly in arrears, on the 15th day of each calendar month.  The Co-Management Fee shall be payable only on rent actually collected.  The term rent, as used in this Agreement, shall include minimum rent, percentage rent, rent escalations, common area maintenance reimbursements, and real estate tax and insurance premium reimbursements.  For the purpose of determining the Co-Management Fee, unless specifically provided otherwise in Section 1.7, rent shall not include (i) fire loss or other insurance proceeds (except rental continuation or business insurance proceeds), capital improvements, remodeling and tenant change costs (including any overhead factor payable by tenants), (ii) security deposits except for the portion applied to past due rent, (iii) prepaid rents except for the portion applied to the then current month; (iv) sums collected or paid for sales, excise or use taxes, (v) revenues from parking, (unless, by virtue of unusual circumstances, Owner has agreed in Section 1.7 or a separate written addendum to this Agreement to pay Co-Manager a fee with respect to such revenues), or (vi) any amount paid for, or in connection with the termination of leases or other agreements with tenants, except for terminations which Owner has requested Co-Manager to negotiate.
ARTICLE IX
      
TERMINATION
9.1    Termination.
(a)    Termination by Co-Manager Without Cause.  Co-Manager, in Co-Manager’s sole discretion, shall have the power to terminate this Agreement on not less 

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than thirty (30) days’ prior written notice to Owner for any or no reason, and in such event no payment of a Termination Fee shall be due and owing to Co-Manager. 
(b)    Termination by Owner Without Cause.  Owner, in Owner’s sole discretion, shall have the power to terminate this Agreement on not less than thirty (30) days’ prior written notice to Co-Manager for any or no reason. 
(c)    Sale of the Premises.  Owner shall have the power to terminate this Agreement upon the sale of the Premises (but not a pledge or mortgage) to a third party which is unaffiliated with Owner in a bona fide transaction, such termination to be effective as of the date of the sale. Owner shall use reasonable efforts to give Co-Manager not less than thirty (30) days’ written notice of such anticipated event. 
(d)    Termination by Owner with Cause.  Owner shall have the power to terminate this Agreement upon five (5) days’ written notice to Co-Manager if any of the following shall occur: 
(i)    Co-Manager fails to timely pay any sum owed or due to Owner and such sum remains unpaid for more than ten (10) days after written notice from Owner; 
(ii)    Co-Manager commits any fraud, makes any material misrepresentation or misappropriates funds in the performance of its obligations under this Agreement; 
(iii)    Co-Manager files, or there shall be filed against Co-Manager, a petition in bankruptcy; 
(iv)    Co-Manager makes an assignment for the benefit of creditors; 
(v)    Substantially all of the Premises are damaged or destroyed, and Owner decides not to rebuild or restore the Premises; 
(vi)    A substantial portion of the Premises is taken by condemnation or similar proceedings and Owner decides not to continue to operate the Premises; and
(vii)    Co-Manager shall be in material breach of any other non-monetary obligations contained in this Agreement, and such material breach shall continue for thirty (30) days after written notice thereof from Owner to Co-Manager specifying the particulars of such breach (plus, with respect to breaches which Co-Manager commences diligent efforts to cure within such period, but which cannot reasonably be cured within thirty (30) days, such additional period as is reasonably necessary to cure such breach). 
(e)    Termination by Co-Manager With Cause.  Co-Manager shall have the power to terminate this Agreement upon five (5) days’ written notice to Owner if any of the following events occurs: 

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(i)    Owner fails to timely pay any sum owed to Co-Manager which remains unpaid for more than thirty (30) days after written notice to Owner from Co-Manager; or
(ii)    Owner commits a material violation or breach of any other obligation of Owner under this Agreement which remains uncured for more than thirty (30) days after notice from Co-Manager (plus, with respect to breaches which cannot reasonably be cured within thirty (30) days, such additional time as is reasonably necessary to cure such breach). 
(f)    Effect of Termination.  In the event that this Agreement is terminated, Co-Manager shall be entitled to all fees and reimbursements earned or accrued through the date of termination, which obligation shall survive such termination. In addition to or in lieu of terminating this Agreement, if Co-Manager or Owner defaults under this Agreement beyond applicable notice and cure periods, Owner or Co-Manager (as applicable) may pursue such other rights and remedies as may be available under applicable law. This Section 9.1(f) shall survive the expiration or termination of this Agreement. 
9.2    Obligations Upon Termination.
(a)    Upon termination of this Agreement for any reason, Co-Manager shall deliver the following to Owner on or before thirty (30) days following the termination date: 
(i)    All keys records, contracts, drawings, leases and correspondence, in existence at the time of termination and all other papers or documents pertaining to the Premises. All data, information and documents shall at all times be the property of Owner; 
(b)    Upon the expiration or earlier termination of this Agreement in its entirety, the Term shall end, neither party shall have any further rights or obligations under the Agreement (other than those obligations which accrued prior to the expiration or termination of this Agreement or which by the terms hereof expressly survive, or expressly provide for obligations to be performed following, such expiration or termination). 
ARTICLE X
      
MISCELLANEOUS
10.1    Status of Co-Manager.  It is the intention of the parties to create a relationship wherein Co-Manager is an independent contractor in providing the Services and Owner is the beneficiary of such Services.  Co-Manager shall afford Owner the full benefit of the judgment, experience and advice of Co-Manager and Co-Manager’s organization with respect to the policies to be pursued in  execution of its responsibilities in a diligent, careful and vigilant manner.

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10.2    Notices.  Any statement, notice recommendation, request, demand, consent or approval under this Agreement must be in writing and personally delivered or sent by overnight courier service, such as Federal Express or sent by United States, registered or certified mail, postage prepaid, return receipt requested, and shall be deemed to have been given upon the date of personal delivery or the next business day following deposit with an overnight courier or delivery by the U.S. Postal Service (or refusal to accept delivery) as indicated in the return receipt, provided that in the case of communications sent by overnight courier service or United States registered or certified mail, the communication is addressed as set forth in Section 1.5 if sent to the Owner’s Representative and as set forth in Section 1.6 if sent to Co-Manager.  Either party may, by written notice, designate a different address.  
10.3    Ownership of Fixtures and Personal Property.  Co-Manager acknowledges that Owner owns all fixtures and personal property situated on or about the Premises and used in or necessary for the operation, maintenance and occupancy of the Premises. 
10.4    Assignment.  This Agreement shall not be assignable by Co-Manager without the express prior written consent of Owner.
10.5    Severability.  Each provision of this Agreement is intended to be severable.  If any term or provision hereof or the application thereof to any entity or circumstance shall be determined by a court of competent jurisdiction to be illegal or unenforceable for any reason whatsoever, such term, provision or application thereof shall be severed from this Agreement and shall not affect the validity of the remainder of this Agreement or the application of such term or provision to any other entity or circumstance.
10.6    Costs of Suit.  If Owner or Co-Manager shall institute any action or proceeding against the other relating to this Agreement, the unsuccessful party shall reimburse the successful party for its disbursements incurred in connection therewith and for its reasonable attorneys’ fees, as fixed by the court.
10.7    Waiver.  No consent or waiver, express or implied, by either party to or of any breach or default by the other party in the performance of its obligations hereunder, shall be valid unless in writing.  No such consent or waiver shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other party of any other obligations of such party hereunder.  The failure of any party to declare the other party in default shall not constitute a waiver by such party of its rights hereunder, irrespective of how long such failure continues.  The granting of any consent or approval in any one instance by or on behalf of Owner shall not be construed to waive or limit the need for such consent in any other or subsequent instance.
10.8    Remedies Cumulative.  No remedy herein contained or otherwise conferred upon or reserved to Owner shall be considered exclusive of any other remedy, but such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law, in equity or by statute.  Every power and remedy given by this Agreement to Owner may be exercised from time to time and as often as occasion may arise or as may be deemed expedient.

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10.9    Entire Agreement.  This Agreement contains the entire agreement between the parties and supersedes all prior oral or written agreements, understandings, representations and covenants, to the extent that they are inconsistent with this Agreement.
10.10    Amendment.  This Agreement may not be amended or modified except by an agreement in writing signed by the party against whom enforcement of such change or modification is sought.
10.11    Governing Law.  This Agreement and the obligations of Owner and Co-Manager shall be governed by, and construed and enforced in accordance with, the laws of the State of California.
10.12    OFAC Representations, Warranties and Indemnification.  Owner and Co-Manager each represents and warrants that (i) it is not, and none of its partners, members, managers, employees, officers, directors, representatives or agents is, a person or entity with whom U.S. persons or entities are restricted from doing business under 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) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property any Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or under any other law, rule, order, or regulation that is enforced or administered by OFAC (such persons and entities each being a “Prohibited Person”); (ii) it is not acting directly or indirectly, for or on behalf of any Prohibited Person; (iii) it is not engaged in this transaction, directly or indirectly, on behalf of, or instigating or facilitating this transaction, directly or indirectly, on behalf of any Prohibited Person; and (iv) it will not contract with or otherwise engage in any dealings or transactions or be otherwise associated with any Prohibited Person. 
10.13    Anti-Discrimination.  It is illegal for either the Owner or the Co-Manager to refuse to display or sell to any person because of one’s membership in a protected class, e.g., race, color, religion, national origin, sex, ancestry, age, marital status, physical or mental handicap, familial status, sexual orientation, unfavorable discharge from the military service, order of protection status or any other class protected by Article 3 of the Human Rights Act. 
10.14    Limitation of Liability of Owner.  Notwithstanding anything contained in this Agreement to the contrary, the obligations of Owner or Owner’s Representative under this Agreement (including any actual or alleged breach or default by Owner) do not constitute personal obligations of the individual partners, directors, officers, trustees, members or shareholders of Owner, Owner’s Representative or Owner’s members or partners, and Co-Manager shall not seek recourse against the individual partners, directors, officers, trustees, members or shareholders of Owner, Owner’s Representative or against Owner’s members or partners or against any other persons or entities having any interest in Owner, or against any of their personal assets for satisfaction of any liability with respect to this Agreement.  Any liability of Owner for a default by Owner under this Agreement, or a breach by Owner of any of its obligations under this Agreement, shall be limited solely to its interest in the Premises, and in no event shall any personal liability be asserted against Owner and/or Owner’s Representative in connection with Agreement nor shall any recourse be had to any other property or assets of Owner, Owner’s Representative, or its partners, directors, officers, trustees, members, shareholders or any other persons or entities having any interest in Owner.

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10.15    Limitation of Liability of Co-Manager.  Notwithstanding anything contained in this Agreement to the contrary, the obligations of Co-Manager under this Agreement (including any actual or alleged breach or default by Co-Manager) do not constitute personal obligations of the individual partners, directors, officers, trustees, members or shareholders of Co-Manager or Co-Manager’s members or partners, and Owner and Owner’s Representative shall not seek recourse against the individual partners, directors, officers, trustees, members or shareholders of Co-Manager or against Co-Manager’s members or partners or against any other persons or entities having any interest in Co-Manager, or against any of their personal assets for satisfaction of any liability with respect to this Agreement.  In no event shall any personal liability be asserted against Co-Manager in connection with Agreement nor shall any recourse be had to any other property or assets of Co-Manager, or its partners, directors, officers, trustees, members, shareholders or any other persons or entities having any interest in Co-Manager.
10.16    Electronic Scanned Signatures.  The parties agree that an electronically scanned signed copy of this Agreement transmitted by one party to the other party(ies) by electronic transmission shall be binding upon the sending party to the same extent as if it had delivered a signed original of this Agreement. 
10.17    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one agreement. 

[Signature Page Follows]

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

	
		
	Owner:

KBGI 421 SW 6TH AVENUE, LLC, 
a Delaware limited liability company 
 
      
 
By:   KBS CAPITAL ADVISORS, LLC,
a Delaware limited liability company,
its authorized agent 

   By:  /s/ Charles J. Schreiber, Jr.
Charles J. Schreiber, Jr.,
Chief Executive Officer

	Co-Manager:

KBS MANAGEMENT GROUP, LLC, 
a Delaware limited liability company

By:         /s/ Kim Smith     
Name:    Kim Smith
Its:          Senior Vice President

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EXHIBIT A

DUTIES OF CO-MANAGER

Set property management standards related to service delivery and ensure those standards are being met in the operation of the Premises.  Periodically inspect the Premises to assess performance and benchmark tenant satisfaction. Implement national programs and initiatives as requested by Owner which benefit the Premises.   
Qualify property manager staffing plans for the Premises;  interview, approve personnel and make recommendations to Owner, lead transitions at acquisition or in event of a change in property manager,  provide guidance to property manager on Owner’s policy and procedure to manage the Premises. 
Consult with and make recommendations to property manager on vendor service agreements to operate the Premises including risk assessment and Owner’s insurance requirements.   
Provide project, construction management and engineering services to the Premises as requested by Owner which are not being provided by Manager. 
Provide repair vs. replacement analysis as requested by Owner to the extent not provided by Manager. 
Assess sustainability opportunities at the Premises including energy benchmarking, LEED certification, compliance with state mandated initiatives, energy efficiencies, etc...  Engage energy consultants as needed in accordance with Owner’s national standards. 
Maintain a database of competitive operating costs to the Premises.   
At Owner’s request, perform such other services from time to time as are customary and usual in the management, operation and maintenance of similar first class properties and not currently provided by Manager. 

Exhibit A - 1

EXHIBIT B

ERISA REQUIREMENTS

This Exhibit B is attached to and made a part of that certain Real Estate Property Co-Management Agreement (the “Agreement”) dated as of June 16, 2016 executed by KBSGI 421 SW 6th AVENUE, LLC, a Delaware limited liability company (“Owner”) acting through KBS CAPITAL ADVISORS, LLC, a Delaware limited liability company (“Owner’s Representative”) and KBS MANAGEMENT GROUP, LLC, a Delaware limited liability company (“Co-Manager”), only if the Owner as an employee benefit plan as that term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
Co-Manager represents and warrants that it is not (except by virtue of entering into this Agreement) a party in interest as that term is defined in Section 3(14) of ERISA as to Owner.  The text of Section 3(14) is set forth below.  Co-Manager shall not knowingly employ, enter into a contract with or purchase any goods for the Premises from any party in interest without Owner’s prior written approval.
Section 3(14) of ERISA reads as follows:
The term “party in interest” means, as to an employee benefit plan --
		
	(A)
	any fiduciary (including, but not limited to, any administrator, officer, trustee, or custodian), counsel, or employee of such employee benefit plan;

		
	(B)
	a person providing services to such plan;

		
	(C)
	an employer any of whose employees are covered by such plan;

		
	(D)
	an employee organization any of whose members are covered by such plan;

		
	(E)
	an owner, direct or indirect, of 50 percent or more of --

		
	(i)
	the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation.

		
	(ii)
	the capital interest or the profits interest of a partnership, or,

		
	(iii)
	the beneficial interest of a trust or unincorporated enterprise which is an employer or an employee organization described in subparagraph (C) or (D);

		
	(F)
	a relative (as defined in paragraph (15) of any individual described in subparagraph (A), (B), (C), or (E);

		
	(G)
	a corporation, partnership, or trust or estate of which (or in which) 50 percent or more of --

Exhibit B - 1

		
	(i)
	the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation,

		
	(ii)
	the capital interest or profits interest of such partnership, or

		
	(iii)
	the beneficial interest of such trust or estate, is owned directly or indirectly, or held by persons described in subparagraph (A), (B), (C), (D), or (E);

		
	(H)
	an employee, officer, director (or an individual having powers or responsibilities similar to those of officers or directors), or a 10 percent or more shareholder directly or indirectly, of a person described in subparagraph (B), (C), (D), (E), or (G), or of the employee benefit plan; or

		
	(I)
	a 10 percent or more (directly or indirectly in capital or profits) partner or joint venturer of a person described in subparagraphs (B), (C), (D), (E), or (G).

The Secretary, after consultation and coordination with the Secretary of the Treasury, may by regulation prescribe a percentage lower than 50 percent for subparagraphs (E) and (G) and lower than 10 percent for subparagraphs (H) or (I).  The Secretary may prescribe regulations for determining the ownership (direct or indirect) of profits and beneficial interests, and the manner in which indirect stockholdings are taken into account.  Any person who is a party in interest with respect to a plan to which a trust described in Section 501(c)(22) of the Internal Revenue Code of 1954 is permitted to make payments under Section 4223 shall be treated as a party in interest with respect to such trust.
Section 3(15) of ERISA (referred to in Paragraph F, Section 3(14) reads as follows:
The term “relative” means a spouse, ancestor, lineal descendant, or spouse of a lineal descendant.

Exhibit B - 2king_ex41.htm

EXHIBIT 4.1
 
THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED, NOR WILL ANY ASSIGNEE, VENDEE, TRANSFEREE, OR ENDORSEE THEREOF BE RECOGNIZED AS HAVING ACQUIRED ANY SUCH UNITS BY THE ISSUER FOR ANY PURPOSES, EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND THE SECURITIES LAWS OF ALL OTHER APPLICABLE JURISDICTIONS OR (2) THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION SHALL BE ESTABLISHED TO THE REASONABLE SATISFACTION OF THE ISSUER. 
 
CONVERTIBLE PROMISSORY NOTE
 
	Note No. 16
U.S. $30,000.00
	August 10, 2016
Tampa, Florida

 
FOR VALUE RECEIVED, the undersigned KINGFISH HOLDING CORPORATION, a Delaware corporation (the "Company"), promises to pay to the order of JAMES K. TOOMEY ("Payee", and Payee and any subsequent permitted holder(s) of this convertible promissory note (the "Note") being referred to collectively as "Holder"), at Holder's address set forth below (or by wire transfer to Holder's wire address set forth below) or at such other place as Holder may designate in writing pursuant to the notice provisions below, the principal sum of THIRTY THOUSAND DOLLARS ($30,000.00) (the "Principal Amount"), together with accrued and unpaid interest thereon, said principal and interest to be due and payable as stated below. 
 
This Note is issued pursuant to the terms of that certain Convertible Promissory Note Purchase Agreement (the "Purchase Agreement") dated as of August 10, 2016 by and between the Company and the Payee. Capitalized terms used herein without definition shall have the meanings given to such terms in the Purchase Agreement. 
 
1. Interest Rate. The Company promises to pay simple interest on the outstanding principal amount of this Note from July 11, 2016 (the date that the underlying loan was originally made by the Holder to the Company) until paid in full at the fixed rate of three and one-half percent (3.5%) per annum. Interest shall be calculated on a 365-day year basis and shall be due and payable as set forth below. 
 
2. Maturity. Unless this Note has been previously converted in accordance with the terms of Section 5 hereof, all outstanding principal and accrued and unpaid interest on this Note, plus all fees, costs and expenses then due under this Note, become fully due and payable upon demand by the Holder (the date of any such demand, the "Maturity Date").
 
3. Payments. No principal amount of this Note or any accrued interest on the principal balance of this Note is due or payable until the Maturity Date. All amounts payable hereunder shall be made for the account of the Holder at the address referred to in Section 8 of this Note. 
 
4. Prepayment. The Company may not prepay this Note prior to the Maturity Date without the consent of the Holder. Following the Maturity Date, the Company may prepay any part or all of any amount payable under this Note, including principal or interest or both, at any time or times without any premium or penalty whatsoever. Any and all prepayments shall be applied first to reimbursement of Holder for any costs or expenses incurred by Holder to enforce or collect amounts owed hereunder, then to repayment of any accrued and unpaid interest hereunder, and then to principal outstanding hereunder. 
 
	 
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 5. Optional Conversion of Note. 
 
(a) Optional Conversion Rights. The outstanding principal balance of this Note shall be convertible, in whole or in part, at the option of the Holder at any time prior to the Maturity Date, into shares of common stock, par value $0.0001 per share, of the Company ("Common Stock"), at the then-Conversion Price (as defined in Section 5(e) below) (the "Optional Conversion Right"). To the extent that the Holder decides to exercise his or her Optional Conversion Right, then any unpaid interest on this Note shall be converted into Common Stock on the same terms as the principal of the Note. 
 
(b) Exercise of Optional Conversion Right. The Optional Conversion Right may be exercised by the Holder, in whole but not in part, at any time, and from time to time prior to the Maturity Date, by the surrender and presentment of this Note accompanied by a duly executed Notice of Exercise in the form attached hereto (the "Exercise Notice"), presented to the Company, at its principal office or at such other place as the Company may designate by notice in writing to the Holder.
 
(c) Issuance of Certificates. As soon as practicable after full or partial conversion of this Convertible Note, the Company at its expense (including, without limitation, the payment by it of all taxes and governmental charges applicable to such conversion and issuance of Common Stock) shall cause to be issued to the Holder a certificate representing the total number of shares of Common Stock for which this Convertible Note is being converted (the "Conversion Shares"). This Convertible Note shall be deemed to have been converted, and the Conversion Shares acquired thereby shall be deemed issued, and the Holder shall be deemed to have become holders of record of such Conversion Shares, for all purposes, as of the close of business on the date that this Convertible Note and the duly executed and completed Conversion Notice, has been presented and surrendered to the Company in accordance with the provisions of Section 5(b) hereof, notwithstanding that the transfer books of the Company may then be closed.
 
(d) Covenants of Company. The Company shall take all action as may be necessary to assure that such Conversion Shares (and any other securities and property) may be issued and delivered as provided herein without violation of the Company's Certificate of Incorporation of bylaws, any applicable law or regulation, or any requirements of any domestic securities exchange or inter dealer quotation system upon which the Common Stock may be listed.
 
(e) Definitions. For purposes of this Note:
 
(i) The term "Conversion Price" shall be equal to the quotient of the Principal Amount plus all accrued and unpaid interest under this Note as of the date of such calculation divided by the Per Share Value.
 
(ii) The "Per Share Value" shall be $1.00 per share of Common Stock, subject to adjustment as provided in Section 5(f) hereof.
 
(ii) The term "Sale of the Company" shall mean (A) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shareholders of the Company immediately prior to such consolidation, merger or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization; (B) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company's voting power is transferred; provided, however, that a Sale of the Company shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or (C) a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.
 
	 
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(f) Anti-Dilution Provisions. The number and kind of securities and other property that may be acquired upon the conversion of this Note and the Conversion Price shall be subject to adjustment, from time to time, upon the happening of any of the following events:
 
(i) In the event that the Company shall declare, pay, or make any dividend upon its outstanding shares of Common Stock payable in Common Stock or shall effect a subdivision of the outstanding Common Stock into a greater number of shares of Common Stock, then the number of Conversion Shares that may thereafter be purchased upon the exercise of the rights represented hereby shall be increased in proportion to the increase in the number of outstanding shares of Common Stock through such dividend or subdivision, and the Per Share Value shall be decreased in such proportion. In case the Company shall at any time combine the outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number of Conversion Shares that may thereafter be acquired upon the exercise of the rights represented hereby shall be decreased in proportion to the decrease through such combination and the Per Share Value shall be increased in such proportion.
 
(ii) In the event that the Company declares, pays, or makes any dividend or other distribution upon its outstanding shares of Common Stock payable in securities or other property (excluding cash dividends and dividends payable in shares of Common Stock, but including, without limitation, shares of any other class of the Company's stock or other securities convertible into or exchangeable for shares of Common Stock or any other class of the Company's stock or other interests in the Company or its assets), a proportionate part of those securities or that other property shall be set aside by the Company and delivered to the Holder in the event that the Holder exercises his Optional Conversion Right with respect to this Note. The securities and other property then deliverable to the Holder upon the conversion of this Note shall be in the same ratio to the total securities and property set aside for the Holder as the number of Conversion Shares with respect to which this Note is then converted is to the total number of Conversion Shares that may be acquired pursuant to this Note at the time the securities or property were set aside for the Holder.
 
(g) Per Share Value Adjustments. Except as otherwise provided in this Section 5, upon any adjustment of the Per Share Value, the Holder shall be entitled to purchase, based upon the new Per Share Value, the number of shares of Common Stock, calculated to the nearest full share, obtained by: (i) multiplying the (A) number of Conversion Shares that may be acquired pursuant to this Note immediately prior to the adjustment of the Per Share Value by (B) the Per Share Value in effect immediately prior to its adjustment, and (ii) dividing the product so obtained in clause (i) by the new Per Share Value.
 
(h) Prior Notice of a Sale of the Company. Notwithstanding any provision of this Note to the contrary, in the event that the Company consummates a Sale of the Company prior to the conversion or repayment in full of this Note, the Company will give the Holder at least five days prior written notice of the anticipated closing date of such Sale of the Company.
 
6. Expenses. In the event of any failure of the Company to pay all amounts due upon a demand made pursuant to Section 2 of this Note, the Company shall pay all reasonable attorneys' fees and court costs incurred by Holder in enforcing and collecting this Note.
 
7. Waiver. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.
 
	 
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8. Notices. Any notice or other communications to be given or that may be given pursuant to this Note shall be deemed to have been given: (x) three (3) calendar days after the deposit of such notice or communication in the United States Mail, registered or certified, return receipt requested, with proper postage affixed thereto; (y) on the first Business Day after depositing such notice of communication with Federal Express, Express Mail, or other expedited mail or package delivery service guaranteeing delivery no later than the next Business Day if next Business Day delivery service has been requested and paid for (or on such subsequent Business Day as such delivery service has been requested, guaranteed and paid for); or (z) upon delivery if hand delivered or telecopied to the appropriate address and person as provided on the signature page to the Purchase Agreement or to the person to whose attention the notice is to be given to the other parties in the manner hereinabove provided; provided, however, that any notice changing Holder's address or wire address shall be effective only upon receipt by the Company.
 
9. Governing Law. 
 
(a) This Note shall in all respects be governed by and construed in accordance with the laws of the State of Florida, without giving effect to the principles of conflict of laws thereof. 
 
(b) Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereunder shall be brought solely in the courts of the State of Florida located in Hillsborough County, Florida, or, if it has or can acquire jurisdiction, in the United States District Court for the Middle District of Florida (Orlando or Tampa Division), and each of the parties hereto hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and waives any objection to the venue or the convenience of forum of any such courts. 
 
10. Modification; Waiver. No amendment, modification, forbearance or waiver of any provision of this Note, and no consent with respect to any departure by the Company therefrom, shall be effective unless the same shall be in writing and signed by the Holder and the Company
 
11. Assignment. Neither the Company nor the Holder may assign or transfer this Note without the prior written consent of the other party (not to be unreasonably withheld) provided that, in no event shall this Note or any interest herein be transferable, in whole or in part, to any person or entity under circumstances that would be reasonably likely to violate or trigger a consent or other approval requirement under applicable laws, including but not limited to U.S. securities laws, the Foreign Corrupt Practices Act, FINSA, laws restricting money transfers and payments to persons or entities located in certain restricted countries, foreign nationals identified on any restricted list, and associated regulations as in existence at the time, and the laws and regulations of any other country. Any such written notice shall set forth in reasonable detail the identity of the new Holder(s) and the terms of transfer of this Note (including a release by the applicable Holder of any right to receive any payments hereunder) and the Company shall be obligated to register the transfer of this Note and make payments to any Holder hereunder only if the Company determines such transfer or payment is not restricted or prohibited by any such laws (and the due date of any such payment shall be extended by the length of time that any such legal restriction or prohibition exists). This Note shall inure to the benefit of Holder, its successors and assigns, and to any person to whom Holder may grant an interest in any of the indebtedness evidenced hereby in compliance with the foregoing restrictions, and shall be binding upon the Company and its successors and assigns. No person or entity not a direct party hereto shall be entitled to enforce any rights or obligations hereunder as a third party beneficiary or otherwise. 
 
	 
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12. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.
 
13. Time of Essence. Time is of the essence of the payment and performance of this Note.
 
14. Miscellaneous. The Company and Holder have participated jointly in the negotiation and drafting of this Note. In the event an ambiguity or question of intent or interpretation arises, this Note shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Note. No delay by Holder in enforcing its rights hereunder or otherwise, shall prejudice Holder's rights to enforce this Note. Neither Party to this Note will be liable to the other for any failure or delay in performance under this Note due to circumstances beyond its reasonable control including, without limitation, Acts of God, labor disruption, war, terrorist threat or government action, or lack of availability of wire transfer systems or other international or national systems; provided, that if either party is unable to perform its obligations under this Note for one of these reasons it shall give prompt written notice thereof to the other party and the time for performance, if any, shall be deemed to be extended for a period equal to the duration of the conditions preventing performance.
 
15. Agreement by Holder. By its acceptance of this Note, Holder agrees to be bound by the terms hereof. 
 
16. Documentary Stamp Taxes. All required Florida documentary stamp taxes due in connection with this Note have been paid.
 
[Signature Page Follows]
 
	 
	5

	

	 

 
		KINGFISH HOLDING CORPORATION,
	
		a Delaware corporation
	
	 
	   
	 
	 

		By: 	/s/ Ted Sparling
	

		Name: 	Ted Sparling
	

		Title: 	President & CEO
	

 
	HOLDER:
	 
	 

	 
	 
	 

	/s/ James K. Toomey 
	 
	 

	James K. Toomey
	 
	 

 
[SIGNATURE PAGE TO CONVERTIBLE PROMISSORY NOTE NO. 16 OF KINGFISH HOLDING CORPORATION]
 
	 
	6

	

	 

 
NOTICE OF EXERCISE
 
(To be executed by the Holder desiring to exercise the right to convert this Note into shares of common stock, par value $0.0001 per share, of the Company ("Common Stock") of KINGFISH HOLDING CORPORATION, a Delaware corporation) 
 
The undersigned Holder of a Convertible Promissory Note (Note No. 16) hereby elects to exercise his or her Optional Conversion Right, pursuant to the provisions of the Note dated August 10, 2016 issued to the Holder by Kingfish Holding Corporation, a Delaware corporation, to receive that number of shares of Common Stock into which the outstanding principal amount of, and accrued and unpaid interest on, this Note is convertible at the Conversion Price at the address set forth below.
 
Dated: _______________, _________ 
 
		Printed Name:
		
		Signature:
		
		Address:
		
				

  
(Signature must conform in all respects to the name of holder as specified on the face of this Note.)
 
 
	7

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