Document:

EX-10.2

 Exhibit 10.2 

AWARD AGREEMENT FOR 2015 CASH-SETTLED PERFORMANCE AWARD 

We are pleased to advise you that the Compensation Committee (the “Committee”) of the Board of Directors of Office Depot, Inc. (the
“Company”) has granted you a performance award pursuant to the Office Depot, Inc. 2007 Long-Term Incentive Plan (the “Plan”) on [—] (the “Grant Date”). Capitalized terms used but not defined in this
Award Agreement for 2015 Cash-Settled Performance Award (the “Agreement”) have the meanings given to them in the Plan. This award is subject to federal and local law and the requirements of the NASDAQ Stock Market LLC. 

 

	1.	Performance Award 

 You have been granted the right to earn a payment from the Company
based upon satisfaction of certain performance conditions pursuant to the provisions and restrictions contained in the Plan and this Agreement (the “Performance Award”). The target amount of your award is $[—] (your
“Target Award”) and is denominated as a number of shares of common stock of the Company (“Common Stock”) having an aggregate Grant Date value of $[—] based on the “fair value” of the Common Stock on
the Grant Date with such “fair value” to be determined in accordance with the terms of the Plan and generally accepted accounting principles. 
  

	2.	Vesting 

  

	 	a.	 Performance Conditions. Subject to the terms and conditions set forth herein and in Sections 2(b) below, you will be eligible to earn up to
[—]% of your Target Award based on the Company’s free cash flow as determined by the Committee pursuant to paragraph (i) below (“Free Cash Flow”) and operating income as determined by the Committee pursuant to
paragraph (ii) below (“Operating Income”). Generally, the Committee will determine Free Cash Flow and Operating Income for the Company’s fiscal year beginning on December 28, 2014, and ending on December 26, 2015 (the
“Fiscal Year”). However, in the event that the Closing Date (as defined in the Agreement and Plan of Merger between the Company, Staples, Inc. and Staples AMS, Inc. dated as of February 4, 2015 (the “Merger Agreement”)
occurs prior to December 26, 2015, then Free Cash Flow and Operating Income will be calculated for the period beginning December 28, 2014 and ending on such Closing Date rather than for the Fiscal Year. The Fiscal Year or any shorter
period over which Free Cash Flow and Operating Income will be calculated is referred to in this Agreement as the “Performance Period.” If the Committee determines that the Company does not achieve Free Cash Flow equal to at least the
threshold amount approved by the Committee for the Performance Period or does not achieve Operating Income equal to at least the threshold amount approved by the Committee for the Performance Period, you will immediately forfeit all rights to the
Performance Award. If the Committee determines that the Company has achieved at least the threshold amounts of Free Cash Flow and Operating Income for the Performance Period, you will be eligible to earn a percentage of your Target Award determined
on the basis of the Company’s achievement of the Operating Income 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 1 

	 	
target set by the Committee for the Performance Period (as defined below) pursuant to the following table, up to a maximum of [—]% of your Target Award: 

 

			
	 Percentage of Attainment

of Operating Income

Target for Performance

Period
	 	Percentage of Target Award
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]
	 [—]
	 	[—]

 Straight-line interpolation shall be applied to determine the percentage of your Target Award earned for a percentile that
falls between the percentiles specified in the table above. 
 The Committee shall be entitled to adjust the percentage of your Target Award earned for the
Performance Period (i) based on your individual performance for the Performance Period, or (ii) based on business performance. In no event may an adjustment pursuant to this paragraph cause the percentage of your Target Award earned for
the Performance Period to exceed [—]%. 
 The Committee will determine the percentage of your Target Award, if any, that you are eligible
to earn on the foregoing basis (your “Eligible Award”). Upon the Committee’s determination of your Eligible Award, you will immediately forfeit the portion of your Performance Award other than your Eligible Award. To become vested in
all or a portion of your Eligible Award, you must satisfy the employment requirements of Section 2(b) below. 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 2 

	 	i.	Free Cash Flow. The Committee will calculate the Company’s Free Cash Flow by subtracting Capital Expenditures from Net Cash Provided by (Used in) Operating Activities for the Performance Period.

  

	 	ii.	Operating Income. The Committee will calculate the Company’s Operating Income as the Company’s Total Company Adjusted Operating Income (Non-GAAP) for the Performance Period, with adjustments, both
positively and negatively, for the following items as approved by the Committee: expenses related to the merger of OfficeMax Incorporated with and into the Company; expenses related to the transactions described in the Merger Agreement; impacts of
unplanned acquisitions and divestitures; internal restructuring and country portfolio changes classified as Discontinued Operations; impairment charges related to goodwill, other intangible assets, and long-lived assets (non-cash); and unplanned
costs and benefits related to real estate strategy including, but not limited to, lease terminations or facility closure obligations; and any additional unplanned and extraordinary events (as determined by the Board Finance and Integration
Committee) for which the Committee determines adjustments should be made. Operating Income excludes, for example, merger-related expenses, North America cost reduction initiatives (e.g., severance), and North America store impairment charges
(non-cash). All calculations related to foreign exchange rates will measure results on a currency neutral basis. 

  

	 	b.	Employment Requirements. 

  

	 	i.	Continuous Employment. Except as provided in Sections 2(b)(ii) and 2(b)(iii) below, (A) you will vest in your Eligible Award (if any) on the date on which the Committee determines your Eligible Award,
provided that you remain continuously employed with the Company or any Subsidiary during the period beginning on the Grant Date and ending on [—], and (B) you will immediately forfeit your entire Performance Award upon your
termination of employment with the Company and its Subsidiaries prior to [—]. 

  

	 	ii.	 Death or Disability. If you terminate employment with the Company and its Subsidiaries due to death or Disability prior to
[—], you will vest in a pro rata portion of your Eligible Award (if any) on the date on which the Committee determines your Eligible Award and you will forfeit the remainder of your Eligible Award (if any) on such date. The
portion of your Eligible Award that will vest under the immediately prior sentence shall be determined by multiplying your Eligible Award by a fraction, the numerator of which is the total number of calendar days during which you were employed by
the Company and its Subsidiaries during the Fiscal Year and the denominator of which is 365, rounded up to the nearest whole dollar (as necessary). Your Disabled status must become effective prior to the date on which payment of your Eligible Award
(if any) would 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 3 

	 	
otherwise be required pursuant to Section 4 below in order to be recognized under this Agreement. In the event of your death, payment will be made to your estate. 

 

	 	iii.	Termination of Employment without Cause or for Good Reason. In the event of your termination of employment with the Company and its Subsidiaries without Cause or for Good Reason prior to [—],
you will vest in a pro rata portion of your Eligible Award (if any) on the date on which the Committee determines your Eligible Award and you will forfeit the remainder of your Eligible Award (if any) on such date, provided that you satisfy the
release requirement and other obligations set out in the employment agreement between you and the Company dated as of [—]. The portion of your Eligible Award that will vest under the immediately prior sentence shall be determined
by multiplying your Eligible Award by a fraction, the numerator of which is the total number of calendar days during which you were employed by the Company and its Subsidiaries during the Fiscal Year and the denominator of which is 365, rounded up
to the nearest whole dollar (as necessary). 

  

	 	iv.	Definitions. As used herein, the terms “Cause”, “Good Reason” and “Disability” shall have the meanings set out in the employment agreement between you and the Company dated as of
[—]. 

  

	 	c.	No Other Special Vesting Rights. The provisions of the Plan with respect to accelerated vesting in the event of retirement and change in control (e.g., Sections 10.5 and 10.8 of the Plan) do not apply to your
Performance Award. If you forfeit your Performance Award at any time, you will cease to have any rights with respect to such forfeited Performance Award. 

  

	3.	Rights as Stockholder 

 You shall have no voting, dividend or any other rights as a
stockholder of the Company with respect to your Performance Award. 
  

	4.	Payment 

 The Company will make payment of the vested portion of your Eligible Award (if
any) in a lump sum in cash during the period beginning [—] and ending [—]. 
  

	5.	Withholding 

 You are required to pay to the Company all applicable federal, state,
local or other taxes, domestic or foreign, with respect to your Performance Award (the “Required Tax Payments”). Unless you make other arrangements with the consent of the Company, all Required Tax Payments and other authorized deductions
(e.g., 401(k) plan contributions) will be deducted from the amount of the payment made to you pursuant to Section 4. 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 4 

	6.	Transferability of Performance Award 

 Your Performance Award may not be sold, pledged,
assigned or transferred in any manner; any such purported sale, pledge, assignment or transfer shall be void and of no effect. 
  

	7.	Conformity with Plan 

 Your Performance Award are intended to conform in all respects
with, and are subject to, all applicable provisions of the Plan which is incorporated herein by reference. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan except as expressly provided
otherwise in this Agreement. The Committee reserves its right to amend or terminate the Plan at any time without your consent; provided, however, that your Performance Award shall not, without your written consent, be adversely affected thereby
(except to the extent the Committee reasonably determines that such amendment or termination is necessary or appropriate to comply with applicable law or the rules or regulations of any stock exchange on which the Company’s stock is listed or
quoted). All interpretations and determinations of the Committee or its delegate shall be final, binding and conclusive upon you and your legal representatives with respect to any question arising hereunder or under the Plan or otherwise, including
guidelines, policies or regulations which govern administration of the Plan. By acknowledging this Agreement, you agree to be bound by all of the terms of the Plan and acknowledge availability and accessibility of the Plan document, the Plan
Prospectus, and either the Company’s latest annual report to shareholders or annual report on Form 10-K on the Plan and/or Company websites. You understand that you may request paper copies of the foregoing documents by contacting the
Company’s Director, Executive Compensation & International Compensation. 
  

	8.	Restrictions on Shares 

 If the Committee determines that the listing, registration or
qualification upon any securities exchange or under any law of shares subject to the grant of the Performance Award is necessary or desirable as a condition of, or in connection with, the granting of same or the issue or purchase of shares
thereunder, no shares may be issued unless such listing, registration or qualification is effected free of any conditions not acceptable to the Committee. In making such determination, the Committee may rely upon an opinion of counsel for the
Company. The Company shall have no liability to make any distribution of the benefits under the Plan unless such delivery or distribution would comply with all applicable state, federal, and foreign laws (including, without limitation and if
applicable, the requirements of the Securities Act of 1933), and any applicable requirements of any securities exchange or similar entity. The Committee shall be permitted to amend this Agreement in its discretion to the extent the Committee
determines that such amendment is necessary or desirable to achieve compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and the guidance thereunder. 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 5 

	9.	Non-Compete, Confidentiality, and Non-Solicitation Requirements 

 Your Performance Award
is also subject to your complying with and not breaching the non-compete, confidentiality, and non-solicitation covenants that you were required to sign as a condition of your employment with the Company. 

 

	10.	Compliance with Section 409A 

  

	 	a.	It is intended, and this Agreement shall be construed and administered, so that all compensation payable to you under this Agreement shall be exempt from section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”). 

  

	 	b.	However, to the extent that any compensation payable under this Agreement constitutes deferred compensation within the meaning of Code Section 409A and the Department of Treasury regulations and other guidance
thereunder, (i) any provisions of this Agreement that provide for payment of compensation that is subject to Section 409A and that has payment triggered by your termination of employment other than on account of your death shall be deemed
to provide for payment that is triggered only by your “separation from service” within the meaning of Treasury Regulation Section §1.409A-1(h) (a “Section 409A Separation from Service”), and (ii) if you are a
“specified employee” within the meaning of Treasury Regulation Section §1.409A-1(i) on the date of your Section 409A Separation from Service (with such status determined by the Company in accordance with rules established by the
Company in writing in advance of the “specified employee identification date” that relates to the date of such Section 409A Separation from Service or in the absence of such rules established by the Company, under the default rules
for identifying specified employees under Treasury Regulation Section 1.409A-1(i)), such compensation triggered by such Section 409A Separation from Service shall be paid to you six months following the date of such Section 409A
Separation from Service (provided, however, that if you die after the date of such Section 409A Separation from Service, this six month delay shall not apply from and after the date of your death). You acknowledge and agree that the Company has
made no representation regarding the tax treatment of any payment under this Agreement and, notwithstanding anything else in this Agreement, that you are solely responsible for all taxes due with respect to any payment under this Agreement.

  

	11.	Employment and Successors 

 Nothing in the Plan or this Agreement shall serve to modify
or amend any employment agreement you may have with the Company or any Subsidiary or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate your employment at any time, or confer upon you any right to continue
in the employ of the Company or any Subsidiary for any period of time or to continue your present or any other rate of compensation subject to the terms of any employment agreement you may have with the Company. The grant of your Performance Award
shall not give you any right to any additional awards under the Plan or any other compensation plan the Company has 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 6 

 
adopted or may adopt. The agreements contained in this Agreement shall be binding upon and inure to the benefit of any successor of the Company. 

 

	12.	Amendment 

 The Committee may amend this Agreement by a writing that specifically states
that it is amending this Agreement, so long as a copy of such amendment is delivered to you, provided that no such amendment shall adversely affect in a material way your rights hereunder without your written consent (except to the extent the
Committee reasonably determines that such amendment or termination is necessary or appropriate to comply with applicable law or the rules or regulations of any stock exchange on which the Company’s stock is listed or quoted). Without limiting
the foregoing, the Committee reserves the right to change, by written notice to you, the provisions of the Performance Award or this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant of the Performance
Award as a result of any change in applicable law or regulation or any future law, regulation, ruling, or judicial decisions; provided that, any such change shall be applicable only to that portion of your Performance Award that is then subject to
restrictions as provided herein. 
  

	13.	Notices 

 Any notice to be given under the terms of this Agreement to the Company shall
be addressed to the Company as follows: 
 Office Depot, Inc. 

c/o Vice President, Global Compensation, Benefits, HRIS and Shared Services 

6600 North Military Trail, C278 

Boca Raton, FL 33496 
 Any notice
to be given under the terms of this Agreement to you shall be addressed to you at the address listed in the Company’s records. By a notice given pursuant to this Section, either party may designate a different address for notices. Any notice
shall be deemed to have been duly given when personally delivered (addressed as specified above) or when enclosed in a properly sealed envelope (addressed as specified above) and deposited, postage prepaid, with the U.S. postal service or an express
mail company. 
  

	14.	Severability 

 If all or any part of this Agreement or the Plan is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any section of this Agreement (or part of such a section) so
declared to be unlawful or invalid shall, if possible, be construed in a manner that will give effect to the terms of such section or part of a section to the fullest extent possible while remaining lawful and valid. 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 7 

	15.	Entire Agreement 

 This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements or understandings, oral or written, with respect to the subject matter herein. 
  

	16.	Governing Law 

 This Agreement will be governed by and enforced in accordance with the
laws of the State of Florida, without giving effect to its conflicts of laws rules or the principles of the choice of law. 
  

	17.	Venue 

 Any action or proceeding seeking to enforce any provision of or based on any
right arising out of this Agreement may be brought against you or the Company only in the courts of the State of Florida or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of Florida, West Palm
Beach Division; and you and the Company consent to the jurisdiction of such courts in any such action or proceeding and waive any objection to venue laid therein. 

Very truly yours, 
 OFFICE DEPOT, INC. 

  
 [—]
2015 STI PERFORMANCE SHARE 

  
 8Hartman XX

  REAL PROPERTY MANAGEMENT AGREEMENT
 

 

               THIS REAL PROPERTY MANAGEMENT AGREEMENT (“Agreement”) is effective as of the 7th day of July, 2015, by and between Hartman Ashford Crossing, LLC, a Texas limited liability company (“Company”), and Hartman Income REIT Management, Inc., a Texas corporation (“Manager”).
 

 ARTICLE 
 AGENCY; TERM
 

 .
 Appointment/Acceptance.  Company hereby appoints Manager, and Manager hereby accepts appointment, on the terms and conditions hereinafter provided, as exclusive managing and leasing agent for all properties acquired by Company.  All properties acquired by Company which from time to time are subject to this Agreement are hereinafter referred to collectively as the “Properties” and individually as the “Property.”
 

 .
 Term.  Subject to Article IV below, the term of this Agreement (the "Term") shall be a period of one (1) year from the date first set forth above and thereafter shall be automatically extended on an annual basis unless terminated in writing by either Company or Manager at least thirty (30) days prior to the expiration of the Term or extension thereof.
 

 ARTICLE 
 MANAGER’S DUTIES
 

 .
   Power and Authority.  Manager shall have, and is hereby granted, full power and authority to exercise all functions and perform all duties in connection with the operation and management of the Properties, subject to the right retained by Company to supervise the activities of Manager pursuant to this Agreement.  The power and authority of Manager shall include but not be limited to:
 

 1.
 Investigating, hiring, paying, supervising and discharging all personnel necessary or desirable, in Manager’s good faith judgment, to be employed in connection with the maintenance and operation of the Properties.  Compensation for the service of all such employees and the cost of worker’s compensation insurance and any benefits with respect to such employees shall be an operating expense of the Properties.  Manager, on behalf of Company, may employ affiliated persons or entities of Manager or Company (hereinafter “Affiliates”) as long as such employment is at rates that do not exceed commercially reasonable rates that would be paid to an unaffiliated person or entity for similar services, supplies, materials or other such dealings.  Manager is authorized to engage, on behalf of and at the expense of Company, professional persons (such as lawyers and accountants) and consultants (such as tax and energy consultants) to render services for the Properties.
 

 2.
 Maintaining business-like relations with tenants.
 

 3.
 Using good faith efforts to lease vacant space in the Properties and renew existing leases with tenants in accordance with the current rental schedule from time to time submitted by Manager and approved by Company (or in the absence of such current rental schedule approved by Company, at rents reasonably determined by Manager taking into consideration market factors then prevailing) and on such other terms and conditions as Manager in its sole discretion shall determine.  Manager shall execute leases and rental agreements with tenants and agreements with concessionaires in Manager’s name as agent for Company on such terms and conditions as Manager, in its sole discretion, shall determine.  Manager shall have the right to reduce the rental rate by an amount up to ten percent (10%) of the rental rate stipulated on the then current rental schedule approved by Company (if any) if, in Manager’s sole discretion, such reduction is necessary to expedite rental of such space under the competitive rental and economic conditions then prevailing.
 

 4.
 Collecting all monthly rentals and other charges due from tenants, all rents and other charges due from concessionaires, users of parking spaces and from users or lessees of other facilities in the Properties.  Company hereby authorizes and directs Manager to request, demand, collect, receive and receipt for any and all charges or rents which may at any time be or become due to Company, and to take such legal action as necessary to evict tenants delinquent in payment of monthly rent and to take such legal action as necessary to collect any rentals owing from tenants.
 

 

 

 

 
 

 5.
 Causing the buildings, appurtenances and grounds on the Properties to be maintained according to customary industry standards including, but not limited to, landscaping, interior and exterior cleaning, painting and decorating, plumbing, steam fitting, carpentry and other normal maintenance and repair work or any extraordinary maintenance and repair work deemed necessary or desirable by Manager, in Manager’s good faith judgment.
 

 6.
 Making contracts for water, electricity, gas, fuel, oil, telephone, pest control, trash removal, insurance and other necessary services as Manager shall deem necessary or desirable, in Manager’s good faith judgment.  Additionally, Manager shall place purchase orders for such equipment, tools, appliances, materials and supplies as are necessary or desirable, in Manager’s good faith judgment, to properly maintain the Properties.  All such contracts and orders may at Manager’s choice be made in either the name of Manager or in the name of Company and shall be on such terms and conditions as Manager deems advisable.  Manager shall use good faith efforts to have such contracts provide that Manager (or Company, as applicable) can terminate on thirty (30) days’ notice.
 

 7.
 Taking such action as may be necessary or desirable, in Manager’s good faith judgment, to comply with any orders or requirements affecting the Properties issued by federal, state, county or municipal authority having jurisdiction over the Properties.  Manager shall promptly notify Company of the receipt and contents of any such governmental orders or requirements.
 

 8.
 Causing to be disbursed or paid, from the monies collected from the operation of the Properties and such other monies as may or shall be advanced by Company to Manager:  (1) salaries and any other compensation or fees due and payable to Manager and employees of the Properties in connection with the management of the Properties and the cost of workers’ compensation insurance with respect to such employees; (2) payments required to be made to the holders of any mortgages affecting the Properties; (3) current amounts due for premium charges under contracts of insurance for fire and other hazard insurance premiums and amounts due for ad valorem taxes or other assessments on the Properties; (4) sums otherwise due and payable in connection with the operation and management of the Properties, including but not limited to, utility bills, service bills, supply bills license fees and payroll taxes; (5) repair expenses, capital improvement costs and other sums retained for such reserves as Manager deems necessary or desirable, in Manager’s good faith judgment,  for the prudent management and operation of the Properties; and (6) the balance of funds, if any, shall be paid monthly to Company.  Unless otherwise agreed to in writing by Manager and Company, such payments and disbursements shall be made by Manager in any order it may determine.
 

 9.
 Verifying appraisals and bills for real estate and personal property taxes, improvement assessments and other like charges which are or may become liens against the Properties.  Manager may pay the bills or take such legal action as necessary to appeal such tax appraisals as Manager may decide, in its reasonable judgment, to be prudent.   
 

 B.
 Manager’s Right to Subcontract.  Manager reserves the right, in its sole discretion, to subcontract some or all of the property management and leasing functions described herein to property managers, leasing agents and certain other third parties.  However, except as expressly provided herein, the fees to be paid to Manager under this Agreement are inclusive of fees payable to such third parties and Manager will pay the third parties with whom it subcontracts for these services a portion of its property management or leasing fees.
 

 C.
 Company’s Right to Supervise.  Company at all times shall have the right to supervise Manager in its performance of any or all of these activities.  Company shall have the right, if it so elects, to direct Manager in the conduct of any of these activities.  Absent any such direction from Company, Manager shall be entitled to perform its duties hereunder in accordance with its own good faith judgment.
 

 D.
 Agency; Payments.  Except for the employment, supervision and discharge of personnel in connection with the maintenance and operation of the Properties, who shall be employees of Manager and not of Company (although all costs with respect to such employees shall, to the extent allocable to the Properties, be deemed costs of the Properties), all action taken by Manager pursuant to the provisions of this Agreement shall be done as agent of Company and obligations or expenses incurred thereunder shall be for the account, on behalf and at the expense of Company, but any such actions may be taken or made either in Company’s name or Manager’s name.  Any payments to be made by Manager hereunder shall be made out of such funds as are available from rentals and 
 

 2
 

 

 
 other collections from the Properties and such other monies as may be provided by Company.  In the event anticipated disbursements for Properties expenses and Company management shall in any month be in excess of the anticipated revenues, Company agrees to advance sufficient funds to meet the obligations (including all costs with respect to the employees of the Properties described in Article II(A)(1) hereof, including Affiliates, the Management Fee, reimbursement of expenses described in Article III(A) hereof,) within fifteen (15) days after Manager’s request.  Manager shall not be obligated to make any advance to or for the account of Company or to pay any sum contemplated by this Agreement except out of funds held by Manager on behalf of Company or out of funds provided by Company to Manager, nor shall Manager be obligated to incur any liability of or for the account of Company without assurance or proof from Company that the necessary funds for the discharge thereof will be provided promptly.
 

 E.
 Bank Account.  Manager shall establish and maintain, in a manner to indicate the custodial nature thereof, with a bank, whose deposits are insured by the Federal Deposit Insurance Corporation, a separate bank account as agent of Company for the deposit of rentals and collections from the Properties, which shall not be commingled by Manager with funds from other projects or other funds of Manager or its Affiliates.  Manager has authority to draw thereon (a) for any payments to be made by Manager pursuant to the terms of this Agreement, (b) to discharge any liabilities or obligations incurred pursuant to this Agreement, and (c) for the payment of the Management Fee described in Article III(A) hereof and the various expense reimbursements due Manager hereunder. 
 

 F.
 Operating Budget.  On or before December 1 of each year, Manager shall prepare and submit to Company for its consent an operating budget with respect to the Properties for the next ensuing calendar year (the “Budget”).  If Company does not consent to the Budget submitted By Manager then, pending such consent or the submission to Manager by Company of an alternative Budget, Manager shall be authorized to rely on the Budget for the prior year, but with a four percent (4%) increase in each line item.
 

 G.
 Discretion.  Manager shall have and is hereby granted sole and complete discretion to exercise the powers and functions granted herein and Manager shall not be required to consult with Company or obtain Company’s approval before taking any action permitted hereunder; provided, however, except in cases of emergency, Manager shall not incur any obligation in excess of $10,000.00 without the consent of Company.  The approval by Company of a Budget shall be deemed the consent of Company to the expenses indicated on such Budget.  For these purposes, an “emergency” shall be deemed to exist if in the good faith judgment of Manager, prompt maintenance or repairs are needed in order to prevent death, bodily injury or material property damage.
 

 H.
 Records.  Manager shall maintain, or cause to be maintained, books of account of all receipts and disbursements from the management of the Properties.  Manager shall provide monthly statements to Company containing occupancy information and collection and disbursement reports.  Manager shall allow Company’s accountant or other representatives to review the books and records of the Properties during reasonable business hours.  Manager also shall provide Company with an annual report for the Properties containing information about occupancy and receipts and disbursements for the immediately preceding calendar year.
 

 ARTICLE 
 COMPENSATION OF MANAGER
 

 .
 Property Management.
 

 1.
 Management Fee.  Company shall pay to Manager, as base compensation for Manager’s duties and obligations under this Agreement, a property management fee (the “Management Fee”) equal to five percent (5%) of the Effective Gross Revenues (as hereinafter defined) for the management of retail centers, office/warehouse buildings, industrial properties and flex properties and 3 to 4% of the Effective Gross Revenues for office buildings, based upon the square footage and gross property revenues of the buildings. Company will pay a 4% fee for the management of office buildings under 100,000 square feet in size or with gross annual revenues under $1,000,000 and a 3% fee for the management of office buildings of 100,000 square feet or more in size and gross annual revenues of $1,000,000 or more. Company shall pay the Management Fee to the Manager within ten (10) days after the end of each calendar month, based upon the Effective Gross Revenues during said calendar month.  For purposes of this Agreement, “Effective Gross Revenues” shall mean all payments actually collected from tenants and occupants of the Properties, exclusive of (a) security and deposits (unless and until such deposits 
 

 3
 

 

 
 have been applied to the payment of current or past due rent) and (b) payments received from tenants in reimbursement of expenses of repairing damage caused by tenants.
 

 2.
 Leasing Fee.  If Manager provides leasing services with respect to a Property, Company shall pay to Manager a leasing fee (the “Leasing Fee”) in an amount equal to the leasing fees charged by unaffiliated persons rendering comparable services in the same geographic location of the applicable property. The Leasing Fee shall be payable upon execution of each lease.
 

 3.
 Construction Management Fee.  In the event that Manager supervises the construction or installation of tenant improvements to the Properties, Company shall pay Manager a construction management fee equal to 5% of the costs of the construction or installation of the tenant improvements.
 

 4.
 Oversight Fee.  In the event that Company contracts directly with a third-party property manager in respect of a Property, Company shall pay Manager an oversight fee equal to 1% of the Effective Gross Revenues of the Property managed.  In no event will the Company pay both a property management fee and an oversight fee to Manager with respect to any particular property. The foregoing fee shall be payable only from net cash flow from the Property after payment of all sums then due to the holder of the mortgage on the Property.   
 

 5.
 Disposition Fee.  If Manager provides a substantial amount of services, as determined by Company’s independent directors, in connection with the sale of one or more assets, Manager will receive a disposition fee equal to (1) in the case of the sale of real property, the lesser of: (A) one-half of the aggregate brokerage commission paid (including the disposition fee) or, if none is paid, the amount that customarily would be paid, or (B) 3% of the sales price of each property sold, and (2) in the case of the sale of any asset other than real property, 3% of the sales price of such asset. 
 

 6.
 Reimbursement of Expenses.  Company, within fifteen (15) days of a request by Manager, shall reimburse Manager for all reasonable and necessary expenses incurred or monies advanced by Manager in connection with the management and operation of the Properties.  However, Manager shall not be reimbursed for its overhead, including the salaries and expenses of employees relating to the management of the Properties except as expressly provided in Article II(A)(1) hereof.  Manager shall have no obligation to advance any of its own funds for the management of the Properties.
 

 B.
 Miscellaneous.  The fees and reimbursements set forth in the Article III are cumulative; and the obligations of Company pursuant to Article III shall survive the termination of this Agreement.
 

 ARTICLE 
 TERMINATION
 

 .
 Termination.  Notwithstanding anything herein to the contrary, but subject to Article IV(B) below, Manager and Company shall each have the right, upon sixty (60) days prior written notice to the other party to terminate this Agreement in its entirety or as to a specific Property or Properties with the mutual consent of Company and Manager.
 

 .
 Default.  Notwithstanding anything herein to the contrary, either party shall have the right (without limitation of its other rights and remedies) to terminate this Agreement in the event of a default by the other party if such default is not cured within thirty (30) days after written notice is given to the other party (provided that if such default cannot reasonably be cured within such thirty (30) day period, the cure period shall be extended as may reasonably be required provided that the party obligated to cure such default endeavors with diligence to do so).  Additionally, Company shall have the right (without limitation of its other rights and remedies) to immediately terminate this Agreement at any time upon written notice to Manager in the event of Manager’s fraud, gross malfeasance, gross negligence or willful misconduct.
 

 .
 Termination Payments.  Upon termination in whole or as to any Properties, Company and Manager shall immediately account to each other with respect to all matters outstanding and all sums owing each other as of the effective date of termination.  Manager shall be entitled to retain copies of such books and records pertaining to such Properties as Manager deems appropriate, provided Manager shall bear the cost of such photocopying.
 

 

 4
 

 

 
 ARTICLE 
 INSURANCE; INDEMNIFICATION OF MANAGER
 

 .
 Insurance.  Except as otherwise agreed in writing between the parties hereto, Manager shall maintain (subject to reimbursement as an expense of the Properties) all risk casualty insurance, and public liability insurance for the Properties with a broad form comprehensive general liability endorsement, in such amounts as Manager may deem appropriate.  Any and all other insurance maintained for the Properties shall be the sole responsibility of Company.  Each party shall provide the other with copies of all insurance policies maintained by such party with respect to the Properties.
 

 .
 Indemnification.  Manager shall have no liability to Company for any loss suffered by Company which arises out of any action or inaction of Manager if Manager, in good faith, determined that such course of conduct was in the best interest of Company and such course of conduct did not constitute gross negligence or willful misconduct of Manager.  Company shall indemnify Manager against all claims, actions, damages, losses, judgments, liabilities, costs and expenses (including attorneys’ fees) and amounts paid in settlement of any claims sustained by Manager in connection with the management of the Properties and the management services provided pursuant to this Agreement, provided that the same were not the result of gross negligence or willful misconduct on the part of Manager (collectively, “Unauthorized Acts”).  Manager shall indemnify Company against all claims, actions, damages, losses, judgments, liabilities, costs and expenses (including attorneys’ fees) and amounts paid in settlement of any claims sustained by Company arising out of or in connection with Unauthorized Acts.  Indemnities herein contained shall not apply to any claim with respect to which the indemnified party is covered by insurance, provided that the foregoing exclusion does not invalidate the indemnified party’s insurance coverage.  The indemnification provisions set forth herein shall survive termination of this Agreement.
 

 .
 Waiver.  Notwithstanding anything herein to the contrary, each party hereby waives any claim against the other to the extent recoverable by insurance carried or required to be carried by the claimant hereunder.
 

 ARTICLE 
 MISCELLANEOUS
 

 .
 Binding Obligation; Assignment.  This Agreement shall inure to the benefit of and constitute a binding obligation upon the parties hereto and their respective successors and assigns.  Subject to Article VI(G), no party may assign its rights or delegate its duties hereunder without the prior written consent of the other party, such consent not to be unreasonably withheld.
 

 .
 Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with respect to the matters set forth herein, and shall not be changed, modified or amended, except by an instrument in writing after this date signed by both of the parties hereto with the same formalities as the execution of this Agreement.
 

 .
 Relief.  Company and Manager each shall be entitled to injunctive and other equitable relief to enforce the provisions of this Agreement.
 

 .
 Competitive Activities.  Manager (and any Affiliate) may acquire, own, promote, develop, operate and manage real property (or any one or more of the foregoing) on its own behalf or on behalf of any other person or entity.  Manager (and any Affiliate), notwithstanding the existence of this Agreement, may engage in any activity it so chooses, whether such activity is competitive with the Properties or Company or otherwise, without having or incurring any obligation to offer any interest in such activities to Company.  Neither this Agreement nor any activity undertaken pursuant hereto shall prevent Manager (and any Affiliate) from engaging in such activities or require Manager (and any Affiliate) to permit Company to participate in such activities, and, as a material part of the consideration for Manager’s execution hereof, Company hereby waives, relinquishes and reserves any such right or claim of participation.
 

 .
 Time Obligation.  Manager shall not be required to spend all of its time in the performance of its duties hereunder, but, rather, shall spend such time as it deems reasonably necessary for the business-like management of the Properties.
 

 

 5
 

 

 
 
 .
 Notices.  Notices or other communications required or permitted to be given hereunder shall be deemed duly made or given, as the case may be, if in writing, signed by or on behalf of the person making or giving the same, and shall be deemed completed upon the first to occur of receipt or two (2) days after deposit in the United States mail, first class, postage prepaid, addressed to the person or persons to whom such offer, acceptance, election, approval, consent, certification, request, waiver, or notice is to be made or given, at their respective addresses:
 

 If to Company:
 Hartman Ashford Crossing, LLC
 2909 Hillcroft
 Suite 420
 Houston, Texas  77057
 Attention:  Allen R. Hartman
 

 If to Manager:
 Hartman Income REIT Management, Inc.
 2909 Hillcroft
 Suite 420
 Houston, Texas  77057
 Attention:  Allen R. Hartman
 

 or, in any case, at such other address as shall have been set forth in a notice sent pursuant to the provisions of this paragraph.
 

 .
 Consents; Approval.  Wherever in this Agreement the consent or approval of a party is required, such consent or approval shall not be withheld unreasonably (except as expressly set forth herein to the contrary) and shall be deemed to have been given if the party whose consent or approval is requested does not notify in writing the party requesting such consent or approval otherwise within ten (10) days after receipt of a written request for such consent or approval.
 

 .
 Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be an original, but all of which shall constitute one instrument.
 

 .
 Situs.  This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflict of laws provisions thereof.
 

 .
 Headings.  Article and section titles or captions contained in this Agreement are inserted only as a matter of convenience and for reference and shall not be construed in any way to define, limit, extend or describe the scope of any of the provisions hereof.
 

 .
 Definitions.  The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.  The singular shall include the plural, and the masculine gender shall include the feminine and neuter, and vice versa, unless the context otherwise requires.
 

 .
 Severability; Invalidity.  Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid.
 

 .
 Additional Instruments, Acts.  Each of the parties hereto shall hereafter execute and deliver such further instruments and do such further acts and things as may be required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the provisions hereof.
 

 .
 Time.  Time is of the essence with respect to the dates set forth in this Agreement.
 

 

 6
 

 

 
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written pursuant to due authority.
 

 

 COMPANY:
 

 

 HARTMAN ASHFORD CROSSING, LLC,
 a Texas limited liability company
 

 

 By: 
 ___________________________________
 Louis T. Fox, III, Vice President
 

 MANAGER:
 

 HARTMAN INCOME REIT MANAGEMENT, INC.,
 a Texas corporation
 

 

 By:
 ________________________________________
 Louis T. Fox, III, Vice President
 

 

 

 

 

 

 

 

 

 7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00247-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00247-of-00352.parquet"}]]