Document:

ex_164029.htm

Exhibit 10.4

 

AMENDMENT NO. 1 TO CONVERTIBLE PROMISSORY NOTE

 

This Amendment No. 1 to Convertible Promissory Note (this “Amendment No. 1”) by and between CESCA THERAPEUTICS INC., a Delaware corporation (the “Company”), and Orbrex (USA) Co. Limited (“Orbrex”), is entered into as of August 12, 2019 but shall be effective as of July 23, 2019 (the “Effective Date”). Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Convertible Promissory Note (as defined below).

 

WHEREAS, on July 23, 2019, the Company issued to Orbrex a Convertible Promissory Note in the original principal amount of $1,000,000 (the “Convertible Promissory Note”);

 

WHEREAS, the terms of the Convertible Promissory Note provide for a floor Conversion Price of $0.10; and

 

WHEREAS, the Company and Orbrex have agreed that the floor Conversion Price should be $0.50, rather than $0.10, and therefore desire to enter into this Amendment No. 1.

 

NOW, THEREFORE, intending to be legally bound, and in consideration of the mutual agreements contained herein, the parties hereto agree as follows:

 

1.     Amendment of Section (3)(b)(ii). Section (3)(b)(ii) of the Convertible Promissory Note is hereby amended by deleting said section in its entirety and replacing it with the following (thereby replacing the definition of “Conversion Price” with the following definition):

 

“(ii)  “Conversion Price” means, as of any Conversion Date (as defined below) or other date of determination, the lower of (a) $1.80 per share or (2) 90% of the Closing Sale Price of the Common Stock on the Conversion Date (subject to a floor Conversion Price of $0.50), in each case subject to adjustment as provided herein.”

 

2.     Amendment of First Sentence of Section (8)(a). Section (8)(a) of the Convertible Promissory Note is hereby amended by deleting the first sentence of said section in its entirety and replacing it with the following:

 

“The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares of Common Stock for each of the Notes equal to 100% of the Conversion Rate (assuming a conversion rate of $0.50) with respect to the Conversion Amount of each such Note as of the Issuance Date.”

 

3.     Ratification and Confirmation. Except as expressly provided in this Amendment No. 1, all of the terms, conditions and provisions of the Convertible Promissory Note remain unaltered, are in full force and effect, and are hereby expressly ratified and confirmed.

 

4.     Miscellaneous. This Amendment No. 1 may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. The parties hereto further agree that facsimile signatures or signatures scanned into .pdf (or similar) format and sent by e-mail shall be deemed original signatures.

 

[signatures follow]

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the day and year first written above.

 

 

	CESCA THERAPEUTICS INC.	 
	 	 
	 	 
	/s/ Xiaochun Xu	 
	Xiaochun (Chris) Xu, Chief Executive Officer	 
	 	 
	 	 
	 	 
	Orbrex (USA) Co. Limited	 
	 	 
	 	 
	/s/ Lan Fang Yuan	 
	Lan Fang Yuan, President	 

 

2purchaseandsaleagreement

                      PURCHASE AND SALE AGREEMENT                                                                                                                    BETWEEN                                                                                                               FARMER BROS. CO.,                                   AS SELLER                                                                                                                      AND                                                                                                              SAGE INTERESTS, INC.,                                 AS PURCHASER                                                                                                                                                                                            DATED: SEPTEMBER __, 2019      Purchase and Sale Agreement  235 N. Norwood Street, Houston, Texas 

 

                             TABLE OF CONTENTS                                                                          Page No.                                    ARTICLE 1                               BASIC INFORMATION  1.1      Certain Basic Terms .................................................................................................................. 1  1.2      Closing Costs ............................................................................................................................. 2  1.3      Notice Addresses: ...................................................................................................................... 3                                    ARTICLE 2                                   PROPERTY  2.1      Property ..................................................................................................................................... 3                                    ARTICLE 3                                EARNEST MONEY  3.1      Deposit and Investment of Earnest Money ............................................................................... 4  3.2      Independent Consideration ........................................................................................................ 4  3.3      Form; Failure to Deposit ........................................................................................................... 4  3.4      Disposition of Earnest Money ................................................................................................... 5                                    ARTICLE 4                                 DUE DILIGENCE  4.1      Due Diligence Materials Delivered ........................................................................................... 5  4.2      Physical Due Diligence ............................................................................................................. 5  4.3      Due Diligence/Termination Right ............................................................................................. 6  4.4      Return of Documents and Reports ............................................................................................ 6  4.5      Service Contracts ....................................................................................................................... 6  4.6      Proprietary Information; Confidentiality ................................................................................... 7  4.7      No Representation or Warranty by Seller ................................................................................. 7  4.8      Purchaser's Responsibilities ...................................................................................................... 7  4.9      Purchaser's Agreement to Indemnify......................................................................................... 7                                    ARTICLE 5                               TITLE AND SURVEY  5.1      Title Commitment ..................................................................................................................... 8  5.2      Survey ........................................................................................................................................ 8  5.3      Title Review .............................................................................................................................. 8  5.4      Delivery of Title Policy at Closing ............................................................................................ 9                                    ARTICLE 6                          OPERATIONS AND RISK OF LOSS  6.1     Ongoing Operations .................................................................................................................. 9  6.2     Damage ...................................................................................................................................... 9  6.3     Condemnation ......................................................................................................................... 10                                    ARTICLE 7                                    CLOSING  7.1      Closing .................................................................................................................................... 10  7.2      Conditions to Parties' Obligation to Close............................................................................... 10  7.3      Seller's Deliveries in Escrow ................................................................................................... 11  7.4      Purchaser's Deliveries in Escrow ............................................................................................ 12  7.5      Closing Statements .................................................................................................................. 12  7.6      Purchase Price ......................................................................................................................... 12    Purchase and Sale Agreement  235 N. Norwood Street, Houston, Texas i 

 

 7.7     Possession ................................................................................................................................ 12   7.8     Delivery of Books and Records ............................................................................................... 12                                     ARTICLE 8                       PRORATIONS, DEPOSITS, COMMISSIONS   8.1      Prorations ................................................................................................................................ 12   8.2      Closing Costs ........................................................................................................................... 13   8.3      Final Adjustment After Closing .............................................................................................. 13   8.4      Commissions ........................................................................................................................... 13                                     ARTICLE 9                        REPRESENTATIONS AND WARRANTIES   9.1      Seller's Representations and Warranties .................................................................................. 13   9.2      Purchaser's Representations and Warranties ........................................................................... 14   9.3      Survival of Representations and Warranties ........................................................................... 14                                    ARTICLE 10                              DEFAULT AND REMEDIES   10.1     Seller's Remedies ..................................................................................................................... 15   10.2     Purchaser's Remedies .............................................................................................................. 16   10.3     Attorneys' Fees ........................................................................................................................ 16   10.4     Other Expenses ........................................................................................................................ 16                                    ARTICLE 11                      DISCLAIMERS, RELEASE AND INDEMNITY   11.1     Disclaimers By Seller .............................................................................................................. 16   11.2     Sale "As Is, Where Is." ............................................................................................................ 17   11.3     Seller Released from Liability ................................................................................................. 18   11.4     "Hazardous Materials" Defined ............................................................................................... 19   11.5     Indemnity ................................................................................ Error! Bookmark not defined.   11.6     Survival ................................................................................................................................... 19                                    ARTICLE 12                                 MISCELLANEOUS   12.1     Parties Bound; Assignment ..................................................................................................... 19   12.2     Headings .................................................................................................................................. 19   12.3    Invalidity and Waiver .............................................................................................................. 19   12.4    Governing Law; Jurisdiction; Venue ....................................................................................... 19   12.5    Survival ................................................................................................................................... 20   12.6    Entirety and Amendments ....................................................................................................... 20   12.7    Time ........................................................................................................................................ 20   12.8    Confidentiality ......................................................................................................................... 20   12.9    Notices ..................................................................................................................................... 20  12.10    Construction ............................................................................................................................ 20  12.11    Calculation of Time Periods; Business Day ............................................................................ 20  12.12    Execution in Counterparts ....................................................................................................... 21  12.13    No Recordation........................................................................................................................ 21  12.14    Further Assurances .................................................................................................................. 21  12.15    Discharge of Obligations ......................................................................................................... 21  12.16    ERISA ..................................................................................................................................... 21  12.17    No Third Party Beneficiary ..................................................................................................... 21  12.18    Reporting Person ..................................................................................................................... 21  12.19    Like-Kind Exchange ................................................................ Error! Bookmark not defined.     Purchase and Sale Agreement   235 N. Norwood Street, Houston, Texas ii 

 

                           LIST OF DEFINED TERMS                                                                          Page No.  Agreement ..................................................................................................................................................... 1  Assignment ................................................................................................................................................. 11  Brokers .......................................................................................................................................................... 2  Business Day ............................................................................................................................................... 21  Casualty Notice ............................................................................................................................................. 9  CERCLA ..................................................................................................................................................... 18  Closing ........................................................................................................................................................ 10  Closing Date.................................................................................................................................................. 2  Deed ............................................................................................................................................................ 11  Due Diligence Termination Notice ............................................................................................................... 6  Earnest Money .............................................................................................................................................. 1  Effective Date ............................................................................................................................................... 2  Escrow Agent ................................................................................................................................................ 1  Exchange ..................................................................................................................................................... 22  Hazardous Materials ................................................................................................................................... 19  Improvements ............................................................................................................................................... 3  Independent Consideration ........................................................................................................................... 4  Inspection Period .......................................................................................................................................... 2  Intangible Personal Property ......................................................................................................................... 4  Land .............................................................................................................................................................. 3  Leases ............................................................................................................................................................ 4  Material Damage ........................................................................................................................................... 9  Materially Damaged .................................................................................................................................... 10  OFAC .......................................................................................................................................................... 14  Permitted Exceptions .................................................................................................................................... 8  Permitted Outside Parties .............................................................................................................................. 7  Property ......................................................................................................................................................... 3  Property Documents ...................................................................................................................................... 5  Purchase Price ............................................................................................................................................... 1  Purchaser ....................................................................................................................................................... 1  Real Property ................................................................................................................................................ 4  Report ............................................................................................................................................................ 6  Reports .......................................................................................................................................................... 6  Seller ............................................................................................................................................................. 1  Seller's Representative ................................................................................................................................ 15  Service Contracts .......................................................................................................................................... 4  Survey ........................................................................................................................................................... 8  Survival Period............................................................................................................................................ 15  Tangible Personal Property ........................................................................................................................... 4  Taxes ........................................................................................................................................................... 12  Title and Survey Review Period ................................................................................................................... 2  Title Commitment ......................................................................................................................................... 8  Title Commitment Delivery Date ................................................................................................................. 2  Title Company .............................................................................................................................................. 1  Title Policy .................................................................................................................................................... 9        Purchase and Sale Agreement  235 N. Norwood Street, Houston, Texas iii 

 

                       PURCHASE AND SALE AGREEMENT                           235 N. Norwood Street, Houston, Texas                                                   This Purchase and Sale Agreement (this "Agreement") is made and entered into by and between   Purchaser and Seller.                                      RECITALS          A.   Defined terms are indicated by initial capital letters.  Defined terms shall have the meaning  set forth herein, whether or not such terms are used before or after the definitions are set forth.         B.    Purchaser desires to purchase the Property and Seller desires to sell the Property, all upon  the terms and conditions set forth in this Agreement.         NOW, THEREFORE, in consideration of the mutual terms, provisions, covenants and agreements  set forth herein, as well as the sums to be paid by Purchaser to Seller, and for other good and valuable  consideration, the receipt and sufficiency of which are acknowledged, Purchaser and Seller agree as  follows:                                      ARTICLE 1                                BASIC INFORMATION          1.1 Certain Basic Terms.  The following defined terms shall have the meanings set forth below:                 1.1.1     Seller:         FARMER BROS. CO., a Delaware corporation                 1.1.2     Purchaser:      SAGE INTERESTS, INC., a Texas corporation                1.1.3     Purchase Price: $10,000,000.00                1.1.4     Earnest Money:  $100,000.00 (the "Earnest Money"), including                                          interest thereon, to be deposited in accordance with                                          Section 3.1 below.                 1.1.5     Title Company:  Fidelity National Title, Commercial Division                                          1900 W. Loop South, Suite 200                                          Houston, TX 77027                                          Attn:  Sam Smith                                          E-Mail: samsmith@fnf.com                                          Phone: 713-986-0769                                                          1.1.6     Escrow Agent:   Fidelity National Title, Commercial Division                                          1900 W. Loop South, Suite 200                                          Houston, TX 77027                                          Attn:  Sam Smith                                          E-Mail: samsmith@fnf.com                                          Phone: 713-986-0769                                               Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  1                                  

 

              1.1.7     Broker:         Broker:                                          Cushman & Wakefield of California, Inc.                                          3780 Kilroy Airport Way, Suite 100                                          Long Beach, California 90806                                          Attn: Rusty Smith                                                          1.1.8     Effective Date: The date on which this Agreement is executed by the                                          latter to sign of Purchaser or Seller, as indicated on the                                          signature page of this Agreement.  If the execution                                          date is left blank by either Purchaser or Seller, the                                          Effective Date shall be the execution date inserted by                                          the other party.                1.1.9     Title           The date which is ten (10) days after the Effective                          Commitment      Date.                          Delivery Date:                1.1.10    Title and Survey The period beginning upon the Effective Date and                          Review Period:  ending at 5:00 p.m., Dallas, Texas time, on the date                                          that is five (5) days prior to the expiration of the                                          Inspection Period.                1.1.11    Inspection      The period beginning on the Effective Date and                          Period:         ending at 5:00 p.m., Dallas, Texas time, on date that is                                          forty-five (45) days after the Effective Date.                1.1.12    Closing Date:   The date that is thirty (30) days after the expiration of                                          the Inspection Period.          1.2 Closing Costs.  Closing costs shall be allocated and paid as follows:                                Cost                               Responsible Party    Title Commitment required to be delivered pursuant to Section 5.1  Seller    Premium for standard form Title Policy required to be delivered pursuant to Seller    Section 5.4    Premium for any upgrade of Title Policy for any amendments or endorsements Purchaser    to the Title Policy desired by Purchaser, and the costs and expenses associated    with any loan policy    Costs for Survey                                                 Purchaser    Costs for UCC Searches (if requested by Purchaser)               Purchaser    Costs of recording lien releases with respect to Seller's existing financing, if any Seller    Cost of recording the deed and any other documents required to be recorded by Purchaser    Purchaser    Any deed taxes, documentary stamps, transfer taxes, intangible taxes, mortgage Purchaser    taxes or other similar taxes, fees or assessments    Any escrow fee charged by Escrow Agent for holding the Earnest Money or Purchaser 1⁄2    conducting the Closing                                            Seller 1⁄2    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  2                                  

 

  Real Estate Sales Commission to Broker                             Seller    All other closing costs, expenses, charges and fees            As customary in                                                                 Dallas County, Texas          1.3 Notice Addresses:           Seller:                               Copy to:          Farmer Bros. Co.                      Munsch Hardt Kopf & Harr, P.C.          1912 Farmer Brothers Drive            500 N. Akard Street, Suite 3800          Northlake, Texas 76262                Dallas, Texas 75201          Attention: Jennifer Brown             Attention: Drew McDonald          E-Mail: jebrown@farmerbros.com        Telephone: 214-855-7546                                                E-mail: dmcdonald@munsch.com            Purchaser:                                      Sage Interests, Inc.          1520 Oliver Street          Houston, Texas 77007          Attention: Frank M. K. Liu          Telephone: 713-961-3877          E-mail: frankl@lovetthomes.com                     With an additional copy to:          Sage Interests, Inc.          1520 Oliver Street          Houston, Texas 77007          Attention: Teresa Brown           E-Mail: teresab@lovettcommercial.com                                      ARTICLE 2                                    PROPERTY          2.1 Property.  Subject to the terms and conditions of this Agreement, Seller agrees to sell to   Purchaser, and Purchaser agrees to purchase from Seller, the following property (collectively, the   "Property"):                 2.1.1 Real Property.  The land described in Exhibit A hereto (the "Land"), together   with (a) all improvements located thereon ("Improvements"), (b) without warranty, all right, title and   interest of Seller, if any, in and to the rights, benefits, privileges, easements, tenements, hereditaments, and   appurtenances thereon or in anywise appertaining thereto, and (c) without warranty, all right, title, and  interest of Seller, if any, in and to all strips and gores and any land lying in the bed of any street, road or  alley, open or proposed, adjoining the Land (collectively, the "Real Property").                2.1.2 Reserved.                 2.1.3 Tangible Personal Property.  All of Seller's right, title and interest, without   warranty, in the equipment, machinery, furniture, furnishings, signage, supplies and other tangible personal     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  3                                  

 

 property, if any, owned by Seller and now or hereafter located in and used in connection with the operation,  ownership or management of the Real Property (collectively, the "Tangible Personal Property"), but such   conveyance shall only take effect on the expiration or termination of the Lease (as hereinafter defined).    Seller and Purchaser expressly acknowledge and agree that during the term of the Lease (as hereinafter   defined), Seller has the right, but not the obligation, to remove all or any part of the Tangible Personal   Property, and any of the Tangible Personal Property remaining at the Real Property shall be deemed   abandoned and title thereto shall vest in Seller upon termination of the term of the Lease.  Notwithstanding   the foregoing, not later than ten (10) days following the Effective Date, Purchaser shall be permitted to   provide to Seller a list of Tangible Personal Property located within or upon the Improvements which   Purchaser desires to remain at the Real Property following expiration of the Lease, and Seller agrees to   review and determine, in Seller's sole and absolute but commercially reasonable, judgement which of the   requested items may remain following termination of the Lease, and to notify Purchaser in writing, not later   than ten (10) days following Purchaser's delivery of such list, which, if any, of the requested items may   remain following expiration of the term of the Lease.  The items identified in Seller's response notice shall   be known as the "Excluded Tangible Personal Property", which Excluded Tangible Personal Property   shall not be removed by Seller during the term of Lease.  Prior to the expiration of the Inspection Period,   Purchaser and Seller shall enter into an amendment to this Agreement attaching the list of Excluded   Tangible Personal Property to this Agreement as Exhibit E.                  2.1.4 Intangible Personal Property.  All of Seller's right, title and interest, if any,   without warranty, in the following intangible personal property related to the Real Property and the   Improvements: the plans and specifications and other architectural and engineering drawings for the   Improvements, if any (to the extent assignable without the consent of any third party or any cost to Seller);   warranties (to the extent assignable without the consent of any third party or any cost to Seller);   governmental permits, approvals and licenses, if any (to the extent assignable without the consent of any   third party or any cost to Seller); (all of the items described in this Section 2.1.4 collectively referred to as   the "Intangible Personal Property"), but such conveyance shall only take effect on the expiration or   termination of the Lease (as hereinafter defined).  Tangible Personal Property and Intangible Personal   Property shall not, in any event whatsoever, be deemed or constructed to include any trade name, mark or   other identifying material that (i) includes the name "Farmer Brothers" or any derivatives thereof, or (ii) the   name of any customer, supplier or vendor of Seller.                                      ARTICLE 3                                 EARNEST MONEY          3.1 Deposit and Investment of Earnest Money.  Within three (3) days after the Effective Date,   Purchaser shall deposit the Earnest Money with Escrow Agent.  Escrow Agent shall invest the Earnest   Money in government insured interest-bearing accounts satisfactory to Seller and Purchaser, shall not   commingle the Earnest Money with any funds of Escrow Agent or others, and shall promptly provide   Purchaser and Seller with confirmation of the investments made.  Such account shall have no penalty for   early withdrawal, and Purchaser accepts all risks with regard to such account.          3.2 Independent Consideration.  If Purchaser elects to terminate this Agreement for any reason   and is entitled to receive a return of the Earnest Money pursuant to the terms hereof, the Escrow Agent shall   first disburse to Seller $100.00 as independent consideration for Seller's performance under this Agreement   ("Independent Consideration"), which shall be retained by Seller in all instances.          3.3 Form; Failure to Deposit.  The Earnest Money shall be in the form of a certified or cashier's   check or the wire transfer to Escrow Agent of immediately available U.S. federal funds.  If Purchaser fails  to timely deposit any portion of the Earnest Money within the time periods required, Seller may terminate  this Agreement by written notice to Purchaser, in which event any Earnest Money that has previously been    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  4                                  

 

 deposited by Purchaser with Escrow Agent shall be immediately delivered to Seller, and thereafter the  parties hereto shall have no further rights or obligations hereunder, except for rights and obligations which,  by their terms, survive the termination hereof.          3.4 Disposition of Earnest Money.  The Earnest Money shall be applied as a credit to the Purchase   Price at Closing.  However, if Purchaser terminates this Agreement prior to the expiration of the Inspection   Period, Escrow Agent shall pay the entire Earnest Money (less the Independent Consideration) to Purchaser   within five (5) Business Days following Escrow Agent's receipt of a Due Diligence Termination Notice   from Purchaser not later than the expiration of the Inspection Period (as long as the current investment can   be liquidated and disbursed in one Business Day).  In the event of a termination of this Agreement by either   Seller or Purchaser for any reason other than in connection with a Due Diligence Termination Notice   delivered prior to the expiration of the Inspection Period, Escrow Agent is authorized to deliver the Earnest  Money to the party hereto entitled to same pursuant to the terms hereof on or before the tenth Business Day  following receipt by Escrow Agent and the non-terminating party of written notice of such termination from  the terminating party, unless the other party hereto notifies Escrow Agent that it disputes the right of the  other party to receive the Earnest Money. In such event, Escrow Agent may interplead the Earnest Money  into a court of competent jurisdiction in the county in which the Earnest Money has been deposited.  All  attorneys' fees and costs and Escrow Agent's costs and expenses incurred in connection with such  interpleader shall be assessed against the party that is not awarded the Earnest Money, or if the Earnest  Money is distributed in part to both parties, then in the inverse proportion of such distribution.                                       ARTICLE 4                                  DUE DILIGENCE          4.1 Due Diligence Materials Delivered.  Seller has delivered or will deliver to Purchaser within   ten (10) days after the Effective Date the following information and documents concerning the Property  (the "Property Documents"):                4.1.1 Personal Property.  A list of Tangible Personal Property;                4.1.2 Tax Statements.  Ad valorem tax statements and/or assessments related to the   Property for the prior tax year.                 4.1.3 Utility Bills.  Copies of invoices from the following public utilities servicing the   Property for the 3 months preceding the Effective Date: electric, gas and water.                4.1.4 Plans and Specifications.  To the extent in Seller's possession, building plans and   specifications relating to the Property; and                4.1.5 Certificates of Occupancy.  The certificate of occupancy for the Property.          4.2 Physical Due Diligence.  Commencing on the Effective Date and continuing until the Closing,   Purchaser shall have reasonable access to the Property at all reasonable times during  normal business hours,   for the purpose of conducting reasonably necessary tests, including surveys and architectural, engineering,   geotechnical and environmental inspections and tests, provided that (a) Purchaser must give Seller two full   Business Days' prior telephone or written notice of any such inspection or test, and with respect to any   intrusive inspection or test (i.e., core sampling) must obtain Seller's prior written consent (which consent   may be given, withheld or conditioned in Seller's sole discretion), (b) prior to performing any inspection or   test, Purchaser must deliver a certificate of insurance to Seller evidencing that Purchaser and its contractors,  agents and representatives have in place (and Purchaser and its contractors, agents and representatives shall  maintain during the pendency of this Agreement) (1) commercial general liability insurance with limits of    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  5                                  

 

 at least $1,000,000 for bodily or personal injury or death, (2) property damage insurance in the amount of   at least $1,000,000, (3) contractual liability insurance with respect to Purchaser's obligations hereunder, and   (4) workers' compensation insurance in accordance with applicable law, all covering any accident arising   in connection with the presence of Purchaser, its contractors, agents and representatives on the Property,   which insurance shall (A) name as additional insureds thereunder Seller and such other parties holding   insurable interests as Seller may designate, and (B) be written by a reputable insurance company licensed   to issue policies in the State of Texas, and (c) all such tests shall be conducted by Purchaser in compliance   with Purchaser's responsibilities set forth in Section 4.8 below.  Purchaser shall bear the cost of all such   inspections or tests and shall be responsible for and act as the generator with respect to any wastes generated   by those tests, which obligation shall survive the termination of this Agreement.  Subject to the provisions   of Section 4.6 hereof, Purchaser or Purchaser's representatives may communicate with any governmental   authority for the sole purpose of gathering information in connection with the transaction contemplated by   this Agreement; provided, however, Purchaser must contact Seller at least five (5) full Business Days in   advance by telephone to inform Seller of Purchaser's intended communication with any governmental   authority and to allow Seller the opportunity to participate in such communication if Seller desires.  As used   in this Section, "communicate" and "communication" shall mean the initiation of, response to, or sharing   or exchange of information, knowledge or messages, whether by oral, written or electronic methods or   media, or by any other means for the purpose of knowingly subverting the provisions of this Section   regarding Purchaser's obligations to provide Seller with prior notice of such communication and Seller's   ability to participate in such communication.          4.3 Due Diligence/Termination Right.  Purchaser shall have through the last day of the Inspection   Period in which to (a) examine, inspect, and investigate the Property Documents and the Property and, in   Purchaser's sole and absolute judgment and discretion, determine whether the Property is acceptable to   Purchaser, (b) obtain all necessary internal approvals, and (c) satisfy all other contingencies of Purchaser.    Notwithstanding anything to the contrary in this Agreement, Purchaser may terminate this Agreement for   any reason or no reason by giving written notice of termination to Seller and Escrow Agent (the "Due   Diligence Termination Notice") on or before the last day of the Inspection Period, in which case the   Earnest Money shall be immediately returned to Purchaser and the parties hereto shall have no further rights   or obligations, other than those that by their terms survive the termination of this Agreement.  If Purchaser   does not give a Due Diligence Termination Notice, this Agreement shall continue in full force and effect,   Purchaser shall be deemed to have waived its right to terminate this Agreement pursuant to this Section 4.3,   and Purchaser shall be deemed to have acknowledged that it has received or had access to all Property   Documents and conducted all inspections and tests of the Property that it considers important.          4.4 Reports.  Only in the event Seller shall make express written request therefor, will Purchaser   notify Seller of the contents, results or information disclosed in, or provide Seller with copies of, any third   party reports, investigations and studies, other than economic analyses (collectively, the "Reports" and,   individually, a "Report") prepared for Purchaser in connection with its due diligence review of the   Property, including, without limitation, any and all Reports involving structural or geological conditions,  environmental, hazardous waste or hazardous substances contamination of the Property, if any, which  Reports shall be addressed to Purchaser only.            4.5 Service Contracts.  Purchaser and Seller acknowledge and agree that as a result of the Lease   (as defined below) certain contract rights related to the operation, ownership or management of the Real   Property, including maintenance, service, construction, supply, electric utility service, and equipment rental   contracts (collectively, the "Service Contracts") will not be terminated by Seller, or assumed by Purchaser,   on the Closing Date, all of which Service Contracts shall be held solely in the name of Seller during the  term of the Lease, and shall be terminated prior to the expiration of the Lease.       Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  6                                  

 

       4.6 Proprietary Information; Confidentiality.  Purchaser acknowledges that the Property   Documents, and any information contained in the Reports or otherwise discovered or obtained by Purchaser   during the Inspection Period, is, are and shall remain proprietary and confidential and have been and will   be delivered to Purchaser solely to assist Purchaser in determining the feasibility of purchasing the Property.    Purchaser shall not use the Property Documents or any other Report or information obtained during the   Inspection Period for any purpose other than as set forth in the preceding sentence.  Purchaser shall not   disclose any information covered by this Section 4.6 to any person other than to those persons who are   responsible for or hired to assist Purchaser in determining the feasibility of Purchaser's acquisition of the   Property, or to otherwise assist Purchaser in the purchase process, and who have agreed to preserve the   confidentiality of such information as required hereby (collectively, "Permitted Outside Parties").  At any   time and from time to time, within two Business Days after Seller's request, Purchaser shall deliver to Seller   a list of all parties to whom Purchaser has provided any Property Documents or any information taken from   the Property Documents.  Purchaser shall not divulge any information covered by this Section except in   strict accordance with the confidentiality standards set forth in this Section 4.6.  In permitting Purchaser to   review the Property Documents or any other information, Seller has not waived any privilege or claim of   confidentiality with respect thereto, and no third party benefits or relationships of any kind, either express   or implied, have been offered, intended or created.  Purchaser's obligations under this Section 4.6 shall   survive the termination of this Agreement.           4.7 No Representation or Warranty by Seller.  Purchaser acknowledges that, except as expressly   set forth in this Agreement, Seller has not made and does not make any warranty or representation regarding   the truth, accuracy or completeness of the Property Documents or the source(s) thereof.  Purchaser further   acknowledges that some if not all of the Property Documents were prepared by third parties other than   Seller.  Seller expressly disclaims any and all liability for representations or warranties, express or implied,   statements of fact and other matters contained in such information, or for omissions from the Property   Documents, or in any other written or oral communications transmitted or made available to Purchaser.    Purchaser shall rely solely upon its own investigation with respect to the Property, including, without   limitation, the Property's physical, environmental or economic condition, compliance or lack of compliance   with any ordinance, order, permit or regulation or any other attribute or matter relating thereto.  Seller has   not undertaken any independent investigation as to the truth, accuracy or completeness of the Property   Documents and are providing the Property Documents solely as an accommodation to Purchaser.          4.8 Purchaser's Responsibilities.  In conducting any inspections, investigations or tests of the   Property and/or Property Documents, Purchaser and its agents and representatives shall:  (a)  not interfere   with the operation and maintenance of the Property by Seller; (b) not damage any part of the Property or   any personal property owned by Seller; (c) not injure or otherwise cause bodily harm to Seller or its agents,   guests, tenants, invitees, contractors and employees; (d) comply with all applicable laws; (e) promptly pay   when due the costs of all tests, investigations, and examinations done with regard to the Property; (f) not  permit any liens to attach to the Real Property by reason of the exercise of its rights hereunder; (g) repair  any damage to the Real Property resulting directly or indirectly from any such inspection or tests; and   (h) not reveal or disclose prior to Closing any information obtained during the Inspection Period concerning   the Property and the Property Documents to anyone other than the Permitted Outside Parties, in accordance   with the confidentiality standards set forth in Section 4.6 above, or except as may be otherwise required by   law.  Purchaser's obligations under this Section 4.8 shall survive the termination of this Agreement.          4.9 Purchaser's Agreement to Indemnify.  Purchaser hereby agrees to indemnify, defend and   hold Seller harmless from and against any and all liens, claims, causes of action, damages, liabilities and   expenses (including reasonable attorneys' fees) arising out of Purchaser's inspections or tests permitted   under this Agreement or any violation of the provisions of Sections 4.2, 4.6 and 4.8; provided, however,  the indemnity shall not extend to protect Seller from any pre-existing liabilities for matters merely  discovered by Purchaser (e.g., latent environmental contamination) so long as Purchaser's actions do not    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  7                                  

 

 aggravate any pre-existing liability of Seller.  Purchaser's obligations under this Section 4.9 shall survive   the termination of this Agreement and shall survive the Closing.                                      ARTICLE 5                                TITLE AND SURVEY          5.1 Title Commitment.  Seller shall cause to be prepared and delivered to Purchaser on or before   the Title Commitment Delivery Date: (a) a current commitment for title insurance or preliminary title report   (the "Title Commitment") issued by the Title Company, in the amount of the Purchase Price and on a   Texas T-7 Form commitment, with Purchaser as the proposed insured, and (b) to the extent available, copies   of all documents of record referred to in the Title Commitment as exceptions to title to the Property.          5.2 Survey.  Purchaser shall obtain a current (dated after the Effective Date) survey of the Property,   prepared by a surveyor licensed by the State of Texas, performed in accordance with, at a minimum, the   Category 1A, Condition II standards in effect for the State of Texas, and certified to Seller and Purchaser   under this Agreement, any lender(s) specified by Purchaser, and the Title Company, in a form satisfactory   to Seller and Purchaser and the Title Company ("Survey").  Purchaser acknowledges and agrees that, unless   Purchaser delivers the Survey to Seller and Escrow Agent prior to the expiration of the Title and Survey   Review Period, any matters shown on the Survey, if subsequently obtained, or which could have been   shown on the Survey if timely obtained, shall constitute Permitted Exceptions.  In no event shall Seller be   required to deliver a so called "survey affidavit".          5.3 Title Review During the Title and Survey Review Period, Purchaser shall review title to the   Property as disclosed by the Title Commitment and the Survey.  Seller shall have five (5) days after receipt   of any objections (the "Title Cure Period") from Purchaser in which it may, without obligation, notify   Purchaser which, if any, of such objections Seller will attempt to cure prior to or at Closing.  Seller's failure   to send any response within the Title Cure Period shall be deemed Seller's election not to take any action   with respect to any objections raised by Purchaser.  Seller shall have no obligation to cure title objections   except financing liens of an ascertainable amount created by, under or through Seller, which liens Seller   shall cause to be released at or prior to Closing (with Seller having the right to apply the Purchase Price or   a portion thereof for such purpose), and Seller shall deliver the Property free and clear of any such financing   liens.  The term "Permitted Exceptions" shall mean: the specific exceptions (excluding exceptions that are   part of the promulgated title insurance form) in the Title Commitment that the Title Company has not agreed   to remove from the Title Commitment as of the end of the Title and Survey Review Period and that Seller   is not required to remove as provided above; matters created by, through or under Purchaser; items shown  on the Survey which have not been removed as of the end of the Title and Survey Review Period; and real  estate taxes not yet due and payable.                  5.3.2 If Purchaser provides timely objections as contemplated in Section 5.3.1 above and   Seller does not agree to cure all of Purchaser's objections, or is deemed to have elected not to cure such   objections, within the Title Cure Period for any reason, then on or prior to the last day of the Inspection   Period, Purchaser shall, as its sole and exclusive remedy waiving all other remedies, in Purchaser's sole   discretion elect to either: (i) terminate this Agreement by giving a written termination notice to Seller prior   to the expiration of the Inspection Period, in which case Escrow Agent shall return the Earnest Money to   Purchaser and the parties have no further rights, liabilities, or obligations under this Contract (other than   those that expressly survive termination); or (ii) waive the uncured objections and be deemed to approve   title as shown in the Title Commitment, each of the underlying title documents, and the Survey (if timely   delivered) or the matters which would have been shown on the Survey if timely obtained.  If Seller does   not receive notice of Purchaser's election to terminate under this Section 5.3.2 prior to the expiration of the   Inspection Period, then Purchaser is deemed to have provided its waiver and approval in accordance with   clause (ii) immediately above.    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  8                                  

 

       5.4 Delivery of Title Policy at Closing.  In the event that the Title Company does not issue at   Closing, or unconditionally commit at Closing to issue, to Purchaser an owner's title policy in accordance   with the Title Commitment, insuring Purchaser's fee simple title to the Real Property in the amount of the   Purchase Price, subject only to the standard exceptions and exclusions from coverage contained in such   policy and the Permitted Exceptions (the "Title Policy"), despite Purchaser's good-faith request and   reasonable cooperation with the Title Company in connection therewith, Purchaser shall have the right, as   its sole and exclusive remedy for such failure, to terminate this Agreement, in which case the Earnest Money   shall be immediately returned to Purchaser and the parties hereto shall have no further rights or obligations,   other than those that by their terms survive the termination of this Agreement.                                      ARTICLE 6                           OPERATIONS AND RISK OF LOSS          6.1 Ongoing Operations.  From the Effective Date through Closing:                6.1.1 New Contracts.  Seller will not enter into any contract that will be an obligation   of Purchaser subsequent to the Closing, it being agreed that Seller may enter into any contracts desired by   Seller in the ordinary course of business.                6.1.2 Maintenance of Improvements; Tangible Personal Property.  Subject to   Sections 6.2 and 6.3, Seller shall have no obligation to maintain or cause to be maintained any of the  Improvements on the Land, or any of the Tangible Personal Property, specifically including, but not limited  to, the Excluded Tangible Personal Property.  Seller makes no representation or warranty regarding the  condition or state of repair of any or all of the Improvements or the Tangible Personal Property located at  or on the Property, specifically including, but not limited to, the Excluded Tangible Personal Property, and  undertakes no obligation regarding the security of such Tangible Personal Property from and after the date  of this Agreement, and Seller expressly disclaims any obligation to repair or replace any of the Tangible  Personal Property, specifically including, but not limited to, the Excluded Tangible Personal Property,  following destruction or loss of any nature.  In no event shall Seller be liable to Purchaser in any manner  whatsoever if, following the date of this Agreement, any of the Tangible Personal Property, specifically  including, but not limited to, the Excluded Tangible Personal Property, or Improvements located at or on  the Property is destroyed, removed or otherwise unavailable on the Closing Date.           6.2 Damage.  If prior to Closing the Property is damaged by fire or other casualty, Seller shall   estimate the cost to repair and the time required to complete repairs and will provide Purchaser written   notice of Seller's estimation (the "Casualty Notice") as soon as reasonably possible after the occurrence of   the casualty.                6.2.1 Material.  In the event of any Material Damage to or destruction of the Property   or any portion thereof prior to Closing, either Seller or Purchaser may, at its option, terminate this   Agreement by delivering written notice to the other on or before the expiration of ten (10) days after the   date Seller delivers the Casualty Notice to Purchaser (and if necessary, the Closing Date shall be extended   to give the parties the full thirty-day period to make such election and to obtain insurance settlement   agreements with Seller's insurers).  Upon any such termination, the Earnest Money shall be returned to   Purchaser and the parties hereto shall have no further rights or obligations hereunder, other than those that   by their terms survive the termination of this Agreement.  If neither Seller nor Purchaser so terminates this   Agreement within said 10-day period, then the parties shall be deemed to have waived their respective right   to terminate under this Section 6.2.1 and the parties shall proceed under this Agreement and close on   schedule (subject to extension of Closing as provided above), and as of Closing Seller shall assign to   Purchaser, without representation or warranty by or recourse against Seller, all of Seller's rights in and to   any resulting insurance proceeds (including any rent loss insurance applicable to any period on and after    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  9                                  

 

 the Closing Date) due Seller as a result of such damage or destruction and Purchaser shall assume full   responsibility for all needed repairs, and Purchaser shall receive a credit at Closing for any deductible   amount under such insurance policies (but the amount of the deductible plus insurance proceeds shall not   exceed the lesser of (a) the cost of repair or (b) the Purchase Price and a pro rata share of the rental or   business loss proceeds, if any).  For the purposes of this Agreement, "Material Damage" and "Materially   Damaged" means damage which, in Seller's reasonable estimation, exceeds $500,000.00 to repair.                   6.2.2 Not Material.  If the Property is not Materially Damaged, then neither Purchaser   nor Seller shall have the right to terminate this Agreement, and Seller shall, at its option, either (a)  repair   the damage before the Closing in a manner reasonably satisfactory to Purchaser (and if necessary, Seller   may extend the Closing Date up to 30 days to complete such repairs), or (b) credit Purchaser at Closing for  the reasonable cost to complete the repair (in which case Seller shall retain all insurance proceeds and  Purchaser shall assume full responsibility for all needed repairs).          6.3 Condemnation.  If proceedings in eminent domain are instituted with respect to the Property   or any portion thereof that would materially and adversely interfere with the present use of the Real Property   as an office project, or if such proceedings are instituted with respect to any portion of the Improvements,  Purchaser may, at its option, by written notice to Seller given within ten days after Seller notifies Purchaser  of such proceedings (and if necessary the Closing Date shall be automatically extended to give Purchaser  the full ten-day period to make such election), either:  (a) terminate this Agreement, in which case the  Earnest Money shall be immediately returned to Purchaser and the parties hereto shall have no further rights  or obligations, other than those that by their terms survive the termination of this Agreement, or (b) proceed  under this Agreement, in which event Seller shall, at the Closing, assign to Purchaser its entire right, title  and interest in and to any condemnation award, and Purchaser shall have the sole right after the Closing to  negotiate and otherwise deal with the condemning authority in respect of such matter.  If Purchaser does  not give Seller written notice of its election within the time required above, then Purchaser shall be deemed  to have elected option (b) above.          6.4 Leaseback.  Commencing on the Closing Date, Purchaser, as landlord, shall lease to Seller, as   tenant, all of the Land and Improvements pursuant to a short-term triple net lease (the "Lease") the form of   which is attached hereto as Exhibit F, such form being agreed to and approved by Seller and Purchaser as   of the Effective Date of this Agreement.                                         ARTICLE 7                                     CLOSING          7.1 Closing.  The consummation of the transaction contemplated herein ("Closing") shall occur on   the Closing Date at the offices of Escrow Agent (or such other location as may be mutually agreed upon by   Seller and Purchaser).  Funds shall be deposited into and held by Escrow Agent in a closing escrow account   with a bank satisfactory to Purchaser and Seller.  Upon satisfaction or completion of all closing conditions   and deliveries, the parties shall direct Escrow Agent to immediately record and deliver the closing  documents to the appropriate parties and make disbursements according to the closing statements executed  by Seller and Purchaser.          7.2 Conditions to Parties' Obligation to Close.  In addition to all other conditions set forth herein,   the obligation of Seller, on the one hand, and Purchaser, on the other hand, to consummate the transactions   contemplated hereunder are conditioned upon the following:                7.2.1 Representations and Warranties.  The other party's representations and   warranties contained herein shall be true and correct in all material respects as of the Effective Date and the     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  10                                 

 

 Closing Date, except for representations and warranties made as of, or limited by, a specific date, which   will be true and correct in all material respects as of the specified date or as limited by the specified date;                7.2.2 Deliveries.  As of the Closing Date, the other party shall have tendered all   deliveries to be made at Closing; and                7.2.3 Actions, Suits, etc.  There shall exist no pending or threatened actions, suits,   arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency,   bankruptcy, reorganization or other proceedings, against the other party that would materially and adversely   affect that party's ability to perform its obligations under this Agreement.                7.2.4 Lender Approval.  Seller shall have received approval of the sale of the Property   from the current mortgagee holding a lien against the Property, and an agreement from such mortgagee to   release its lien at Closing.           So long as a party is not in default hereunder, if any condition to such party's obligation to proceed  with the Closing hereunder has not been satisfied as of the Closing Date (or such earlier date as is provided  herein), subject to any applicable notice and cure periods provided in Sections 10.1 and 10.2, such party  may, in its sole discretion, terminate this Agreement by delivering written notice to the other party on or  before the Closing Date (or such earlier date as is provided herein), or elect to close (or to permit any such  earlier termination deadline to pass) notwithstanding the non-satisfaction of such condition, in which event  such party shall be deemed to have waived any such condition.  In the event such party elects to close (or  to permit any such earlier termination deadline to pass), notwithstanding the non-satisfaction of such  condition, said party shall be deemed to have waived said condition, and there shall be no liability on the  part of any other party hereto for breaches of representations and warranties of which the party electing to  close had knowledge at the Closing.          7.3 Seller's Deliveries in Escrow.  As of or prior to the Closing Date, Seller shall deliver in escrow   to Escrow Agent the following:                7.3.1 Deed.  A special warranty deed in the form of Exhibit B hereto and including a list   of Permitted Exceptions to which the conveyance shall be subject, executed and acknowledged by Seller,   conveying to Purchaser Seller's interest in the Real Property (the "Deed");                7.3.2 Bill of Sale and Assignment Agreement.  A Bill of Sale and Assignment   Agreement in the form of Exhibit C hereto (the "Assignment"), executed by Seller vesting in Purchaser   Seller's right, title and interest in and to the property described therein free of any claims, except for the   Permitted Exceptions to the extent applicable;                7.3.3 FIRPTA.  A Foreign Investment in Real Property Tax Act affidavit in the form of   Exhibit D hereto executed by Seller;                7.3.4 Authority.  Evidence of the existence, organization and authority of Seller and of   the authority of the persons executing documents on behalf of Seller reasonably satisfactory to the   underwriter for the Title Policy, it being expressly agreed that Seller shall have no obligation to provide  evidence of authority to Purchaser;                 7.3.5 Lease.  The Lease, executed and acknowledged by Seller; and                7.3.6 Additional Documents.  Any additional documents that Escrow Agent or the Title   Company may reasonably require for the proper consummation of the transaction contemplated by this     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  11                                 

 

 Agreement (provided, however, no such additional document shall expand any obligation, covenant,   representation or warranty of Seller or result in any new or additional obligation, covenant, representation   or warranty of Seller under this Agreement beyond those expressly set forth in this Agreement).          7.4 Purchaser's Deliveries in Escrow.  As of or prior to the Closing Date, Purchaser shall deliver   in escrow to Escrow Agent the following:                7.4.1 Bill of Sale, Assignment and Assumption.  The Assignment, executed and   acknowledged by Purchaser;                7.4.2 Conveyancing or Transfer Tax Forms or Returns.  Such conveyancing or   transfer tax forms or returns, if any, as are required to be delivered or signed by Purchaser by applicable   state and local law in connection with the conveyance of the Real Property;                7.4.3 Authority.  Evidence of the existence, organization and authority of Purchaser and   of the authority of the persons executing documents on behalf of Purchaser reasonably satisfactory to the   underwriter for the Title Policy;                 7.4.4 Lease.  The Lease, executed and acknowledged by Seller; and                7.4.5 Additional Documents.  Any additional documents that Seller, Escrow Agent or   the Title Company may reasonably require for the proper consummation of the transaction contemplated   by this Agreement (provided, however, no such additional document shall expand any obligation, covenant,   representation or warranty of Purchaser or result in any new or additional obligation, covenant,   representation or warranty of Purchaser under this Agreement beyond those expressly set forth in this   Agreement).          7.5 Closing Statements.  As of or prior to the Closing Date, Seller and Purchaser shall deposit   with Escrow Agent executed closing statements consistent with this Agreement in the form required by   Escrow Agent.          7.6 Purchase Price.  At or before 10:30 a.m. local time on the Closing Date, Purchaser shall deliver   to Escrow Agent the Purchase Price, less the Earnest Money that is applied to the Purchase Price, plus or   minus applicable prorations, in immediate, same-day U.S. federal funds wired for credit into Escrow   Agent's escrow account, which funds must be delivered in a manner to permit Escrow Agent to deliver   good funds to Seller or its designee on the Closing Date (and, if requested by Seller, by wire transfer); in   the event that Escrow Agent is unable to deliver good funds to Seller or its designee on the Closing Date,   then the closing statements and related prorations will be revised as necessary.             7.7 Possession.  Seller shall deliver possession of the Property to Purchaser at the Closing subject   only to the Permitted Exceptions and the Lease.          7.8 Delivery of Books and Records.  After the Closing, Seller shall deliver to the offices of   Purchaser's property manager or to the Real Property to the extent in Seller's possession or control:   maintenance records; plans and specifications; licenses, permits and certificates of occupancy; and keys.                                      ARTICLE 8                       PRORATIONS, DEPOSITS, COMMISSIONS          8.1 Prorations.  At Closing, the following items shall be prorated as of the Closing Date with all   items of income and expense for the Property being borne by Purchaser from and after (and including) the     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  12                                 

 

 Closing Date: fees and assessments; real and personal ad valorem taxes ("Taxes"); and any assessments by   private covenant for the then-current calendar year of Closing.  Specifically, the following shall apply to   such prorations:                8.1.1 Taxes.  If Taxes for the year of Closing are not known or cannot be reasonably   estimated, Taxes shall be prorated based on Taxes for the year prior to Closing.  Any additional Taxes   relating to the year of Closing or prior years arising out of a change in the use of the Real Property or a   change in ownership shall be assumed by Purchaser effective as of Closing and paid by Purchaser when   due and payable, and Purchaser shall indemnify Seller from and against any and all such Taxes, which   indemnification obligation shall survive the Closing.                8.1.2 Other Costs.  As a result of the Lease, utilities, operating expenses, and other such   amounts attributable to the Improvements shall not be prorated, and Seller shall remain liable for such   amounts to the extent accruing during the term of the Lease.           8.2 Closing Costs.  Closing costs shall be allocated between Seller and Purchaser in accordance   with Section 1.2.          8.3 Final Adjustment After Closing.  If final bills are not available or cannot be issued prior to   Closing for any item being prorated under Section 8.1, then Purchaser and Seller agree to allocate such   items on a fair and equitable basis as soon as such bills are available, final adjustment to be made as soon   as reasonably possible after the Closing.  Payments in connection with the final adjustment shall be due   within 30 days of written notice.  All such rights and obligations shall survive the Closing.          8.4 Commissions.  Seller shall be responsible to the Broker for a real estate sales commission at   Closing (but only in the event of a Closing in strict accordance with this Agreement) equal to six percent   (6%) of the Purchase Price.  Under no circumstances shall Seller owe a commission or other compensation   directly to any other broker, agent or person.  Other than as stated above in this Section 8.4, Seller and   Purchaser each represent and warrant to the other that no real estate brokerage commission is payable to   any person or entity in connection with the transaction contemplated hereby, and each agrees to and does   hereby indemnify and hold the other harmless against the payment of any commission to any other person   or entity claiming by, through or under Seller or Purchaser, as applicable.  This indemnification shall extend   to any and all claims, liabilities, costs and expenses (including reasonable attorneys' fees and litigation   costs) arising as a result of such claims and shall survive the Closing.                                      ARTICLE 9                        REPRESENTATIONS AND WARRANTIES          9.1 Seller's Representations and Warranties.  Seller represents and warrants to Purchaser that:                9.1.1 Organization and Authority.  Seller has been duly organized, is validly existing,   and is in good standing in the state in which it was formed.  Seller has the full right and authority and has   obtained any and all consents required to enter into this Agreement and to consummate or cause to be   consummated the transactions contemplated hereby.  This Agreement has been, and all of the documents   to be delivered by Seller at the Closing will be, authorized and executed and constitute, or will constitute,   as appropriate, the valid and binding obligation of Seller, enforceable in accordance with their terms.                  9.1.2 Conflicts and Pending Actions.  There is no agreement to which Seller is a party   or, to Seller's knowledge, that is binding on Seller, under which Seller will be in default as a result of   entering into this Agreement.  To Seller's knowledge, there is no action or proceeding pending or overtly     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  13                                 

 

 threatened in writing against Seller or relating to the Property, which challenges or impairs Seller's ability   to execute or perform its obligations under this Agreement.                9.1.3 Condemnation.  Except as may be reflected by the Property Documents or   otherwise disclosed in writing to Purchaser, to Seller's knowledge, Seller has received no written notice   from any governmental authority having jurisdiction over the Real Property that it is presently the subject   of any condemnation or similar proceeding.                9.1.4 Bankruptcy.  Seller has not made a general assignment for the benefit of creditors,   filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by its creditors,   suffered the appointment of a receiver to take possession of substantially all of its assets, suffered the   attachment or other judicial seizure of substantially all of its assets, admitted its inability to pay its debts as   they come due, or made an offer of settlement, extension or composition to its creditors generally.                9.1.5 Prohibited Persons and Transactions.  Seller represents and warrants to   Purchaser that Seller is currently in compliance with and shall at all times during the term of this Agreement   (including any extension thereof) remain in compliance with the regulations of the Office of Foreign Asset   Control ("OFAC") of the Department of the Treasury (including those named on OFAC's Specially   Designated and Blocked Persons List) and any statute, executive order (including the September 24, 2001,   Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to   Commit, or Support Terrorism), or other governmental action relating thereto.          9.2 Purchaser's Representations and Warranties.  Purchaser represents and warrants to Seller   that:                9.2.1 Organization and Authority.  Purchaser has been duly organized, is validly   existing, and is in good standing in jurisdiction in which it was formed.  Purchaser has the full right and   authority and has obtained any and all consents required to enter into this Agreement and to consummate   or cause to be consummated the transactions contemplated hereby.  This Agreement has been, and all of   the documents to be delivered by Purchaser at the Closing will be, authorized and properly executed and   constitute, or will constitute, as appropriate, the valid and binding obligation of Purchaser, enforceable in   accordance with their terms.                9.2.2 Conflicts and Pending Action.  There is no agreement to which Purchaser is a   party or to Purchaser's knowledge binding on Purchaser which is in conflict with this Agreement.  There is   no action or proceeding pending or, to Purchaser's knowledge, threatened against Purchaser which   challenges or impairs Purchaser's ability to execute or perform its obligations under this Agreement.                9.2.3 Prohibited Persons and Transactions.  Purchaser represents and warrants to   Seller that Purchaser is currently in compliance with and shall at all times during the term of this Agreement   (including any extension thereof) remain in compliance with the regulations of OFAC (including those   named on OFAC's Specially Designated and Blocked Persons List) and any statute, executive order   (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with   Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating   thereto.          9.3 Survival of Representations and Warranties.  The representations and warranties set forth   in this Article 9 are made as of the Effective Date and are remade as of the Closing Date and shall not be   deemed to be merged into or waived by the instruments of Closing, but shall survive the Closing for a   period of 3 months (the "Survival Period"); provided, however, that such representations and warranties   shall automatically terminate if prior to the Closing, Purchaser assigns this Agreement in violation of    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  14                                 

 

 Section 12.1.  Terms such as "to Seller's knowledge," "to the best of Seller's knowledge" or like phrases   mean the actual present and conscious awareness or knowledge of Kimberly Weedman ("Seller's   Representative"), without any duty of inquiry or investigation; provided that so qualifying Seller's   knowledge shall in no event give rise to any personal liability on the part of Seller's Representative, or any   officer or employee of Seller, on account of any breach of any representation or warranty made by Seller   herein.  Said terms do not include constructive knowledge, imputed knowledge, or knowledge Seller or   such persons do not have but could have obtained through further investigation or inquiry.  No broker,   agent, or party other than Seller is authorized to make any representation or warranty for or on behalf of   Seller.  Each party shall have the right to bring an action against the other on the breach of a representation   or warranty or covenant hereunder or in the documents delivered by Seller at the Closing, but only on the   following conditions:  (1) the party bringing the action for breach first learns of the breach after and gives   written notice of such breach to the other party before the end of the Survival Period and files such action   on or before the first day following the second anniversary of the Closing Date, and (2) neither party shall   have the right to bring a cause of action for a breach of a representation or warranty or covenant unless the   damage to such party on account of such breach (individually or when combined with damages from other   breaches) equals or exceeds $10,000.00, in which event the full amount of such claims shall be actionable,   subject to the limitations of Seller's liability set forth in this Section 9.3.  On the expiration of the Inspection   Period, Purchaser shall be deemed to have knowledge of all matters contained in the Property Documents   or any Reports. Neither party shall have any liability after Closing for the breach of a representation or   warranty or covenant hereunder of which the other party hereto had knowledge (actual or constructive), or   which could reasonably have been discovered in the course of due diligence and investigation of the   Property, as of Closing.  Notwithstanding any other provision of this Agreement, any agreement   contemplated by this Agreement, or any rights which Purchaser might otherwise have at law, equity, or by   statute, whether based on contract or some other claim, Purchaser agrees that any liability of Seller to   Purchaser will be limited to an amount equal to $100,000.00.  The provisions of this Section 9.3 shall   survive the Closing.  Any breach of a representation or warranty or covenant that occurs prior to Closing   shall be governed by Article 10.                                     ARTICLE 10                              DEFAULT AND REMEDIES          10.1  Seller's Remedies.  If Purchaser fails to consummate the purchase of the Property pursuant   to this Agreement or otherwise defaults on its obligations hereunder at or prior to Closing for any reason  except failure by Seller to perform hereunder, or if prior to Closing any one or more of Purchaser's  representations or warranties are breached in any material respect, and in each case such default or breach  is not cured by the earlier of the fifth (5th) day after written notice thereof from Seller or the Closing Date  (except no notice or cure period shall apply if Purchaser fails to consummate the purchase of the Property  hereunder), Seller shall be entitled, as its sole remedy (except as provided in Sections 4.9, 8.4, 10.3 and  10.4 hereof), to terminate this Agreement and recover the Earnest Money as liquidated damages and not as  penalty, in full satisfaction of claims against Purchaser hereunder.  Seller and Purchaser agree that Seller's  damages resulting from Purchaser's default are difficult, if not impossible, to determine and the Earnest  Money is a fair estimate of those damages which has been agreed to in an effort to cause the amount of  such damages to be certain.  Notwithstanding anything in this Section 10.1 to the contrary, in the event of  Purchaser's default or a termination of this Agreement, Seller shall have all remedies available at law or in  equity in the event Purchaser or any party related to or affiliated with Purchaser is asserting any claims or  right to the Property that would otherwise delay or prevent Seller from having clear, indefeasible and  marketable title to the Property.  In all other events Seller's remedies shall be limited to those described in  this Section 10.1 and Sections 4.9, 8.4, 10.3 and 10.4 hereof.  If Closing is consummated, Seller shall have  all remedies available at law or in equity in the event Purchaser fails to perform any obligation of Purchaser  under this Agreement.     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  15                                 

 

       10.2  Purchaser's Remedies.  If Seller fails to consummate the sale of the Property pursuant to   this Agreement or otherwise defaults on its obligations hereunder at or prior to Closing for any reason   except failure by Purchaser to perform hereunder, or if prior to Closing any one or more of Seller's   representations or warranties are breached in any material respect, and in each case such default or breach   is not cured by the earlier of the fifth (5th) day after written notice thereof from Purchaser or the Closing  Date (Purchaser hereby agreeing to give such written notice to Seller within one Business Day after  Purchaser first learns of any such default or breach by Seller, except no notice or cure period shall apply if  Seller fails to consummate the sale of the Property hereunder), Purchaser shall elect, as its sole remedy,  either to (a) terminate this Agreement by giving Seller timely written notice of such election prior to or at  Closing and recover the Earnest Money, (b) seek specific performance of Seller’s obligations hereunder or  (c) waive said failure or breach and proceed to Closing without any reduction in the Purchase Price.   Notwithstanding anything herein to the contrary, Purchaser shall be deemed to have elected to terminate  this Agreement if Purchaser fails to deliver to Seller written notice of its intent to file a claim or assert a  cause of action for specific performance against Seller on or before fifteen Business Days following the  scheduled Closing Date or, having given such notice, fails to file a lawsuit asserting such claim or cause of  action in the county in which the Property is located within six months following the scheduled Closing  Date.  Purchaser's remedies shall be limited to those described in this Section 10.2 and Sections 10.3 and  10.4 hereof.  IN NO EVENT SHALL SELLER'S DIRECT OR INDIRECT PARTNERS,  SHAREHOLDERS, OWNERS OR AFFILIATES, ANY OFFICER, DIRECTOR, EMPLOYEE OR  AGENT OF THE FOREGOING, OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF  HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR OTHER LIABILITY ARISING  OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY, WHETHER BASED ON  CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.          10.3  Attorneys' Fees.  In the event either party hereto employs an attorney in connection with   claims by one party against the other arising from the operation of this Agreement, the non-prevailing party   shall pay the prevailing party all reasonable fees and expenses, including attorneys' fees, incurred in   connection with such claims.          10.4  Other Expenses.  If this Agreement is terminated due to the default of a party, then the   defaulting party shall pay any fees or charges due to Escrow Agent for holding the Earnest Money as well   as any escrow cancellation fees or charges and any fees or charges due to the Title Company for preparation   and/or cancellation of the Title Commitment.                                     ARTICLE 11                            DISCLAIMERS AND RELEASE          11.1  Disclaimers By Seller.  EXCEPT AS EXPRESSLY SET FORTH IN THIS   AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER AND SELLER'S AGENTS OR   EMPLOYEES HAVE NOT AT ANY TIME MADE AND ARE NOT NOW        MAKING, AND THEY  SPECIFICALLY DISCLAIM, ANY WARRANTIES, REPRESENTATIONS OR GUARANTIES OF  ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY,  INCLUDING, BUT NOT LIMITED TO, WARRANTIES, REPRESENTATIONS OR GUARANTIES AS  TO (a) MATTERS OF TITLE (OTHER THAN SELLER'S SPECIAL WARRANTY OF TITLE TO BE  CONTAINED IN THE DEED), (b) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY  OR ANY PORTION THEREOF, INCLUDING, WITHOUT LIMITATION, THE PRESENCE OF  HAZARDOUS MATERIALS IN, ON, UNDER OR IN THE VICINITY OF THE PROPERTY,  (c) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION, SUBSIDENCE,  SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS,  LIMITATIONS REGARDING THE WITHDRAWAL OF WATER, AND GEOLOGIC FAULTS AND  THE RESULTING DAMAGE    OF PAST AND/OR FUTURE FAULTING, (d) WHETHER, AND TO    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  16                                 

 

 THE EXTENT TO WHICH THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY   STREAM (SURFACE OR UNDERGROUND), BODY OF      WATER, WETLANDS, FLOOD PRONE   AREA, FLOOD  PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD,     (e) DRAINAGE, (f) SOIL   CONDITIONS, INCLUDING THE EXISTENCE OF INSTABILITY, PAST SOIL REPAIRS, SOIL   ADDITIONS OR CONDITIONS OF SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE   SUFFICIENCY OF ANY UNDERSHORING, (g) THE PRESENCE OF ENDANGERED SPECIES OR   ANY ENVIRONMENTALLY SENSITIVE OR PROTECTED AREAS, (h) ZONING OR BUILDING   ENTITLEMENTS TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE SUBJECT,   (i) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION THEREOF   INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC, (j) USAGES OF   ADJOINING PROPERTY, (k) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF, (l) THE   VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE, USE,   DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY, OPERATION,   TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTION   THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR   CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF,   (m) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF THE PROPERTY WITH   ANY OR ALL PAST, PRESENT   OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES,   RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING ORDINANCES, CODES OR   OTHER SIMILAR LAWS, (n) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND  STORAGE TANKS, SURFACE IMPOUNDMENTS, OR LANDFILLS,       (o) ANY OTHER MATTER  AFFECTING THE STABILITY AND INTEGRITY OF THE PROPERTY, (p) THE POTENTIAL FOR  FURTHER DEVELOPMENT OF THE PROPERTY, (q) THE MERCHANTABILITY           OF THE  PROPERTY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, (r) THE  TRUTH, ACCURACY OR COMPLETENESS OF THE PROPERTY DOCUMENTS, (s) TAX  CONSEQUENCES, OR (t) ANY OTHER MATTER OR THING WITH RESPECT TO THE PROPERTY.                                                                                                                               Purchaser's signature and acknowledgement of                                             the terms and provisions of this Section 11.1          11.2  Sale "As Is, Where Is."  Purchaser acknowledges and agrees that upon Closing, Seller   shall sell and convey to Purchaser and Purchaser shall accept the Property "AS IS, WHERE IS, WITH   ALL FAULTS," except to the extent expressly provided otherwise in this Agreement and any document   executed by Seller and delivered to Purchaser at Closing.  Further, Purchaser acknowledges and agrees that   Seller shall have no obligation whatsoever to remove, repair or otherwise account for any Tangible Personal   Property located on or at the Property.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,   PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER HAS NOT MADE AND   IS NOT LIABLE FOR OR     BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES,  GUARANTEES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE  PROPERTY OR RELATING    THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION,  PROPERTY INFORMATION    PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY)  MADE OR FURNISHED BY SELLER, OR ANY PROPERTY MANAGER, REAL ESTATE BROKER,  AGENT OR THIRD PARTY    REPRESENTING OR PURPORTING TO REPRESENT     SELLER, TO  WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN          WRITING.    PURCHASER REPRESENTS     THAT IT IS A KNOWLEDGEABLE, EXPERIENCED          AND   SOPHISTICATED PURCHASER OF REAL ESTATE AND THAT, EXCEPT AS EXPRESSLY SET   FORTH IN THIS AGREEMENT, IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT   OF PURCHASER'S CONSULTANTS IN PURCHASING THE PROPERTY AND SHALL MAKE AN   INDEPENDENT VERIFICATION OF THE ACCURACY OF ANY DOCUMENTS AND  INFORMATION PROVIDED BY SELLER.  PURCHASER WILL CONDUCT SUCH INSPECTIONS    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  17                                 

 

 AND INVESTIGATIONS OF THE PROPERTY AS PURCHASER DEEMS NECESSARY,   INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS  THEREOF, AND SHALL RELY UPON SAME.  BY FAILING TO TERMINATE THIS AGREEMENT   PRIOR TO THE EXPIRATION OF THE INSPECTION PERIOD, PURCHASER ACKNOWLEDGES   THAT SELLER HAS AFFORDED PURCHASER A FULL OPPORTUNITY TO CONDUCT SUCH  INVESTIGATIONS OF THE PROPERTY AS PURCHASER DEEMED NECESSARY TO SATISFY  ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE          OR NON-  EXISTENCE OR CURATIVE ACTION TO BE TAKEN    WITH RESPECT TO ANY   HAZARDOUS   MATERIALS ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON   SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR   ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH   REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET   FORTH IN THIS AGREEMENT.  UPON CLOSING, PURCHASER SHALL ASSUME THE RISK   THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL OR   CONSTRUCTION DEFECTS     OR ADVERSE ENVIRONMENTAL, HEALTH OR SAFETY   CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S INSPECTIONS AND   INVESTIGATIONS.  PURCHASER HEREBY REPRESENTS AND WARRANTS TO SELLER THAT:    (a) PURCHASER IS REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE   TRANSACTION CONTEMPLATED BY THIS AGREEMENT; AND (b) PURCHASER IS   PURCHASING THE PROPERTY FOR BUSINESS, COMMERCIAL, INVESTMENT        OR OTHER   SIMILAR PURPOSE AND NOT FOR USE AS PURCHASER'S RESIDENCE.  PURCHASER WAIVES   ANY AND ALL RIGHTS OR REMEDIES IT MAY HAVE OR BE ENTITLED TO, DERIVING FROM   DISPARITY IN SIZE OR FROM ANY SIGNIFICANT DISPARATE BARGAINING POSITION IN   RELATION TO SELLER.                                                                                                                               Purchaser's signature and acknowledgement of                                             the terms and provisions of this Section 11.2          11.3  Seller Released from Liability.  Purchaser acknowledges that it will have the opportunity   to inspect the Property during the Inspection Period, and during such period, observe its physical   characteristics and existing conditions and the opportunity to conduct such investigation and study on and   of the Property and adjacent areas as Purchaser deems necessary, and Purchaser hereby FOREVER   RELEASES AND DISCHARGES Seller from all responsibility and liability, including without limitation,  liabilities and responsibilities for the lessor's obligations under any existing leases relating to the physical,  environmental or legal compliance status of the Property, whether arising before or after the Effective Date,   and liabilities under the Comprehensive Environmental Response, Compensation and Liability Act Of 1980   (42 U.S.C. Sections 9601 et seq.), as amended ("CERCLA"), regarding the condition, valuation, salability   or utility of the Property, or its suitability for any purpose whatsoever (including, but not limited to, with   respect to the presence in the soil, air, structures and surface and subsurface waters, of Hazardous Materials   or other materials or substances that have been or may in the future be determined to be toxic, hazardous,   undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from   the Property under current or future federal, state and local laws, regulations or guidelines, and any   structural and geologic conditions, subsurface soil and water conditions and solid and hazardous waste and   Hazardous Materials on, under, adjacent to or otherwise affecting the Property).  Purchaser further hereby   WAIVES (and by Closing this transaction will be deemed to have WAIVED) any and all objections and  complaints (including, but not limited to, federal, state and local statutory and common law based actions,  and any private right of action under any federal, state or local laws, regulations or guidelines to which the   Property is or may be subject, including, but not limited to, CERCLA) concerning the physical   characteristics and any existing conditions of the Property, including, without limitation, the lessor's   obligations under any existing leases relating to the physical, environmental or legal compliance status of    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  18                                 

 

 the Property, whether arising before or after the Effective Date.  Purchaser further hereby assumes the risk   of changes in applicable laws and regulations relating to past, present and future environmental conditions   on the Property and the risk that adverse physical characteristics and conditions, including, without   limitation, the presence of Hazardous Materials or other contaminants, may not have been revealed by its   investigation.          11.4  "Hazardous Materials" Defined                .  For purposes hereof, "Hazardous Materials" means "Hazardous Material," "Hazardous   Substance," "Pollutant or Contaminant," and "Petroleum" and "Natural Gas Liquids," as those terms are   defined or used in Section 101 of CERCLA, and any other substances regulated because of their effect or   potential effect on public health and the environment, including, without limitation, PCBs, lead paint,   asbestos, urea formaldehyde, radioactive materials, putrescible materials, and infectious materials.          11.5  Survival.  The terms and conditions of this Article 11 shall expressly survive the Closing,   not merge with the provisions of any closing documents and shall be incorporated into the Deed.           Purchaser acknowledges and agrees that the disclaimers and other agreements set forth herein are  an integral part of this Agreement and that Seller would not have agreed to sell the Property to Purchaser  for the Purchase Price without the disclaimers and other agreements set forth above.                                     ARTICLE 12                                 MISCELLANEOUS          12.1  Parties Bound; Assignment.  This Agreement, and the terms, covenants, and conditions   herein contained, shall inure to the benefit of and be binding upon the heirs, personal representatives,  successors, and assigns of each of the parties hereto.  Purchaser may assign its rights under this Agreement  upon the following conditions:  (a) the assignee of Purchaser must be an entity controlling, controlled by,  or under common control with Purchaser, (b) all of the Earnest Money must have been delivered in  accordance herewith, (c) the Inspection Period shall be deemed to have ended, (d) the assignee of Purchaser  shall assume all obligations of Purchaser hereunder, but Purchaser shall remain primarily liable for the  performance of Purchaser's obligations, (e) a copy of the fully executed written assignment and assumption   agreement shall be delivered to Seller at least five Business Days prior to Closing.          12.2  Headings.  The article, section, subsection, paragraph and/or other headings of this   Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the language   hereof.          12.3  Invalidity and Waiver.  If any portion of this Agreement is held invalid or inoperative,   then so far as is reasonable and possible the remainder of this Agreement shall be deemed valid and   operative, and, to the greatest extent legally possible, effect shall be given to the intent manifested by the   portion held invalid or inoperative.  The failure by either party to enforce against the other any term or   provision of this Agreement shall not be deemed to be a waiver of such party's right to enforce against the   other party the same or any other such term or provision in the future.          12.4  Governing Law; Jurisdiction; Venue.  This Agreement shall, in all respects, be governed,   construed, applied, and enforced in accordance with the law of the state in which the Real Property is   located.  EACH OF PURCHASER AND SELLER HEREBY CONSENTS AND SUBMITS TO THE   JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF   DALLAS, STATE OF TEXAS, AND IRREVOCABLY AGREES THAT ALL ACTIONS OR   PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  19                                 

 

 DOCUMENTS TO BE DELIVERED BY PURCHASER AND SELLER HEREUNDER SHALL BE   LITIGATED EXCLUSIVELY IN SUCH COURTS.  EACH OF PURCHASER AND SELLER   EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS   AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS OR ANY OTHER SIMILAR   DEFENSE TO THE JURSIDICTION OR VENUE OF SAID COURTS.          12.5  Survival.  The provisions of this Agreement that contemplate performance after the   Closing and the obligations of the parties not fully performed at the Closing (other than any unfulfilled   closing conditions which have been waived or deemed waived by the other party) shall survive the Closing   and shall not be deemed to be merged into or waived by the instruments of Closing.          12.6  Entirety and Amendments.  This Agreement embodies the entire agreement between the   parties and supersedes all prior agreements and understandings relating to the Property.  This Agreement   may be amended or supplemented only by an instrument in writing executed by the party against whom   enforcement is sought.  All Exhibits hereto are incorporated herein by this reference for all purposes.          12.7  Time.  Time is of the essence in the performance of this Agreement.          12.8  Confidentiality.  Purchaser shall make no public announcement or disclosure of any   information related to this Agreement to outside brokers or third parties, before or after the Closing,   without the prior written specific consent of Seller; provided, however, that Purchaser may, subject   to the provisions of Section 4.6, make disclosure of this Agreement to its Permitted Outside Parties   as necessary to perform its obligations hereunder and as may be required under laws or regulations   applicable to Purchaser.            12.9  Notices.  All notices required or permitted hereunder shall be in writing and shall be served   on the parties at the addresses set forth in Section 1.3.  Any such notices shall, unless otherwise provided   herein, be given or served (a) by depositing the same in the United States mail, postage paid, certified and   addressed to the party to be notified, with return receipt requested, (b) by overnight delivery using a   nationally recognized overnight courier, (c) by personal delivery, (d) by facsimile transmission during   normal business hours with a confirmation copy delivered by another method permitted under this  Section 12.9, or (e) by electronic mail addressed to the electronic mail address set forth in Section 1.3 for   the party to be notified with a confirmation copy delivered by another method permitted under this   Section 12.9.  Notice given in accordance herewith for all permitted forms of notice other than by electronic   mail, shall be effective upon the earlier to occur of actual delivery to the address of the addressee or refusal   of receipt by the addressee (even if such addressee refuses delivery thereof).  Notice given by electronic   mail in accordance herewith shall be effective upon the entrance of such electronic mail into the information   processing system designated by the recipient's electronic mail address.  A party's address may be changed   by written notice to the other party; provided, however, that no notice of a change of address shall be   effective until actual receipt of such notice.  Copies of notices are for informational purposes only, and a   failure to give or receive copies of any notice shall not be deemed a failure to give notice.  Notices given   by counsel to the Purchaser shall be deemed given by Purchaser and notices given by counsel to the Seller   shall be deemed given by Seller.          12.10 Construction.  The parties acknowledge that the parties and their counsel have reviewed   and revised this Agreement and agree that the normal rule of construction - to the effect that any ambiguities   are to be resolved against the drafting party - shall not be employed in the interpretation of this Agreement  or any exhibits or amendments hereto.          12.11 Calculation of Time Periods; Business Day.  Unless otherwise specified, in computing   any period of time described herein, the day of the act or event after which the designated period of time    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  20                                 

 

 begins to run is not to be included and the last day of the period so computed is to be included, unless such   last day is not a Business Day, in which event the period shall run until the end of the next day which is a   Business Day.  The last day of any period of time described herein shall be deemed to end at 5:00 p.m. local   time in the state in which the Real Property is located.  As used herein, the term "Business Day" means any   day that is not a Saturday, Sunday or legal holiday for national banks in the city in which the Real Property   is located.          12.12 Execution in Counterparts.  This Agreement may be executed in any number of   counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute   one Agreement.  To facilitate execution of this Agreement, the parties may execute and exchange by   telephone facsimile counterparts or electronic counterparts (i.e., PDF counterparts) of the signature pages.          12.13 No Recordation.  Without the prior written consent of Seller, there shall be no recordation   of either this Agreement or any memorandum hereof, or any affidavit pertaining hereto, and any such   recordation of this Agreement or memorandum or affidavit by Purchaser without the prior written consent   of Seller shall constitute a default hereunder by Purchaser, whereupon Seller shall have the remedies set   forth in Section 10.1 hereof.  In addition to any such remedies, Purchaser shall be obligated to execute an  instrument in recordable form releasing this Agreement or memorandum or affidavit, and Purchaser's  obligations pursuant to this Section 12.13 shall survive any termination of this Agreement as a surviving  obligation.          12.14 Further Assurances.  In addition to the acts and deeds recited herein and contemplated to   be performed, executed and/or delivered by either party at Closing, each party agrees to perform, execute   and deliver, but without any obligation to incur any additional liability or expense, on or after the Closing   any further deliveries and assurances as may be reasonably necessary to consummate the transactions   contemplated hereby or to further perfect the conveyance, transfer and assignment of the Property to   Purchaser.          12.15 Discharge of Obligations.  The acceptance of the Deed by Purchaser shall be deemed to   be a full performance and discharge of every representation and warranty made by Seller herein and every   agreement and obligation on the part of Seller to be performed pursuant to the provisions of this Agreement,   except those which are herein specifically stated to survive Closing.          12.16 ERISA.  Under no circumstances shall Purchaser have the right to assign this Agreement   to any person or entity owned or controlled by an employee benefit plan if Seller's sale of the Property to   such person or entity would, in the reasonable opinion of Seller's ERISA advisors or consultants, create or   otherwise cause a "prohibited transaction" under ERISA.  In the event Purchaser assigns this Agreement or   transfers any ownership interest in Purchaser, and such assignment or transfer would make the   consummation of the transaction hereunder a "prohibited transaction" under ERISA and necessitate the   termination of this Agreement then, notwithstanding any contrary provision which may be contained herein,   Seller shall have the right to terminate this Agreement.          12.17 No Third Party Beneficiary.  The provisions of this Agreement and of the documents to   be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser only and are   not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the   provisions of this Agreement or of the documents to be executed and delivered at Closing, except that a   tenant of the Property may enforce Purchaser's indemnity obligation under Section 4.9 hereof.          12.18 Reporting Person.  Purchaser and Seller hereby designate the Title Company as the   "reporting person" pursuant to the provisions of Section 6045(e) of the Internal Revenue Code of 1986, as   amended.    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  21                                 

 

                         [SIGNATURE PAGES AND EXHIBITS TO FOLLOW]    Purchase and Sale Agreement                                                                             235 N. Norwood Street, Houston, Texas                 22                                                

 

 

 

                          JOINDER BY ESCROW AGENT    Escrow Agent has executed this Agreement in order to confirm that Escrow Agent has received and shall   hold the Earnest Money required to be deposited under this Agreement and the interest earned thereto, in   escrow, and shall disburse the Earnest Money, and the interest earned thereon, pursuant to the provisions   of this Agreement.                                        FIDELITY NATIONAL TITLE                                                                                                                        Date executed by Escrow Agent      By:                                                                              Name:                                       _______________________            Title:                                                     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  1                                  

 

                               LIST OF EXHIBITS    A    -     Legal Description of Land   B     -     Special Warranty Deed   C     -     Bill of Sale and Assignment Agreement   D     -     FIRPTA Certificate   E     -     Tangible Personal Property   F     -     Lease        Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas  2                                  

 

                                                EXHIBIT A                                                                                              LEGAL DESCRIPTION OF LAND                                                                                                            Purchase and Sale Agreement                                                                             235 N. Norwood Street, Houston, Texas                A-1                                                

 

                                                                                                           Purchase and Sale Agreement                                                                             235 N. Norwood Street, Houston, Texas                A-2                                                

 

                                                                                                             Purchase and Sale Agreement                                                                             235 N. Norwood Street, Houston, Texas                A-3                                                

 

                                   EXHIBIT B                                                                       SPECIAL WARRANTY DEED    After Recording, Return To:            NOTICE OF CONFIDENTIALITY RIGHTS: IF   Munsch Hardt Kopf & Harr, P.C.         YOU ARE A NATURAL PERSON, YOU MAY   500 N. Akard Street, Suite 3800   Dallas, Texas  75201                   REMOVE OR STRIKE ANY OR ALL OF THE   Attn: Drew McDonald                    FOLLOWING INFORMATION FROM ANY                                          INSTRUMENT THAT TRANSFERS AN                                          INTEREST IN REAL PROPERTY BEFORE IT                                          IS FILED FOR RECORD IN THE PUBLIC                                          RECORDS:     YOUR SOCIAL SECURITY                                          NUMBER OR YOUR DRIVER'S LICENSE                                          NUMBER.                                                                        SPECIAL WARRANTY DEED      THE STATE OF TEXAS      §                           §                   KNOW ALL MEN BY THESE PRESENTS:   COUNTY  OF  TARRANT    §          FARMER BROS. CO., a Delaware corporation ("Grantor"), for good and valuable consideration,   the receipt and sufficiency of which is hereby acknowledged, has GRANTED, BARGAINED, SOLD, and   CONVEYED and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto   ______________________, a _________________ ("Grantee") the tract or parcel of land in Tarrant   County, Texas, described in Exhibit A, together with all rights, titles, and interests appurtenant thereto   including, without limitation, Grantor's interest, if any, in any and all adjacent streets, alleys, rights of way   and any adjacent strips and gores (such land and interests are hereinafter collectively referred to as the   "Property").          This Special Warranty Deed and the conveyance hereinabove set forth is executed by Grantor and  accepted by Grantee subject to all easements, restrictions, reservations and covenants now of record and  further subject to all matters that a current, accurate survey of the Property would show, together with the  matters described in Exhibit B hereto and incorporated herein by this reference, to the extent the same are   validly existing and applicable to the Property (hereinafter referred to collectively as the "Permitted   Exceptions").          Grantee acknowledges that Grantee has independently and personally inspected the Property.  The  Property is hereby conveyed to and accepted by Grantee in its present condition, "AS IS, WITH ALL  FAULTS, AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR IMPLIED."   Notwithstanding anything contained herein to the contrary, it is understood and agreed that Grantor and  Grantor's agents or employees have never made and are not now making, and they specifically disclaim,  any warranties, representations or guaranties of any kind or character, express or implied, oral or written,  with respect to the Property, including, but not limited to, warranties, representations or guaranties as to  (a) matters of title (other than Grantor's warranty of title set forth herein), (b) environmental matters relating  to the Property or any portion thereof, including, without limitation, the presence of Hazardous Materials  (as defined in the purchase and sale agreement, the "Sale Agreement" between Grantor and Grantee) in,   on, under or in the vicinity of the Property, (c) geological conditions, including, without limitation,  subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the    Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas B-1                                 

 

 withdrawal of water, and geologic faults and the resulting damage of past and/or future faulting,   (d) whether, and to the extent to which the Property or any portion thereof is affected by any stream (surface   or underground), body of water, wetlands, flood prone area, flood plain, floodway or special flood hazard,   (e) drainage, (f) soil conditions, including the existence of instability, past soil repairs, soil additions or   conditions of soil fill, or susceptibility to landslides, or the sufficiency of any undershoring, (g) the presence   of endangered species or any environmentally sensitive or protected areas, (h) zoning or building   entitlements to which the Property or any portion thereof may be subject, (i) the availability of any utilities   to the Property or any portion thereof including, without limitation, water, sewage, gas and electric,   (j) usages of adjoining property, (k) access to the Property or any portion thereof, (l) the value, compliance   with the plans and specifications, size, location, age, use, design, quality, description, suitability, structural   integrity, operation, title to, or physical or financial condition of the Property or any portion thereof, or any   income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the   Property or any part thereof, (m) the condition or use of the Property or compliance of the Property with   any or all Regulation  federal, state or local ordinances, rules, regulations or laws, building, fire or zoning  ordinances, codes or other similar laws, (n) the existence or non-existence of underground storage tanks,  surface impoundments, or landfills, (o) any other matter affecting the stability and integrity of the Property,  (p) the potential for further development of the Property, (q) the merchantability of the Property or fitness  of the Property for any particular purpose, (r) the truth, accuracy or completeness of the Property  Documents, (s) tax consequences, or (t) any other matter or thing with respect to the Property.  EXCEPT  AS EXPRESSLY SET FORTH HEREIN OR IN THE SALE AGREEMENT, GRANTOR MAKES  NO REPRESENTATIONS OR WARRANTIES OF ANY KIND TO GRANTEE, INCLUDING,  WITHOUT LIMITATION, THE PHYSICAL CONDITION OF THE PROPERTY, OR THEIR  SUITABILITY FOR ANY PARTICULAR PURPOSE OR OF MERCHANTABILITY.  GRANTEE  IS RELYING ON ITS INVESTIGATIONS OF THE PROPERTY IN DETERMINING WHETHER  TO ACQUIRE IT.  THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL PART OF  THE CONSIDERATION FOR GRANTOR EXECUTING THIS SPECIAL WARRANTY DEED,  AND SHALL SURVIVE CLOSING.         TO HAVE AND TO HOLD the Property, together with all and singular the rights and  appurtenances thereunto in anywise belonging, unto Grantee, its successors and assigns forever, and  Grantor does hereby bind itself, its successors and assigns, to WARRANT AND FOREVER DEFEND all  and singular the title to the Property unto the said Grantee, its successors and assigns against every person  whomsoever lawfully claiming or to claim the same or any part thereof by, through, or under Grantor but  not otherwise, subject to the Permitted Exceptions.         Grantee assumes payment of ad valorem taxes for the current year and all subsequent years.         Grantee's address is: __________________________.     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas B-2                                 

 

           EXECUTED as of _____________________, 2019.                                        FARMER BROS. CO.,                                       a Delaware corporation                                                                                                                      By:                                                                             Name:                                                                           Title:                                                                               THE STATE OF __________       §                                §  COUNTY  OF  ____________      §         This instrument was acknowledged before me on ____________, 2019, by ________________,  ______________ of Farmer Bros. Co., a Delaware corporation, on behalf of said corporation.                                                                                                                        Notary Public, State of ___________     Purchase and Sale Agreement                                              235 N. Norwood Street, Houston, Texas B-1                                 

 

                                                   EXHIBIT A                                           [Description of the Property]       Purchase and Sale Agreement                                                                             235 N. Norwood Street, Houston, Texas                B-2                                                

 

                                                    EXHIBIT B                                              [Permitted Exceptions]         Purchase and Sale Agreement                                                                             235 N. Norwood Street, Houston, Texas                B-3                                                

 

                                       EXHIBIT C                                                                     BILL OF SALE AND ASSIGNMENT                           235 N. Norwood Street, Houston, Texas                                                   THIS BILL OF SALE AND ASSIGNMENT (this "Bill of Sale") is made as of the _____ day of   __________________, 2019, by and between FARMER BROS. CO., a Delaware corporation   ("Assignor"), and _________________________, a _________________________ ("Assignee").                                  W I T N E S S E T H:          For good and valuable consideration, receipt and sufficiency of which are hereby acknowledged,  Assignor and Assignee hereby agree as follows:          1.    Assignor hereby sells, transfers and conveys to Assignee all of Assignor's right, title and  interest, if any, in and to the following, in each case to the extent located on that certain land and  improvements more particularly described in Exhibit A attached hereto and made a part hereof ("Real   Property"):                 (a) all tangible personal property furniture, fixtures and equipment (including, without   limitation, the property described on Exhibit B attached hereto) attached to or used in connection with the   ownership, maintenance, or operation of the Real Property, but only to the extent any of the same remains   thereon following the termination or earlier expiration of that certain Lease Agreement of even date   herewith between Assignor, as lessee, and Assignee, as lessor (the "Personalty"), it being agreed by   Assignor and Assignee that during the term of the Lease Agreement, Assignor shall have the right to remove   any and all Personalty desired by Assignor, without liability or obligation to Assignee;                (b) the plans and specifications and other architectural and engineering drawings for the  improvements located on the Real Property, if any (to the extent assignable without the consent of any third  party or any cost to Assignor); warranties (to the extent assignable without the consent of any third party  or any cost to Assignor); governmental permits, approvals and licenses, if any (to the extent assignable  without the consent of any third party or any cost to Assignor).               (c) Notwithstanding anything contained herein to the contrary,  in no event shall any of   Assignor's trade names, marks, signage, branding, and other identifying marks related to "Farmer Brothers"   be included within the Personalty or otherwise be deemed or construed to have been transferred by this Bill   of Sale, all of which are expressly reserved to, and retained by, Assignor.          2.    This Bill of Sale is given pursuant to that certain Purchase and Sale Agreement (as  amended, the "Purchase Agreement") dated as of ____________________, between Assignor and   Assignee, providing for, among other things, the conveyance of the Personalty.          3.    As set forth in Article 11 of the Purchase Agreement, which is hereby incorporated by  reference as if herein set out in full and except as set forth herein, the property conveyed hereunder is  conveyed by Assignor and accepted by Assignee AS IS, WHERE IS, AND WITHOUT ANY  WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR IMPLIED, IT BEING THE  INTENTION OF ASSIGNOR AND ASSIGNEE EXPRESSLY TO NEGATE AND EXCLUDE ALL  WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF  MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES  CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF    Purchase and Sale Agreement   235 N. Norwood Street, Houston, Texas C-1 

 

     THE PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR MODEL THEREOF,   AND ALL OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE  TEXAS UNIFORM COMMERCIAL CODE.          4. Assignee hereby accepts the assignment of the Personalty and agrees to assume and discharge,  in accordance with the terms thereof, (a) all of the obligations thereunder from and after the date hereof,   and (b) all of the lessor's obligations under any Leases relating to the physical, environmental or legal   compliance status of the Real Property, whether arising before or after the date hereof.  Assignee agrees to   indemnify and hold harmless Assignor from any cost, liability, damage or expense (including attorneys'   fees) arising out of or relating to Assignee's failure to perform any of the foregoing obligations.          5.    This Bill of Sale may be executed in any number of counterparts, each of which shall be  deemed an original, but all of which shall constitute one and the same instrument.             [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]                                Purchase and Sale Agreement   235 N. Norwood Street, Houston, Texas C-2 

 

           IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale as of the date first  above written.                                        ASSIGNOR:                                                                              FARMER BROS. CO.,                                       a Delaware corporation                                                                              By:                                                                             Name:                                                                           Title:                                                                                                                                                        ASSIGNEE:                                                                                                                       ,                                       a                                                                                                                                                             By:                                                                             Name:                                                                           Title:                                            Exhibit A   Real Property   Exhibit B   Personalty           Purchase and Sale Agreement   235 N. Norwood Street, Houston, Texas C-3 

 

                                       EXHIBIT D                                                                         FIRPTA CERTIFICATE          Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest  must withhold tax if the transferor is a foreign person.  For U.S. tax purposes (including Section 1445), the  owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be  the transferor of the property and not the disregarded entity.  To inform _____________ ("Transferee")   that withholding of tax is not required upon the disposition of a U.S. real property interest by FARMER   BROS. CO., a Delaware corporation ("Transferor"), the undersigned, in his capacity as _____________   of _____________, but not individually, hereby certifies to Transferee the following on behalf of  Transferor:          1.    Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate  (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);         2.     Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);         3.     Transferor's U.S. employer identification number is ___________; and         4.     Transferor's office address is ___________________________.         Transferor understands that this certification may be disclosed to the Internal Revenue Service by  Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.         Under penalties of perjury I declare that I have examined this certification and to the best of my  knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this  document on behalf of Transferor.         Dated as of __________, 2019.                                       FARMER BROS. CO.,                                      a Delaware corporation                                                                                                                    By:                                                                             Name:                                                                           Title:                                           Purchase and Sale Agreement   235 N. Norwood Street, Houston, Texas D-1 

 

                                                      EXHIBIT E                                                                                     EXCLUDED TANGIBLE PERSONAL PROPERTY                                                                                                                      Purchase and Sale Agreement  235 N. Norwood Street, Houston, Texas                D-1 

 

                                                    EXHIBIT F                                                                                                              LEASE    Purchase and Sale Agreement  235 N. Norwood Street, Houston, Texas                D-1 

 

                                LEASE                                   between                                                 ,                                as Landlord                                    and                             FARMER BROS. CO.,                                 as Tenant    4843-0049-4241v.4 

 

                                                        LEASE           This Lease (this Lease) is entered into by          , a             (Landlord), and FARMER BROS. CO., a  Delaware corporation (Tenant), effective as of the Lease Date.  Landlord leases to Tenant and Tenant leases from Landlord the Premises  upon the terms specified herein.                                            BASIC LEASE INFORMATION   1.     Lease Date:                                  , 2019   2.     Notice Address: Means the following postal address(es), fax number(s), and e-mail address(es) for the respective Parties or         such other postal address(es), fax number(s), or e-mail address(es) as a Party designates by notice to the other Party:                  For Landlord:                                       For Tenant:                  1520 Oliver Street                                  1912 Farmer Brothers Drive                 Houston, Texas 77007                                Northlake, Texas 76262                 Attn:      Legal Department                         Attn:     Real Estate Department                                                                             and General Counsel                    3.     Rent Payment Address:  The following address, or other address designated by Landlord by notice to Tenant for the payment         of Monetary Obligations:                   1520 Oliver Street                  Houston, Texas 77007                    4.     Building:      235 N. Norwood Street, Houston, Texas   5.     Project:       As depicted on Exhibit A   6.     Premises:      The Building located on the Project   7.     Term:   Beginning on the Commencement Date and ending on the last day of the thirty-sixth (36th) full calendar month after          Commencement Date, subject to earlier termination as provided in this Lease.  Notwithstanding the foregoing, Tenant shall          have the ongoing right to terminate this Lease effective nine (9) months from delivery of written notice to Landlord; provided,          however, no such termination shall be effective prior to the first day of the eighteenth (18th) full calendar month of the Term.   8.     Commencement Date:                                   , 201      9.     Monthly Base Rent:                               Months                     Annual Base Rent                Monthly Base Rent            1 through and including 3                     $0.00                          $0.00             4 through and including 36                 $600,000.00                     $50,000.00   10.    Security Deposit:      None.   11.    Permitted Uses:        (i) The continued operation of a coffee roasting, distribution and warehouse facility, consistent in         accordance with Tenant's use of the Premises prior to the Commencement Date, (ii) removal of all or any part of Tenant's         property, whether real or personal, related to the Project and the improvements thereon as described above; provided, however,         that the Excluded Tangible Personal Property as set forth in the PSA (as hereinafter defined), a list of which is attached hereto         as Exhibit C (the Excluded Property), shall not be removed from the Premises, and (iii) any activities directly related and   Lease – 235 N. Norwood Street                                                                              Page 1  4843-0049-4241v.4 

 

           attendant to the foregoing, in each case to the extent in compliance with all applicable laws, ordinances, orders, rules and          regulations.     12.     Tenant's Broker:      None.   13.    Landlord's Broker:     None.   14.    Business Days: All weekdays except weekdays on which national or state banks located in Texas are required or permitted         to be closed.   This Lease consists of the foregoing Basic Lease Information and the following attachments:          (a)     Standard Lease Provisions         (b)     Exhibit A – The Land         (c)     Exhibit B – The Premises         (d)     Exhibit C – Excluded Property     Executed by Landlord and Tenant as of the Lease Date.       LANDLORD                                          TENANT                                                                                    ,                   FARMER BROS. CO.  a                                                 a Delaware corporation                                                                                                          By:                                               By:                                            Name:                                             Name:                                          Title:                                            Title:                                                                                                                                                                           Lease – 235 N. Norwood Street                                                                              Page 2  4843-0049-4241v.4 

 

                                           STANDARD LEASE PROVISIONS                                                 TABLE OF CONTENTS                                                                                                               Page   1.     Persons Referenced in this Lease................................................................................................................................................. 4   2.     Location; AS IS ........................................................................................................................................................................... 4   3.     Term ............................................................................................................................................................................................ 4   4.     Tenant's Monetary Obligations .................................................................................................................................................... 4   5.     Tenant's Non-monetary Obligations ............................................................................................................................................ 6   6.     Landlord Obligations ................................................................................................................................................................... 7   7.     Rights Reserved by Landlord ...................................................................................................................................................... 7   8.     Indemnities and Releases ............................................................................................................................................................. 8   9.     Casualty ....................................................................................................................................................................................... 8   10.    Condemnation ............................................................................................................................. Error! Bookmark not defined.   11.    Defaults and Remedies ................................................................................................................................................................ 9   12.    Landlord's Financing ................................................................................................................................................................... 9   13.    Tenant's Representations ............................................................................................................................................................. 9   14.    End of Term ............................................................................................................................................................................... 10   15.    Miscellaneous ............................................................................................................................................................................ 10                                        Lease – 235 N. Norwood Street                                                                              Page 3  4843-0049-4241v.4 

 

                                           STANDARD LEASE PROVISIONS   1.     Persons Referenced in this Lease.           (a)    Parties.  The Parties to this Lease are Landlord and Tenant.           (b)    Persons.  Person means a natural person, a trust or estate, or a corporation, partnership, limited liability company, or                 other form of entity.           (c)    Affiliates.  An Affiliate of a Person is any other Person that directly or indirectly, through one or more intermediaries,                 Controls, is Controlled by, or is under common Control with such Person.  Control refers to the power to influence                 management decisions.           (d)    Related Persons.                  Tenant-related Persons are the following: (A) Tenant; (B) subtenants and other occupants of the Premises; (C) the                 shareholders, members, managers, partners, and Affiliates of the Persons described in items (A) and (B); and (D) the                 officers, managers, directors, employees, and agents of the Persons described in items (A) through (C).                  Landlord-related Persons are the following: (A) Landlord; (B) Landlord's Mortgagees; (C) Landlord's property                 management company; (D) the shareholders, members, managers, partners, and Affiliates of the Persons described in                 items (A) through (C); and (E) the officers, managers, directors, employees, and agents of the Persons described in                 items (A) through (D).   2.     Location; AS IS.           (a)    Project.  The Project is located on the land described in Exhibit A (the Land).  The Premises are shown on Exhibit B.           (b)    Condition and Acceptance of the Premises.  LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY                 IMPLIED WARRANTY THAT THE PREMISES, BUILDING OR PROJECT ARE SUITABLE FOR TENANT'S                 INTENDED COMMERCIAL PURPOSE, AND TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT                 DEPENDENT UPON THE CONDITION OF THE PREMISES.  FURTHER, THE PREMISES ARE LEASED "AS                 IS", WITH TENANT ACCEPTING ALL DEFECTS, IF ANY; AND LANDLORD MAKES NO WARRANTY OF                 ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE PREMISES (WITHOUT LIMITATION,                 LANDLORD MAKES NO WARRANTY AS TO THE HABITABILITY, FITNESS OR SUITABILITY OF THE                 PREMISES FOR A PARTICULAR PURPOSE, NOR AS TO COMPLIANCE WITH ANY LAWS, RULES OR                 REGULATIONS, NOR AS TO THE ABSENCE OF ANY TOXIC OR OTHERWISE HAZARDOUS                 SUBSTANCES), AND TENANT EXPRESSLY ACKNOWLEDGES THAT TENANT HAS NOT RELIED UPON                 ANY SUCH REPRESENTATION OR WARRANT, WHETHER EXPRESS OR IMPLIED.   3.     Term. Tenant leases the Premises and the Land from Landlord for the Term.  The Commencement Date is as specified in          Paragraph 9 of the Basic Lease Information.     4.     Tenant's Monetary Obligations.  Monetary Obligations means Monthly Base Rent and other sums that become due and          payable by Tenant to Landlord under this Lease.  Monthly Base Rent for any partial month will be prorated.  Tenant's obligation          to pay Monetary Obligations is independent of any obligation of Landlord under this Lease.           (a)    Timing of Payments.  Tenant shall pay to Landlord without deduction or setoff Monthly Base Rent in advance on or                 before the 1st day of each month beginning with the first day of the fourth (4th) full calendar month of the Term,                 without prior request for payment, and (iii) all other Monetary Obligations on the due date specified herein (or if there                 is no due date specified herein, then within ten days after the date of Landlord's invoice together with commercially                 reasonable evidence of the amounts incurred).           (b)    Real Estate Taxes.     Lease – 235 N. Norwood Street                                                                              Page 4  4843-0049-4241v.4 

 

                  (i)     Landlord shall be responsible for the payment of all real estate taxes assessed against the Premises.                          Notwithstanding the foregoing, for each month during the Term, Tenant shall make a payment to Landlord                         (a Tax Payment) in an amount equal to one-twelfth of the real estate taxes assessed against the Project for                         the applicable year, which Tax Payments are intended to reimburse Landlord for the real estate taxes accruing                         during the Term.  In the event the assessed valuation of the Premises or the tax rates for the applicable year                         are not known at the time that a Tax Payment becomes due and payable, the Tax Payment shall be made on                         the basis of the most recent valuation and tax rates with an appropriate adjustment made between the parties                         as set forth in Section C(1)(d) below. Each Tax Payment installment shall be due and payable on a monthly                         basis.                   (ii)    When the actual valuation and tax rates are known, Landlord or Tenant, as applicable, will pay to the other                         such amounts as may be appropriate based on actual valuation and tax rates, within thirty (30) days after                         written demand together with commercially reasonable evidence of the final amounts demanded.                  (iii)  On or before the Commencement Date, Landlord purchased the Premises from Tenant pursuant to the terms                        of that certain Purchase and Sale Agreement dated     ___, 2019, by and between Landlord (as                         purchaser) and Tenant (as seller) (the PSA).  The PSA required that, in the event the assessed valuation of                         the Premises or the tax rates for the applicable year were not known at the time of the closing (Closing) of                         the transaction contemplated by the PSA, the proration of taxes to be paid at the Closing was to be made on                         the basis of the most recent valuation and tax rates with appropriate adjustment made between the parties as                         set forth in Section in Section 4(b)(ii) above.            (c)    Insurance Expenses.  For each month during the Term, Tenant shall make a payment to Landlord (an Insurance                 Payment) in an amount equal to one-twelfth of the costs and expenses actually incurred by Landlord in order to carry                 the insurance required of Landlord described in Section 6(b) below.  The Insurance Payments are intended to                 reimburse Landlord for the actual costs incurred during the Term for the required insurance coverages of Landlord,                 but Tenant shall not be required to reimburse Landlord for the costs associated with any other insurance which                 Landlord carries, regardless of whether such additional insurance is required to be carried by any Landlord Mortgagee.              (d)    Other Monetary Obligations.  Tenant will pay the following:                  (i)     Utilities.  To the applicable utility provider, all charges (including connection, hook-up, or set-up charges)                         for all separately metered electricity, water, gas, telephone, and other utilities consumed at the Premises.                  (ii)    Janitorial Services.  To the provider thereof, all charges for janitorial services Tenant wants for the Premises.                  (iii)  FF&E Taxes.  Excise, sales, franchise, margin, and ad valorem taxes attributable to Tenant's operations,                         Tenant's FF&E and leasehold improvements (A) to the applicable taxing authorities, if Tenant is billed                         directly by such taxing authorities, or (B) to Landlord, if such taxes are levied against Landlord or Landlord's                         property or if the assessed value of Landlord's property is increased by inclusion of Tenant's FF&E or                         leasehold improvements.                  (iv)    Contamination.  All Claims arising from Hazardous Materials Contamination, but only to the extent actually                         caused by Tenant from and after the Lease Date, and in any event subject to the provisions of Section 5(e)                         below.                  (v)     Liens.  Any liens against the Project arising from acts or omissions of any Tenant-related Person, which are                         not released or bonded over and diligently contested, within 10 Business Days following actual notice thereof.                  (vi)    Late Charges.  A late charge equal to $200 for any Monetary Obligation more than five days overdue in                         order to reimburse Landlord for the extra administrative time involved in collecting such amount.           (e)    Manner of Payment.  Monetary Obligations are payable to Landlord in lawful money of the United States of America                 at the Rent Payment Address.  Upon the request of any Mortgagee, Tenant shall pay all amounts due and owning for                 Real Estate Taxes directly to an account designated by such Mortgagee.   Lease – 235 N. Norwood Street                                                                              Page 5  4843-0049-4241v.4 

 

           (f)    Cost of Performance.  Except as expressly provided to the contrary in this Lease, all of Tenant's obligations under                 this Lease will be performed at the sole cost of Tenant.   5.     Tenant's Non-monetary Obligations.           (a)    Use.  Tenant will use the Premises only for the Permitted Uses; provided, however, Tenant shall have no obligation                 whatsoever to operate or conduct any business whatsoever within the Premises.           (b)    Compliance with Laws.  Tenant will comply with Applicable Law.  Tenant will procure and maintain any permits,                 licenses, or governmental approvals necessary for Tenant's operations, if any.           (c)    Alterations.  Except as may be associated with the removal of Tenant's property, whether real or personal, Tenant                 will make no material alterations to the Building.           (d)    Hazardous Materials.  Obey all laws, ordinances, orders, and rules and regulations applicable to the use, condition                 and occupancy of the Premises. Specifically, and without limiting the foregoing, Tenant will comply with all                 Environmental Laws. The term "Environmental Laws" means the Federal Comprehensive Environmental Response,                 Compensation and Liability Act, 42 U.S.C. §§ 9601-9657; the Hazardous Materials Transportation Act of 1975,                 49 U.S.C. §§ 1801-1812; the Resources Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901-6987; or any                 other Federal, state or local statute, law, ordinance, code, rule, regulation, order or decree relating to or imposing                 liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material as now or                 at any time hereafter in effect.  Landlord and Tenant acknowledge and agree that on or before the Lease Date, Landlord                 has performed such studies and tests as Landlord deems necessary or advisable with respect to Environmental Laws                 and any substances or materials regulated thereunder, on, at or under the Premises, and, therefore, Landlord                 acknowledges that Tenant has no liability or obligation under this Lease, and Tenant is expressly released from, and                 Landlord hereby waives, any claims, actions, losses, costs or expenses arising from, any violation of Environmental                 Laws and any substances or materials regulated thereunder which existed at the Premises on or before the Lease                 Date, even if caused or generated by Tenant. For the avoidance of doubt, Tenant shall be responsible for any actual                 claims, actions, losses, costs or expense, but not consequential or other speculative amounts, arising from Tenant's                 violation of the first two sentences of this Section 5(d) from and after the Commencement Date.           (e)    Maintenance of Premises.  Neither Landlord nor Tenant shall have any obligation whatsoever to repair, replace or                 maintain any portion of the Premises (including without limitation the structure, roof, foundation, footings, load                 bearing walls, any heating, ventilating and air conditioning equipment, any mechanical, electrical or plumbing fixtures                 or appurtenances, or any other portion of the Premises), except that Tenant shall not intentionally do or knowingly                 permit anything to be done which would reasonably be expected to cause the Premises to be in violation of any                 applicable laws, ordinances, orders, rules or regulations.            (f)    Assignment and Subletting.  Tenant may not assign or sublet the Premises, or Tenant's interest in this Lease, or                 permit the use or occupancy of any part of the Premises by anyone other than Tenant (collectively, Transfer) without                 Landlord's prior written consent.  Notwithstanding the foregoing, Tenant may assign this Lease or sublet the Premises                 or any portion thereof, without the consent of Landlord, to: any entity into which or with which Tenant has merged or                 consolidated; any Affiliate of Tenant; any entity which acquires all or substantially all of the assets of Tenant or the                 issued and outstanding shares of stock of Tenant.           (g)    Tenant's Insurance.  During the Term, Tenant shall maintain (i) commercial general liability insurance on an                 occurrence basis with a general aggregate limit of at least $2,000,000, and (ii) insurance covering the value of all                 furniture, trade fixtures, inventory and other personal property placed in or upon the Project by Tenant in such amount                 as Tenant deems necessary in Tenant's sole and absolute discretion.  Tenant's insurance carriers must have be                 authorized to sell insurance in Texas.  All liability insurance policies must name Landlord-related Persons as                 "additional insureds" and be primary, with Landlord's liability policies being secondary and noncontributing.  Liability                 insurance policies must delete the contractual liability exclusion with respect to personal injury or damage to property.                  All property insurance policies must waive subrogation against the Landlord-related Persons.  Tenant must deliver to                 Landlord certificates evidencing Tenant's insurance and copies of all required endorsements upon execution of this                 Lease, and thereafter at least 30 days prior to expiration of each insurance policy.  Any insurance carried by Tenant                 may be in the form of one or more blanket insurance policy(ies) covering multiple properties.  Lease – 235 N. Norwood Street                                                                              Page 6  4843-0049-4241v.4 

 

           (h)    Security.  Tenant will be solely responsible for securing the Premises and any Tenant's FF&E from unlawful intrusion,                 theft, loss, and damage.           (i)    Estoppel Certificates.  Tenant will execute and deliver to Landlord and its designee(s) within twenty days after                 request by Landlord, but in no event more than one (1) time in any twelve (12) month period, an estoppel letter                 certifying (A) as true and correct, a copy of this Lease and any amendments, (B) the then effective business terms,                 (C) whether Landlord is in default and, if so, the nature of the default, and (D) the date to which Monthly Base Rent                 have been paid.           (j)    No Recording.  Tenant may not record this Lease or a memorandum or other form of notice thereof.   6.     Landlord Obligations.           (a)    Maintenance and Repair.  Landlord and Tenant expressly acknowledge and agree that Landlord has no obligations                 whatsoever for repair, maintenance or restoration of any portion of the Building or Project under this Lease.           (b)    Landlord's Insurance.  Landlord will maintain: (i) commercial general liability insurance on an occurrence basis                 with a general aggregate limit of at least $2,000,000, and (ii) causes of loss-special form property insurance on the                 Project in the amount of the full replacement cost thereof.  All liability insurance policies must name Tenant-related                 Persons as "additional insureds", and all liability insurance policies must delete the contractual liability exclusion with                 respect to personal injury or damage to property.  All property insurance policies must waive subrogation against the                 Tenant-related Persons.  Any insurance carried by Landlord may be in the form of one or more blanket insurance                 policy(ies) covering multiple properties.   7.     Rights Reserved by Landlord.           (a)    Access to the Premises.  Upon no less than forty-eight (48) hours prior written notice, Landlord may enter the                 Premises to (i)  confirm Tenant's compliance with this Lease, or (ii) show the Premises to prospective partners,                 purchasers, mortgagees, or tenants.  Access by Landlord will not be deemed constructive eviction or entitle Tenant to                 any abatement of Monetary Obligations, but any such entry shall be subject to all applicable life safety and other rules                 and regulations then in effect for Tenant's operations in the Premises.  In an emergency or to comply with this Lease,                 Landlord may use any means to open doors in the Premises as may be necessary under the circumstances.             (b)    Project Modifications.  During the initial twelve (12) full calendar months following the Commencement Date,                 Landlord may not without Tenant's prior written consent, such consent to be given in Tenant's sole and absolute                 discretion (i) alter or replace any improvement in the Project, (ii) install, repair, and replace in the Premises any pipes,                 cables, or similar equipment serving portions of the Building outside the Premises, (iii) rename the Building and the                 Project, (iv) substitute for any parking area other areas, or (v) add additional improvements or land to the Project.                  Notwithstanding the foregoing, beginning on the first day of the thirteenth (13th) full calendar month following the                 Commencement Date, Tenant shall not unreasonably withhold or condition its consent to any request from Landlord                 to (i) alter or replace any improvement in the Project, (ii) install, repair, and replace in the Premises any pipes, cables,                 or similar equipment serving portions of the Building outside the Premises, or (iii) add additional improvements or                 land to the Project, so long as no such alterations, replacements, improvements or additions shall interfere with, impede                 or otherwise adversely affect Tenant's ongoing operations at the Project, or pose any risk of damage to property or                 injury to persons, as reasonably determined by Tenant.  Landlord covenants at all times to use, and to cause its agents,                 employees and contractors to use, commercially reasonable best efforts not to in any manner interfere with Tenant's                 ongoing operations, and shall coordinate all such activities with Tenant prior to commencement thereof to minimize                 disruption.  Tenant shall have the right to have a representative present during any such entry into or upon the Project                 by Landlord, and all Landlord-related Parties entering the Project shall be required to maintain the confidentiality of                 any and all matters and activity observed therein.           (c)    Landlord agrees to indemnify, defend and hold harmless Tenant and the Tenant-related Persons, from and against all                 claims, causes of action, losses, damages, suits and liability of every kind, including all expenses of litigation, court                 costs and attorney's fees, for damage to any property, or for injuries to or sickness or death of any person, caused by,                 arising out of or related, directly or indirectly, to Landlord's entry into or upon the Project for the purposes described   Lease – 235 N. Norwood Street                                                                              Page 7  4843-0049-4241v.4 

 

                  in this Section 7,  (collectively, Landlord Indemnified Claims).  This indemnity applies even though any such                 Landlord Indemnified Claim is caused in whole or in part by any defect in or condition of the Premises or any defect                 in or condition of any area, facilities, equipment, tools or other items which may be provided by Tenant, whether such                 defect or condition was known by the party to be indemnified.  UNDER THE PROVISIONS OF THIS                 INDEMNITY, LANDLORD IS AGREEING TO INDEMNIFY TENANT FROM TENANT'S OWN                 NEGLIGENCE OR FAULT, BUT THIS INDEMNITY SHALL NOT APPLY TO ANY LANDLORD                 INDEMNIFIED CLAIM TO THE EXTENT ARISING FROM OR OUT OF THE SOLE NEGLIGENCE,                 GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TENANT.   8.     Indemnities and Releases.           (a)    Indemnities.  Tenant agrees to indemnify, defend and hold harmless Landlord and the Landlord-related Persons, from                 and against all claims, causes of action, losses, damages, suits and liability of every kind, including all expenses of                 litigation, court costs and attorney's fees, for damage to any property, or for injuries to or sickness or death of any                 person, caused by, arising out of or related, directly or indirectly, to the use or enjoyment of the Premises by Tenant                 or any Tenant-related Persons, on the Premises (collectively, Claims) to the extent arising or occurring after the Lease                 Date, and expressly excluding any Claims related to Environmental Laws attributable to a period of time before the                 Commencement Date.  This indemnity applies even though any such Claim is caused in whole or in part by any defect                 in or condition of the Premises or any defect in or condition of any area, facilities, equipment, tools or other items                 which may be provided by the party to be indemnified, whether such defect or condition was known by the party to                 be indemnified, but expressly excluding any Claims related to Environmental Laws attributable to a period of time                 before the Commencement Date.  UNDER THE PROVISIONS OF THIS INDEMNITY, TENANT IS                 AGREEING TO INDEMNIFY LANDLORD FROM INDEMNITEE'S OWN NEGLIGENCE OR FAULT,                 BUT THIS INDEMNITY SHALL NOT APPLY TO ANY CLAIM TO THE EXTENT ARISING FROM OR                 OUT OF THE SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF                 INDEMNITEE.             (b)    Waivers.  Except as described in Section 7(c) above, Tenant waives all:                  (i)     Claims against Landlord-related Persons arising out of (A) the performance, interruption of or any defect in                         services or utilities, (B) condition of the Premises or Project, (C) the actions of any other occupant of the                         Project, or (D) Landlord's disposal of property abandoned by Tenant at the Premises.                  (ii)    Warranties that any security measures undertaken by Landlord or the Project will prevent occurrences of                         criminal activity.                  (iii)  Rights (A) under the Texas Property Code §93.012 regarding assessments of charges, (B) to contest taxes or                        other levies, protest appraised values or receive notice of reappraisal regarding the Building or the Project                        (including Landlord's personal property), whether or not Landlord contests same, under §43.413 of Title 1 of                        the Texas Tax Code, (C) under the Texas Deceptive Trade Practices-Consumer Protection Act, §17.41 et.                        seq. of the Texas Business and Commerce Code, and (D) to trial by jury in any action, proceeding, or                        counterclaim brought by either Party against the other Party under any statute, rule of law, or public policy                        in connection with any matter whatsoever arising out of or in any way relating to this Lease or the Premises.             (c)    Mutual Release.  Landlord and Tenant release each other and Landlord's Mortgagee from all Claims for losses of or                 to (i) the Project, Building, or Premises, (ii) Tenant's FF&E, or (iii) business or revenues, provided the Losses are                 covered by the releasing Party's insurance or that would have been covered by the required insurance if the Party does                 not maintain the insurance coverages required by this Lease, and regardless of whether the negligence of the other                 party caused such Loss.  The Party incurring the loss is responsible for any deductible or self-insured retention under                 its property insurance, up to a maximum of $10,000.  The Parties will notify the issuing property insurance companies                 of the release set forth in this Paragraph and will have the property insurance policies endorsed, if necessary, to prevent                 invalidation of coverage.   9.     Casualty.  If the Premises cannot be used for the purposes contemplated by this Lease because of casualty, condemnation or          purchase in lieu of condemnation, this Lease will terminate, and Tenant shall be entitled to a refund from Landlord of amounts         for Basic Rent or real property taxes prepaid by Tenant to Landlord for the period arising after the later to occur of (x) the date  Lease – 235 N. Norwood Street                                                                              Page 8  4843-0049-4241v.4 

 

           that Tenant provides notice to Landlord that Tenant has vacated the Premises and (y) the date that Tenant vacates the Premises          in accordance with the terms of this Lease.  Tenant will have no claim to insurance proceeds with respect to insurance policies          maintained by Landlord, condemnation award or proceeds in lieu of condemnation; provided that in the event of a casualty,          Tenant shall be permitted to retain any insurance proceeds payable under any policy carried by Tenant.  Tenant may separately         pursue a claim (to the extent it will not reduce Landlord's award) against the condemnor for the value of Tenant's personal         property taken, loss of leasehold interest, moving costs and loss of business.    10.    Defaults and Remedies.           (a)    Defaults.  Each of the following constitutes a Default: (i) Tenant does not pay any Monetary Obligation under this                 Lease when due, and the same shall continue for 5 days after written notice from Landlord; (ii) Tenant does not comply                 with any non-monetary obligation under this Lease within 30 days after notice; (iii) any petition seeking protection                 against creditors is filed by or against Tenant or Guarantor under the U.S. Bankruptcy Code; (iv) Tenant or Guarantor                 dissolves, dies, liquidates, or does not maintain good standing in the State of Texas.           (b)    Remedies.  Landlord's remedies for Tenant's Default are to:  (a) enter and take possession of the Premises; (b) enter                 the Premises and perform Tenant's obligations; (c) terminate this Lease by written notice, and (d) sue for damages                 actually incurred; provided, however, that in no event shall Tenant be responsible for, and Landlord hereby releases                 Tenant from, the costs and expenses of removing any of Tenant's property, whether real or personal  or any costs and                 expenses of securing a new tenant for the Premises, including, but not limited to, commissions, remodeling or                 otherwise causing the Premises to be rendered in any state other than its then "As-Is" condition. Without being liable                 for damages, Landlord may enter and take possession of the Premises by self-help, by picking or changing locks if                 necessary, and may lock out Tenant until the default is cured.  The liability of Tenant to Landlord for any monetary                 damages arising from any default by Tenant under the terms of this Lease shall be limited to Landlord's actual direct,                 but not consequential damages therefor.  Landlord acknowledges that the Permitted Use requires operation of a coffee                 roasting facility at the Premises, and Landlord shall have no right to shut off utilities to the Premises unless (i) Tenant                 is no longer operating at the Premises, (ii) Tenant has vacated the Premises, or (iii) the Term of the Lease has expired                 or terminated.           (c)    Landlord's Lien.  Landlord hereby knowingly waives any claim it may have, pursuant to this Lease, statute or                 common law, for a lien in or upon any of Tenant's FF&E or any of Tenant's other property, real or personal, located                 at the Property.            (d)    Consequential Damages.  Tenant shall not be liable for punitive, consequential or special damages under this Lease                 and Landlord waives any rights it may have to punitive, consequential or special damages under this Lease in the                 event of a breach or default by Tenant under this Lease.   11.    Landlord's Financing.  This Lease is subordinate to all mortgages, deeds of trust, and ground leases encumbering the Project          (collectively, Mortgages) so long as any such Landlord Mortgagee shall recognize Tenant's right to remove any and all property          of Tenant, whether real or person, including Tenant's FF&E.  Tenant will, within ten Business Days after Landlord's request,          execute and deliver to Landlord whatever instruments may be required by a holder of a Mortgage (Landlord's Mortgagee) to          evidence subordination.  Landlord's Mortgagee may subordinate its interest to this Lease by unilaterally executing a          subordinating instrument.  If Landlord's Mortgagee or a purchaser at foreclosure succeeds to the title of Landlord in the          Building, then Tenant will pay all Monetary Obligations subsequently accruing under this Lease to the successor and recognize          the successor as "Landlord" under this Lease for all purposes.  If Tenant alleges that Landlord breached this Lease, then Tenant          must (a) deliver notice to Landlord and any Landlord's Mortgagee whose contact information has been provided to Tenant          specifying the exact nature of the alleged breach and (b) not exercise any remedy unless both Landlord and Landlord's          Mortgagee do not cure the alleged breach within 30 days after receipt of Tenant's notice, plus such additional time as Landlord's          Mortgagee may require.   12.    Tenant's Representations.  Tenant represents and warrants to Landlord that:           (a)    Existence, Authority.  Tenant (i)  is in good standing and qualified to do business in the State where the Land is                 located, (ii) has the power and authority to execute and deliver this Lease or the guaranty and perform its obligations                 under this Lease or the guaranty, and (iii) to Tenant's knowledge, possesses all permits, approvals, and consents                 necessary to conduct its business in the Premises.  Lease – 235 N. Norwood Street                                                                              Page 9  4843-0049-4241v.4 

 

           (b)    No Violations.  Tenant is not to its actual (i) in violation of any laws relating to terrorism or money laundering,                 including Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001 (Executive Order) and                 the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism                 Act of 2001 (Patriot Act), or (ii) a Person with whom Landlord is prohibited from dealing under the Executive Order                 or Patriot Act, who commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive                 Order, or is named as a "specially designated national and blocked person" on the most current list published by the                 U.S. Treasury Department Office of Foreign Assets Control.           (c)    Binding Obligations.  This Lease (i) has been duly executed and delivered by Tenant, (ii) constitutes the valid and                 binding obligation of Tenant, and (iii) is enforceable against Tenant according to its terms.           (d)    Real Estate Brokers.  Tenant has had no dealings with any real estate broker or agent in connection with the                 negotiation and execution of this Lease other than Tenant's Broker and Landlord's Broker.   13.    End of Term.           (a)    Surrender.  Upon the earlier of the last day of the Term (whether by expiration or earlier termination of the Term) or                 termination of Tenant's right of possession of the Premises, Tenant will peaceably surrender the Premises to Landlord,                 in its then "AS IS" "WHERE IS" condition, and Landlord hereby waives any obligation of Tenant to render or cause                 the Premises to be in any other condition.             (b)    Removal of Improvements and Tenant's Property.  Notwithstanding anything to the contrary in this Lease, any                 and all equipment or property remaining at the Premises after the expiration of the Term shall be conclusively deemed                 to have been abandoned by Tenant and title thereto shall immediately vest in Landlord and the existence of any                 equipment or property at the Premises after the expiration of the Term shall not be evidence or proof that Tenant (a)                 has not vacated or surrendered the Premises, (b) is occupying the Premises or (c) is claiming any right to occupy the                 Premises.  Landlord will have no liability to Tenant with respect to any equipment or other property remaining at the                 Premises after the Expiration Date.           (c)    Holdover.  If any Tenant Party remains in possession of all or any part of the Premises after the last day of the Term                 (whether by expiration or earlier termination of the Term) without executing a new lease or written extension, whether                 or not with Landlord's consent (Holdover), the Term is not extended and no rights or remedies of Landlord are                 adversely affected, even if Landlord thereafter accepts payment of a Monetary Obligation.  During the Holdover,                 Tenant is a tenant at sufferance subject to all provisions of this Lease except that Monthly Base Rent is 25% greater                 than the amount payable during the last month of the Term or (ii) Landlord's then quoted Monthly Base Rent rate for                 comparable space in the Building.  Either party may terminate the Holdover upon at least three days' notice to the                 other party.   14.    Miscellaneous.           (a)    Notices.  All notices must be in writing and delivered by (i) hand, (ii) reputable overnight courier, (iii) overnight mail                 sent by USPS or other reputable common carrier; or (iv) e-mail, to Landlord at Landlord's Notice Address (or such                 other addresses specified in writing to Tenant); and to Tenant at Tenant's Address.  Notice is deemed given upon the                 date of confirmed receipt, if sent by hand, or the next Business Day after the date sent, if sent by mail, overnight                 courier, electronically confirmed facsimile, or e-mail, except that a change of address notice is effective five Business                 Days after actual receipt.  Notices to Tenant addressed to the Premises may be made by posting on the entrance door                 of the Premises.           (b)    Interpretation.  This Lease contains the entire agreement of the Parties and may be amended only by subsequent                 written agreement executed by all Parties.  There are no promises, conditions, representations, or warranties between                 the Parties except those expressly set forth in this Lease.  If any provision of this Lease is held to be illegal, invalid,                 or unenforceable, the legality, validity, and enforceability of remainder of this Lease is not affected.  Because each                 Party and its counsel had an opportunity to review this Lease prior to execution, the rule of construction that                 ambiguities are resolved against the drafting Party does not apply to this Lease.  The word "including" does not exclude                 items not listed.  The word "will" also means shall or must, as the context requires or permits.  Unless the context   Lease – 235 N. Norwood Street                                                                             Page 10  4843-0049-4241v.4 

 

                  otherwise requires, singular includes the plural and plural the singular, and masculine, feminine, and neuter genders                 are interchangeable.  Paragraph captions are for convenience only and do not define, construe, or limit the contents of                 such paragraphs.  This Lease is binding and inures to the benefit of the Parties and their respective successors and                 permitted assignees, except as set forth herein.  Except as otherwise expressly extended to Landlord-related Persons                 or Tenant-related Persons in this Lease, no beneficial rights are given to any third parties by or under this Lease.           (c)    Requests and Consents.  All requests to Landlord must be in writing where Landlord's consent or approval is required                 in this Lease and Landlord may withhold the consent or approval in Landlord's sole discretion, except as otherwise                 expressly provided in the applicable provision.  If Tenant requests Landlord's consent or approval under any provision                 of this Lease and Landlord does not give the consent or approval, Tenant's sole remedy is an action for specific                 performance or mandatory injunction.           (d)    Applicable Law.  Applicable Law means all current and future federal, state, and local laws and building codes and                 environmental laws applicable to the Project and Tenant's operations and any regulations, rulings, orders, and                 guidelines issued thereunder.  The construction, performance, and enforcement of this Lease are governed by the laws                 of the State of where the Land is located.  Venue for all legal actions relating to this Lease is in the County where the                 Land is located.           (e)    Waiver.  No waiver is effective unless contained in an agreement signed by the Party against whom the waiver is                 claimed.  No waiver in one instance is a waiver in any other instance, however similar.  No demand for or acceptance                 of partial payment or performance waives the underlying obligation or breach unless expressly agreed in writing.           (f)    Legal Costs.  The prevailing Party in any legal action or alternative dispute resolution proceeding arising from this                 Lease is entitled to all court costs, attorneys' and paralegals' fees and costs, experts' fees and costs or other expenses                 incurred in investigating, preparing, prosecuting, or settling any legal or alternative dispute resolution action or                 proceeding (collectively, Legal Costs).           (g)    Force Majeure.  Time is of the essence.  However, if either party is unable to perform any obligation under this Lease,                 other than the payment of Monetary Obligations or other monies, due to unavailability of materials or equipment,                 strikes or other labor difficulties, governmental restrictions, casualties, or other causes beyond such party's reasonable                 control, the obligation is stayed for the duration of the condition; provided the Party whose performance is delayed                 notifies the other Party within 48 hours after the delay begins.           (h)    Execution.  This Lease is effective only upon full execution and delivery by all Parties.  This Lease may be executed                 in counterparts, each of which is an original and all of which are one and the same instrument.  Each individual Person                 executing this Lease as "Tenant" is jointly and severally bound and liable as Tenant under this Lease.           (i)    Landlord's Interest; Damages Waiver.  Any liability of Landlord under this Lease is recoverable solely out of                 proceeds from execution against Landlord's interest in the Project.  No Landlord-related Person has any personal                 liability under this Lease.  Landlord and Tenant hereby waive all Claims against the other for consequential, special,                 or punitive damages suffered, including lost profits and business interruption, except to the extent arising from or out                 of(i)  holdover in the Premises by Tenant, or (ii) disclosure by a Landlord-related Person of any confidential                 information discovered or observed during any entry upon the Project pursuant to Section 7.  The term "Landlord"                 includes only the holder of Landlord's interest in this Lease at the time in question.  Immediately upon conveyance by                 Landlord of its interest in this Lease, the conveying Person is released from all obligations of "Landlord" thereafter                 arising under this Lease, and Tenant will look solely to the new Landlord for performance of such obligations.           (j)    Waiver of Jury Trial.  To the maximum extent permitted by Applicable Law, each Party irrevocably waives all                 right to trial by jury in any action, proceeding, or counterclaim (whether based on contract, tort, or otherwise)                 arising out of or relating to any of the provisions of this Lease, whether now existing or hereafter arising.  Each                 Party agrees that either Party may file an original counterpart or copy of this Lease with any court as written                 evidence of the consent of the Parties to the waiver of its right to trial by jury.                                       [signatures contained on following page]                                 Lease – 235 N. Norwood Street                                                                             Page 11  4843-0049-4241v.4 

 

           This Lease is executed on the respective dates set forth below, but for reference purposes, this Lease shall be dated as of the  date first above written.  If the execution date is left blank, this Lease shall be deemed executed as of the date first written above.   LANDLORD:                                                                         ,                                               a                     ,                                                                                                                                             By:                                                                                 Name:                                                                               Title:                                                                                                                                        Execution Date:  ______ ___, 2019         TENANT:                                      FARMER BROS. CO.,                                               a Delaware corporation,                                                                                                                                             By:                                                                                 Name:                                                                               Title:                                                                                 Execution Date:  ______ ___, 2019                                                                                                                             Lease – 235 N. Norwood Street                                                                             Page 12  4843-0049-4241v.4 

 

                                                             EXHIBIT A                                                                                                                              THE LAND    Lease – 235 N. Norwood Street                                                                                             Page 13  4843-0049-4241v.4 

 

                                                             EXHIBIT B                                                                                                                           THE PREMISES    Lease – 235 N. Norwood Street                                                                                             Page 14  4843-0049-4241v.4 

 

                                                             EXHIBIT C                                                                                                                       EXCLUDED PROPERTY       Lease – 235 N. Norwood Street                                                                                             Page 15  4843-0049-4241v.4

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